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3/23/2010
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Rajan Chandras
Rajan Chandras
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Forrester Sees 'Smart Computing' IT Growth

Findings at Forrester Research indicate that every 15-20 years, there is a resurgence in IT spending -- and that we are on the cusp of the next big spend cycle, focusing on optimizing the balance sheet. They're calling it "Smart Computing."

Findings at Forrester Research indicate that every 15-20 years, there is a resurgence in IT spending -- and that we are on the cusp of the next big spend cycle, focusing on optimizing the balance sheet. They're calling it "smart computing."

In a nutshell, smart computing blends advances in hardware, software and networking into industry-specific solutions that focus on maximizing asset value and minimizing asset risk. Intrigued by the premise, I chatted recently with Forrester analyst Andrew Bartels, lead author of the paper.Bartels and others found three such cycles of IT growth in recent history, each cycle starting with 7 to 8 years of spending spurts -- where IT grows twice as fast as the economy -- followed by an equal-length period when business takes a breather to assimilate this growth -- yet where IT grows no slower than the economy. The previous cycles focused on mainframe computing (1950s-60s), personal computing (70s-80s), and network computing (90s-00s).

The current cycle started in 2008, and -- although the recession has cut into its growth -- the good news is that it is poised to rebound soon.

A key difference, Bartels explained, is that whereas the previous three cycles focused on the Income Statement -- automating and optimizing business processes with an eye on reducing business expenses and improving productivity -- smart computing focuses on the balance sheet, meaning taking a look at how assets are managed, and the risks and opportunities posed by assets.

This requires vertical convergence that goes beyond ERP and transactional solutions -- the ability to manage and analyze investments in assets in real time. For example, smart grid initiatives that enable utilities and their consumers to understand, analyze... and influence electric usage, all in real time. Or, real-time solutions that enable healthcare providers to leverage their assets, and consumers (I prefer the industry term "payors" -- so much more accurate, don't you think?) to keep track of their medical histories and planning. The idea here isn't to merely optimize the processes, Bartels says, it's to keep an informed and intelligent eye on the balance sheet, because "when it blows up, it blows up big," as we've all witnessed last year in mortgages.

Focusing on the balance sheet -- managing asset opportunities and risks -- is an imperative for businesses, and opens new doors for vendors. Yet, although the need is urgent, there are few off-the-shelf solutions out there, and Bartels urges businesses to push their solution vendors to produce vertically integrated solutions that provide real-time visibility and analytics for asset managers (businesses) and consumers. Skills, technologies, and capabilities are out there already, from asset monitoring devices and IP network layers to real-time analytics and sophisticated algorithms, and from niche vendors like Accruent and growing forces like Tibco to established leaders like IBM, Oracle and SAP; what's needed is for businesses to step up the ante.

What about business/technology professionals like you and me? Bartels advises keeping track of what's happening in related spaces, deepening the focus on business issues, particularly as they relate to enterprise assets, and taking forward our skills in areas such as asset monitoring and real-time analytics.

Hmmm. Very interesting, I thought, but isn't "smart computing" a very dull and non-descriptive label for this? In their time and in their own ways, all the previous cycles were "smart" too. "Ok," concedes Bartels, in words to this effect. "We might have chosen the wrong name for this, but it's early days, and another -- and better -- name might come along. Labels aren't that important."

Verily so... Shakespeare, a rose by any other name, and all that stuff.Findings at Forrester Research indicate that every 15-20 years, there is a resurgence in IT spending -- and that we are on the cusp of the next big spend cycle, focusing on optimizing the balance sheet. They're calling it "Smart Computing."

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