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Mobility, cloud, analytics to reshape IT in 2012

Gartner says IT spending will be flat in 2012, but IDC is estimating 6.9% growth, driven by smartphones, tablets, social networking, and big data

By Ann Bednarz, Network World, 01/03/12

Despite some hopeful fits and starts, the U.S. economy didn't escape the doldrums in 2011. Unemployment remained stubbornly high, the U.S. debt-ceiling crisis and budget scuffles spurred more economic uncertainty, and Europe's ongoing financial problems threatened global markets. If there's an upside, at least it's familiar territory.

"Back in 2008, nobody knew what was going to happen as a result of the global financial crisis and IT spending almost stopped overnight," says Richard Gordon, a research vice president at Gartner. "We're not in that kind of situation now. The solutions to the problems [in the U.S. and Europe] are understood and known. The question is now, is there a political way to execute and make them happen?"

[ Stay ahead of the key tech business news with InfoWorld's Today's Headlines: First Look newsletter. | Read Bill Snyder's Tech's Bottom Line blog for what the key business trends mean to you. ]

Read NWW's package of stories looking forward to 2012

Against the worrisome economic backdrop, enterprises have continued to spend on IT, albeit with caution. IT budgets grew in 2011, but not by much when the impact of exchange rates is factored in.

"If you look at constant dollars -- in other words, if you strip out exchange rates -- we've seen marginal growth in 2011 in the very low single digits, maybe 1 percent or 2 percent globally," Gordon says. Healthier growth in emerging economies compensated for sluggish growth in the U.S. and Europe, but the net effect is essentially flat IT spending in 2011 compared to 2010.

We'll see more of the same in 2012, Gordon says. "From an enterprise IT perspective, folks are planning for a period of slow economic growth."

Research firm IDC is more bullish, estimating that worldwide IT spending will grow 6.9 percent year over year to $1.8 trillion in 2012. A healthy chunk of spending -- as much as 20 percent, IDC says -- will be driven by a handful of technologies that are reshaping the IT industry: smartphones, media tablets, mobile networks, social networking, and big data analytics.

Mobility is introducing significant management and security headaches for IT, while at the same time enabling the business to increase employee productivity and improve customer service. Social networking is spawning a treasure trove of customer data, but also creating an enormous challenge for companies that want to make any sense of all that data.

Fighting for IT talent
As companies try to balance the technical challenges and opportunities, they're also grappling with a shortage of skilled professionals. IT pros with application development, virtualization or cloud computing skills are in short supply, as are those with business analytics expertise.

The number of available IT jobs in the U.S. is up about 12 percent compared to a year ago, and demand for tech professionals is expected to get even stronger in 2012, according to Dice.com. When the jobs site surveyed 1,200 IT hiring managers and recruiters, 65 percent said they're planning to add tech pros in the first half of 2012. Among those in hiring mode, 27 percent said they plan to expand headcount by more than 20 percent. (See "Can you keep your IT staff in 2012?")

Tech pros with in-demand skills and relevant experience aren't having trouble finding jobs, says Jack Cullen, president of IT staffing and recruiting firm Modis. "If candidates have strong skills, robust backgrounds, and they communicate well, they're getting snapped up fast," he says. In fact, many hiring managers haven't adjusted to the new pace. "They're still slow to react, still very deliberate in the hiring cycle," Cullen says. "They're really looking for that quality hire."

Cars.com has been on an IT hiring spree for the past year and remains bullish as 2012 kicks off and the hard-hit automotive industry's recovery continues.

"We're optimistic," says Bill Swislow, CIO at Cars.com, a pricing and reviews site for online car shoppers. "We suffered in the recession just like everyone else, but the auto industry has been rebounding. Even though we're still not close to pre-recession levels of auto sales, the incremental climb in sales has been pretty steady."

As a result, Cars.com has been investing heavily in IT. "In 2010 and 2011 we made substantial investments. We increased headcount, increased overall IT spending and executed a number of different strategic initiatives and infrastructure upgrades," Swislow says.

That growth will continue in 2012, he says, though he won't be increasing headcount by as much as he did in 2011, when his IT team grew by about 30 percent. Swislow is predicting about 10 percent growth in headcount for 2012.

On the project front, Cars.com is planning a handful of major projects in 2012, including reengineering its CRM and fulfillment systems, deploying a new data warehouse platform, and rolling out new business intelligence technologies.

"There's an increasing market expectation with our customers, especially car dealers, that they can log into a tool and see real-time metrics. Our current data warehouse architecture requires an overnight batch process, and we want to load continuously throughout the day," Swislow says. "On the business intelligence layer, we're looking to greatly upgrade our visualization and dashboard capabilities, both for internal use and for customer-facing reporting."

Successful execution of some major IT projects over the last couple of years -- in particular shifting from a waterfall to an agile development methodology, which dramatically increased developer productivity -- makes it easier to justify further increases in headcount and IT budgets, Swislow says. "Our ability to spend effectively enables us to make a credible case for spending more."

Keeping it lean
Not all enterprises are staffing up and spending more, however. Many organizations are still struggling to pare back expenses.

IT headcount and budgets are remaining flat in the city of Ridgeland, Miss. "We're still cautious," says Joe Kirchner, information systems manager for the city. "We're taking care of the essentials, and there's beginning to be some optimism."

A key project for 2012 will be to extend a VoIP rollout. Ridgeland analyzed its VoIP options for several years before starting to deploy the technology at city hall and the police department. Beginning in January, more city departments, including the fire department, will be brought on board.