High-Tech Companies Face Challenges Keeping Pace With New Cloud-Based Business Models

High-tech companies are struggling to transform their traditional business models of shipping hardware products or packaged software to more complex business models of providing new services based on cloud computing, new Accenture research has found.

The research revealed that many senior leaders lack a clear understanding of how the complexity of these new business models impacts operations in nearly every function of their companies. This disconnect will become increasingly important because most leading technology firms expect to generate revenue growth through five or more business models by 2015, several of which are likely to be based on cloud, the research concluded. These companies typically have two-to-three business models today.

Accenture recommends that companies take these steps to help overcome the challenges:

-- Determine how many business models they have today and which new ones are needed to capitalize on market opportunities;

-- Identify and build distinctive capabilities needed to deliver business in the cloud;

-- Develop a segmented operating model to deliver distinctive service capabilities with the right customer experience and economics; and

-- Implement a governance model for making key resource allocation and other critical decisions.

More information on CRM and Cloud Computing can be found at www.CRMindustry.com.

Research Indicates that Cloud Increases Short Term Costs for Long Term Gains

IDG Enterprise has released the results from the 2012 Cloud Computing survey examining cloud computing implementation, usage, investment plans and vendor requirements.

The survey, completed by more than 1,650 IT and security decision-makers from a range of industries, highlights the growth in cloud computing investments, demonstrating the value cloud computing provides to organizations. Respondents state that 34% of their current IT budget is allocated to cloud computing solutions and more than half (63%) expect to increase spending in the next 12 months. On average, organizations will increase cloud computing spending by 16%.

Key findings include:

-- Sixty-three percent of organizations plan to increase their IT budget allocation for cloud computing initiatives over the next 12 months. On average organizations plan to increase cloud computing spending by 16%.

-- Private cloud deployments are currently where the majority of information is stored in the cloud (24%), and the trend will continue to dominate 18 months from now (33%). Additionally, information is stored in other cloud deployment models including public cloud (10% currently, and 16% 18 months from now), community cloud (9% and 8% respectively) and hybrid cloud (8% and 14% respectively).

-- In addition to investing in cloud computing solutions, 68% of organizations strongly agree/agree that the IT organization had to grow skillsets to keep up with cloud developments.

-- Two-thirds of organizations (66%) believe that cloud computing is a very/somewhat important enabler of business innovation.

-- By a significant margin, the number one barrier to implementing cloud strategies is security (70%), followed by concerns about accessing information (40%) and concerns about information governance (37%).

More information on CRM and Cloud Computing can be found at www.CRMindustry.com

Software and PCs Will Lead the Way in Record-Breaking Year for U.S. Small and Midsize Business IT Spending

Spending on information technology by the 8 million small and medium-sized businesses (SMBs) in the United States will account for approximately one-quarter of overall global SMB IT spending and more than 10% of all IT spending worldwide in 2012. Although U.S. SMB IT spending has more than made up the ground lost during the especially weak years of 2008 and 2009 – and is expected to exceed $138 billion in 2012 -- future levels of investment and spending growth will not be uniform across technology categories. A new study from International Data Corporation (IDC) explores the size and growth of the five major technology sectors in the small (<100 employees) and midsize (100-999) segments – and the critical differences in IT investment between SMBs and large businesses (1000+).

Key findings of this study include the following:

-- The small business segment will spend nearly twice as much as the midsize segment – and more than the entire large enterprise segment – on PCs and peripherals in 2012. The client business is expected to be particularly strong, as small and midsize businesses look to invest in a variety of PC form factors, with particularly high levels of interest in notebooks and media tablets.

-- Small and midsize businesses will spend nearly $50 billion on packaged software in 2012, accounting for more than one-third of total U.S. SMB IT spending; this category will also have the highest compound annual growth rate (CAGR) throughout the forecast period (6.0%).

-- More than one-quarter of total SMB IT spending in 2012 will be allocated to IT services, totaling more than $38 billion. While this level of spending is significant, it also represents a critical departure from the conventions of the large enterprise segment, where IT services account for nearly half of all IT spending. In keeping with the growing importance of IT services as company size increases, the midsize business market for IT services will be more than triple the size of that for small firms throughout the forecast period.

-- Systems and storage will continue to be the slowest-growing IT category in the SMB space. While small and midsize business interest in servers and storage is expected to remain strong, the appeal of virtualization is expected to slow the growth of the server installed base, particularly in the midsize segment.

-- The networking equipment category will account for the smallest share of total SMB IT spending throughout the forecast period. This represents another key difference between the SMB and enterprise segments — while large businesses continue to make significant investments in next-generation datacenters and networking infrastructure, more than one-third of SMBs have not yet deployed networks. Despite increasing interest in networking and network-enabled technologies such as software as a service, cloud resources, and unified communications, SMB spending will remain relatively modest throughout the forecast period.

More information on IT spending can be found at www.CRMindustry.com