© 2010 IDC

What will the future be like?ICT Market Outlook

CISCO Expo

Athens, April 20, 2010

Stelios Charalambakis

scharalambakis@idc.com

Senior Research Analyst

IDC Greece, Cyprus & Malta

© 2010 IDC

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telecommunications, and consumer technology markets (ICT)

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and economists, provide global, regional, and local expertise

on technology and industry opportunities and trends in over

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Our multilingual, multicultural workforce surveys over 360,000

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unrivaled coverage

IDC is a subsidiary of IDG, the world's leading technology

media, events and research company

IDC Overview

© 2010 IDC

IDC Analysts Present in Over 50 Countries

IDC analyzes the future of IT, telecommunications, and consumer

technology markets worldwide, with analysts in over 50 countries

and regional research hubs in: Framingham, Massachusetts; Miami;

London; Prague; Dubai; Singapore; and Hong Kong.

© 2010 IDC

IDC Value: Providing Expertise at Every Stage of Your Business Planning

Go-to-Market Services• Lead generation

• Speaking engagements

• Sales cycle advancement

• Independent content for marketing and sales collateral

Partnering and

Channel Offerings• Identify key players to

partner with

• Develop partner programs

• New channel strategies

• New delivery models

Market Intelligence Services• Market size and forecasts

• Market trends

• Vendor performance

• Direct analyst expertise

• Competitive analysis

Custom ConsultingIDC can help with custom projects in any stage

Data Tracking ToolsElectronic tools to track market data and deals frequently

© 2010 IDC

Agenda

5

The Economic Implosion & ICT

Budget Fallout

Implications for CIOs/IT Managers

Accelerated Transformations

© 2010 IDC

An Economic ShockImpact of WW Economic Crisis:

Credit tightening / crunch

Lower market & business confidence

Spending cuts across most sectors => increasing unemployment

Lower confidence and declining international trade > lower GDP growth

Economic slowdown & recession

World Wide GDP Growth

Source: IMF, EIU

3,8%

2,8%3,0%

3,8%

4,1%

4,0%

2,5%

1,8%

3,1%

3,8%

3,8%

2007 2008 2009 2010 2011 2012

May 08 Forecast

October 08 Forecast

May 09 Forecast

October 09 Forecast

January 2010 Forecast

© 2010 IDC

Greek Reality

Negative economic climate, large deficit and financial measures affecting GDP growth and recovery

Increased unemployment rate

Loans approved by the banks have decreased dramatically

Tourism, falling FDI push Greece into recession

Large Construction sector and its supplier network have seen a decline in sales

EU funding, e-Government and other stimulus efforts may help kick-start economy

-5,0%

-4,0%

-3,0%

-2,0%

-1,0%

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

7,0%

2007 2008 2009 2010 2011 2012

World

Greece

Source: EIU, Jan 2010

© 2010 IDC

IT Spending Growth

Source: IDC 2008, 2009 Worldwide Black Books

Impact of Economic Crisis:

Major downturn in hardware segments, limited resiliency in software &

services

Some key differences according to region

Where We Stand with IT

WW IT Spending7,1%

5,5%5,9%

6,3% 6,1%

6,0%

7,1%

-3,1%

3,2%3,6%

-4,4%

3,3%

5,2%5,5%

2007 2008 2009 2010 2011 2012

Aug 08 Forecast

Nov 08 Forecast

Jul 09 Forecast

Oct 09 Forecast

Jan 2010 Forecast

© 2010 IDC Source: IDC 2009 Worldwide Black Book

2009 Worldwide IT Spending YoY Growth

9

The New IT Market Outlook

5.9%

-7.1%

-18.0%

-11.9%

-14.2%

-3.0%

1.2%

0.0%

-3.1%

3.9%

7.2%5.5%

2.9%2.1%

5.5%

1.7%

-15.0%

-13.0%

-11.0%

-9.0%

-7.0%

-5.0%

-3.0%

-1.0%

1.0%

3.0%

5.0%

7.0%

PCs

Servers

Storage

Printers

Networks

Software

Services

Total IT

Pre Crisis Forecast

Post Crisis Forecast

© 2010 IDC

Overview of Greek IT Market, 2009

HW equipment (including PCs, Servers, Storage, Peripherals and Networking)

accounted for 65.5% of total IT spending, while Svcs for 22.5% in 2009.

Source: IDC, 2010

IT Services22,5%

Packaged Software

12,0%

Servers2,4%

PCs29,0%

Storage 1,6%

Peripherals16,5%

Networking Equipments

15,8%

© 2010 IDC Source: IDC Q1 2010 Worldwide Black Book (Preliminary) 11

The New Greek IT Market Outlook

-30,0%

-25,0%

-20,0%

-15,0%

-10,0%

-5,0%

0,0%

5,0%

10,0%

Services Packaged software Hardware Storage

2008

2009

2010

Greece Total IT Market 2010

US $2873.79 millionForecast 2009-2013 CAGR 1.4%

© 2010 IDC Source: IDC Surveys,

What Areas Are Vulnerable?

N = US =286, International =97

Most Likely IT Areas for Cutbacks

12

45%43%

14%

31%

45%

24%22%

26%

16%

App Dev -

New projects

PC Hardw are

Upgrades

Server

Upgrades

Enterprise

App

Upgrades

MS Office

Migration

PC OS

Migration

Server OS

Migration

App

Maintenance

Help Desk

© 2010 IDC

What crisis? Accelerated trends

WW Growth from 2008-2012

1.1X1.9X

3.0X3.6X

5.1X

8.4X

IT Staff

(000) (M)

Servers

(M)

Mobile

Internet

Users

(M)

Non

Traditional

Devices (M)

Information

(EB)

User

Interactions

(num per day)

Challenges:

Dealing with Information Explosion

Protecting Digital Assets

Data Center Efficiency

Managing Company Performance

© 2010 IDC

The New Normal

IT Equipment

Stretch lifecycles

Improved utilization

Used equipment

IT Software

Highly selective buys

One-year payback

Open source software

IT Services

Maintain reliability

Improve efficiency

Even more outsourcing

Cost and

funding

management

Sourcing

and platform

strategies

Equipment

leasing and

software

financing

Life-cycle

management

IT financial

management

tools

Lower IT investment budgets

Just-in-time IT spending

Pressing new requirementsReactions

Challenges

Strategies

© 2010 IDC

Top 3 Business Initiatives by Vertical Market Europe 2009

Source: IDC European Vertical Markets Survey, 2009; N = 1898

Priority #1 #2 #3

Financial Services

IT Organization

responsiveness & efficiency

improvement

Sensitive data privacy/

payment transaction protection

Customer care/ customer

service enhancement

ManufacturingSales productivity/

performance improvement

Customer care/ customer

service enhancement

Sensitive data privacy/

payment transaction protection

HealthcareSensitive data privacy/

payment transaction protection

IT Organization

responsiveness & efficiency

improvement

Customer care/ customer

service enhancement

Telecom/MediaCustomer care/ customer

service enhancement

IT Organization

responsiveness & efficiency

improvement

Sensitive data privacy/

payment transaction protection

TransportSensitive data privacy/

payment transaction protection

Customer care/ customer

service enhancement

Business performance

monitoring

UtilitiesSensitive data privacy/

payment transaction protection

Efficiency sourcing &

procurement

Business performance

monitoring

Retail/WholesaleCustomer care/ customer

service enhancement

Sensitive data privacy/

payment transaction protection

Sales productivity/

performance improvement

Business ServicesCustomer care/ customer

service enhancement

IT Organization

responsiveness & efficiency

improvement

Sensitive data privacy/

payment transaction protection

GovernmentCustomer care/ customer

service enhancement

IT Organization

responsiveness & efficiency

improvement

Sensitive data privacy/

payment transaction protection

© 2010 IDC

IT Solution Priorities by Vertical Market

Source: IDC European Vertical Markets Survey, April 2009; N = 1898

Public

Sector

Transport

Telecoms

Media

Utilities

Manufacturing

& Distribution

Financial &

Professional

Services

Healthcare

• Personal Health Records

• Patient Mgmt & Accounting Sys

• Healthcare Portals

• Medical Imaging/PACS

Local Government

• Record/Document Mgmt

• Waste & Env’t Mgmt

• GIS/Cartography

• Citizen Smart Cards/Electronic ID

Central Government

• Case/Workflow Mgmt

• Budgeting

• Record/Document Mgmt

• GIS/Cartography

Manufacturing

• Production Scheduling

• Quality Management

• Inventory Planning & Optimization

• Sales & Operations Planning

Retail/Wholesale

• Inventory/ Warehouse Management

• Sourcing, Order Management

• Merchandise Management

Transport

• Logistics/Freight Mgmt Sys.

• Fleet Mgmt/Vehicle

Tracking

• Asset Mgmt & MRO

Telecoms

• Packet IP Operational

Services

• Voice/Data Portals

• Dealer Mgmt

Utilities

• Health, Safety & Env’t

• ETRM

• Plant Operations

Media

• Airtime Sales

• DRM

• Resource Mgmt

Banking

• Core Banking

• ATMs and Kiosks

• Branch Automation

• eBanking

Insurance/Other Finance

• Accounting Reporting &

Compliance

• Fraud Prevention and Detection

• Operational Risk Management

Professional Services

• Data Protection

• Service Level Mgmt

• Industry-specific SW (CAD, legal SW, …)

• Knowledge Mgmt

© 2010 IDC

Vendor Selection Criteria

Source:/Notes: N=77, IDC CEE Services Survey

Enterprises want a mix of technical capability and vertical insight

They want financially stable partners who employ great people

However, they also want their vendors to offer a good price and value for money

An existing relationship does not cut the mustard on its own

0 1 2 3 4 5

Independent of technology vendors

Good track record in social rspblty

Accredited by relevant HW/SW vendor

Existing relationship

Low cost

Financial viability

Industry experience

Technical skills of professional staff

Q. How important are the criteria below for selecting an

external IT service provider

(5 is highest and 1 is lowest)

© 2010 IDC

The Network Center Will Consolidate

Servers As Virtual

Machine Hosts

8.8 million virtual

servers vs. 9 million

physical servers ship

in 2009

Virtualization and data center

consolidation will continue

Network and availability

investments will increase

Management overhead will

increase

IT skills and organization will

need to evolve to support a

service-oriented infrastructure

18Source: IDC WW Server Tracker, 2009

13%

18%

2007 2009

© 2010 IDC

The Network Edge Will Expand

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

2008 2009 2010 2011 2012 2013 2014 2015

Millions of Communicating

Devices WW*

Computers & Communications

Equipment

Mobile Devices

CE & Industrial

* Excludes voice- and SMS-only phones

19Source: IDC Device Universe Model, Jan 2009

Enterprise bandwidth

demands will explode

Device support and asset

management demands will

explode

Data center architectures

will have to change

Operational systems will

drive new service level

requirements

© 2010 IDC

Enterprise Information Will Explode

20

New storage, information

management, content

management will be needed

New levels of security and

privacy will be needed

New tools for search and

discovery, including video,

voice will be needed

New relationship with

business units will be needed

– on policy, classification, data

ownership

0

5

10

15

20

25

30

35

40

45

50

2007 2008 2009 2010 2011 2012

Content Depots & Cloud

Unstructured data

Replicated data

Structured data

Consumption of Enterprise

Disk Capacity by Type

CAGR

26.9%

58.5%

(EB)

33.2%

83.8%

© 2010 IDC

Web 2.0 Will Create Problems

21

Laptop PC PDA

Text or Instant

Messaging

67%

Posting to

Blogs, Wikis,

Forums

46%

Percent Hyper Connected Both For Business and Personal Use

79% 64%

Enterprise-to-customer contacts

will grow by an order of magnitude

Interactivity and mobility will blur

work and personal boundaries

New client access tools will

fragment customer relationships

Web 2.0 will drive

Operational fragmentation

Customer confusion

Organizational issues

Web 2.0 also will drive new policy

needs – with IT in the middleSource: IDC Study on Hyperconnectivity

© 2010 IDC

Embedded IT

IT Marketing

Usage-Based

Charges

Business Objectives

New Staff/ Org

Job Rotation

New Reporting Structure

Capital Spending

Visibility

Business Process Responsibility

Six Sigma Process

Management

Mixed Outsourcing

Virtual Teams

Client Contact

Infrastructure money will

come from consolidation

New project money will come

from business payback

IT performance will be tied to

business performance

IT and business department

boundaries will become

porous

IT Will Have To Reorganize

22

© 2010 IDC

Essential Guidance

Economic environment will remain challenging – productivity gains important everywhere – IT will play a key role here

Focus on opportunities to translate opex savings into investment through improved asset utilization

Explore new delivery and business models increasingly available

Strong IT initiatives in tough times will build market share

Get the business units in the lifeboat

23