FT’s Techwatch blog has, this week, been suggesting there’s another tech bubble at play, focusing on the successes of Intel and Apple. Commenting on the results, the blog suggested tech was leading the charge for the recovery… ”most of the big tech companies have turned in pretty solid earnings in the past few weeks. Investors have been most interested, though, in their outlook for the coming year. By and large, they have been getting what they need, if little more–signs that tech customers are buying, and that they the recovery is gaining traction, with tech once again leading the way.”

Retailing giant Tesco has, according to the Harvard Business Review’s John Quelch, ”taken the lead in promoting its  [corporate responsibility] Sustainable Consumption Initiative, now being copied by Wal-Mart.”

In an article highlighting that CR programmes are not just surviving, but thriving, in a recession Quelch says that  Tesco “plans to require carbon footprint information to be placed on the label of every product sold in its stores.” He ties this back to the trend that shoes a growng segment of consumers worldwide considers CR evaluations important in selecting among brands across a wide range of categories.

Terry Leahy, Tesco’s CEO, wants to make it easy for consumers to incorporate environmental impact criteria in their purchasing. As he says: “To achieve a mass movement in green consumption is to empower everyone, not just the enlightened or the affluent.” Corporations cannot change the world on their own. They need to empower their customers to help change the world for themselves.”

For all of Tesco’s major suppliers, this must be a hell of an ask.  They are effectively demanding CR measurements and focus back up their supply chain. For those suppliers, these demands can surely only only be met by using actionable using data driven from IT systems. Certainly to accurately measure carbon footprint across product lines going foward will require IT support. This resonates with my earlier post this month that revealed CIO’s challenges for 2010 and beyond, that many CIOs are heavily focused on interrogating data to support decision-making. If you can help Tesco’s suppliers out with this challenge right now, you’re well placed.

IBM has just released its first global CIO study, free to download from their website. It covers the findings of over 2500 interviews with CIOs from across the world.

For those marketing to CIOs, the study points to contined unpredictable conditions  – 90% of the CIOs interviewed believe that there’s moderate or substantial change ahead for them. The top 3 factors driving this belief were agreed to be business model changes, budgets and macroeconomic factors.

Other major findings are that CIOs split their time between 3 main activities – making innovation real, raising the ROI of IT and expanding business impact. The levels to which they spend time on these depend very much on whether those CIOs work for high, medium or low growth organisations. 10 minutes spent reviewing the numbers in detail is worthwhile as there are some useful nuggets – the heavy usage of collaboration tools in the high growth environments is one. Another is the fact that all CIOs are seeing that IT is “key to making business models unique and difficult to imitate.” The relentless march of SaaS is obviously not causing a “utility” situation to arise just yet!

CIOs are spending their time now and in the medium term on plans that enhance competitiveness (83%) and virtualisation (76%). They are also highly focused on “making the data sing” – interrogating data to support decision making – especially around new ways to meet customer need. The unpredictability to the customer in the recession has clearly put a lot of pressure on IT to use data to reveal what they might do next.

For many marketers, one of the study’s most interesting findings is the conflict that’s increasingly inherent in the CIO’s role. Many of the verbatims and case studies draw this out… “I need to introduce new services without disrupting existing ones”… “I need to reduce costs and improve services”. It strikes me that acknowledging this in marketing material, and offering ways that these dichotomies could be resolved, might be one way to strike a chord with CIOs.

Just spotted this in Holway’s TechMarketView bulletin, “In our just-released MarketViews report, we forecast that the UK BPO market will grow 8% this year, the fastest growing segment in the UK software and IT services marketplace.”

It makes sense, based on our own observations in the article “Outsourcing thriving in recession“ which highlights what’s happening with revenue announcements from the big outsourcing players. As the main UK vertical markets start to streamline, outsourcing is well placed to take up the slack.  Good news if you’re an outsourcer. And if you’re not, it’s worth reflecting on what this means for where your next big sales might come from…

Last night saw the Prince’s Trust Technology Leadership group’s Big Debate on Supplying Global IT Services & Technology in the Next Decade, between the President of Fujitsu’s Global Business Group, Richard Christou and IT analyst and guru Richard Holway. First, a summary of the debaters’ respective positions:

Richard Holway

• The IT industry will never again see such staggering growth as it did during the 90s. We will roughly track GDP from now on (as a broad IT industry trend)
• Within this broad trend there will be significant winners and losers; the hardware industry is already being dented by the downturn whereas applications services and outsourcing will remain stronger
• At present, BRICs countries do not have strong enough economies within themselves to support strong IT growth, they are still heavily reliant on servicing the western world, either directly, or servicing local companies who themselves service the west
• Cloud will be THE driving force in IT for the next decade. Thomas Watson’s famous quote that there will only be a market for 5 computers worldwide may still come true in a sense – as people and companies increasing don’t want to own and service IT, they just want to use it. Perhaps the big 5 ‘computers’ will be cloud owners like Microsoft, Google, Amazon, the US government etc 
• Challenges for the next decade: changing to a service/SaaS approach may ruin many companies’ revenue model, it will be an expensive and disruptive time (cashflow and revenue models), the downturn has accelerated change in our industry and the leader is now the most threatened.

Richard Christou

• Not sure it’s quite so bad as RH makes out. Agree that BRICs countries won’t replace revenues for now. Downturns throw up discontinuities – you can plot new entrants against downturns in the market. Plus downturns provide the opportunity to look at what you’re doing and how you’re doing it. A period to invest.
• The new technology always takes longer to come through than expected. Supplier models such as SaaS can be seen as us coming full circle (ie. back to bureau model of old). Netbook/cloud can be seen as mainframe/dumb terminal. Revenue models for SaaS are highly relevant – who’s going to pay for the next generation of IT development if such businesses are so hard to run profitably?
• Cloud’s impact on business as opposed to consumers isn’t entirely as clear. There will be clouds, many owned by large real estate companies. Google/Amazon etc exploit the IT infrastructure that makes up the cloud but that leaves an opportunity for outsourcers to manage the them.
• Christou draws a distinction between Google/Amazon and enterprise needs. There are data ownership, confidentiality and cross-border information flow issues. There will be a cloud within the enterprise and IT companies will get a  lot of business here, as you will interface through many devices to your corporate cloud
• Managing a company supplying global IT services and technology will need close attention to local cultural alignment from a sales perspective. For example, outsourcing not really undertaken beyond US and fringes of Europe. Vision for the global IT company has to be locally strong operations which operate to standards/best practice but have ability to operate in local cultures highly effectively
• Managed services and outsourcing is not a bad place to be right now

Useful points made from the floor, and in response by the debaters:

• If IT becomes more of a utility, then in the future there will only be room for a few very large players. Similarly to Apple iPhone and its downloadable apps, will this happen in enterprise IT? Huge vendors becoming the channel for mini “widget” vendors?
• IT as a term is becoming a hindrance – we are an industry supplying business support and organisational outsourcing that is technology enabled
• Focus on investing in applications and outsourcing. No-one can do without IT these days – companies cannot manage without it, even in the downturn banks, travel companies, airlines, are all still spending
• Our mindset in IT should be about change, not recovery – it will never be the way it was. We will not go back to the industry we left, but the future is exciting and full of opportunity.

My top 3 summary for IT marketers is:

1) it’s going to be easy to jump on cloud/SaaS/virtualised bandwagons but much harder to carve out a decent and defendable position.

2) as IT expands from “IT” to “business support” you’ll need to understand your key accounts and segments better than ever to keep relevant. If you’re not looking to rearrange your marketing along these lines, then get started.

3) If you’re not one of the IT giants then keep an eye on them and get aligned. There was a strong feeling that the really big companies will become even more critical as a channel to market for everyone else.

The entire management team of The Marketing Practice attended the event. To see all of their conclusions on it, take a look at the comments fields of this post.

Companies are increasingly turning to outsourcing in a recession, claimed IBM’s CFO Mark Loughridge, as the company unveiled 4th quarter results ahead of expectations (net income of $4.4bn on revenue of $27bn) on Tuesday.

UKHotViews said on Jan 21st that “Wipro sees 24% European growth” and on 19th December claimed that (as a bellwether of the outsourcing market) Accenture’s 6% revenue growth is “solid and encouraging” with outsourcing the best performer, up 7%. The report claims “outsourcing really is the place to be in a downturn – helping your customers to save money.”

In its report “What’s in store for outsourcing in 2009?” IT World quotes Gartner analyst Linda Cohen as saying “Whenever there’s a downturn people outsource more, not less. Organizations want to take costs out wherever they can.” However, the piece claims that outsourcing will increasingly flourish in a “different” way – with cost, consolidation and the ‘green’ing of industries being major factors. We think trust will be a major factor too.

An enlightening podcast discussion on what effect the regulation of the financial services industry will have was released yesterday by Finextra, featuring a discussion between Michael Dawson of Promontory, (an ex-regulator himself) and Keith Saxton, Global Director of Financial Markets of IBM.

Here are some of the highlights and our conclusions on them:

• Management information systems available to regulators and firms are not robust enough to cope with increased demands. It’s still too hard to measure risk horizontally and technology is being looked at now to help cope with this
• There was a clear identification of regulators as opportunities – especially a potential “uber-regulator” – maybe the IMF, to look at systematic risk across financial markets
• The commentators said that there was a significant data issue – that FS companies needed to build effective models of liquidity risk, and technology was urgently needed to help solve this issue
• The desire for greater transparency is becoming more real, there’s more commitment to it. First stop will be governments opening up their “national darlings” to regulators. There was a view that only technology could help FS companies manage the huge number of compliance obligations in the future.
• Regulators are keeping a sharp eye out for banks “going too fast, taking on too much risk, banks who might need to slow down” – the banks that do well out of the turmoil will need the systems and processes in place to prove that they can chew what they bite off.

Viviane Reding, Member of the European Commission responsible for Information Society and Media made a speech yesterday on the theme “Why ICT research is even more important in the aftermath of the financial crisis.”

She made some interesting points about the amount of investment the EU is making (more than 2bn euro in 18 months), the areas where they want to encourage European growth (software and services, especially in the cloud). Some of the interesting parts of the article and what she had to say are below: 

“The ICT sector provides the heartbeat of the real economy, of our productivity growth, of our capacity to innovate and create jobs and of our ability to address key societal challenges.

What is on the agenda at ICT 2008? We will unveil details of the EU-funding for the next wave of ICT projects – more than € 2 billion of EU funding over the next 18 months.

If Europe wants for example, to lead the transition to a low-carbon, knowledge economy we can only do this with a massive and targeted development and take-up of innovative ICT solutions.

• In telecoms, European equipment manufacturers are leaders in broadband data networks and mobile devices.
• Europe is also a leading worldwide player in the design, integration and supply of embedded systems.
• Europe has secured 30-35% of the market for ICT systems embedded in products in domains like automotive, industrial automation and avionics.
• Europe is also a leading player in the semiconductor industry. Here European programmes have helped us build and keep these positions as the recent funding decisions by the embedded systems and nano-electronic Joint Technology Initiatives demonstrate.
• Europe also has leaders in enterprise software, equipping many of the world’s major companies and SMEs. World leading research on software technologies is also taking place in our public labs. We need to build on this and expand further our presence in software and services including in important areas such as web-based services 

The second principle is that we should be well placed to seize the opportunities of future markets. Let me highlight two such markets: The Future Internet and ICT for Energy Efficiency

Our investments in research and the opening up of the new markets will not be fully exploited unless we can make Europe a much better place to establish high-tech start-ups. Today, few European SMEs break through the ceiling of € 20 million turnover. Why is it that so few European ICT start-ups have come through to become global players?”

The whole article is available from Public Technology

Andrew Higgins, Tesco Chief Executive, pointed the way to a wave of IT spending by retailers looking to capitalise on new business models.

Tesco’s plans include extending its current financial services offerings to that of a “full service retail bank.

According to this Finextra article, the supermarket previously dismissed suggestions that it would offer mortgages because they were seen as unprofitable. However Higgins said the credit crunch – and the return of “rational pricing” in mortgages – appears to have created a potential opportunity.

And where Tesco goes, others will follow – needing the solutions and expertise to set up new business operations.

The Harvard Business Review’s November interview is “Cisco Sees the Future“, a free in-depth interview with the company’s CEO.

The article covers how the IT market is changing, how Cisco seeks to manage that change, where IT is going and how they tap opportunity in economic down cycles.