Incremental and departmental implementation of BI software will continue to be the norm in the short run. Enterprises will remain cautious to large-scale implementations. Furthermore, average deal sizes are unlikely to grow in the region in the face of a more crowded BI market.

Homegrown vendors will continue to gradually increase their market share, albeit predominantly in their home markets and among the less lucrative SMB segment. Local vendors providing BI tools software typically benefit from government policies, plain vanilla type of packaging, and pricing as well as a better understanding of unique country cultures.

BI capabilities are expected to improve. Applications are expected to be more tightly integrated, allowing for easy but controlled access by the employees. Closer integration of querying, reporting, online analytical processing (OLAP), data mining, and data warehousing functions will be required to speed up the decision-making process, and to ensure reliability and quality by enabling users to obtain enterprise wide information more easily across their organization's numerous databases.

Searching will be more user friendly and faster, not so much as the rate or capability as Google today, but it will certainly put pressure on software vendors to fill the gaps.

Identity and Access Management Takes Center Stage, Driven by Compliance: Recent high profile data losses that could have potentially led to identify theft have highlighted the various industries and regulators' concerns about IAM.

The IAM market is buzzing with activities, and there will be some exciting developments in 2006: IAM solution implementations are often long-drawn, complex, and may require business process re-engineering. This translates to high costs and large resource commitments. Customers will invest in solutions that allow them to start small, but can be incrementally scaled up when the need arises in the future.

Enterprises are beginning to view IAM solutions in the context of risk management for its applications infrastructure, and not as a standalone solution. For instance, IAM solutions are often seen as the basis on which compliance management is simplified and centralized security management for different applications is achieved, and the investments are justified on these arguments accordingly.

As the IT infrastructure is increasingly weaved into their business processes, organizations need smooth and seamless identity management across disparate applications and platforms. They are increasingly shying away from identity management solutions that may lock them into proprietary technologies. This avoids vendor lock-in and maximizes the chances of interoperability as applications and new platforms are added to the firm's infrastructure. Although there is no single de-facto standard for IAM (yet), enterprises favor solutions that support the major industry standards. As vendors busy themselves with upgrading or integrating their newly acquired IAM capabilities into their core products, many are also announcing at the same time their solutions' support for industry identity standards such as Liberty Alliance specifications and WS-Federation. As standards mature, users will assume interoperability of IAM solutions to be a given, not a feature.

Global players aside, there are several strong local players in the APEJ region, including Shanghai Koal (PRC), Softforum (Korea), and JIT (the PRC). Although these players are not well known internationally, they are established in their local markets and possess very strong channel and partner networks. In their local markets, they pose formidable competition to even the strongest global vendors.

Underpinning this market growth will be increased concerns on the possibility of large-scale identity thefts, data control issues, and the business and legal consequences that may ensue following unauthorized access to data. Compliance is the primary driver triggering IAM investments decisions. IDC predicts vendors in APEJ to achieve total software licenses revenue of $200 mn in 2006 on IAM technologies, representing a yearly growth of 19% from $167 mn in 2005.

Dynamic Resilience Becomes the Ultimate Goal: From the Asian tsunami to large multinational corporations losing highly confidential financial information, corporate culture has been given ample examples of how potential threats can affect businesses. IDC's Continuum 2005 survey find 27.8% of all businesses in APEJ do not have any business continuity solution deployed. This is a relatively large number that is fated to decrease as companies become more dependent on their IT infrastructures and as security awareness continues to grow. Security as an issue and as a strategic consideration is the one thing that has not lost momentum in the ever-changing IT world for many CIOs and business strategists.

Dynamic Resilience will not be limited to cost and return for a company but will become a holistic strategy of how one conducts business. More and more, the entire business needs to join in on the efforts of security, policy planning, disaster recovery, testing, and so forth to embed the planning and practices into the corporate culture. Dynamic Resilience is not a simple issue, and will encompass acquisition and management across security and business continuity practices across IT hardware, IT software, communications, and services.

Some factors that will move more companies in this direction are: An increase in awareness and willingness to implement security process and strategic changes in the current business environment by corporate planners.

Dramatic events and the frequency of these events are causing CXOs to think seriously about their current situation and how robust their IT infrastructures are (eg, Asian tsunami, London city bombings, and Card Systems data loss).

Government entities continue to be active in the conduct of businesses and how information flow should be monitored, processed, and stored. Many of the countries in the region are implementing some form of legislation for their enterprises or for those that wish to do business in their environment. Globalization has spread to many companies over many regions and having a secure internal framework is critical for day-to-day business functions. As more holes in the corporations network multiply, IT engineers need to make certain to fill those gaps.

Which New Business Models will Vendors Push?
While users and their organizations take the fast track towards ubiquitous, secure, and reliable connectivity, the industry itself will continue on its path toward maturity.

Business models that are no longer delivering the requisite returns will be transformed into better, and sometimes, disruptive ones.

Access to Intellectual Property Drives a New Kind of Partnering: Most established system vendors as well as horizontal enterprise application vendors who have not begun to target consulting firms and independent software vendors (ISVs) that provide vertical-specific line-of-business applications into the market, will begin to do so in 2006.

IT services oriented firms (SIs and consulting firms) as well as ISVs are and will continue to grow as influencers for hardware and software sales moving forward as more end-user organizations start insisting on the vertical-specific knowledge from their IT providers. ISVs that provide the core central application in a technology solution are in a position to influence customer decision making with regards to the selection of complementary hardware and software offerings that make up the total solution.

Local systems integrators and consultants tend to possess relationships with C-level executives and senior LOB managers within the end-user community. In certain cases, they will also lead the selection process for the core line of business application in the solution stack and, therefore, are important partners for certain ISVs at the local level. ISVs that provide the line of business applications will tend to recommend the system vendor that has ported their application to run most effectively on their hardware platform along with complementary software applications.

Open Source Gains Traction in Specific Markets: Industry leaders historically earned their successes by keeping tight control over product development, with protected intellectual property rights. However, the go-it-alone model of innovation is an endangered species, and incorporating a community-based innovation model (eg, open source) is quickly becoming an important ingredient for market leadership. In 2006, IDC believes that building more open innovation communities will be a big focus for much of the industry.

Making money through traditional methods, such as sale of the use of individual copies and patent royalty payment, is more difficult and sometimes impractical with open-source software.

Virtualization and VoIP are also landing strong on the open source platform. IDC believes that these disrupters' impact on the industry will be profound.

Service Delivery Models Continue to Morph: The service delivery model is in a state of constant evolution, due to a combination of both client- and vendor-driven activities. This process is in a state of acceleration.

Offshore outsourcing, utility-based services, and increased automation are all viable options for CIOs and their service providers to consider. In addition, we are seeing increased overlap between IT services and business process outsourcing delivery (IBM's acquisition of Daksh), and even network-based service providers and BPO (NCS of Singapore as a BPO provider).

This is coming about as a result of increasing numbers of countries demanding best-of-breed services as the key requirement while putting less emphasis on the mode of delivery. This trend is impacting all of the discrete outsourcing areas where companies are looking for vendors who have the technical and business know-how at a competitive rate (which is where the offshore delivery has highest impact). IDC defines “smart shoring” as a situation where the service provider uses a combination of offshoring and onshoring to deliver the services to the client (based on the user requirements/needs). In addition, the base of offshore delivery will move from location to location as skills and costs change.

This will mean that for enterprises there is going to be a requirement for improved vendor management skills, a non-emotional decision-making process, and the ability to translate this flexible service delivery to all business processes from IT to procurement.

IDC (International Data Corp)
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