3 Headline-Grabbing Trends Will Still Dominate 2011
Big data, virtualization, and IT vendor consolidation made headlines this year, but where are these trends headed in 2011?
By David Besemer, CTO, Composite Software, Inc.
As the CTO of a data integration vendor, one of my responsibilities is to monitor IT trends against our product road map to ensure we’re supporting the ever-changing user and vendor landscape. Year end is a great time to reflect on the many conversations I’ve shared with our Global 2000 customers in the context of potential trends that emerge through their innovative use of technology to solve universal business problems. As a result of this analysis, I’ve identified the top three 2010 data trends and forecasted how they will affect IT professionals in 2011.
Trend #1: Big Data
In 2010, big data made a big bang. It became a hot topic in 2010, and rightly so, given the fabulous returns that enterprises are reaping from their big data investments. Creation of massive amounts of “Web-scale” data at Amazon, Google, Yahoo!, Facebook, and others has been a major driver, opening the door to new ways for businesses to address critical topics such as customer experience management. Predictive analytics, customer behavior analysis, churn prevention, fraud detection, and other big-data use cases with significant business impact also emerged in 2010. From a technology enablement point of view, a plethora of new data management options emerged, offering drastically superior price-performance characteristics over traditional relational database management system (RDBMS) or data warehousing offerings.
T.S. Eliot once said, "For every life and every act, consequence of good and evil can be shown.” In 2011, the big-data trend should continue to provide goodness in the form of excellent insights and greater business success. However, as a consequence, the resulting proliferation of fit-for-purpose analytic data stores across various lines of business, functions, and regions will create a seemingly unmanageable diversity of sources and uses that will break traditional, centralized, consolidation-based data integration architectures. For the majority of enterprises that need to share data across their many internal silos, virtualization of sources via a common enterprise data layer will be the most practical answer.
Trend #2: IT Vendor Consolidation
Large IT vendors’ buying small ones is not a new trend. However, this trend accelerated during 2010, as large vendors demonstrated an increasing willingness, some might say a desperate need, to innovate via purchase rather than internal R&D. For example, in the first ten months of 2010, Oracle acquired nine companies, starting in January with Silver Creek Systems and ending in October with Passlogix. This pace was double its 2005 acquisition rate.
Not to be outdone, IBM bought 15 companies, with Clarity Systems the latest in a list that includes data warehouse appliance leader Netezza, master data management (MDM) leader Initiate Systems, and business process management (BPM) leader Lombardi Software. Hewlett-Packard (HP) Company purchased six firms including Palm, Inc., 3Com Corporation and 3PAR. For enterprise IT teams, this consolidation has simplified some things: rationalizing architectures once the acquired offering is fully integrated in the larger platform, and providing the proverbial “single-throat-to-choke” when problems arise. These gains have come at a price: slower development of new features, reduced domain expertise, and lessened choice of, and influence over, their vendors.
We can get a glimpse of what’s ahead next year from a recent report, The Limited Partner Venture Capital Sentiment Survey, by Ernst & Young LLP, which found the number of active Venture Capital (VC) funds shrank 47 percent during 2010. As VC funding -- the primary source of capital for technology startups -- dries up, it appears reasonable to expect the innovation these startups would have provided will diminish proportionately. This trend, combined with the continued acceleration of small IT vendor acquisitions by IBM, HP, Oracle Corporation, SAP, and similar cash-rich giant corporations, will likely significantly reduce the pool of innovative IT vendors and solutions available to enterprises. Enterprises that seek strategic advantage via IT will have to more actively seek out and embrace the remaining independent innovators.
Trend #3: Data Virtualization
The market I watch most closely is data virtualization, a complementary approach to traditional data integration. According to the stages established in the technology adoption life cycle model popularized by Geoffrey Moore in his book, Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers (1991, John Wiley & Sons), data virtualization crossed the chasm in 2010, with pragmatic early majority customers coming to the fore with a range of use cases including business intelligence (BI) federation, data warehouse extension, Information-as-a-Service (IaaS) architecture deployments, and more.
All industries were represented, expanding far beyond the typical early adopters in financial services, pharmaceuticals, energy and telecom. Vendors from adjacent categories such as extract, transfer, and load (ETL), BI, and even search, rebranded their earlier offerings in an attempt to catch this adoption wave. Enterprises and government agencies that consider themselves late majority adopters are now comfortably gaining advantage from data virtualization across a broad swath of use cases.
With the proverbial data virtualization chasm crossed, pragmatists will look in 2011 to emulate the many use cases that have been built upon year after year over the last five years. These use cases have developed primarily from single projects that have been subsequently linked together into enterprise-scale data service layers. Established best practices and integration competency center models will be more widely available to the larger group of enterprises and government agencies looking to design and deploy enterprise-level data services layer architectures rather than growing into them as their early adopter peers did. I expect that greater numbers of enterprises with project-scale data virtualization deployments today will be getting in front of this enterprise-level trend in 2011.
As the CTO in the data virtualization market, I’m professionally fascinated by all data topics. Therefore, I find it interesting that my peers outside the data industry are increasingly referring to “information” as a valuable corporate asset (in contrast to the traditional assets of equipment and inventory). Two of my three identified 2011 information trends -- big data goes layered and data virtualization expands to enterprise layers -- should assist enterprises and government agencies to leverage their information assets to increase their rates of return. The third trend (a shrinking pool of independents) has the potential for spotlighting the innovations coming from the dedicated best-of-breeds determined to stay one step ahead of their Goliath peers.
David Besemer is the CTO of Composite Software, Inc. You can contact the author at