Expert View

January 8, 2004
XML, SOAP to drive Web services growth: Forrester

BANGALORE -- As chairman and CEO of Forrester Research, George F Colony, is one of the most recognised analysts in today's world of technology. During his 22-year career as an analyst, he has been helping executives at large businesses to use technology for driving revenue, profit and market share. Here, the master analyst shares his perspectives on tech usage with Convergence plus. Excerpts from an interview.

Convergence plus: How is the tech spend scenario in the US?
George F. Colony: Technology spend by the US corporates is beginning to happen after a gap of three years. Technology investments by these companies are expected to grow at 4 percent in 2004, as opposed to the estimated -1 percent growth for the current year.

CP: What are the areas that will see high IT investments?
GFC: IT investments in the consumer facing applications would see high growth. The latest Forrester survey involving around 850 companies in the US, said that the top IT spenders would be retail, insurance and consumer services segments. Investments in network infrastructure, such as networking equipment and hardware would be high. Companies are likely to spend big bucks in the upgrading of IT security and disaster recovery solutions as well.

While computer peripherals will see a 9 percent growth in 2004, as compared to -4 percent in 2003, software is likely to grow at 6 percent during the same period. In the transition from the physical to the digital world, 14 billion devices would be connected by 2010. Around US $2.7 trillion will likely be invested in the Net devices connectivity, and Indian IT services firms must leverage it.

CP: What will be the hot technologies for corporates in future?
GFC: We see extended Internet involving handheld devices, home appliances, vehicles and other lifestyle objects gaining a lot traction as the world is moving from physical to digital. As a result of this, over 14 billion devices will be connected by 2010, unleashing the networking of things. Books and flowers with RF-tags are already being shipped in the market for better supply chain management. This new phenomenon has the potential of generating a market size of US $2.7 trillion in terms of products and services. The Indian companies must prepare themselves to grab this huge market opportunity.

CP: What role will Web services play in the emerging digital world?
GFC: Web services are nothing but the digital language for easily communicating among companies, divisions and individuals. Moreover, Web services are not the Web and not services, but Internet middleware that enables you to link to customers, partners and operating groups.

With Web services at the core, it will spawn the "XInternet," an executable and extended Internet, and "organic IT," easily linkable IT systems. Organic IT will replace today's fragmented IT infrastructure inside companies with a connected environment. Organic IT is cheaper, shareable and flexible.

Web services offer a great deal of flexibility to the users in terms of the vendor and computing platform they choose. Standards like XML and SOAP will really drive the Web services growth. Web services could enable corporates to conduct same activities at 1/10th of the costs as compared to the traditional way of doing business.

CP: What is the difference between the Internet and the Web?
GFC: They are completely different. The Web is the wire and the Internet is the software architecture on that wire.

CP: What is the ideal way of managing technology within an organisation?
GFC: The key is to bring IT projects on time, under budget and to the business buyers' satisfaction. The IT staff, marketers and business people within a company have to work together to make IT investments pay off. It is a collaboration game between the T-shirts (techies), the turtlenecks (business people)and the ties (marketing folks).

The 'more' tech spend does not always translate into more benefits. The better way of managing and spending IT can yield higher results. We have an instance of a corporate spending 3.3 percent its total sales in technology reaping better results than another company with a higher tech spend at 4.5 percent of its total sales.