ICT analyst firm issues ten predictions for Asia Pacific

Although the Asia Pacific financial market is expected to encounter difficult times in 2009, an ICT research firm said that enterprise use of IT and offshoring will still be the catalysts in driving business efficiency and cost savings for the region.
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XMG, an analyst firm based in Canada and in the Philippines, issued the statement in conjunction with the release of its top ten 2009 predictions for the Asia Pacific region.

The research company said it conducted a survey at the end of 2008, which revealed that good guidance and wise investment tops the list of decision makers for 2009.

1. Top Concerns of Asia Pacific CIOs — Measuring the efficiency and effectiveness of ICT investments and minimizing the risks of ICT investments.

2. Asia Pacific will Outspend Other Regions — The Asia Pacific market is forecast to grow an estimated 6.3 percent, the lowest growth estimate seen since the Asian financial crisis of the late 1990s. However, despite the dismal forecast, the Asia Pacific region will outperform well above the global average of 2.4 percent in 2009.

3. Offshoring to be the Rare Bright Spot for ICT in 2009 — Very few segments of the ICT industry will hold up well in 2009. However, XMG said it expects offshoring (offshore outsourcing and captive) to continue to be in play in 2009 with an expected 24.2 percent growth forecast through 2010 dominated by the major offshoring countries in the Asia Pacific region namely India, China, the Philippines, Malaysia and Vietnam.

4. Workforce Revolution through Workplace Performance Evolution — Driven by the phenomenal growth of the offshore ICT segments in Asia Pacific and the high levels of attrition across captives, vendors and non-IT organizations, getting the most from the existing workforce and improving talent management practices are among the top priorities in 2009.

5. Co-location is Ready for Primetime — As growth of private data center costs continue to escalate making up an average of 50 to 75 percent of the IT budget, XMG forecasts IT colocation to grow by 17 percent as companies look to optimize technology’s value contribution, increase manageability and utilization, and minimize capital expenditures.

6. Achieving Economic Resilience through Mergers, Acquisitions and Divestitures — Unlike the period of the dot-com bust, the current economic downturn reveal several IT companies with the war chest to fund and make acquisitions to dominate select and targeted market segments.

7. Business Continuity Plan Gaps will Continue to put Asia Pacific Operations at Risk — With the recent geopolitical events (Mumbai terror attack on November 2008, Bangalore bombing on July 2008) and the geophysical prone characteristics of several Asia Pacific countries and urban centers (the Philippines, China, Indonesia), XMG forecasts an increase in the number of business continuity belt tightening activities since many DRP and BCPs are largely developed in isolation and unrealistically addresses and factor such risks.

8. Threat and Vulnerability Takes Center Stage as the "Above Ground Economy Deflates and the "Underground Economy" Inflates — With the expected increase in economic crimes due to several IT professionals that will be losing their jobs from the financial and insurance industries, cyber crime and the number of malicious software plaguing the internet will increase at unprecedented levels.

9. Downturn in Semiconductor Market will see Job Losses Across the Region — XMG economic analysts forecast the semiconductor industry to continue its decline and bottom out in the first half of 2009 with an expected 1.9 percent growth forecast. Recovery of the semiconductor industry is expected to be sluggish throughout the second half of 2009 with a rebound not expected until 2010. With over investment and excessive capacity, job losses are expected namely in countries such as Taiwan, China, the Philippines, Korea and Vietnam.

10. Current State of the Economy is an "Opning for Open Source"— Open source software will continue to expand in several Asia Pacific enterprises and continue to find its way into corporate developer use and become the underlying foundation of commercial software. With the global economy in a recession, the use of open source software will become a standard part of several enterprises in Asia Pacific (particularly those utilizing Java in its enterprise architecture, SAAS). XMG expects this trend to continue well into 2010 and organizations must establish specific policies to control how open source is utilized.

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BY MELVIN G. CALIMAG
Source：Manila Bulletin online