The World At A Watershed: The Macroeconomic, Demographics, and Technology Landscape of the Next Decade IDC Innovation Forum 2009, Milan John Gantz Chief Research Officer March 23, 2009

Agenda The Economic Implosion ICT Budget Fallout The Economy as Catalyst

An Economic Shock Source: IMF, Consensus Economics, Inc., EIU Worldwide GDP Forecast Interbank Lending Cranes in Dubai

50 Years of Slowdowns GDP vs IT Growth Source: EIU, OECD

50 Years of Slowdowns GDP vs IT Growth Source: EIU, OECD, IDC Historical Data

Impact on the CIO

ICT Budget Fallout

Where We Stand Source: IDC Q2, Q3 & Q4 2008 Worldwide Black Books WW IT Spending

The New ICT Geography 2009-2011 Aggregate Net New ICT* Spending ($B) Source: IDC Q4 2008 Worldwide Black Book; *IT plus data services Emerging = 56% new opportunity, 28% of 2009 $

Opportunities Hot Public Sector SMB Enterprise Social Media Security Management Business Analytics IT Outsourcing & BPO SaaS Wi-Max Search & Discovery Storage Replication Cold Commodity Hardware Project Based Consulting Mobile Voice IT Training Finance & Accounting ERP Sales Force Automation Manufacturing SW DSL Large Enterprise IT Gantz Watch Virtualization Mgt SW Real Time Analytics IT Driven Sustainability IP Surveillance Location Based Services Smart Grid Video Search Compliance Reputation Mgt SW Machine-to-Machine

An Economic Unknown $1-3 Trillion For Bank Bailouts Tax Cuts Smart Grid SMB Incentives Health Care Infrastructure Broadband Auto Manufacturers Green Building

$1-3 Trillion For

Bank Bailouts

Tax Cuts

Smart Grid

SMB Incentives

Health Care

Infrastructure

Broadband

Auto Manufacturers

Green Building

The Potential Impact of Stimulus Plans WW ICT Spending Growth Source: Q4 2008 Worldwide Black Book, IDC Estimates WW ICT Spending (B) $250 Billion over 4 Years

The Economy as Catalyst

The Demographic Catalyst Percent Penetration in Emerging Markets, 2009 23% 44% 60% 67% 72% 84%

The Technology Catalyst WW Growth from 2008-2012 1.1X 1.9X 3.0X 3.6X 5.1X 8.4X Efficiency Resource Sharing Complexity Economy of Scale Off Premises

Artifacts of Tomorrow

Innovation During Recession

Innovation During Recession Percent of Fortune 500 Companies Incorporated During Recession Source: Gary Beach, CIO

Five Key Steps Manage working capital aggressively – via inventory, AR, etc. Increase sales and marketing expenses Use the downturn to make acquisitions Divest non-core assets early Improve debt to equity

Manage working capital aggressively – via inventory, AR, etc.

Increase sales and marketing expenses

Use the downturn to make acquisitions

Divest non-core assets early

Improve debt to equity

Essential Guidance The leading edge will pull further ahead Business transformation will take place – voluntarily or not There will be no status quo for ICT management Suppliers, government, and end users will need to work in concert

The leading edge will pull further ahead

Business transformation will take place – voluntarily or not

There will be no status quo for ICT management

Suppliers, government, and end users will need to work in concert