© 2008 IDC

Enterprise IT in the “Post-Disruption” EraOctober 30, 2008In-Hyung BaikAssociate General Manager

© 2008 IDC

AgendaAgenda

2

§ Post-disruption

§ Building an alternative IT spending scenarioü Worldwide IT Market outlookü Korea IT Market outlook

© 2008 IDC

Dis-rup-tionDis-rup-tion

3

a situation in which something is prevented from continuing in its normal way because of problems and difficulties

Disruptive Routes to Market

Disruptive Customers

Disruptive Offerings

Three Dimensions of Disruption

ü

© 2008 IDC

Line-of-Business ExecutivesLine-of-Business Executives

What they want from their CIO/Senior IT Management

3. Understand our business better

4. Speed up (business) project delivery

2. Make IT more dependable and secure

1. Deliver more high-business value services

© 2008 IDC

What’s New …What’s New …

Next-Gen SIs(SaaS-based)

Business Services

Innovation Communities

Mobile Internet

(Online)

Appliances

Everything-as-a-Service(Apps, Information, Infrastructure)

Dynamic IT/SOA

SMB Long Tail

BRIC… and Beyond

Rising LOBInfluence

Consumer MarketInfluence Mobile Internet

(Online)

Appliances

Everything-as-a-Service(Apps, Information, Infrastructure)

InnovationCommunities

© 2008 IDC

Everything-as-a-ServiceEverything-as-a-Service

• Software

• Services

• Hardware

• Software

• Services

• Hardware

OfferingDelivery

Model

“as”

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Market Makers (& Ecosystems) Jump Feet First Into “Everything-as-a-Service”

Market Makers (& Ecosystems) Jump Feet First Into “Everything-as-a-Service”

• Market makers – notably IBM and Microsoft – will move strongly into Software-as-a-Service

§ Cisco and Google also

• Other Segments Accelerate Online Shift

§ (Web 2.0) Data Center-as-a-Service

§ Storage-as-a-Service

§ BI-as-a-Service

• Ecosystems shift online: new tools, new players

§ Online solution configurators are critical

§ Next-generation “-aaS” SIs

© 2008 IDC

“Software as a Service”“Software as a Service”

§ SaaS Tipping Point in '07

üIBM will create an online marketplace on WebSphere

üSAP, Microsoft will accelerate SaaS strategies

üLots of SaaS startups

§ LOBs “get it”…

Q: Support concept of purchasing software as a business/hosted service?

CIO

No

Yes

LOB

No Yes

© 2008 IDC

No/Low-Skill Appliances for On-PremiseNo/Low-Skill Appliances for On-Premise

• Next-generation appliances(“appPods”)

• One (or two) server market-makerswill introduce this model in a big way in ’08

§ And … the leading SaaS disrupters will participate!

§ Internet-connected§ Pre-integrated, downloadable software

appliances § No/low on-site skills needed

© 2008 IDC

The (Mobile) Last MileThe (Mobile) Last Mile

• A Flood of “Web Gadgets”

•Open Mobile Internet

§ Many major mobile network operator networks will open upin ’08/’09

§ Intel is placing big bets in ’08, ’09

§ 1–2 palms wide, wireless Web-connected, consumer-priced, good at one or two things

© 2008 IDC

Convergence 1.0 not same as Convergence 2.0

§ Convergence 1.0 is on mobile device level

– Mobile device appropriates attributes of other consumer electronic devices

– Networks remain distinct, easy to control

§ Convergence 2.0 is on the network level

– All consumer electronic devices may directly connect to the network

– Common IP protocol makes it difficult for operator to exercise control

§ Convergence impact on operator control unclear

– Dual-mode devices may erode operator control

©2007 IDC 11

Convergence 1.0 & 2.0Convergence 1.0 & 2.0

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Convergence, Cooperation, Conflict?Convergence, Cooperation, Conflict?

Telecom

Internet

Media

§ Telecom, broadcasting media, and the Internet — all converging and competing in the same content delivery space

§ Result is collision of worldviews, business models (e.g., ad-based v. subscription-based)

§ Leading players seek to acquire core assets they deem critical for success in converged space

§ Seek to lead, and shape necessary eco-system

§ Colliding industries, “creative gales of destruction” force players to experiment with new business models

§Operators, device vendors, IT and media firms, chipset vendors — all jostling for dominance

§ User experience emerges as new battleground

© 2008 IDC

The New “Innovation Infrastructure”The New “Innovation Infrastructure”

•“Collaboration”(connect the brains)

§ Enterprise social networking

§ 14% have deployed, 27% additional plan in ‘08

• “+ Information”(generate & analyze the information)

§ 10X growth in 5 years

§ Will flip “enterprise information” to primarily externally-sourced

•“= ‘Eureka 2.0’”

§ IBM, Microsoft, Oracle, Google

§ HP, EMC, Cisco, Adobe, Symantec, et al.

© 2008 IDC

Essential Guidance

Business

Relevance& Value

Adopt

Quickly

Access to

Information

Affordable& Open

Innovative

IdeasSupport New

Innovation Models

Simple to Adopt

& Affordable

Solutions-

packaged

Mobile/

Accessible

New Information& InnovationInfrastructure

© 2008 IDC

New Design Pointsfor the “Post-Disruption” MarketplaceNew Design Pointsfor the “Post-Disruption” Marketplace

Post-DisruptionPre-Disruption

Small/Medium, Consumers

Emerging Economies

IT “Embedded” in Business Service

Business-Value-Oriented Partners

Huge Partner Communities

IT Vendor as the OEM

Install-Oriented Partners

Moderate-sized Partner Programs•PartnerRelationships

Online & On-Premise: “Boundary-less”

Simple to Adopt and Use

“Solutions-Integrated” (iPod/iTunes)

Mobility = the Rule

A World of Information (and Insights)

On-Premise

Solutions “piece parts”

Complex to Adopt and Use

Mobility = the Exception

“Corporate” Information

Developed Economies

Large Enterprises

© 2008 IDC

New Alternative WW ScenarioNew Alternative WW Scenario

16

© 2008 IDC

7.3%

5.6%4.1%4.3% 3.9%

9.5%

2.3%

3.8%2.7%

0.4%1.2% 1.2%

US WE APxJapan Japan WW Korea

Q2 Black Book

Downside Scenario

Source: IDC Q2 2008 Worldwide Black Book, GRO estimates 17

2009 IT Spending2009 IT Spending

New WW GDP

Scenario2.8

%

1.9

%

2009 Old 2009 New

© 2008 IDC

-3.0%

3.6%

9.2%8.7%

-0.5%

12.8%

7.1% 7.1%

5.1%

7.1%

1.4%

0.3%

2.5%1.7%

-4.0%

0.0%

4.0%

8.0%

12.0%

PC Peripherals Server Disk STR Net.Equip. Software IT Services

18

2008 & 2009 IT Spending by Product2008 & 2009 IT Spending by Product

Korea

-1.3%

4.4%

5.4%

7.3%

3.6%

9.8%

-0.8%-0.5%

3.6%3.7%

0.6%0.5%0.4%

5.7%

-4.0%

0.0%

4.0%

8.0%

12.0%

PC Peripherals Server Disk STR Net.Equip. Software IT Services

WW2008

2009

© 2008 IDC

Key Message

§ IT spending reductions are reasonable

ü IT spendings will not drop to zero or below as they were after dot.com bust and 9.11 terror

ü Alignment of IT and business

ü IT projects are multi-year base

§ About $3 billion of IT spending will be cut by directly afflicted financial services firms in 2009, not so much in the overall scheme of a global IT spending($1.5 trillion)

§ A much bigger impact will be felt from lower economic activities, lower consumer spending, falling home prices, and lower exports to the US

© 2008 IDC

Key Message(cont.)

§ Some IT projects will get cut or postponed – the strongest impact may be on project-based IT services. IT budget scrutiny will increase

§ Belt tightening will actually drive faster migration to new tech., virtualization, SaaS, IP-based Tele., enterprise web2.0 app.

§ Server markets will see slower growth from financial services sector directly

§ Inasmuch as new regulations are put in place, there will be more spending on software and services to enforce compliance