Tuesday, January 24, 2012

Real Estate, Gold & Enterprise IT investments!

Sounds like a Bollywood film title?. Well, it was not intentional.

Wanted to enlist the corporate IT trends for 2012 based on social-economic trends that we see in the market. Irrespective of the industry, the larger global  trends have started to influence us quite a lot in the last few years. And I believe its going to remain the new normal in coming years as well.

From socio-economic trends perspective, What do we see out in the World?. What is so abundant that can influence our thoughts/behaviors? To name a few:

1. Geo-Political Risks
2. Economic Uncertainity
3. Indecisiveness
4. Neuro-Diversity of Global Population. Suddently, you see a surge of talent across the world, enabled by Technology.
5. Plenty of free Information
6. Cash (Yes. Contrary to the common belief, due to indecisiveness, lots of companies are sitting on huge cash)
7. Sky-rocketing Inflation
8. Increase in Consumables spending (against capital investments) - such as Mobile/Travel/Hospitality/Vacation - typically one-off expenses.
   (Live for the day, anyway nobody knows whats going to happen in the long-term attitude)

How do these factors influence our investments, in General?. What do we seek?.  The more uncertainity pervails, the more demand for certainity and stable investments. Purely because of the reason that Certainity/Stability are scarce in the new normal. Based on Economics, Anything that is scarce and in demand is likely to appreciate.  In the last few months, Gold as an investment instrument has reached record prices across the world. Real-Estate, atleast in Emerging Regions are reaching levels that were unheard of, in combination with Inflation.

What else is in more demand?. I can name a few that are in demand, but nacessarily the investment instruments per se.

1. Leadership with Vision/Courage/Decisiveness
2. Clarity, Rationale & Judgement - side-effect of Information overload
3. Capital Investments
4. Legal Infrastructure - what is right/wrong - neuro-diversity among people leads to ongoing conflicts/difficulty in consensus building
5. Entrepreneural culture
6. Top Talent that can take risks & deliver results
7. Communal harmony
8. Personal & Familiy Time

Contrary to vendor sales pitches that talk about 'Agility in Business' or 'Business Transformation', People in General seek stability/certainity when it comes to their investments. In my view, Instruments that have delivered good, guaranteed returns in the past, that can be liquidated faster, that appreciates, that is stable - will be more in demand.

Now, with this surplus and demand as the background, What kind of Technology investments that corporate IT would make in 2012 or next couple of years?

I would list the following

1. Managed VAS - mobile services
   Mobility is big time trend right now. It has influence on People's personal lives, professional lives and it would call for a significant leverage from Corporate IT. Corporate IT has so far hung up only on Mobile Applications. However, there is lot more mobility can deliver, in addition to applications.
   PwC has recently forecasted that by 2015, Mobile VAS market in India is going to grow to INR 55, 000 Crores, that is USD 10+ billions.
2. Vendors turning to Partners
   Lack of capital investments coupled with indecisivenss would delay signing contracts worth millions of dollars. If the investment is too big, the purchase cycle just gets longer and longer.
   If its too small, Companies are going to ask the vendor to sponsor for free. That's the fact!. Its happening across the value chain!. Why dont u do this for free?. This requires, the product/service vendors to figure out a new business model that would be profitable in the long-run.

3. Business/Go-to-Market Technology offerings
   Demand for Entrepreneurship and New Business Models/Products/Services will encourage a few to invest in new product initiatives.  Here, the companies would expect a credible partner who can share risks/profits together in the respective vertical. This could be Corporate IT as well.

4. Security/Legal/VPN Technologies
   Demand for security, legal technologies that would help in managing Governance, Risk and Compliance would sky rocket like never before.  The reason being that Corporates wants to be play defensive.

5. Investments in Hiring Technologies
   Rather than investing in solutions that promise improving employee engagement that is hard to achieve, companies would invest smartly in Talent Sourcing/Leveraging new technologies in this space.

6. Investments in Digital Marketing / Market Research
   Individuals/Companies would need to make themselves heard all the time using various channels that are available.    Especially, if they are serving in B2C space or services industry. Demand for innovative technology deployments in this space will continue to grow

7. Data processing Technologies delivered as Services/in Cloud
   Big Data definitely has a huge potential considering the current trend. But, Investing in Big Infrastructure may not be a good idea, atleast to start with. If someone delivers Data Services / Data Analytics from the Cloud, it's a hit!.

8. Technologies/Startups in Travel/Hospitality & Inter-personal Communication will take-off big time.
9. Consumer Technologies - Gaming/Mobile/Social Media/ Infotainment/NUI - again a no-brainer.
   Companies will also pilot some of these technologies in their enterprise products/services.
10. Technologies that can visibily save costs - Virtualization, Platform Upgrade & Private/Public Clouds

Comments/Inputs most welcome!