2. Copyright 2007 IDC. Reproduction is forbidden unless authorized. All rights reserved. Innovation through IT: Challenges and Opportunities CIO 2007 May 24, 2007 Helsinki John Gantz Chief Research Officer

3. ©2007 IDC Agenda IT Innovation Implications for CIOs The Challenges of Transformation

4. ©2007 IDC Billions Finland IT Budgets

5. ©2007 IDC Billions The Innovation Shockwave

6. ©2007 IDC

7. The Information Explosion Exabytes Created, Captured, or Copied in a Year Source: “The Expanding Digital Universe,” IDC, March 2007; sponsored by EMC

8. ©2007 IDC Exabytes Created, Captured, or Copied in a Year Source: “The Expanding Digital Universe,” IDC, March 2007; sponsored by EMC ~70% consumer generated ~85% incurring enterprise responsibility ~90% unstructured data IT: integrated enterprise approach to information discovery, classification, and management The Information Explosion

9. ©2007 IDC The Device Explosion WW Installed Base (Millions)

10. ©2007 IDC WW Installed Base (Millions)  New devices: RFID, sensors, machinery, surveillance  New services: location, presence  Expanded IP networks: voice, video, building automation IT: infrastructure and architecture become business decisions The Device Explosion

11. ©2007 IDC The Transaction Explosion Internet Commerce-Related Transactions Source: IDC Internet Commerce Market Model, V11, March 2007 Billions WW

12. ©2007 IDC The Transaction Explosion Internet Commerce-Related Transactions Source: IDC Internet Commerce Market Model, V11, March 2007 Billions WW  Multiple transaction streams: B2B to B2C micro payments  Mobility, broadband, customer self service  Reliability, reliability, reliability IT: now in the direct line of company revenue, service, and customer experience

13. ©2007 IDC IT Security Vulnerabilities Reported (CERT) The Mayhem Explosion Source: Carnegie Mellon, Center for Emergency Response Team

14. ©2007 IDC IT Security Vulnerabilities Reported (CERT) The Mayhem Explosion Source: Carnegie Mellon, Center for Emergency Response Team Attacks more frequent and sophisticated Hacker motivations have changed Mandatory reporting coming IT: prepare to spend more time in the boardroom

15. ©2007 IDC

16. IT Domain Growth  Everything on the IP network will be in the IT domain  IT responsibility will migrate outward and deeper into the organization IT organizations will need new ways to work with the business on new apps, integration, budgeting

17. ©2007 IDC Source: McKinsey; increase in total factor productivity 8% Project Returns* IT Deployment Mgt Practices <25%-tile >75% -tile 0% 20% 2% The SLA Challenge LOBs determine the fate of IT!

18. ©2007 IDC The New IT Organization Embedded IT IT Marketing Usage-Based Charges Business Objectives New Staff/ Organization Job Rotation New Reporting Structure Capital Spending Visibility Business Process Responsibility Six Sigma Process Management Mixed Outsourcing Virtual Teams Client Contact

19. ©2007 IDC Essential Guidance  Advanced IT organizations will need a service – not technical – mentality  IT portfolio management will require CEO involvement  Speed of IT system change will be a competitive weapon