Here Come the Predictions for 2004

As we wade into 2004, it’s a good time to prognosticate. So, here goes:

First, IT offshoring: It will be the hot button issue of 2004. As the recovery gathers momentum, there will be a hue and cry among IT staffers at user firms that some rationality be applied to this phenomenon, especially when large salaries, careers and bonuses are on the line. The industry needs a more sophisticated approach to offshoring--the wholesale shifting of responsibilities to far-flung spots will no longer be in vogue. The limits of offshoring will become painfully clear as the knee-jerk reactions evolve into more thoughtful strategies.

RMDS: As the Reuters-imposed deadlines edge closer, user firms will seriously explore alternatives to the Reuters Market Data System (RMDS), but they are not likely to find many. Still, Moneyline Telerate and GL Trade-combined-with-formerly-Misys offerings might give users pause if they can provide viable alternatives and complementary solutions (TTW, Nov. 10, 2003). But it will take more than a new marketing campaign and chutzpah to overcome Reuters and its market dominance.

The Godsend Linux-Intel: The revolution will continue to nip at Sun’s heels and Sun still has time to stem the flow of defectors. There will continue to be surprises such as the variable of AMD-with-Linux and the potential rise of new players such as SGI (the former Silicon Graphics).

Reuters in 2004: I would not be surprised to see Reuters turn a corner in 2004 and find itself on the upswing. Over the last two years, the vendor has let go of a slew of products, cut back on its overhead, invested in offshoring, and refocused itself on its core business. It has also been decisive in its efforts to move users onto RMDS. I would also not be surprised to see the improbable American Tom Glocer still around to reap the benefits of the tough decisions he had to make in a very difficult market.

Tibco Software: I hope we see Tibco jolt the middleware/enterprise application integration (EAI) market. Tibco is correct that the enterprise that surrounds the trading room does need to be better connected, whether it’s through JMS, Web services or Tibco’s own mix of goods. But Tibco will have an uphill battle, facing off against the IT-chameleon-of-all-time, IBM, and upstarts such as Sonic Software. Building more bridges among various trading units is an attempt by firms to exert financial and operational risk controls; the new plumbing will reflect the bottom-line thinking that will guide firms as they gear up to take advantage of the coming recovery.

Comments? Send them to me at egrygo@riskwaters.com.