Forrester Research: Forrester Retail Insights IT First Look: Research And Event Highlights From Forrester

 26 June 2006
Revised Pricing Models For Application Maintenance Emerge In Europe
With many companies in renewal cycles and many new maintenance deals in the pipeline, application
maintenance is a promising market for the next five years. Looking for price reductions? Understand the components and parameters that constitute the price, and work closely with service providers
to implement better pricing models. Shared help desk support, shared coding teams, and remote maintenance teams grouped in excellence centers are approaches both parties should consider.


As Mobile Telecom Industry Matures, Retail Channel Lags
The mobile telecom industry is mature: market penetration rates are at 78% and average revenue per user (ARPU) has been flat for three years. But many of the industry's working practices have not changed since the years of rapid growth. Mobile operators' new business efficiency imperatives and retail resellers' objectives tied to customer acquisition are out of synch. Mobile operators need to define, negotiate, and implement a new approach to retail distribution. (Editor's note: So you're not a mobile telecom firm. Do you have customers? Have you looked at real-time marketing and customer life-cycle management and their effects on your alignment? This research is packed with insights you can use if you sell products through channels.)


Eleven Entry Points To SOA For Packaged Applications
Packaged applications provide a major gateway on the journey toward service-oriented architecture (SOA). Next-generation apps promise to use SOA designs and Web services to let customers tailor software to their specific business needs. As vendors converge application development on four major middleware ecosystems (IBM, Microsoft, Oracle, and SAP) that provide SOA design, enterprises must determine how many of these ecosystems and related projects can and will be supported.


The Internet Is An Enterprise-Class Network
IP VPNs provide secure connectivity across any IP network. As branches become more globally distributed and workforces continuously go mobile, the Internet has emerged as a viable network option. We now see companies in all industries relying on the Internet for daily operations. North American and European executives are investing in emerging IP VPN technologies like MPLS and SSL and are moving away from more established technologies like IPsec. Why? Because newer VPN technologies promise lower operational costs, more reliable
connectivity, and traffic prioritization for mission-critical apps.


India IT Spending Outlook 2006
While outsourcers, telecom, and financial services have fueled much of India's current economic growth, the Indian government also wants to establish the country as a reliable source of manufacturing. Cisco Systems, Intel, and Microsoft are committing multibillion-dollar investments to the country, but Forrester¿s Business Technographics survey data shows manufacturing firms expect a tough 2006 as they compete with China and other parts of Asia. Other notable results: Indian firms work with HP and Microsoft more than any other vendors, and more than one-third of Indian IT shops plan to increase spending in 2006 with both vendors.


Indian Firms' Hardware Vendor Spending Plans
Indian Firms' Hardware Vendor Spending Plans

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Rich User Experiences Empower Rich Internet Applications
Much of the buzz about Web 2.0 is around the proliferation of rich Internet applications (RIAs), which promise numerous user experience benefits. But building a Web application using fancy technology doesn't ensure a better user experience. As you incorporate RIAs into site designs, create a solid understanding of users' needs and implement structured testing techniques to understand and validate appropriate use and design of RIAs.
(Editor's note: This research features visual examples of Web sites that provide key RIA value-adds: sorting large data sets; controlling multistep processes; manipulating images; and using familiar controls and features.)

Forrester/ITAA US Tech Sector Index: Q1 2006
The health of the tech sector in Q1 2006 fell 2.9 points -- the first drop since Q1 2005 -- and receded off its four-and-a-half-year high. Losses were focused most heavily in the firm strength indices -- measures of vendor financials and technology prices. By itself, this is not terribly surprising. Forrester predicted just such a fall in Q4 2005's index, as many of the forward-looking indicators showed a correction in the works. In Q1 2006, three of the four forward-looking indices are up, which will likely translate into an overall tech sector health gain in Q2.


alt tag This loss has been driven predominantly by a substantial fall in US vendor profits and by decreasing US technology exports and imports. US imports have been growing at a slowing rate, and in Q1 2006 they fell overall. Because these foreign goods are most often intermediate inputs to US vendor products, a reduction in imports will translate directly into a reduction in the US high-tech product supply. Continued declines would signal that vendors are tightening inventories as a hedge against a potential slowdown, which would be bad news across the board.

Five New Forrester Waves
Key new technology decisions will be far simpler for users of these interactive decision tools. View detailed product evaluations and adapt the criteria weightings to fit your individual needs through the Forrester Wave Excel-based vendor comparison tool. In this new group, we discuss:

Enterprise Search Platforms
Fast Search & Transfer (FAST) and Autonomy established early leadership thanks to their extensive search capabilities, broad platform focus, and significant market presence. Endeca Technologies is also a leader with its mature search management tooling and increased focus on offering search as a platform. Google, IBM, and Microsoft are all strong performers but lack the breadth of capabilities and focus to be considered more broadly as search platforms.

Warehouse Management Systems For Retail Supply Chains
A lot of change has come to warehouse management in a short time: evolving consumers and consumer channels, convergence between retail and consumer product supply chains, and technology advances in WMS. How have vendors responded? Best-of-breeds still dominate, with Manhattan Associates at the top of the list. HighJump Software, RedPrairie, SSA Global, and Sterling Commerce are hard on its heels. ERP vendors Aldata Solution, Oracle, and SAP continue to duke it out among themselves while trying to close the gap with the pure plays.

Web Conferencing
Leaders: WebEx Communications Meeting Center garnered top scores because of its consistent high performance, coupled with the breadth and depth of the overall product. Microsoft Office Live Meeting offers excellent integration with other applications, and Adobe Systems Macromedia Breeze has superior flexibility.

Open Source Databases
The maturity level of open source databases is at its highest ever, with more choices, better support, and comprehensive ecosystems. Ingres, MySQL, and PostgreSQL are the Leaders, while Derby, Firebird, and Oracle are Strong Performers. For data warehouses, none of the projects offer strong native data warehouse-related features, but some third-party vendors help fill the gap with their extended solution offering for open source databases.

e-Forms Software
Once viewed as a necessary bureaucratic evil, e-forms are
increasingly used as a tool to systematically capture data, serve as an interface to a process step, and bridge the paper-digital divide. E-forms software sits at the intersection of data, content, and process. Adobe is a Leader, bringing together a user-friendly forms design environment with the ubiquitous Acrobat Reader rich client. IBM is a Leader providing unparalleled XML and digital signature support. Cardiff Software and Microsoft are Strong Performers, offering e-forms products appropriate for forms-driven horizontal business processes. FileNet is a Strong Performer aimed squarely at integrating forms into enterprise business processes.

Thanks, as always, for reading First Look, and please send me any requests or comments.

Merv Adrian
Senior Vice President
mervadrian@forrester.com

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