What's on IT's Shopping List?

We expect CIOs to keep up the pressure to wrest cost savings from IT operations, not least because those savings represent a major source of funding for new investments."

--McKinsey

The spring 2006 McKinsey Quarterly is just out and headlining this issue is the consulting firm's survey of 77 IT executives on spending plans for the year ahead. What's interesting is how cutbacks in low-priority areas (keeping overall growth to 3%) will help fund major investments in high-priority areas. Some of that money will come from IT-based productivity boosters, such as virtualization.

The study was written by Kishore Kanakamedala, Vasantha Krishnakanthan, and David Mark.

This is becoming a familiar story: Not all IT is high tech anymore. But where it is high tech, that's where growth happens (although not always). But some high tech is higher than others -- and where you stand in the innovation cycle can mean whether you are a net consumer or net contributor of investment dollars.

According to McKinsey, this year's high priorities include:

• Industry-tailored ERP
• VoIP
• Business intelligence
• Hardware upgrades
• Wireless
• Disaster recovery and high availability
• Security

Interestingly, virtualization (which McKinsey cites as a productivity enhancer) does not itself show up as often on shopping lists as these other technologies. Perhaps that's because the technology is very high tech. It is still relatively new and not as well understood. McKinsey might also have mentioned service oriented architectures.

The reason I say that is because I just finished working on a white paper (for my client GigaSpaces) explaining how these two technologies relate to each other in the transition out of tier-based (client/server) computing. You can read the beginning of the paper here.

Now somone should write a paper on how technologies on one part of the innovation cycle help pay for the investments in another part.