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Analyst outlook: Hottest developing markets and mistakes to avoid

New analyses predict strong security markets and a sad record on outsourcing.

Analyst predictions aren't a completely reliable indicator of what will happen in a particular market during the next few years — or even one year. But they do sample the zeitgeist and, if nothing else, offer ways to open a conversation with customers about where they'd like to go (and what they'd like to buy) in the relatively near future.

WLAN security

This week In-Stat highlights a potential selling point for value-added resellers (VARs) with expertise in either networking or security with an alert that wireless local area networks (LANs) in most businesses are still less secure than they should be.

The report, "Mobility and Security: The Perfect Storm Ahead," estimates that network and wireless security will grow into a $4.4 billion business by 2010.

Almost three-quarters of the end-user companies surveyed use wireless LANs to some degree, the report said. And there is plenty of security to be built and maintained in carpeted conference rooms and lobbies." But the real growth will come in securing non-traditional devices and spaces, as telecommuting and mobile work continue to spread the workforce across a wider geographic space.

By 2010, 94.9% of business client devices be mobile PCs of one type or another, with Wi-Fi or cellular connections, and cell phones with both Wi-Fi and cellular links, according to the report, which is available at In-Stat.

Outsourcing comes in

A report from DiamondCluster International, Inc. brings the welcome news (to U.S.-based VARs) that the outsourcing wave has crested and is receding. While 64% of companies surveyed said they intend to increase their offshore IT spending over the next few years, that number is an all-time low for this survey; it was 70% last year and 84% in 2004.

Only 47% of companies that hired offshore companies said all their expectations are being met; but only 29% of those that hired domestic companies said the same thing.

Not that the offshore companies have it easy; 28% of end-user companies fired one or more offshore outsourcing companies. But 42% of domestic contracts ended the same way. Of all the terminations, 53% were because of poor performance by the providern; only 16% were due to unrealized cost savings, which is a perennial complaint among end users.

India, by the way, still has customers at about 75% of the companies surveyed. But 48% of buyers expect to buy services in China as well.

The report is called the "2006 Global IT Outsourcing Study,"Diamond Management & Technology Consultants.

Just having knowledge isn't enough

 

Service organizations tend to be heavy users of knowledge management, according to a Service Excellence Research Group (ServiceXRG) and eVergance, especially technology companies whose expertise tends to be concentrated in the heads of a few gurus and needs to be shared with the rest of the staff.

The key to making it successful is the amount spent on building and maintaining the knowledge management system, the report said. On average, existing knowledge management systems use 8.2% of the support budget and take up 3.1% of total support-staff time.

That said, coercive methods of making sure the knowledge is up to date, such as implementing a knowledge quota that support reps must reach tends to be ineffective, the report said. Among other negative results, more than half the documents in an average KM document database are used rarely or never.

The report is called "Knowledge Management — Strategies, Benchmarks and Best Practices."

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