Analysts Discuss the Framework for Evaluating and Prioritising IT Investment and Divestment Activities at Gartner Symposium/ITxpo 2009, 2-5 November, in Cannes Gartner, Inc has developed the IT Market Clock, a decision framework to assist IT and business leaders evaluate and prioritise their IT investment and divestment activities throughout the entire asset life cycle.
- Advantage — From 12:00 to 3:00, during which time the market typically moves from an emerging to adolescent status. Levels of demand and competition are typically low, so the technology is procured for what it delivers, not for its placement in its own market.
- Choice — From 3:00 to 6:00, during which time the market typically moves from adolescence to early mainstream. This is the phase of highest demand growth, during which supply options should grow and prices fall at their fastest rate.
- Cost — From 6:00 to 9:00, during which time the market moves from early mainstream to mature mainstream. During this phase, commoditisation is at its highest level and costs will be the strongest motivator in most procurement decisions.
- Replacement — From 9:00 to 12:00, during which time the market moves from mature mainstream, through legacy and to "market end" (after which, the technology is no longer viable to procure or use). Procurement and operating costs will steadily rise and organisations should seek alternative approaches to fulfilling the business requirement.
“The relative commoditisation determines the distance from the centre of the IT Market Clock and the assets further from the centre are more commoditised. For most asset classes, relative commoditisation levels begin low, increasing steadily as the market matures and then decreasing again towards the end of life,” said Mr Gammage.
As a working example of the model, Gartner has applied the IT Market Clock to the client computing sector (see Figure 1). It positioned 20 classes of technology assets according to where they lie within their market life cycles and their relative commoditisation levels.
Figure 1. IT Market Clock for Client Computing, 2009
- available at http://www.slideshare.net/Gartner/gartner-it-market-clock
“The client computing market is undergoing significant changes and organisations must make critical investment and divestment decisions; the IT Market Clock for client computing helps IT and business leaders make those choices,” said Mr Gammage. “In particular, the IT Market Clock can help IT and business leaders create business cases for replacing assets that are approaching ‘end of life’ such as desktop PCs, and we recommend that organisations plan to selectively replace them with thin client terminals or notebooks. It also assists IT and business leaders to establish divestment and re-investment plans for key assets such as the Microsoft Windows operating system and to determine when to renegotiate sourcing contracts for assets like hosted virtual desktops, for which costs will fall as the technology matures and market volumes grow.”
The IT Market Clock for client computing shows that nine technologies require attention and resources within the next 12 months. Among them are Windows 7, which organisations must decide by the first quarter of 2010 when and how they plan to deploy, and application virtualisation, potentially of high value during Window 7 migrations and for which organisations should also establish deployment plans by the first quarter of 2010. It also found that cathode-ray tube (CRT) monitors will reach the end of their life in the next two to five years and Gartner recommends that organisations plan to remove them from their portfolio by the first quarter of 2013.
“With this holistic decision framework, organisations will be able to proactively manage their portfolio of assets and determine the right time to adopt and deploy emerging or adolescent technology options, establish road map plans for replacement and upgrade of existing technology assets, and perform reviews with suppliers for best saving opportunities,” said Mr Gammage. “Although this framework is focused on technology assets, the same approach could be applied to any class of business assets.”
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