Video"New technology buzzwords will be kept to a minimum next year and corporate IT investment will focus on projects that make a solid business case," pronounces Klaus Elix, the chief technology officer of AMS Europe, a consultancy. While that might actually be music to the ears of many CFOs, the underlying message is a gloomy one for businesses that have grown accustomed to throwing lots of euros at new technology over the past few years.
Do other consultants, analysts, vendors and venture capitalists share Elix's assessment? It seems so. CFO Europe spoke to a host of IT experts to see what they have to say about technology trends in 2002. What we heard was widespread agreement about the economy in general — each and every contributor replied to our queries with a recessionary lament coupled with a mention of September 11th.
With good reason. There is plenty of evidence to suggest that companies are rejigging their IT budgets in response to the dismal economy and the ongoing terrorist threat. Accordingly, two old buzzwords — return-on-investment (ROI) and security — will be heard more frequently next year.
That's not to say that there isn't anything to look forward to in the world of enterprise technology. In today's environment, it's clear that some technologies that might have sat on the shelf for another year will be put on a fast-track rollout across the enterprise, replacing formerly rising stars. After all, the basic tenets of capitalism are still in place in Europe. Businesses, as always, are under pressure to lower costs, improve information flows around the organization and protect their valuable assets. And they will use technology to take the heat off.
To help companies do that, we've identified ten technologies that are worth getting to know.
1. WEB SERVICE
Talking the Talk
Connecting two applications over the Internet — the foundation of E-commerce — should be fast and cheap. Instead, says Forrester, a research firm, it can take many months to achieve and it can soak up as much as $1 million in software and integrators' fees.
The good news is that this could all change in 2002 when Web services enter mainstream enterprise computing. Applications created as web services are built using industry standards, such as XML and SOAP. This common "vocabulary" means Web services running on different computer platforms can communicate with one another without expensive middleware.
The bad news is that not all Web services speak the same "dialect". Essentially, there are two camps. Microsoft, predictably, is responsible for one half of the schism. The software colossus claims its .NET Web services framework sticks to industry standards. Critics counter that .NET doesn't, making it difficult for users to switch to Java-based Web services, .NET's main competitor. And while the coalition around Java, which includes Sun Microsystems and IBM, is widely held to be more faithful to open standards, it still leaves companies with an unenviable choice to make.
The uncertainty leads Alexander Linden, a research director at Gartner, to warn companies against "creating mission-critical Web-services projects until a clear case for revenue-generation opportunities can be made." Yet that shouldn't stop companies from using the year ahead to put in place a framework for Web services, insists Paul Jones, at consultancy KPMG Metrius. After all, he says, once issues such as standards and security are addressed, these services will reduce dramatically the cost of adding new functionality and consolidating IT systems.
2. ARTIFICIAL INTELLIGENCE
Brainy Software
In his latest film, AI, Steven Spielberg envisions a day when boy-robots fool humans into thinking they're real. Robert Hecht-Nelsen also foresees a time when machine and human become indistinguishable. The difference is, while Spielberg makes fictional movies, Hecht-Nelsen makes real software used by some of the world's biggest companies.
Hecht-Nelsen's California-based company, HNC Software, has been putting artificial intelligence (AI) to practical business use for some 15 years. Its software is based on the idea of neural networks, which associate concepts and data in the same way the human brain does. By unleashing this technique on millions of past transaction records, HNC helps companies predict the future behavior of "good" and "bad" customers. The good customers detected by the technology are likely to give a company more business and provide up-selling and cross-selling opportunities.
AI tools will also soon go one step further. At the moment, human salespeople are responsible for interacting with a company's good customers. But in the future, predicts Hecht-Nelsen, the task will be handed over to cheaper, conversational computers. "This would make it possible for every consumer to enjoy the same kind of personalized service the British Queen does today," he enthuses.
That may be a bit of a stretch. And given the growing threat of terrorism, companies and governments may be more interested in using AI to stop bad customers than service good ones. Already, an alliance between HNC and PROS Revenue Management, which supplies pricing optimisation software to 15 major airlines, will help carriers flag suspicious flight bookings for further investigation. And both HNC and UK-based rival Searchspace are pushing AI technology aggressively as a weapon in tackling money laundering by terrorist organizations.
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