Predicts2011 Rebound Surge

Gartner Top Industry Predicts 2011:
Industries Rebound and Surge Ahead
Summary Report
®
Gartner Top Industry Predicts 2011—Analysis 2
Top Industry Predictions for 2011

By 2014, automobiles will be among the top three fastest-growing connected-device
platforms for Internet-based content.
By 2014, catastrophic system failures will force 75% of banks to change their core
application infrastructure approaches.
By 2012, a life science company will pay a $1 billion-plus fine for noncompliance with
government contracting/rebating rules.
By 2014, hardware purchases by K-12 school districts will be reduced by 30%.
By 2013, 50% of smart grid initiatives will be trumped by regulators’ discord with
policymakers’ energy sustainability agendas.
By 2014, 40% of healthcare delivery organizations will switch 20% of server-based

computing to hosted virtual desktops.
By year-end 2012, insurers’ investments in healthcare reform will decrease up to 50%,

creating inconsistent regulatory compliance.
By 2014, 35% of consumer-paid TV revenue will come from IP-based network

services, up from 2010’s relatively small revenue.
By 2012, system failure involving software in manufactured products will cause at least
one multibillion-dollar catastrophe.
By 2013, the average revenue from mobile commerce won’t exceed 1.5% of overall
sales for large retailers.
By 2015, more than 50% of government outcomes will depend on consumer or h

technologies.
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This is a summary review of Gartner top industry predictions from the Gartner Predicts 2011 Special Report. As economic conditions
improve, the so-called “new normal”—a radical change in the organizational and business environments trumpeted in 2010 as a result of
the financial crisis—has created new opportunities and challenges. Industry change is expected to continue in 2011, driving greater focus
on innovation, new business models and risk management.
Gartner sees two seemingly contradictory outcomes for industries as the economy rebounds: increased regulation and a resurgence of
growth and strategic initiatives among organizations. Enterprises must strike a balance between these clashing realities and ensure that
they are making appropriate investments to address both outcomes.
This report is a summary of a more-comprehensive research document available only to Gartner’s clients.
The full report includes:

• The Top 11 industry-specific predictions
• Key findings that led our analysts to develop their predictions
• The full range of market implications
• Actionable recommendations IT industry leaders should consider
• Related research to help you tackle your key initiatives in 2011
To learn how to gain access to this and other research that can help you achieve your goals, contact your
account executive or e-mail thoughtleadership@gartner.com.
Join us on Decmber 15 for an exclusive webinar, Top Technology Predictions for 2011 and Beyond. A replay will
also be available after the webinar.
Analysis
By 2014, automobiles will be among the top three fastest-growing connected-
device platforms for Internet-based content.
Market implications:
• Connected cars are expanding the value proposition of automobiles beyond basic transportation.
This will create new business and differentiation opportunities for the automotive industry and will
further highlight the importance of technology innovation and deployment.
• Developing a car-centric connectivity solution is challenging, given the complexity of automobiles,
long product development times and life cycles, and harsh usage requirements for automobiles.
This will lead to new supply chains and supplier evaluations. For example, the software provider of
the in-vehicle solution’s operating system will become equally important to the traditional hardware
supplier that designs the head unit.
Related Research:
• “Hype Cycle for Vehicle-Centric Information and Communication Technologies (Vehicle ICT), 2010”
• “Automobile of the Future: The Ultimate Connected Mobile Device”
By 2014, catastrophic system failures will force 75% of banks to change their
core application infrastructure approaches.
• Banks and investment services firms will need to reconsider their approaches to core applications.
• Banks are evaluating open systems as a viable platform for core banking applications.
• To meet expectations, SOA projects need extra technical and business support, as well as industry
standardization.
• Firms with group treasury operations must find less capital-intensive ways to implement and
operate their application infrastructures.
Related Research:
• “Hype Cycle for Banking and Investment Services Core Applications Technologies, 2010”
• “Architectural Orientation in the Financial Services Industry: SOA and SOA in Combination With
EDA Predominate”
Analysis
By 2012, a life science company will pay a $1 billion-plus fine for
noncompliance with government contracting/rebating rules.
• Fines for other behaviors, such as “off label” marketing, have already run into the billions. It is only
a matter of time before the lack of integrated systems, poor visibility into contracting processes
and lack of investment in contract analytics create a feeding frenzy of regulatory sanctioning.
• The $1 billion or more fine will not only have a detrimental financial impact on a life science
company of any size, but also tarnish the reputation and standing of that company.
• Investment in a revenue management solution, which includes government pricing and rebating,
can be recouped in less than 24 months by reducing the margin erosion and revenue losses that
stem from bad revenue management practices.
Related Research:
• “Hype Cycle for Life Sciences, 2010”
• “Transforming Pharmaceutical Product Distribution for 2015”
By 2014, hardware purchases by K-12 school districts will be reduced by 30%.

• Leveraging student-owned consumer devices will speed the move to digital content. CIOs will
utilize desktop virtualization and cloud offerings to reach client devices — effectively moving toward
becoming device-agnostic.
• School agencies will take advantage of the influx of consumer devices to scale back the purchase
of user devices. As education accepts and uses consumer form factors, hardware providers will
eliminate plans for education-specific user devices.
Related Research:
• “Key Issues for K-12 Education, 2010”
• “Rethinking Technology Integration for K-12 Leaders”
By 2013, 50% of smart grid initiatives will be trumped by regulators’ discord

with policymakers’ energy sustainability agendas.
Market Implications:
• Without the approval or acceptance by consumers and regulatory bodies, large-scale capital-
intensive infrastructure projects in line with national energy policy will, at best, be delayed. At
worst, they will be stalled indefinitely.
• Without these projects, it will be impossible to meet energy policy goals for the overall security of
supply.
• As the costs of energy policy implementation become increasingly politicized, the gap between
policy aspiration and the price consumers are willing to pay will lead to compromise and scope
reduction in large projects.
Related Research:
• “Management Update: Top 10 Business Trends Impacting the Utility Industry in 2010”
• “The Utility of the Future: The information Utility”
Analysis
By 2014, 40% of healthcare delivery organizations will switch 20% of server-
based computing to hosted virtual desktops.
• “Desktop virtualization” most commonly refers to the hosted virtual desktop, which provides
mechanisms for centralizing a thick-client desktop PC without the need to re-engineer applications
for centralized execution. It is made of server virtualization software to host desktop software, a
session management software layer to connect users to their desktops, and tools to provision,
monitor and manage the HVD environment.
• Although not fully mature, HVDs are already a viable technology for some users and scenarios
— particularly task workers such as call center and service desk technicians. An HVD, combined
with thin-client workstations, will be attractive in the patient room — where noise and heat can be
minimized with these technologies. Issues surrounding infrastructure build-out, software licensing
and total cost of ownership must be understood.
Related Research:
• “Hype Cycle for Healthcare Provider Technologies and Standards, 2010”
• “Top 10 Issues With Hosted Virtual Desktops”
By year-end 2012, insurers’ investments in healthcare reform will decrease up

to 50%, creating inconsistent regulatory compliance.
• Health insurers will continue to execute against hard-stop mandates, such as ICD-10, and
directional changes, such as portal tools needed for health insurance benefit exchanges. However,
these initiatives will be mitigated if there is any doubt created by unclear guidance from federal and
state regulators.
• Changes in the legislative environment will add further uncertainty to the mix. In this complex
environment, early adopters will benefit only if they can remain flexible to the potential changes
that might be needed. Organizations that concentrate on the hard-stop mandates and prepare for
directional changes can use uncertainty to their advantage by reducing their capital outlays while
things “sort themselves out.”
Related Research:
• “Medical Loss Ratio to Affect Entire U.S. Healthcare Sector”
• “U.S. Health Reform 2010: Health Insurance Organizations”
Analysis
By 2014, 35% of consumer-paid TV revenue will come from IP-based network
services, up from 2010’s relatively small revenue.
• The disruptive power of the Internet on media is driving shifts in the TV business. While
conventional TV content still holds sway on consumers’ time share, how they acquire that content
will shift dramatically through 2014.
• This prediction is related to one made in December 2008 in which Gartner predicted that 2010
would mark the first year that average revenue per household (ARPH) would drop for cable and
satellite video service providers.
Related Research:
• “Key Issues for the Media Industry, 2H10”
• “Hype Cycle for Broadcasting and Entertainment, 2010”
By 2012, system failure involving software in manufactured products will cause

at least one multibillion-dollar catastrophe.
• There is strong potential for software-related product failures. If manufactured products such as
cars, medical equipment and consumer electronics have 2 million lines of code, the best we should
expect is between 100 and 200 software errors. For example, General Motors and IBM recently
announced that the Chevrolet Volt has 10 million lines of code. Continued growth in the use of
software as part of manufactured products will increase product complexity, resulting in product
failures.
• Since software in manufactured products will proliferate faster than the lessons and best practices
of system engineering practices for software development, the risk of subtle, yet potentially
catastrophic, software defects increases.
Related Research:
• “To Err Is Human, So Test That Software”
• “Findings From Manufacturing Research: Embedded Software Must Still Link Back to Bills of
Materials”
Analysis
By 2013, the average revenue from mobile commerce won’t exceed 1.5% of
overall sales for large retailers.
• Mobile will have reached a magnitude of sales comparable to other non-store, non-Internet
channels like catalog and call center — but in a very short time frame. Although mobile may only
represent 1.5% of overall sales, its impact in other sales channels could be much greater. For
example, a consumer may add items to the shopping cart in an m-commerce application, but then
retrieve the shopping, check-out and pay on a full-size PC via the e-commerce site.
• The success of the mobile channel by 2013 should not be determined by its percentage of overall
sales, but by the sales uplift it can create across all the retailer’s channels.
Related Research:
• “How Can Retailers Get Started in Mobile Commerce?”
• “Developing a Mobile Retail Business-to-Consumer Strategy”
By 2015, more than 50% of government outcomes will depend on consumer or

h technologies.
• The growing standardization of cloud-based infrastructure and application services will not only
challenge government IT organizations that try to retain their independence, but also shared and
centralized initiatives that do not leverage such solutions.
• Employees will choose the right balance between the use of enterprise social software platforms
and consumer social media, depending on their individual requirements and work styles.
Consumer social media will be used for both external and internal communication.
• The retirement of aging workers and the influx of younger ones, who are used to consumer tools
and collaboration, will cause a greater impact of such tools on the outcomes they produce.
Related Research:
• “Government in the Cloud: Much More Than Computing”
• “Government 2.0: A Gartner Definition”
Learn more
Interested in finding out more about Gartner predictions for 2011 or other valuable insight to help
drive the success of your key initiatives?
Visit gartner.com/predicts2011 or e-mail thoughtleadership@gartner.com.
Follow what our analysts are saying on this and other topics: visit http://blogs.gartner.com/.
Join us on December 15 for an exclusive webinar, Top Technology Predictions for 2011 and Beyond.
A replay will also be available after the webinar.
Gartner Predicts 2011

Gartner Predicts 2011 details the shifting role of IT as technology is more tightly linked to business
outcomes. More than 50 Predicts reports cover a range of topics, from cloud computing and tablets in
the workforce, to supporting revenue growth and deployment of social media.
TOPIC
Predicts 2011: Addressing Key Advancements in Application Architecture
Predicts 2011: Adoption of Unified Communications Creates New Sourcing and Deployment Challenges
Predicts 2011: Aligning Enterprise Business Applications to Drive Business Outcomes
Predicts 2011: Anticipate Application Development Challenges Arising From Cost Optimization, Agile Methodologies and Multichannel
Customer Engagement
Predicts 2011: Application Integration: A Nimble Veteran of IT
Predicts 2011: Assessing and Revising Vendor Management Programs Key to Driving Value
Predicts 2011: Business Process Management Competencies Will Expose the ‘Haves’ and ‘Have-Nots’
Predicts 2011: Client-Computing Shifts Continue in Operating Systems, Hardware and Software
Predicts 2011: Cloud Computing Is Still at the Peak of Inflated Expectations
Predicts 2011: Context-Aware Computing Brings Significant Shifts in Consumer Behavior and Privacy Regulations
Predicts 2011: CRM Enters a Three-Year Shake-Up
Predicts 2011: CRM Sales Will Raise Performance Through Innovation
Predicts 2011: Customer Service Innovations in a Collaborative World
Predicts 2011: Data Management Disciplines Elevate Business Criticality
Predicts 2011: E-Commerce Will Reach for New Geographies, Channels and Payment Opportunities
Predicts 2011: Enterprise Architecture Shifting Focus to Business Value Outcomes
Predicts 2011: Enterprise Information Management Programs Connect IT and Business
Predicts 2011: Enterprises Should Not Wait to Find Solutions for Business-Critical Privacy Issues
Predicts 2011: Executive Focus on Revenue Growth Puts Added Pressure on CIO
Predicts 2011: Global Logistics Leadership a Strategic Imperative
Predicts 2011: Government CIOs Must Balance Cost Containment With IT Innovation
Predicts 2011: High-Tech and Industrial Value Chains Invest in Innovative Strategies
Predicts 2011: Identity and Access Management Continues Its Evolution Toward a Strategic Discipline
Predicts 2011: Improved Recoverability May Be on the Horizon, but Significant Challenges Remain
Predicts 2011: In the ‘New Normal,’ Governance, Risk Management and Compliance Are Inseparable From Business Realities
Predicts 2011: Infrastructure Protection Is Becoming More Complex, More Difficult and More Business-Critical Than Ever
Predicts 2011: Investments in CRM Marketing Technology Are Rising
Predicts 2011: IT Financial and Performance Management Gets Strategic
Predicts 2011: Master Data Management Is Important in a Tough Economy, and More Important in Growth
Predicts 2011: Network Capacity and Consumers Impact Mobile and Wireless Technologies
Predicts 2011: New Delivery Models and Proven Value Solutions Will Change IT Services Sourcing
Predicts 2011: New Delivery Models and Requirements Drive the Evolution of Finance, HCM and Procurement Applications
Gartner Predicts 2011 (continued)
Predicts 2011: New Relationships Will Change BI and Analytics

Predicts 2011: Open-Source Software, the Power Behind the Throne
Predicts 2011: Pattern-Based Strategy Technologies and Business Practices Gain Momentum
Predicts 2011: Platform as a Service: The Architectural Center of the Cloud
Predicts 2011: PPM Goes From Managing Projects to Managing Value and Change
Predicts 2011: Program Management Mistakes Will Sink Your BCM Boat
Predicts 2011: Storage, a Thicket of Digital Life in Evolving Internet and Entwining Storage Landscapes
Predicts 2011: Supply Chain for the Consumer Value Chain
Predicts 2011: Supply Chain Getting Competitive Again
Predicts 2011: Technology, IT Industrialization and Cloud Computing Clash With Obsolete Traditions for IT Service Buyers and Vendors
Predicts 2011: Watch for New Kinds of Content and Applications to Manage
Predicts 2011: Web Technologies Continue to Evolve Along Multiple Dimensions
Predicts 2011: When Social and Business Processes Collide
INDUSTRY
Predicts 2011: Bank and Investment Firms’ Core Applications and Application Infrastructure Are at Risk
Predicts 2011: Banks and Investment Firms Must Change IT Approaches or Face Catastrophe G00208088
Predicts 2011: Complexity Ready to Rattle the Healthcare and Life Sciences Supply Chain
Predicts 2011: Consumer Goods Companies Must Sharpen Commercial Capabilities to Capture Demand G00209129
Predicts 2011: Consumers Push Emerging Retail Channels Into the Mainstream
Predicts 2011: Healthcare Delivery Organizations Wrestle With the Challenges of Deploying Complex Clinical Applications
Predicts 2011: Insurers Must Focus on Customer Retention, Operational Excellence and Compliance
Predicts 2011: Life Science Companies Will Need to Defend Their Base and Adapt to New Business Realities
Predicts 2011: Manufacturers Revamp and Enhance Product Life Cycle Management Strategies
Predicts 2011: Media Incumbents and Insurgents Fight for Online Dominance
Predicts 2011: Sustainability Facing a Long Path to Fruition
Predicts 2011: Technology and the Transformation of the Education Ecosystem
Predicts 2011: The Automotive Industry Accelerates Innovations
Predicts 2011: The Energy and Utility Sector Is Shaped by a Confluence of Policies and Market Forces
MARKET
Predicts 2011: Data Centers Need a Solution-Based Approach to Gain Efficiencies
Predicts 2011: CSPs Must Rethink Business Paradigms to Meet Market Challenges
Predicts 2011: Increasing Value of Imaging and Print Services Complements Multimedia Communications
Predicts 2011: Opportunities for Growth Still Exist in PC Market
Predicts 2011: Photovoltaic Solar Energy Market Evolves Rapidly
Predicts 2011: Semiconductor Industry Structure and Products Continue to Adapt
Predicts 2011: The Interconnected Consumer
2011 Gartner Events Snapshot

As of December 1, 2010, and subject to change
Symposium/ITxpo The World’s Most Important Gathering of CIOs and Senior IT Executives
Symposium/ITxpo August 22 – 24 Cape Town, South Africa
Symposium/ITxpo October 5 – 7 Tokyo, Japan
Symposium/ITxpo October 16 – 20 Orlando, FL
Global Symposium/ITxpo October 25 – 27 Sao Paulo, Brazil
Symposium/ITxpo November 7 – 10 Cannes, France
Symposium/ITxpo November 14 – 17 Gold Coast, Australia
Symposium/ITxpo November 21 – 23 Mumbai, India
Summit Events Gartner Summits focus on specific topics, technologies and industries that are top-of-mind.
CIO Leadership Forum March 20 – 22 Phoenix, AZ
Portals, Content & Collaboration Summit March 28 – 30 Los Angeles, CA
Customer 360 Summit March 30 – April 1 Los Angeles, CA
Business Process Management Summit April 27 – 29 Baltimore, MD
Business Intelligence Summit May 2 – 4 Los Angeles, CA
Master Data Management Summit May 4 – 6 Los Angeles, CA
Supply Chain Executive Conference June 1 – 3 Scottsdale, AZ
IT Infrastructure, Operations & Management Summit June 13 – 15 Orlando, FL
North America PPM & IT Governance Summit June 20 – 22 San Diego, CA
Security & Risk Management Summit June 20 – 22 National Harbor, MD
Enterprise Architecture Summit June 22 – 24 San Diego, CA
Catalyst Conference July 26 – 29 San Diego, CA
Outsourcing & Vendor Management Summit September 12 – 14 Orlando, FL
IT Financial, Procurement & Asset Management Summit September 14 – 16 Orlando, FL
Identity & Access Management Summit November 14 – 16 San Diego, CA
Application Architecture, Development & Integration Summit November 29 – December 1 Las Vegas, NV
Data Center Conference December 5 – 8 Las Vegas, NV
Business Intelligence Summit January 31 – February 1 London, U.K.
Master Data Management Summit February 2 – 3 London, U.K.
CIO Leadership Forum February 28 – March 1 Dubai, U.A.E
Business Process Management Summit March 7 – 8 London, U.K.
Identity & Access Management Summit March 9 – 10 London, U.K.
Customer Relationship Management Summit March 14 – 15 London, U.K.
CIO Leadership Forum April 4 – 6 London, U.K.
Enterprise Architecture Summit May 9 – 10 London, U.K.
EMEA PPM & IT Governance Summit June 13 – 14 London, U.K.
SOA & Application Development and Integration Summit June 15 – 16 London, U.K.
Supply Chain Executive Conference September 14 – 15 London, U.K.
Security & Risk Management Summit September 19 – 20 London, U.K.
Portals, Content & Collaboration Summit September 21 – 22 London, U.K.
Outsourcing & IT Services Summit September 26 – 27 London, U.K.
IT Asset Management Summit September 28 – 29 London, U.K.
Data Center & IT Operations Summit November 28 – 29 London, U.K.
Data Center Summit April 5 – 6 Sao Paulo, Brazil
Outsourcing Summit June 7 – 8 Sao Paulo, Brazil
Enterprise Integration Summit June 15 – 16 Mexico City, Mexico
Latin America Enterprise Integration Summit August 15 – 17 Sao Paulo, Brazil
The Future of IT Conference September 20 – 21 Buenos Aires, Argentina
The Future of IT Conference October 4 – 6 Mexico City, Mexico
The Future of IT Conference October 11 Lima, Peru
Business Intelligence & Information Management Summit February 22 – 23 Sydney, Australia
Infrastructure, Operations & Data Center Summit March 15 – 16 Sydney, Australia
APAC SOA & Application Development and Integration Summit August 9 – 10 Sydney, Australia
Business Process Management Summit August 9 – 10 Sydney, Australia
Security & Risk Management Summit April 19 Tokyo, Japan
IT Infrastructure, Operations & Management Summit April 28 – 29 Tokyo, Japan
Japan Sourcing Summit May 30 – 31 Tokyo, Japan
Application & Architecture Summit June 30 – July 1 Tokyo, Japan
Business Intelligence & Information Management Summit July 20 Tokyo, Japan
Visit gartner.com/events for a full listing of our global events or call 1 866 405 2511.

Predicts2011 Rebound Surge

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Gartner Top Industry Predicts 2011:

Industries Rebound and Surge Ahead

Top Industry Predictions for 2011

By 2014, hardware purchases by K-12 school districts will be reduced by 30%.

By 2014, 40% of healthcare delivery organizations will switch 20% of server-based

By year-end 2012, insurers’ investments in healthcare reform will decrease up to 50%,

By 2014, 35% of consumer-paid TV revenue will come from IP-based network

By 2015, more than 50% of government outcomes will depend on consumer or h

The full report includes:

By 2014, hardware purchases by K-12 school districts will be reduced by 30%.

By 2013, 50% of smart grid initiatives will be trumped by regulators’ discord

By year-end 2012, insurers’ investments in healthcare reform will decrease up

By 2012, system failure involving software in manufactured products will cause

By 2015, more than 50% of government outcomes will depend on consumer or

Visit gartner.com/predicts2011 or e-mail thoughtleadership@gartner.com.

Gartner Predicts 2011

Gartner Predicts 2011 (continued)

Predicts 2011: New Relationships Will Change BI and Analytics

2011 Gartner Events Snapshot

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