Who will win in IT in 2012?December 16, 2011: 9:20 AM ET
A bigger portion of spending will go to mobile computing, social networking and analytics. That means a new lineup of companies could benefit next year.
FORTUNE -- Worldwide IT spending is expected to hit $1.8 trillion in 2012, according to research firm IDC. An increasing portion of those dollars will be spent on fast-growing technologies like mobile computing, social networking and analytics, which means a new lineup of companies could start to benefit in 2012.
While the traditional enterprise players (think Microsoft (MSFT), IBM (IBM)and Oracle (ORCL)) still rake in billions of dollars from IT departments, relative newcomers like Facebook, Amazon (AMZN) and Google (GOOG) plus smaller cloud-based companies are likely to snag a growing piece of the pie in 2012. Take Amazon Web Services, which is expected to top $1 billion in cloud services revenue by end of next year. Google's enterprise business, meanwhile, is expected to follow within 18 months. "The battle for enterprise platform dominance is just getting underway with established players like IBM, Microsoft, and Oracle facing serious challenges from Amazon, Google, Salesforce.com (CRM), and VMware (VMW)," notes a recent report from IDC.
That's why traditional enterprise players are buying independent software-as-a-service vendors, which also stand to benefit from trends in IT spending in 2012. A handful of them -- like Workday, Taleo (TLEO) and Netsuite (N) -- are likely to get snapped up in the coming year. In the last few months there have already been several large-scale acquisitions in this space. Earlier this month, SAP announced it is buying cloud-based HR management software maker SuccessFactors (SFSF) for $3.4 billion, and last October Oracle acquired online customer service company RightNow Technologies (RNOW) for $1.5 billion. This trend of large enterprise players buying their way into the cloud will likely continue in 2012. That's good news for smaller cloud-based software vendors, at least the ones that get acquired.
And then there's Facebook. The biggest name in social networking has been looking for a way to diversify its revenue stream. To that end, says IDC chief analyst Frank Gens, it could leverage its dominance with consumers into a larger role as an identity management platform for banks and online retailers. "Your Facebook identity could become your online identity everywhere," says Gens. "Facebook is one of the very few companies that has the reach to consumers to actually pull it off."
That's already happening to some extent with Facebook Connect, which allows users to log into websites using their Facebook identity. Linking profiles to payment sites and online retailers could enable users to not only sign in but also make purchases with one click using their Facebook credentials. And that could put Facebook on the path of becoming a bigger and more diversified player in the enterprise market.
But despite the potential for Facebook and other relative newcomers to snag a growing share, the majority of IT dollars will be spread among the usual suspects in 2012. "Even though the IT industry will follow along the same transformational path as it did in 2011, the events, the choices, and the stakes will be very different in 2012," chief analyst Gens said in a recent IDC report. "By the end of 2012, we should be able to see much more clearly which players have successfully positioned themselves in the 'lead pack' of the marathon-like race for industry leadership in the decade ahead."