How A Booming IT Market Means More Spending on Sustainability

How A Booming IT Market Means More Spending on Sustainability

Forrester's latest forecast for the technology economy is bullish, which by extension means good news for providers of software and services focused on improving corporate sustainability.

In our new outlook for IT spending by businesses and governments, we estimate that the market will hit $1.58 trillion in 2010, up almost 8 percent from the depressed 2009 level, and grow by a further 8.4 percent to $1.71 trillion in 2011 (global purchases expressed in U.S. dollar; see the figure below). U.S. government data about the overall economy, and tech vendors' Q1-Q2 financial reports, buttress our expectation that IT spending will growth at more than double the rate of the overall economy in 2010-11 and even beyond.

Click image for full-sized. Figure 1

We expect that some of the prime beneficiaries of this positive outlook for IT spending will be those services and software suppliers that are focused on helping clients improve their sustainability posture. In particular, we are very positive on the outlook for sustainability consulting, and for enterprise carbon and energy management (ECEM) software.

Our research team is working now on reports that will update our outlook and spending forecasts for these two exciting markets. As we work with clients in enterprise IT organizations, it's clear that the "green IT" of yesterday is becoming the "IT for green" of tomorrow; that is, IT organizations and infrastructure are increasingly being deployed to meet the corporate-wide sustainability challenge, not just improving IT's own energy efficiency and CO2 footprint.

As sustainability takes hold as an executive-level imperative, IT is asked to be the enabler of initiatives in business functions ranging from facilities to logistics to human resources, and CIOs are stepping up to these challenges. An improving IT budget/spending outlook will help fuel those efforts.

We have been following the sustainability consulting and ECEM markets for several years now; the new wrinkle in 2010 is that they are starting to intersect and converge in very interesting ways. Many of the leading ECEM vendors deliver their software as-a-service, meaning no big upfront investments and ability to scale up the implementation quickly. And these software providers are finding that consulting and industry expertise, like PE International has in automotive or Verisae has in grocery retailing, are more important differentiators that the feature/function of the products themselves.

But even the largest software suppliers like SAP or CA are limited in how much consulting service they can provide. So they are linking up with the big IT services shops, forming design and implementation partnerships along the lines of the relationships that exist in well-established software product categories like ERP and CRM.

For example, Wipro is now working with SAP and has other ECEM vendor relationships in the works. PE International has signed on with Tata Consulting Services. CA is working with Deloitte Consulting. And we expect to see plenty more such partnerships, both loosely and tightly coupled.

Stay tuned for new research on these IT-for-sustainability markets over the next month or so. And in the meantime, let us know what you think about the prospects for ECEM and sustainability consulting; are these products and services that your firm's IT organization is considering or piloting?

Chris Mines is a vice president and research director at Forrester Research, advising tech industry strategists. He leads a research team that predicts and quantifies growth and disruption in the technology industry, focusing on the economics and business models of IT suppliers, and emerging trends in technology adoption. Currently, his research is centered on the role of information technology in enabling sustainability initiatives and improving corporate environmental responsibility.

Photo montage uses CC-licensed images from argenberg and fotocromo.

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