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Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

Consumer Power

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What’s the similarity between an iPod and an enterprise system? On the face of it maybe not much but if we dig a little deeper perhaps there is something that points to an underlying trend in the corporate IT industry – consumer power. And perhaps it’s directly affecting share prices in the corporate IT industry. Earlier this week, Apple announced results for the quarter to year-end 06 showing a 78% rise in profits with a resulting 5% share price rise. On the other hand, while SAP’s 06 sales are expected to be 11% higher than 05, it announced it is likely to miss its own sales target growth and analyst expectations of a 15-17% increase. On the back of the news SAP shares dropped 9.5% to their lowest level since 2002. As THINKStrategies’ Jeffrey Kaplan neatly puts it ‘Consumers have seen the marketplace deliver tremendous changes recently. Companies like Amazon.com iTunes, eBay, Google, and UTube have demonstrated that it's possible to make highly sophisticated applications responsive and simple to use. Of course these same consumers live in the corporate world and wonder why, if these kinds of advances can be made for consumer applications, are they not being delivered as corporate applications.’ And so it seems consumer power is deepening its influence over corporate IT. While satisfaction with corporate IT remains at a low – most analysts have a figure of around 50% for corporate IT projects that either fail, cost a lot more, or deliver a lot less than expected – satisfaction with personal IT remains on the up. The industry is reacting – for example Duet for Microsoft Office and SAP is bringing the personal and enterprise IT worlds together – and we’re seeing a rapid rise in the adoption of Software as a Service. But to this day most business stakeholders in the corporate are told that personal IT and corporate IT are completely different worlds. Does evidence suggest that the consumer is on the march?

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C. Bate

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