1. Bob Hayward Technology Trends 2004-2008 These materials can be reproduced only with Gartner’s official approval. Such approvals may be requested via e-mail -- quote.requests@gartner.com.

2. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. The Long View – Mid-Life Pause For Breath for IT-based Transformation of Business 1970 1980 1990 2000 2010 2020 2030 Silicon Age Nano & Quantum Age ? "Knowledge" Age Mainframes PCs Physical Connectivity Logical Connectivity Embedded Connectivity Relative importance

3. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 2 Technology Laws and Innovation Continue… Moore’s Law – The Fifth Paradigm 10 -6 10 -4 10 -2 10 10 +2 10 +4 10 +6 10 +8 10 +10 19001910192019301940195019601970198019902000 Exponential Scale Calculations Per Second Per $1,000. Electromechanical Relay Vacuum Tube Transistor Integrated Circuit

4. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 3 The Hype Cycle Trough of Disillusionment Slope of Enlightenment Plateau of Productivity Maturity Technology Trigger Peak of Inflated Expectations Positive Hype Negative Hype Do not join in just because it is "in" Do not miss out just because it is "out"

5. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 4 Technology Trigger Peak of Inflated Expectations Trough of Disillusionment Slope of Enlightenment Plateau of Productivity Maturity Visibility Less than two years Two to five years Five to 10 years More than 10 years Key: Time to Plateau As of May 2003 Instant messaging, retail Instant messaging, corporate Mobile applications, retail Mobile applications, corporate Mobile payments Speech and voice technologies Grid computing Data mining Web services Artificial intelligence Intelligent agents/push technology Sales planning and pricing tools Partner relationship management (PRM) Biometrics Chip-based cards, corporate Contact chip cards, Europe Contact chip cards, U.S. E-tag Network identity services E-signatures Document imaging Document management/archive Business rules engine Emerging technologies hype cycle

6. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Benefit Maturity New business models New processes Improved processes Moderate: Usable with motivation Low: demonstrations, prototypes and pilots Biometrics Natural Language Search Wireless LANs/802.11 WAP/Wireless Web Location Sensing VoIP Bluetooth P2P Personal Fuel Cells Web Services Nanocomputing Grid Computing Digital Wallets E-Tags Text-to-Speech Speech Recognition PKI PDA Phones E-Payments VPN Radar Screen

7. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 6 Technologies at Different Speeds Long-fuse technologies One to two decades from trigger to plateau Science-fiction-like fascination Inherent complexity, business implications. Reliance on certain infrastructure, skills “Fast Track” Technologies Two to four years from trigger to plateau Performance peaks early Uses current infrastructure/standards Easy to use Vendor support IM, SMS, USB Flash Cards. Smart Dust Speech Recognition Handwriting Recognition Machine Translation Intelligent Clothes “Intelligent Agents” Holographic Storage E-mail Internet Desktop Videoconferencing Biometrics Tele-Immersion Fiber optics Nano-Computing DNA-Computing “Autonomic Computing” Quantum-Decryption

8. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Gartner Predicts: Ten Hot Technologies 2004 The Top Ten Technologies Instant Messaging Real Time Data Warehouse WiFi Security Internal Web Services Policy based management IP Telephony Utility Computing Grid Computing Network Security Technologies RFID Tags Maturing in 18-36 months Wider Applicability Lowered RiskIssues Resolved

9. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 8 Instant Messaging in the Enterprise Values: Presence Service Real-time No rewind Low overhead Other Issues: Lack of audit trail QoS limitations Poor integration capability Lost record of decisions Text focused, limited media Security concerns: Data protection Privacy Tamper resistance

10. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 9 “Creative Scheduling” DW ETL Source Replication Source Replicate DW Data Warehouse As An Application DW Integration Broker Source Target Apps. Avoid The Issue — No Data Warehouse! Source BI Tools and Applications DW ETL Options for developing a ‘Real-Time’ Data Warehouse

11. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 10 On the Cusp of the Most Fundamental Change to Business Since The Internet IT Architecture, concepts and business philosophy have reached a critical tipping point: –Service Oriented Architectures (SOA), Event Driven Architectures (EDA), Service Oriented Business Applications (SOBA), Service Oriented Development of Applications (SODA), Web Services, Real Time Enterprise (RTE), Business Process Management (BPM) and Modeling and Business Process Fusion gaining major traction and move towards critical mass and mainstream adoption Maturity in these areas will drive dramatic changes in the way we do business, to a degree not seen since the advent of the Internet

12. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 11 Integration of IT and Business Processes HighLow Customer Business Process Business Process IT Customer Business Process Business Process IT Customer Business Process Business Process IT No Business Is an Island: The Increased Dependence on IT for Business Processes

13. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 12 Software As Product –License model –Customization required –Post implementation hosting –Expensive Software As Service –Speed to solution –Rental model –Remote delivery –Vertical templates –Medium cost Business Services –Application agnostic –Net-native software –Pay for use –Business process focused –Lower cost Time 2014 Business Focus & Alignment External applications managed by service provider - customer buying access to an application External applications managed by customer – customer buying application Services provisioned by service provider (i.e., like voice services provided by a telco) – customer buying a service with no concern or awareness of enabling applications Key Trend: Software as a Service

14. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 13 Internal Use of Web Services Scope of Deployment Scope of Control “ B ” = Shared Web services for closely held supply chains and narrow partner groupings “ A ” = Proprietary web services for internal integration cross-industry extended supply chain cross- enterprise cross- application U.S. & Int ’ l standards bodies industry consortia (public) channel master (private) CIO office 1 dept.. Level 2: Limited External-Trading Partner Integration — 2005 “B”“B” Level 3: Unlimited- Potential Prospects, Suppliers, and Influencers — 2007 Level 1: Internal- Building E-hubs- 2003 “A”“A” “C”“C” “ C ” =Open Sourced Web Services- UDDI Directories XML-driven internet

15. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 14 The Emerging Standards Stack SOAP WSDL In placeKey : Messaging Description Standard Need Business Semantics ebXML, UBL, RosettaNet UDDI BPEL4WS, BPML, WSCI WS-Security, SAML, XRML Search & find Workflow/BPM Reliability Building trust Identifying Liberty, Passport XML Format Common Internet Protocols (e.g., TCP/IP, HTTP) Transport WS-Reliable Messaging User interface WSRP, WSIA Emerging Entrenched Established Eventually

16. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 15 Shared Management Infrastructure Shared Middleware Infrastructure Integrated Development Framework and IDE PortalIntegrationTransactions Rules Editor Orchestration Editor Assembly Editor Designers/Modelers Runtime Engines Service Wrappers Generators Registry Pub/Sub Integrated SODA Environment SES Business Application Services ERP CRM (for example, Customer record (multiple systems, composite or adapted services) SOBA ISE — Producer Platform Application Platform Suite (APS) Software As A Service SODA SOA

17. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 16 2005 to 2006: Move Toward BPF and RTE With Composite Applications Market Event Business Response SOA & CEP enabled business process fusion 2008: Fusion & consolidation End-to-end virtual processes and relationships (& CEP) Market Event Business Response Web-enabled, services-wrapped composite apps BPM 2005-6: Flexible but complex Process 1 2 3 4 Cross-function, multienterprise business processes (& BPM) Market Event Business Response Proprietary, monolithic app suites & modules, MOM 1998: Rigid and simple Process 3Process 1 Process 2 Process 4 Function-focused business processes (& MOM)

18. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 17 Transactions and RDBMS Data warehouse and analytics Document store and workflow Messaging Processing Styles — Remove the Architecture Silos

19. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 18 Business Process Fusion Enables End-to-End Applications and Processes Business Process Fusion Applications Cross-functional processes (internal and external) End-to-End process support All content types Embedded analytics Services-based Optimize Value of All Contracts With All Customers RDBMS Data Warehouse Unstructured Data Mgmt. Noteworthy Architectural Element Transaction- Based Systems Analytics Systems Collaboration, Content and Workflow Application Style Determine Yearly Sales Volumes by Customer Analyze Customer Profitability Discuss & Record “T’s & C’s” of Customers’ Relationships

20. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 19 Application Requirements Expand Data to Knowledge; Transactions to Process Innovation Flexible Application Platform Portal, Integration, App Server, APS, SOA Leverage Enterprise Knowledge Content, Data, Analytics, Relationship Mgmt Transaction Processing ERP, SCM, Customer Transactions, etc. Business Collaboration Smart Enterprise Suites, Multienterprise End-to-End Processing Business Process Fusion Low High Med Low Maturity in 2003 Low Mission- Critical 2007 2005 Now 2005 2004Low Business Value High

21. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 20 Gartner Predicts: Application Development Models, Toolsets Are Changing 50% 100% 19982003200220002001199920042005 Proprietary Vendor 4GL, AS/400 RPG, Mainframe COBOL, etc. Microsoft.NET Microsoft DNA Java Platforms 1M 2M 3M 200220032004200520062007 New Projects Programming ModelsProfessional Developers COBOL Visual Basic 6 and lower C/C++ Java C# Visual Basic.NET

22. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 21 Static and Unshared Islands Service A Edge Application Database Service BService C Inefficient Overprovisioned Hard to manage Current state is inflexible and does not reflect business priorities (And Many Others)

23. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 22 Policy Based Management: The Real-Time Infrastructure Black-Box Application Services Actual User Experience Policies Definition of IT Service Service Agreements User Class Business Priorities INPUTS ComputeStore Network Resources Workloads ApplicationsDatabases Middleware OUTPUTS IT Services Policy-based, dynamic, cost-efficient: Provisioning: Deployment, Growth Optimization: Resource Efficiency Availability: Predictable, Service Level

24. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 23 IP Telephony VoIP on WAN issues QoS control Economics vs carrier trends IP variable latency Standards and interoperability IP telephony issues Features vs PBX Scalability Reliability QoS and sharing networks Interoperability Some Missing Features Attendant console Least cost routing Busy override Trunk callback queuing Blind transfer Less then 500 phones; VoIP over WAN Large IP Telephony (500 or more phones) Very Large IP telephony (2,000 or more phones)

25. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 24 Utility Computing Utility computing Buy the services of system, not HW/SW Separates the ‘what’ from the ‘how’ Pricing model tends toward usage Examples: ASPs, SSPs, MSPs, hosting services Access them various ways Web services Browsers Thick clients... 8.6B$ 2003 25B$ 2006

26. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 25 GRID Computing Application Owner COwner AOwner B

27. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 26 Utility Computing and GRID Application Utility selling grid resources Owner A

28. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 27 Honey Pots, Application Traces and Forensics Firewalls IDS VA Gateway AV Security Platform In the Cloud MSS Intrusion Prevention Appliances Anti- spam Content Scanning Sub- 100 Mb Gigabit+ 2002 2004 2006 ? ? Policies and Parameters New Network Security Technology Unified ManagementUnified Management

29. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 28 Current Applications Toll pass systems Pet identification Access cards Retail theft protection Electronic parolee tracking Photos source Texas Instruments Successor to Bar Codes Can read even covered Can read while moving Can scan at distance Survives water, heat, painting Price dropping to low levels Remain in product for life Potential Applications Locate common objects Improved asset control Real-time retail-shelf inventory Move to faster or self-checkout Improve manufacturing and supply-chain efficiency After-sale services offerings RFID Tag

30. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 29 “Smart” Objects 2002 2015 Passive tags temporarily attached to medium-/high- value items. Dedicated communication and computation is applied in specialized situations only. Computers are relatively large and long-lived. Passive tags in every nontrivial object. Active intelligence wireless networking and sensing capabilities cost under 50c and are widely distributed. The majority of computers are invisible and disposable. Bar coded shopping. Inventory tagging. Specialized industrial tagging. Nothing is ever lost. Everything is identifiable. Many objects know their history and can interact wirelessly.

31. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 30 More information Improved understanding Improved decisions Analysis Gap Action Gap Digital footprints (Sensors, RFID) Self-service Information extraction Unstructured data sources Embedded connectivity Metadata and tags Improved algorithms Targeted algorithms Integrated analysis Business rules Business process fusion Analysis: Mind the Gap

32. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 31 Proxy Caching VPN Firewall WAP VoIP Gateway Desktops Client Devices Databases Consolidation on zSeries ERP SCM CRM HR Business Application Server Internet Access Line of Business Enterprise Data Data/Content Server/ Warehouse Network Edge Servers Compute Clusters Infrastructure Server/Blade Directory Security Load balance File/print Web E-mail NAS Financial, R&D, biotech, geophysical, energy, visualize Gartner Predicts: Linux in the Enterprise: Grass Roots

33. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 32 Office Suite Word Processor Spreadsheet Charting Personal Database ERP Suite Material Requirements Planning Inventory Control Financials Human Resources Smart Enterprise Suite Collaboration Support Content Management Information Access Portal Framework Gartner Predicts: Smart Enterprise Suite — A New Wave of Software Consolidation

34. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Content management Collaboration Information organization and retrieval Business intelligence Portal framework Ad hoc process support Expertise location and management Community support With: Sufficient range of functionality Aggressive price points Coherent offer for individual, team and enterprise processes Integration across suite — for user and administration Services and support SES — What to Expect

35. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Connected Society wireless wearables Wi-Fi smart phones location- based services ultra-wide band Smart Networked Objects embedded computing RFID MEMS smart dust digital ink Semantic Web information extraction XBRL Semantic Connectivity affinity profiles automatic tagging Three Megatrends

36. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 35 Mobile and Wireless in the Next Decade PDA Hub Mesh Networks By 2007, hubs (central units without peripherals) will emerge that connect many peripherals (e.g., via PAN). Lots of Functions: Phone, Calendar, Internet, MP3 Player, Camera, Video, House/Car Key, Payment, Authentication, Biometrics, Life Saving, Stun Gunning, Insect Repelling Shared Hub: I/O, Security, Battery, Storage, Call Center A mix of technologies, e.g., Zigbee, UWB, Bluetooth, Wi-Fi x.y, 2.5/3/4G, will allow best economical mix: reliability, costs, size, bandwidth, reach Sensor Mesh Networks/Monitoring Self-Organizing Principles: Plug-and-Play Tags, Motes, GPS RFID, Smart Dust (Smart Peas), GPS Sensors Fleet Management (AVLDS), Inventory Management Optimized Traffic Routing

37. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 36 Mobile Network Evolution Cell location (worst case, several Km) Location precision of 80 M or better 2006 2005 2004 2003 2002 2001 TDMACDMA GPRS EDGE WCDMA 1x-EV DV cdma2000 1xRTT GSM GPRS WCDMA EDGE 2G Assume 9.6-19.6 Kbps 2.5G Assume 80-100 Kbps EDGE, 20-40 Kbps GPRS 3G Assume 200-300 Kbps Cell location (worst case, several Km) ? EV DO CDMA GSM CDMA GSM

38. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 37 Short-Range Wireless Personal Area Adjacent Local Area Metropolitan 1M10M100M1KM Near field Passive RFID Active RFID 802.16a (Wi-Max) 802.16b (mobile) Proprietary fixed mesh 802.20 (mobile) UWB 802.15.4 (Zigbee) Bluetooth Proprietary PAN Proprietary mesh 802.11 a,b e,g,h,i,f (b = Wi-Fi)

39. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 38 Device Innovation, 2003-2005 Consumer Corporate Market Trends  Fashion is still key  Annuity handset revenue  Nokia n-gage console  Asian manufacturers  Greater competition, e.g., Dell, Microsoft  Fragmentation, not convergence  Microsoft and Symbian battle for corporate "mind share"  No single-standard corporate device Technology Trends  Color, polyphonic sound  Imaging, video, cameras  Game technology  M-commerce hardware  Java everywhere  Form-factor proliferation  Slow Bluetooth deployment  Integrated WLAN  Microsoft.NET grows  1GHz, PDA by 2005  Tablet PC

40. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 39 Pre-Teen Teen Young Adult Middle Aged Senior Citizen Mobile Population B2E, B2B, B2G B2CM2M Meters Vending Kiosk ATM Vehicular Mass Transit Supervisory Control Preventative Maintenance SMB Head Office Telecommuter Office- Centric Site Rover Caregiver Hazardous Point of Sale Dock Worker Education Warehouse Site Security Campus Workers Mobile Exec. Delivery Sales Fleet Field Service Construction/ Maintenance Critical Workers Knowledge Worker Traveling Workers (Road Warriors) The Diverse Mobile User

41. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 40 Gartner estimates as of February 2003 Primary Modes of Mobile Workers Well-defined, structured cached thin/slim client Avg. Annual Cost: $1,183 Forms Full fidelity thick client Avg. Annual Cost: $3,106 Power Knowledge Unstructured messages and forms, thick client Avg. Annual Cost: $2,296 Message E-mail-centric, slim offline Avg. Annual Cost: $889 Thin client, Read, one- button response Avg. Annual Cost: $416 Alerts

42. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 41 Computer Human Interaction in the Next Decade Human  Computer Computer  Human Biometrics, Speech, Handwriting, Eye Position Gait Analysis, Infrared Emotion/Lie Detection SPA: Most CHI will remain keyboard-driven throughout 2015 (0.7 probability) OLED/OLEP, E-Ink Head-Mounted Displays Speech Synthesis Avatars, Synthetic Characters Logic Natural Language Search Machine Translation Taxonomies/Browsing Personalization

43. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 42 Supply Chain IP Supply Chain IP Services Uncontrolled distribution of information Political & social instability Electronic fraud Geographical & cultural remoteness Lack of trust in Internet security Supplier dependency The Connected Economy Opens the Door to New Dependencies and Threats In recent years, we have witnessed terrorist attacks, political unrest, war and most recently SARS which has forced us to urgently address the business issues of globalization in a way never before required

44. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 43 The World in 2003-2006 Universal Security Compliant Accounting Transparency Investors Seek Value Audit Certifies Accuracy Better Governance The Basics Demand Attention and Spending: Security, Governance, Transparency Lower spending, less attention to next-generation applications 2004-06: 50% annual increases in spending for “basic” applications to ensure security, governance and transparency Enterprise Security Creative Accounting Secrecy, Confidentiality Investors Seek Big Ideas Audit Provides Opinions Better Management The World in 1995-2002

45. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 44 Basel II (Financial Services, world-wide) [pending] Sarbanes-Oxley (All industries,USA) Turnbull (All industries, UK) Data Protection Directives (EU) Database Security Breach Notification Act (California) Regulation is Tightening on Corporate Governance Management, Privacy and Security IFRS (accounting, Australia)

46. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 45 This Next Wave of Technology Will Cause Massive Disruption in the IT Workforce and Societies IT professionals that are now employed to perform administration and maintenance functions must upgrade their skills Infrastructure becomes more reliable and robust Application development shifts to a service model Programmers also must upgrade their skill sets. Assembly overtakes coding. Secure robust, wireless networks will reach critical mass Broadband, wireless, Linux, content management, real-time analytics, data mining, security, middleware and certification skills will be highly valued Global, ubiquitous communications Arbitrage of costs, global delivery models Replacement or reduction of entire industries

47. Bob Hayward Technology Trends 2004-2008 These materials can be reproduced only with Gartner’s official approval. Such approvals may be requested via e-mail -- quote.requests@gartner.com.