IDC issued recently its top 10 predictions for 2014. IDC’s Frank Gens predicted that 2014 “will be about pitched battles” and a coming IT industry consolidation around a small number of big “winners.” The industry landscape will change as “incumbents will no longer be foolish enough to say we don’t compete with Amazon.”
Here’s my edited version of the predictions in the IDC press release and webcast:
Overall IT spending to grow 5.1% to $2.14 trillion, PC revenues to decline 6%
Worldwide sales of smartphones (12% growth) and tablets (18%) will continue at a “torrid pace” (accounting for over 60% of total IT market growth) at the expense of PC sales which will continue to decline. Spending on servers, storage, networks, software, and services will “fare better” than in 2013.
Android vs Apple, round 6
The Samsung-led Android community “will maintain its volume advantage over Apple,” but Apple will continue to enjoy “higher average selling prices and an established ecosystem of apps.” Google Play (Android) app downloads and revenues, however, “are making dramatic gains.” IDC advises Microsoft to “quickly double mobile developer interest in Windows.” Or else?
Amazon (and possibly Google) to take on traditional IT suppliers
Amazon Web Services’ “avalanche of platform-as-a-service offerings for developers and higher value services for businesses” will force traditional IT suppliers to “urgently reconfigure themselves.” Google, IDC predicts, will join in the fight, as it realizes “it is at risk of being boxed out of a market where it should be vying for leadership.”***
Emerging markets will return to double-digit growth of 10%
Emerging markets will account for 35% of worldwide IT revenues and, for the first time, more than 60% of worldwide IT spending growth. “In dollar terms,” IDC says, “China’s IT spending growth will match that of the United States, even though the Chinese market is only one third the size of the U.S. market.” In 2014, the number of smart connected devices shipped
in emerging markets will be almost double that shipped in developed markets and emerging markets will be a hotbed of Internet of Things market development.
There’s a $100 billion cloud in our future
Spending on cloud services and the technology to enable these services “will surge by 25% in 2014, reaching over $100 billion.” IDC predicts “a dramatic increase in the number of datacenters as cloud players race to achieve global scale.”
Cloud service providers will increasingly drive the IT market
As cloud-dedicated datacenters grow in number and importance, the market for server, storage, and networking components “will increasingly be driven by cloud service providers, who have traditionally favored highly componentized and commoditized designs.” The incumbent IT hardware vendors will be forced to adopt a “cloud-first” strategy, IDC predicts. 25–30% of server shipments will go to datacenters managed by service providers, growing to 43% by 2017.
Bigger big data spending
IDC predicts spending of more than $14 billion on big data technologies and services or 30% growth year-over-year, “as demand for big data analytics skills continues to outstrip supply.” The cloud will play a bigger role with IDC predicting a race to develop cloud-based platforms capable of streaming data in real time. There will be increased use by enterprises of externally-sourced data and applications and “data brokers will proliferate.” IDC predicts explosive growth in big data analytics services, with the number of providers to triple in three years. 2014 spending on these services will exceed $4.5 billion, growing by 21%.
Here comes the social enterprise
IDC predicts increased integration of social technologies into existing enterprise applications. “In addition to being a strategic component in virtually all customer engagement and marketing strategies,” IDC says, “data from social applications will feed the product and service development process.” By 2017, 80% of Fortune 500 companies will have an active customer community, up from 30% today.
Here comes the Internet of Things
By 2020, the Internet of Things will generate 30 billion autonomously connected end points and $8.9 trillion in revenues. IDC predicts that in 2014 we will see new partnerships among IT vendors, service providers, and semiconductor vendors that will address this market. Again, China will be a key player: The average Chinese home in 2030 will have 40–50 intelligent devices/sensors, generating 200TB of data annually.
The digitization of all industries
By 2018, 1/3 of share leaders in virtually all industries will be “Amazoned” by new and incumbent players. “A key to competing in these disrupted and reinvented industries,” IDC says, “will be to create industry-focused innovation platforms (like GE’s Predix) that attract and enable large communities of innovators – dozens to hundreds will emerge in the next several years.” Concomitant with this digitization of everything trend, “the IT buyer profile continues to shift to business executives. In 2014, and through 2017, IT spending by groups outside of IT departments will grow at more than 6% per year.”
***Can’t resist quoting my August 2011 post: “Consumer vs. enterprise is an old and soon-to-be obsolete distinction. If Google will not take away some of Microsoft’s (and IBM’s, etc. for that matter) “enterprise” revenues, someone else will. At stake are the $1.5 trillion spent annually by enterprises on hardware, software, and services. If you include what enterprises spend on IT internally (staff, etc.), you get at least $3 trillion. A big chunk of that will move to the cloud over the next fifteen years. Compare this $3 trillion to the $400 billion spent annually on all types of advertising worldwide. Why leave money on the table?”
[Originally published on Forbes.com]