In a recent webcast (and accompanying report), IDC issued its top 10 predictions for 2015. IDC’s Frank Gens advised companies in all industries to “Amazon” themselves, but also predicted that the best job of “Amazoning” will be done by Amazon itself.
All innovation today is Amazon-style innovation: at scale, high-velocity, and low-cost. China will use this type of innovation to join Amazon in ruling the world of technology. Here’s my edited version of IDC’s 2015 predictions:
New technologies will account for 100% of growth
Worldwide IT and telecommunications spending will grow 3.8% in 2015 to more than $3.8 trillion. Nearly all of this spending growth and one third of total spending will be focused on new technologies such as mobile, cloud, big data analytics and the Internet of Things.
Wireless data, the largest segment of the telecommunications sector, will also be the fastest growing
Wireless data will be the largest ($536 billion) and fastest growing (13%) segment of telecom spending. Net Neutrality will be mandated in the US, with a hybrid approach that will provide a baseline of services available to all.
Phablets will be the mobile growth engine
Sales of smartphones and tablets will slow down from the pace of recent years, reaching $484 billion and accounting for 40% of all IT spending growth. Chinese vendors will capture 15% or more of worldwide mobile growth. Phablet sales will grow 60%, cannibalizing the tablet market. Wearables will disappoint, with “only” 40-50 million units sold in 2015. A wrist-phone will ship and flop. Mobile app downloads will slow in 2015, reaching $150 billion, with Chinese independent app stores accounting for 18%. But enterprise mobile app development will more than double.
New partnerships to redraw cloud computing’s landscape
Spending on the greater cloud ecosystem (public, private, enabling IT and services) will reach $118 billion (almost $200 billion in 2018), $70 billion ($126 billion in 2018) of which will be spent on public clouds. Amazon will withstand attacks on many fronts to maintain or even gain market share. Gens predicted we will see “strange bedfellows” in the cloud market in 2015 such as Facebook with Microsoft and/or IBM or Amazon partnering with HP.
Data-as-a-Service will drive new big data supply chains
Worldwide spending on big data-related software, hardware, and services will reach $125 billion. Rich media analytics (video, audio, and image) will emerge as an important driver of big data projects, at least tripling in size. 25% of top IT vendors will offer Data-as-a-Service as cloud platform and analytics vendors offer value-added information from commercial and open data sets. IoT will be the next critical focus for data/analytics services with 30% CAGR over the next five years, and in 2015 we will see a growing numbers of apps and competitors (e.g., Microsoft, Amazon, Baidu) providing cognitive/machine learning solutions.
The IoT will continue to rapidly expand the traditional IT industry
Internet of Things (IoT) spending will exceed $1.7 trillion, up 14% from 2014 (and will reach $3 trillion by 2020). One-third of spending for intelligent/embedded devices will come from outside of the IT and telecom industries. This, said Gens, amounts to a “dramatic expansion of what we would consider IT.” Seeing the opportunity, a number of traditional IT vendors (possibly Cisco, IBM, and Intel) will form “an IoT solutions company.” Predictive maintenance will emerge as an important IoT solutions category.
Cloud service providers will become the new data center, redrawing the IT landscape
The massive shift to datacenters operated by cloud service providers will spark a burst of “cloud first” hardware innovations and drive greater consolidation among server, storage, software, and networking vendors. By 2016, over 50% of compute and 70% of storage capacity will be installed in hyperscale data centers. IDC expects to see two or three major mergers, acquisitions, or restructurings among the top-tier IT vendors in 2015.
Rapid expansion of industry-specific digital platforms
The new technologies combine to create a business innovation platform, not just a technology platform, helping transform “every industry on the planet.” One-third of market share leaders in every industry will be disrupted by vendors selling new IT products and services. Examples include alternative payment networks in financial services (in 2 years, 2% all global payments will be conducted with bitcoin); expansion of IoT technologies into city safety, public works and transportation systems (25% of all government IoT spending by 2018); and the expansion of location-based services in the retail industry. The number of industry platforms – industry-specialized cloud-based data and services platforms, usually created by leaders within the industry – will expand rapidly, doubling in 2015 to 60.
Adoption of new security and printing innovations
Securing the edge: 15% of mobile devices will be accessed biometrically (over 50% by 2020). Securing the core: 20% of regulated data will be encrypted by year-end 2015 (80% by 2018). Threat intelligence will emerge as a killer Data-as-a-Service category: By 2017, 55% of enterprises will receive customized threat intelligence data feeds. 3D printing will see significant activity among conventional document printing companies: 2015 spending will surge 27%, to $3.4B, and by 2020, 10%+ of consumer products will be available through “produce on demand” via 3D printing.
More China, everywhere
China will have a “skyrocketing influence” on the IT and telecomm market in 2015 with spending that will account for 43% of all industry growth, one third of all smartphone purchases, and about one third of all online shoppers. With a huge domestic market, China’s cloud and ecommerce leaders (Alibaba in ecommerce, Tencent in social, and Baidu in search) will rise to prominence in the global marketplace. Chinese branded smartphone makers will capture 40% of the worldwide smartphone market in 2015.
[Originally published on Forbes.com]