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Thursday, November 03, 2016

Digital Transformation Investment will Reach $2.2 Trillion

As 2016 comes to a close, industry analysts start to share their outlook for next year, and beyond. International Data Corporation (IDC) has announced its worldwide information technology (IT) industry predictions.

IDC foresees digital transformation (DX) attaining macroeconomic scale over the next three to four years, changing the way enterprises operate and reshaping global commerce. From their perspective, this is the dawn of the DX Economy.

"We are at an inflection point as digital transformation efforts shift from 'project' or 'initiative' status to strategic business imperative," said Frank Gens, senior vice president at IDC. "Every growing enterprise, regardless of age or industry, must become 'digital native' in the way its executives and employees think, what they produce, and how they operate."

Top Ten IDC Predictions for 2017

By 2020, 50 percent of the Global 2000 new growth will depend on their ability to create digitally-enhanced products and services. Revenue growth will come from information-based products and services. Worldwide investment in DX initiatives will reach $2.2 trillion in 2019 -- that's almost 60 percent more than in 2016.

By 2019, 3rd Platform technologies and services will drive nearly 75 percent of IT spending – growing at twice the rate of the total IT market. This represents a major acceleration from last year's outlook, when IDC predicted that 3rd Platform technologies would account for over 60 percent of IT spending by 2020.

By 2020, 67 percent of all enterprise IT infrastructure and software spending will be for cloud-based offerings. Driving this transition is the fact that almost every enterprise will be a cloud service provider of innovative services to its own marketplace, making cloud capability a core business operations issue.

By 2019, 40 percent of all digital transformation initiatives – and 100 percent of all IoT efforts – will be supported by cognitive capabilities. This is because the flood of data that comes from IoT devices and DX initiatives have limited value without AI technologies that are capable of finding valuable insights in the data.

In 2017, 30 percent of consumer-facing Global 2000 companies will experiment with AR/VR as part of their marketing efforts. Interfaces are the essential gateway to customer engagement and they are evolving much faster than many have anticipated.

By 2018, the number of Industry Collaborative Clouds (ICCs) will triple to more than 450 -- by 2020, over 80 percent of the Global 500 will be digital services suppliers. ICCs are cloud-based platforms through which multiple companies in an industry collaborate in some fashion toward a common goal.

By the end of 2017, over 70 percent of the Global 500 will have dedicated digital transformation or professional innovation teams. To meet the challenges of the DX economy, enterprises will have to grow their skilled software developer teams more quickly -- look for growth of 2-3 times by 2018.

By 2020, over 70 percent of cloud service provider revenues will be mediated by channel partners or brokers. As enterprise use of the cloud becomes more complex, traditional IT channel partners and a new generation of partners, will provide the help needed to support the expanding variety of cloud users and uses.

By 2020, all enterprise performance will be measured by a new set of DX-driven benchmarks, requiring 20-100 percent business performance. Thriving in the DX economy means that every enterprise must operate as a digital native organization. Therefore, CEOs must have critical technology leadership experience.

By 2020, one third of health or life sciences and consumer product companies will begin to develop the first wave of products and services tightly integrating 3rd Platform technologies with the human body -- with "Augmented Humanity" offerings going mainstream by the mid-2020's.