How Hybrid Working Empowers Digital Business Growth

As more enterprises adopt a 'hybrid work by design' model, we'll witness the rapid evolution of traditional offices and digital workspaces, plus a new and compelling approach to executive leadership that will drive innovation and productivity -- fueling exponential digital business growth.

IDC has completed a worldwide market study that contextualizes their 'Future of Work' predictions for 2021. The ongoing transformation of the environment for typical office-based knowledge workers has been one of the hottest topics of discussion among CEOs and their leadership team.

With the COVID-19 pandemic significantly impacting every aspect of office work, there is growing interest in developing a holistic strategy that focuses on business technology upgrades, and the culture of organizations, to deliver an enhanced experience that will result in a sustained competitive advantage.

Global 'Future of Work' Market Development

"Every aspect of 'Future of Work' is undergoing a dramatic shift, including digital transformation (DX) strategies, talent management approach, workspace redesigning and the very nature of how, when and where the work is being done," said Deepan Pathy, research manager at IDC.

The global pandemic has been a catalyst for the majority of organizations to rethink their strategic, financial, and technological decisions to transform work and be better prepared for 'the new normal' -- whatever that looks like, going forward.

This shift will increasingly demand continuous efforts from executive leaders and their organizations to adapt to business technology advancements, changing employee and customer requirements, and the overall enterprise environment.

Critical for the enterprise C-suite -- especially across multinational organizations that will move to a 'Hybrid Working Model' -- is a cohesive action plan that provides employees with the same secure access to essential software applications, regardless of how, when and where they choose to work.

That said, what many organizations have done thus far is focus on merely 'getting by' -- awaiting an eventual return to the office, in the hope that some semblance of their prior 'status quo' can be regained.

"This is clearly going to take longer than anticipated and is likely to repeat in the future, and so many of these predictions indicate what technologies will support increased enterprise agility in the future," said Simon Piff, vice president at IDC Asia-Pacific.

Some of the key IDC 'Future of Work' predictions that will impact the business technology ecosystem, including traditional IT vendors and IT professional services companies, are:

• By 2022, 35 percent of repetitive work tasks in large enterprises will be automated and/or augmented by using 'digital co-workers' -- powered by artificial intelligence (AI), robotics, and intelligent process automation (IPA) -- furthering human and machine collaboration.
• By 2024, 40 percent of the A1000 will augment human staff with 'digital co-workers' (powered by AI, robotics, and IPA) to navigate and manage large ecosystems to perform complex cross-business interactions.
• By 2022, 25 percent of A2000 firms will deploy technologies imbued with data manipulation and visualization capabilities, driving collaborative productivity via conference calls for a hybrid workforce.
• By 2022, an additional $1 Billion will be spent on desktop and workspace 'as a service' by the A2000, as 75 percent of them incorporate employee’s home network and workspace as part of the extended enterprise environment.

Outlook for Hybrid Working Applications Growth

The global COVID-19 pandemic has already accelerated some forward-looking organizations' transition to an agile work environment that provides workers with secure access to corporate online resources anytime and anywhere. That includes both enterprise data center applications and cloud SaaS apps.

I believe that the pandemic highlighted the need to rapidly adapt and respond to unforeseen disruptions to the Global Networked Economy. It has become clear that future digital business growth depends upon the responsiveness, scalability, and resiliency of software application delivery solutions.

As the more progressive organizations accelerate digital transformation initiatives, they'll discover that many of their legacy business processes are obsolete. With the shift to design thinking methodologies and modern online business models, more CIOs and CTOs will seek secure ways to support an increasingly diverse, distributed and dynamic workforce.

Emerging 5G Network Slicing Market will Reach $20B

Enterprise decision-makers are seeking to identify the best deployment models for a trial private cellular wireless network initiative. Many of the CIOs and CTOs at progressive companies and forward-looking public sector agencies are already defining requirements for fifth-generation (5G) infrastructure investments.

With 5G deployments proliferating, the importance of network slicing for the enterprise domain is set to grow. According to the latest worldwide market study by ABI Research, the demand for 5G slicing will be propelled primarily by heavy industry verticals.

Industrial manufacturing, cellular vehicle-to-everything (C-V2X), and logistics alone will potentially generate cumulative revenues of $12 billion by 2026, representing a significant portion of an overall 5G slicing market that will likely exceed the $20 billion mark.

5G Network Slicing Market Development

Much of the upside growth discussion at present focuses on how various industry verticals can alleviate the operational complexity of doing business with 5G Network Slicing.

"This research highlights the importance of 5G Slicing as an enabler for new value creation, particularly as Communications Service Providers (CSPs) bolster their capabilities to go beyond connectivity revenues," said Don Alusha, senior analyst at ABI Research.

The discourse in a post-COVID-19 pandemic environment will be to accelerate edge computing deployments to further develop low-latency use cases, extend 5G coverage, and reach industry consensus on how smartphone handsets and other devices can support 5G slicing.

Further, the telecom industry at large now realizes that to extract the value at stake, there is a need to enhance the traditional way of doing business and clearly articulate business drivers and commercial utility of slicing to vertical partners.

There are three predominant business drivers for 5G slicing. One, new services can be deployed with little or no disruption to existing services. With today’s networks, service agility is a challenge because the introduction of new services necessitates reconfiguration of underlying networks.

Two, verticals can optimize network efficiency with potentially lower costs. A shared network infrastructure used across multiple slices promotes better resource utilization and can, in theory, reduces integration scope and complexity.

Three, 5G slicing enables vertical partners to bring to market a wider range of services based on customized service level agreements (SLAs).

According to the ABI assessment, it will take time for a mature, 5G slice-ready ecosystem to emerge. With the global economy rebounding from the current climate with COVID-exit strategies, it is very likely that new investments advance existing proof of concepts (PoCs) and trials to commercial deployments.

Ultimately, wholesale deployment of public networks (5G slicing) for private use requires more vertical engagement. To that end, the telecom sector should realign existing commercial arrangements to include strategic vertical industry partners.

Outlook for 5G Network Slicing Applications Growth

5G slicing serves as an enabler towards that change, but first, the incumbents should aim to extend trust and build relationships with value-added vertical partners. That will better address end verticals’ pain points, and identify mutually beneficial arrangements for both telecom and key industry partners.

"Lastly, reaping full benefits from 5G network slicing is a long-haul endeavor that will need to start small with same-vendor, campus type deployments. Multi-vendor implementations will materialize with further industry alignments on terminal support, business model, and collaboration among system integrators, vendors, and CSPs," Alusha concludes.

I believe that the upside potential for net-new revenue growth will require telecom service providers to enhance their pre-sales professional service offerings. Potential customers for private 5G network deployments seek information and guidance from qualified and trusted advisors. It's a huge opportunity.

Cybersecurity Solution Innovation Gains New Momentum

Given the ongoing reports from the SolarWinds Orion breach, most senior executives agree that Information Technology (IT) security must be a priority that includes all enterprise leaders in the decision-making process of ensuring that all assets are fully protected.

The big picture: new revelations suggest that the access gained into SolarWinds software was only one part of a broader Russian hacking campaign that impacted other providers. And the initial point of entry, or the ultimate goal, remains unknown.

Furthermore, the primary target was stealing intellectual property (IP), instead of customer data. Why is this fact significant? Most public company cyber insurance policies do not cover losses from the theft of intellectual property assets. Therefore, these losses directly impact the firm's shareholders.

Cybersecurity Solutions Market Development

By 2025, 40 percent of boards of directors will have a dedicated cybersecurity committee overseen by a qualified board member -- that's up from less than 10 percent today, according to the latest worldwide market study by Gartner.

This is one of several organizational changes Gartner expects to see at the board, management, and security team level, in response to the greater risk created by the expanded digital footprint of organizations during the COVID-19 pandemic.

According to Gartner, the cybersecurity-related risk is rated as the second-highest source of risk for the enterprise -- following regulatory compliance risk. However, relatively few directors feel confident that their company is properly secured against a cyberattack.

"To ensure that cyber risk receives the attention it deserves, many boards of directors are forming dedicated committees that allow for discussion of cybersecurity matters in a confidential environment, led by someone deemed suitably qualified," said Sam Olyaei, research director at Gartner.

According to the Gartner assessment, this change in governance and oversight is likely to impact the relationship between the board and the chief information security officer (CISO).

While CISOs should experience more scrutiny as a result, they are also likely to receive more support and resources. CISOs must expect executive conversations to shift away from performance and health-related discussions to risk-oriented and value-driven exercises.

Gartner also predicts that by 2024, 60 percent of CISOs will establish critical partnerships with key executives in sales, finance, and marketing -- that's up from less than 20 percent today.

"Effective CISOs realize that heads of sales, marketing, and business unit leaders are now key partners as the use of technology and, subsequently, the incurrence of risk happens outside of IT," said Mr. Olyaei.

According to Gartner, top-performing CISOs regularly meet with three times as many non-IT stakeholders as they do IT stakeholders -- and they meet with them more frequently than bottom performers.

For asset-intensive enterprises such as utilities, manufacturers, and transportation networks, IT security threats targeting cyber-physical systems present an increased risk to the whole organization.

Bad actors increasingly target weaknesses wherever they are, as demonstrated by the surge in ransomware affecting organizations’ operational systems and recent supply chain attacks.

The siloed nature of today’s security disciplines then becomes its own risk and a liability to the organization, and the IT-centric focus of most security teams needs to expand to include threats in the physical world.

Gartner predicts that by 2025, 50 percent of asset-intensive organizations will converge their cyber, physical, and supply chain security teams under one chief security officer role that reports directly to the CEO.

Gartner research conducted pre-COVID-19 pandemic found that 61 percent of organizations surveyed were struggling to find and hire qualified and experienced IT security professionals.

Outlook for Cybersecurity Solution Innovation

As organizations shifted to 'remote working' in response to the global pandemic, it proved that some, if not all, security capabilities could be delivered remotely. This includes security monitoring or operations, policy development, security governance and reporting, security awareness, and incident response via dispersed teams.

Cybersecurity teams can work remotely and still provide effective capabilities. As a result, Gartner predicts that by 2022, 30 percent of all IT security teams will have increased the number of employees working remotely on a permanent basis.

Gartner recommends that security and risk leaders consider adapting their operating models and expand their job advertising to gain access to job candidates residing outside of their organization’s traditional recruitment geographies.

I believe that government counterintelligence investigation teams will work more closely with their commercial counterparts at multinational companies, to ensure the protection of strategic intellectual property assets. Proprietary software code assets are now one of the most prized corporate possessions, and they will be protected by more innovative IT security solutions.

Digital Wallet Spending will Reach $10 Trillion in 2025

During the last decade, mobile app developers and start-up fintech vendors have offered a variety of innovative digital wallet solutions across global markets. Due in part to the COVID-19 pandemic and the move away from cash-based payments, digital wallet apps have gained rapid new user adoption.

Initially, digital wallets centered on providing easy eCommerce payments or consumer person-to-person payments. This early growth enabled large tech companies -- such as Google, Apple, and PayPal -- to launch services and achieve a presence across the online payments and global retail ecosystems.

Digital Wallet App Market Development

According to the latest worldwide market study by Juniper Research, the total consumer spending via digital wallet apps will exceed $10 trillion in 2025 -- that's up from an estimated $5.5 trillion in 2020.

Moreover, the research findings found a dramatic 83 percent growth in digital wallet spending will be fuelled by the heightened adoption of digital payment solutions during the ongoing global pandemic.

Digital wallets, where payment details are stored and accessed via a smartphone software application, have proven themselves as being both convenient and secure -- acting as a platform for future innovation and growth.

The market study identified that digital wallets are becoming increasingly capable of both in-person contactless payment and online remote payments via the public internet.

The Juniper Research analysts forecast that in 2025, contactless and eCommerce payments will account for 50 percent of total wallet spend, from just under 36 percent in 2020.

According to the Juniper assessment, upside growth opportunities make this a high-priority area where digital wallet providers need to maximize their commercial merchant networks.

The new research found that the rapid growth in digital wallet availability, coupled with rising adoption, has left merchants with difficult decisions around acceptance.

The market study identified integration costs for multiple digital wallets as challenging for merchants -- meaning that picking the best-performing wallets to select and focus on is highly important.

"Merchants must base their payment strategies around wallet acceptance in order to support a digitally-engaged addressable market, but must also judge the right wallets to target, or they will be lumbered with increased costs and limited benefits," said Alexandria Sadler, associate research analyst at Juniper Research.

The research also found that the increased use of contactless mobile payments during the pandemic, prompted by concerns around cash, has seeded greater wallet use across the payments’ ecosystem.

Outlook for Digital Wallet Applications Growth

Juniper analysts forecast that contactless adoption will rise, with over 34 percent of mobile phone handsets anticipated to use contactless payments in 2025 -- that's up from 11 percent in 2020.

This growth means that integrating contactless-enabled digital wallets within typical in-store retailer checkout processes will be critical to meet evolving mobile phone app user expectations.

I believe that financial services companies, such as traditional banks, may be able to identify niche applications where their online payment service offerings are viable. Many of these organizations are already pursuing a digital transformation agenda that could enable them to launch new platforms with associated partner ecosystems.

Huge Upside for Private Wireless Network Infrastructure

Across the globe, mobile network operators continue to invest in public network infrastructure to support the growing demand for new applications. Moreover, there is an increasing need for purpose-built private cellular networks that enable the deployment of new Internet of Things (IoT) apps.

The fourth-generation (4G) long-term evolution (LTE) mobile technology standard and the fifth-generation (5G) standard are the foundation for these new emerging wireless network use cases.

Private LTE/5G infrastructure is any 3GPP-based LTE and/or 5G network deployed for a specific enterprise or industrial customer that provides 'dedicated access'.

Private Wireless Network Market Development

It includes networks that may utilize dedicated -- licensed, unlicensed, or shared -- spectrum, dedicated infrastructure, and private devices embedded with unique subscriber identity module (SIM) chips. 

Furthermore, private LTE/5G infrastructure carries traffic native to a specific organization, with no shared resources in use by any third-party entities.

Worldwide revenue attributable to the sales of private LTE/5G infrastructure will grow from $945 million in 2019 to an estimated $5.7 billion in 2024 with a 5-year compound annual growth rate (CAGR) of 43.4 percent.

This includes aggregated spending on radio access network (RAN), core, and transport infrastructure.

"Private LTE infrastructure is already used by select verticals worldwide to solve mission-critical networking challenges. However, the barrier to consumption has remained high, limiting adoption to organizations possessing in-house competency and access to dedicated spectrum," said Patrick Filkins, senior research analyst at IDC.

With more spectrum being made available for enterprise uses, coinciding with the arrival of commercial 5G, interest has grown toward using private LTE/5G solutions as a basis for connectivity across a multitude of mission-critical, industrial and traditional enterprise organizations.

Many organizations are deploying private LTE today, and a select few are beginning to deploy private 5G in limited instances. While many of these industry verticals overlap in both use case and network needs, the market opportunity can be categorized into three segments:

Mission-critical: Verticals that require 'always-on' connectivity addressable through redundancy and dedicated resources, as well as the clear need or desire for mobile site connectivity. Loss of connectivity would likely result in significant negative business or operational outcomes.

Industrial: Verticals whose primary focus is process and industrial automation for Industry 4.0. It also generally involves providing high-capacity and ultra-reliable low-latency communication (5G URLLC) either with time-sensitive networking (TSN) or as an alternative.

Traditional enterprise or business-critical: These are verticals that require deterministic wireless networking beyond traditional Wi-Fi, but where redundancy and automation needs are lower. These include 'business-critical' applications, where the loss of connectivity could result in loss of revenue.

Outlook for Private Wireless Network App Growth

I believe that with improvements in speed, latency, and higher density of connected devices, the emerging Wi-Fi 6 wireless local area network (WLAN) standard is likely to be ideal for indoor enterprise network applications.

That said, CIOs and CTOs will compare the unique attributes of wireless technologies and select the most suitable one for each enterprise application scenario. Therefore, we'll likely see situations where 5G and Wi-Fi 6 infrastructure will coexist, and interconnect to provide the optimal wireless network coverage.

Cloud Artificial Intelligence will Transform Mobile Apps

The ongoing growth of cellular wireless network applications creates new demand for emerging technologies. Fifth-generation (5G) wireless communication includes several network layers that leverage technology such as Open Radio Access Network (Open RAN), network slicing, and cloud edge computing.

Within cloud-edges, the broader Artificial Intelligence (AI) industry is witnessing a migration of AI to the edge. According to the latest worldwide market study by ABI Research, the edge AI training and inference market for chipsets is expected to grow from $2.6 billion in 2020 to $10.7 billion in 2025, at a CAGR of 35 percent.

Furthermore, new enterprise use cases place new performance, agility, and latency requirements on the network. These, along with the ongoing quest to drive new growth, are compelling the industry to shed human-intensive networks in favor of an intelligence-driven ecosystem.

5G Network Market Development

According to the ABI assessment, telecom service providers are already actively expanding the utilization of AI and machine learning (ML) beyond merely digitizing internal and external interactions.

"Many Communication Service Providers (CSPs) are already on a journey to become augmented service providers where AI augments human decision making for prediction, analysis, and new revenues," said Don Alusha, senior analyst at ABI Research.

Rakuten, for example, has renamed its Network Operations Centers (NOCs) to Service Experience Centers (SECs) as it implements extreme automation for self-aware networks. In addition, Telefónica Tech is a new venture to incubate new growth based on AI/ML, cloud and IoT/Big Data.

"AI/ML capabilities enable the industry to leverage IT-oriented nimbleness and scale as they seek to manage the complexities of today’s networks and establish new commercial models,” Alusha adds.

New commercial models will need to complement existing asset-intensive environments where an understanding of the cost of goods sold, inventory turns, managing factories, and supply chains is key to success. In the new world of cloud, AI/ML, and software, technology vendors do not manufacture a product and sell it.

"They sell a capability. They sell knowledge. They create it at the same time they deliver it. The business model is different and so are the economics. DriveNets, Enea Openwave, Ericsson, HPE, and Nokia are some vendors among many others that are building software-centric ways of marketing and selling solutions. The point is that AI/ML-based platforms are re-shaping existing commercial models. The winners will be those who act decisively and thoughtfully," Alusha says.

For CSPs, the continued maturity of AI/ML will be a key enabler of new value creation in their journey to become a digital service provider. Technology is a key pillar of that journey, but there are other key dimensions, that if not considered part of the overall digitalization journey, may limit CSPs’ ability to capture the full value at stake.

Specifically, change management is critical and constitutes the bulk of the effort as CSPs embrace new ways of working. Equally important is to embrace openness and break the siloes, two sides of the same coin. CSPs that are investing in AI/ML-based platforms must consider that efficiency will come from sharing knowledge and embracing open platforms where APIs and data can be easily accessed.

Outlook for 5G and AI/ML Applications Growth

AI/ML, big data, and open APIs offer agility and the ability to drive innovation. Consequently, the new world in cellular must start with a foundation on software and API-led connectivity. The ability to harness the power of software-defined networking platforms and AI/ML capabilities are the future.

"This may well mean that, in addition to bolting on software and intelligent capabilities, CSPs need to learn how to build them as cloud-edges, Open RAN, and 5G core proliferates in the ecosystem," Alusha concludes.

This is an emerging market where mobile network operators can differentiate their network services with value-added offerings. I believe that open innovation methodologies will enable service providers to engage their chosen technology partners that become part of evolving and expansive 5G ecosystems.

Global IT Investment will Recover to $3.9 Trillion in 2021

Any market momentum lost in 2020 for digital transformation initiatives will now be regained in 2021 as large enterprise CEOs, and their board of directors, approve IT spending acceleration.

Moreover, in anticipation of a recovery within the Global Networked Economy, savvy leaders are investing in key digital business priorities with the intent to gain a strategic competitive advantage.

Worldwide IT spending is projected to total $3.9 trillion in 2021 -- that's an increase of 6.2 percent from 2020, according to the latest market study by Gartner. In contrast, worldwide IT spending declined by 3.2 percent in 2020 as CIOs prioritized spending on technology and services that were deemed mission-critical during the initial stages of the pandemic.

Digital Transformation Market Development

Gartner says the speed of digital transformation in 2020 to satisfy remote working, remote education, and new social norms presented lockdowns and social distancing measures as double-edged swords.

"CIOs have a balancing act to perform in 2021 -- saving cash and expanding IT," said John-David Lovelock, vice president at Gartner. "With the economy returning to a level of certainty, companies are investing in IT in a manner consistent with their expectations for growth, not their current revenue levels. Digital business, led by projects with a short Time to Value, will get more money and board-level attention going into 2021."

All IT spending segments are forecast to return to growth in 2021. Enterprise software is expected to have the strongest rebound (8.8 percent) as remote work environments are expanded and improved. The devices segment will see the second-highest growth in 2021 (8 percent) and is projected to reach $705.4 billion in IT spending.

"There is a combination of factors pushing the devices market higher," said Mr. Lovelock.

As countries continue remote education through this year, there will be a demand for media tablets and laptop computers for students. Likewise, enterprises are standardizing on remote work methodologies as quarantine measures keep their knowledge worker employees at home.

By 2024, businesses will be forced to accelerate digital business transformation plans by at least five years to survive in a post-COVID-19 world that involves permanently higher adoption of remote work and digital touchpoints.

Gartner forecasts global IT spending related to remote work will total $332.9 billion in 2021 -- that's an increase of 4.9 percent of spending levels from 2020.

"Digital business represents the dominant technology trend in late 2020 and early 2021 with areas such as cloud computing, core business applications, security, and customer experience at the forefront. Optimization initiatives, such as hyper-automation, will continue and the focus of these projects will remain on returning cash and eliminating work from processes, not just tasks," said Mr. Lovelock.

According to the Gartner assessment, despite the availability of COVID-19 vaccines, the virus will continue to require government health interventions throughout 2021. Non-COVID-19 geopolitical factors such as Brexit and the U.S.-China tension will also inhibit recovery for some regions.

Outlook for Digital Transformation Applications Growth

Overall, returning global recovery back to 2019 spending rates will not occur until 2022, although many countries may recover earlier. People-gathering industries -- such as restaurants, travel, and entertainment -- will hover at the bottom long-term.

"COVID-19 has shifted many industries’ techquilibrium," said Mr. Lovelock. "Greater levels of digitalization of internal processes, supply chain, customer and partner interactions, and service delivery is coming in 2021, enabling IT to transition from supporting the business to being the business. The biggest change this year will be how IT is financed, not necessarily how much IT is financed."

I believe that more CIOs and CTOs will reassess their Digital Workspace strategies in 2021. The Hybrid Workforce phenomenon creates increasing demand to support more remote working employees' need for secure internet access -- regardless of their location. Besides, many employees already require secure access to a combination of enterprise applications that reside in corporate data centers and SaaS apps within the cloud.

How the Pandemic Impacts International Mobile Roaming

When you consider all the industries most impacted by the economic disruption in 2020, telecom service providers likely do not come to mind. However, global mobile communications revenue was significantly impacted last year.

Moreover, within the United Kingdom, the situation for incumbent mobile service providers will become even more complex and challenging during 2021, and beyond. All because of Brexit.

International Mobile Roaming Market Development

According to the latest worldwide market study by Juniper Research, the number of international mobile roaming subscribers dropped by 73 percent to 243 million globally in 2020 -- caused by travel restrictions arising from the COVID-19 pandemic.

Juniper analysts predict that an improvement in mobile roaming subscriber numbers will take until 2024 to exceed 2019 levels; reaching 918 million by 2024, as the international travel industry embarks on a prolonged recovery from the long-term impacts of the pandemic.

The new market study findings also predict that mobile network operators in North America will be amongst the first to recover from the impacts of the global pandemic on the roaming market.

Juniper's analysis found that the region will account for 23 percent of global roaming revenue by 2025, as border restrictions are lifted and demand for international travel returns to somewhat normal levels.

The market study findings also highlight that North America's recovery will likely be aided by the region’s early adoption of fifth-generation (5G) wireless services, with mobile network operators able to increase roaming revenue through the provision of advanced functionality to subscribers.

In response to further anticipated global economic challenges, Juniper analysts urge all mobile network operators to focus on expanding 5G roaming agreements in 2021 to capitalize on this revenue growth in the foreseeable future.

The research forecasts that the UK will account for 11 percent of mobile roaming subscribers in Europe by 2025, increasing from 8 percent in 2020, demonstrating that the revenue opportunity for network operators is growing.

Juniper found accordingly that UK-based mobile communication service providers are now facing pressure to form individual bilateral agreements with network operators in Europe to guarantee continued inclusive roaming for UK subscribers.

Outlook for International Mobile Roaming Growth

"Any decisions by UK operators to reintroduce roaming changes would negatively affect customer satisfaction. Operators must approach changes to their roaming policies with caution, in order to avoid an increase in the number of silent roamers and accompanying lost revenue," said Scarlett Woodford, research analyst at Juniper Research.

The implementation of 5G roaming agreements will lead to a range of application benefits, including new opportunities for globally connected Internet of Things (IoT) businesses and high-speed low-latency data transfer, hopefully providing some subscribers with an improved user experience.

I believe that as governments across the globe continue to respond to the ongoing pandemic crisis, and manufacturing supply chain stability may be difficult to achieve, we could see other technology-oriented business sectors make adjustments to their future 'revenue recovery' forecasts.

That said, the current relatively slow increase of COVID-19 vaccinations means that most commercial growth projections are very difficult to predict. Clearly, the potential for continued global market volatility merely adds more complexity to the process of forward-looking strategic planning.

Public Cloud Demand Accelerates During the Pandemic

The global enterprise IT modernization and migration to SaaS cloud computing platforms has been accelerated by the ongoing COVID-19 pandemic, as more CIOs and CTOs adapt to the increased demand for flexible online working models that enable their knowledge worker employees to work from virtually anywhere.

Clearly, IT infrastructure vendors directly benefited from this phenomenon.

Vendor revenue from sales of IT infrastructure products for cloud environments -- including public and private cloud -- increased 9.4 percent year-over-year in the third quarter of 2020 (3Q20). However, investments in traditional, non-cloud, IT infrastructure declined -8.3 percent year-over-year, according to the latest worldwide market study by International Data Corporation (IDC).

These growth rates demonstrate the market response to major adjustments in business, educational, and societal activities caused by the COVID-19 pandemic and the role IT infrastructure plays in these adjustments.

Across the globe, there were massive shifts to online tools in all aspects of human life -- including collaboration, virtual business events, entertainment, shopping, telemedicine, and education. Cloud computing environments, and particularly public cloud services, were a key enabler of this shift.

Public Cloud Infrastructure Market Development

Spending on public cloud IT infrastructure increased 13.1 percent year-over-year in 3Q20, reaching $13.3 billion. During the previous quarter spending on public cloud IT infrastructure exceeded non-cloud IT infrastructure spending for the first time ever, but non-cloud IT infrastructure spending was back on top in 3Q20 at $13.7 billion.

IDC expects public cloud IT infrastructure spending to surpass non-cloud IT infrastructure spending again in the near future and expand its lead going forward. Spending on private cloud infrastructure increased 0.6 percent year-over-year in 3Q20 to $5 billion with on-premises private clouds accounting for 63.2 percent of this amount.

IDC believes the hardware infrastructure market will continue to account for an increasingly greater share of overall spending. With only one quarter remaining and the market stabilizing after the initial COVID-19 market shock, IDC has increased its forecast slightly for cloud IT infrastructure spending for the full year 2020, expecting 11.1 percent growth to $74.1 billion.

IDC reduced its forecast for non-cloud infrastructure, expecting a decline of -11.4 percent to $60.2 billion. Public cloud IT infrastructure is expected to grow by 16.7 percent year-over-year to $52.7 billion for the full year. Spending on private cloud infrastructure is expected to decline -0.5 percent to $21.3 billion for the full year.

As of 2019, the dominance of cloud IT environments over non-cloud already existed for compute platforms and Ethernet switches while the majority of newly shipped storage platforms were still residing in non-cloud environments. Starting in 2020, with increased investments from public cloud providers on storage platforms, this shift will remain persistent across all three technology domains.

Within cloud deployment environments in 2020, compute platforms will remain the largest segment (49.1 percent) of spending, growing at 2.3 percent to $36.4 billion while storage platforms will be the fastest-growing segment with spending increasing 27.4 percent to $29.2 billion, and the Ethernet switch segment will grow 4 percent year over year to $8.5 billion.

Spending on cloud IT infrastructure increased across most regions in 3Q20, with the highest annual growth rates in Canada (32.8 percent), China (29.4 percent), and Latin America (23.4 percent). Growth in the United States was 4.7 percent. Japan and Western Europe declined by -6.7 percent and -3.4 percent, respectively. In all regions except Canada and Japan, growth in public cloud infrastructure exceeded growth in private cloud IT.

Outlook for Cloud Infrastructure Investment Growth

Long-term, IDC expects spending on cloud IT infrastructure to grow at a five-year compound annual growth rate (CAGR) of 10.6 percent, reaching $110.5 billion in 2024 and accounting for 64 percent of total IT infrastructure spend.

Public cloud data centers will account for 69.9 percent of this amount, growing at an 11.3 percent CAGR. Spending on private cloud infrastructure will grow at a CAGR of 9.2 percent. Spending on non-cloud IT infrastructure will rebound after 2020 but will decline overall at a CAGR of -1.7 percent.

There's no doubt in my mind that this cloud growth trend will continue for the foreseeable future. That said, the demand doesn't change the fact that many multinational enterprise organizations still require the inherent flexibility of a hybrid multi-cloud environment. Traditional on-premises IT systems are often mandated for regulatory compliance, and other key factors, that make these platforms invaluable corporate assets.

Augmented Reality Apps and Content Gain Momentum

The COVID-19 pandemic created many challenges within the enterprise, but it also generated technology application innovation. Augmented Reality (AR) has helped to fuel remote worker enablement, including high-value use cases such as remote assistance, training, and workflow instruction.

Combine this with an increasingly viable consumer AR market over the next few years, the market growth potential is significant. ABI Research estimates that the worldwide augmented reality market will surpass $140 billion in total market value by 2025.

"While enterprise usage has dominated the augmented reality conversation over the past few years, the tides are shifting. All of the tech companies that can shift markets on a global scale are directly involved in AR already, and many are planning more dedicated AR hardware efforts over the next two to three years," said Eric Abbruzzese, research director for ABI Research.

Augmented Reality Market Development

According to the ABI assessment, this growth will eventually switch the leading AR market from enterprise to consumer, benefitting both sides through increased competition and maturity.

Growth patterns around AR hardware and content will back this up over the next five years. Media & Entertainment along with Retail & Marketing are the fastest growing verticals -- Consumer Software & Content and AR Advertising are the fastest growing market segments.

However, enterprise growth isn’t slowing. Healthcare; architecture, engineering, and construction (AEC); manufacturing; and automotive all promise growth between 70 percent and 90 percent CAGR through 2025.

There will not be the same rapid influx of users that the consumer market will see, but increased hardware options coming from that market will spur further adoption, as will a higher familiarity around AR content and technology.

Apple has AR-focused LIDAR sensors on iOS products and ARKit enabling experiences across content types. Google acquired smart glasses maker North, and they still have the Glass for an Enterprise solution and ARCore for content enablement. Also, Facebook announced continuing AR efforts with their Reality Labs smart glasses plans for 2021.

Developments from enterprise vendors continue to grow. PTC, Atheer, Microsoft, Lenovo, Teamviewer, and many others are increasing AR investment and focus, often tweaking pricing structures and business models. Free trials and AR-as-a-service options have been spurred by COVID-19 and are likely to remain.

Furthermore, Facebook, Google, and Apple have built AR foundations in content creation and mobile device enablement, with visions for a ubiquitous augmented reality applications market by 2025.

Consumer market growth will benefit the enterprise, with key AR requirements around the price, ease of use, and overall user value shared among both sides of the emerging marketplace for new services.

Outlook for Augmented Reality Applications Growth

"The latent value of remote enablement AR provides has been expounded, and similar needs in the consumer space will also spur adoption there. These all combine to create significant momentum around AR, rather than the common excitement yet hesitation and immaturity of years before," concludes Abbruzzese.

The distributed workforce trends that are driven by the ongoing global pandemic will create new AR and other emerging technology applications. As an example, I anticipate the exponential growth of remote working adoption will launch more opportunities for workflow streamlining apps and related project management optimization use cases. Clearly, the upside growth potential is vast.