Cross-Border Payment and Settlement Fuels Blockchain

Across the globe, CIOs and CTOs will assess the potential benefits of distributed ledger technology applications that are empowered by purpose-built peer-to-peer networks. To date, the adoption and development of blockchain solutions have been somewhat problematic, due to a variety of complex challenges.

Regardless, organizations are forecast to spend nearly $6.6 billion on blockchain solutions this year -- that's an increase of more than 50 percent compared to 2020. Blockchain investments will see growth throughout the 2020-2024 forecast period with a five-year compound annual growth rate (CAGR) of 48 percent, according to the latest worldwide market study by International Data Corporation (IDC).

"This is an important time in the blockchain market as enterprises across markets and industries continue to increase their investment in the technology. The pandemic highlighted the need for more resilient, more transparent supply chains, healthcare delivery, financial services, and so much more, and enterprises around the world have been investing in blockchain to provide that resiliency and transparency," said James Wester, research director at IDC.

Blockchain Technology Market Development

There's growing interest and investment by corporations, financial institutions, and governments in areas previously viewed with some uncertainty -- such as cryptocurrencies, digital assets, central bank digital currencies, decentralized finance, and stablecoins.

The leading use case for blockchain in 2021 and throughout the forecast is Cross-Border Payments & Settlements, which uses distributed ledger technology to track, trace, and manage payments and settlements.

The second-largest blockchain use case is Lot Lineage or Provenance, which is used to verify the origin and authenticity of a product as it moves throughout the value chain. Other leading use cases include Trade Finance & Post Trade or Transaction Settlements, Asset or Goods Management, and Identity Management.

From an industry perspective, banking leads the way in blockchain spending, accounting for nearly 30 percent of the worldwide total in 2021. Banking will remain the top industry for blockchain spending throughout the forecast although its share of spending will diminish slightly by 2024.

According to the IDC assessment, the primary use cases for blockchain within the banking industry are Cross-Border Payments & Settlements and Trade Finance & Post Trade or Transaction Settlements.

The next largest industries for blockchain spending are process manufacturing and discrete manufacturing, which together account for more than 20 percent of all spending worldwide. The leading use case in both industries is Lot Lineage or Provenance.

Following the manufacturing industries are professional services, retail, and insurance, which rely on blockchain to trace the movement of payments and products. The industries that will see the fastest growth in blockchain spending over the forecast period are professional services (56 percent CAGR), state or local government (53.3 percent CAGR), and healthcare (52.7 percent CAGR).

From a technology perspective, IT services and business services (combined) will account for more than two-thirds of all blockchain spending throughout the forecast with IT services receiving slightly more investment over the forecast period.

Blockchain platform software will be the largest category of spending outside of the services segment and the fastest growing technology category overall with a five-year CAGR of 52.9 percent.

Outlook for Blockchain Applications Regional Growth

Spending on blockchain solutions in the United States will be nearly $2.6 billion this year, making it the largest geographic market, followed by Western Europe ($1.6 billion) and China ($777 million).

All nine regions covered by IDC analysts are predicted to see exceptional spending growth over the forecast period, led by China with a five-year CAGR of 54.6 percent and Central and Eastern Europe (50 percent CAGR).

That said, I've followed the blockchain market through the recent history of abundant hype and euphoria that has led to the current more realistic outlook. One of the most persistent challenges is the lack of people that have proven skills and experience with this technology. I anticipate that market growth will continue to be impacted by this significant obstacle to accelerated progress.

Satellite Broadband Internet Access Gains Momentum

In today's economy, broadband internet access is an essential enabler for users of online government services and active participants of commercial eCommerce applications. While people in most urban settings may have access to affordable offerings, that's typically not true for many rural residents.

There's a significant need in most remote locations for high-speed internet connectivity. Demand for internet access via broadband services over both fixed and mobile networks has increased dramatically. Yet, despite telecom network expansions and upgrades, it's estimated that only half of the households worldwide currently have access to fixed broadband services.

With the rollout of Low Earth Orbit (LEO) constellations, satellite broadband services could improve broadband penetration. According to the latest market study by ABI Research, the satellite broadband market will reach 3.5 million subscribers in 2021 -- growing at a CAGR of 8 percent to reach 5.2 million users in 2026, and generate $4.1 billion in service revenue.

Satellite Broadband Service Market Development

"LEO satellites will play an important role in satellite broadband services in the years to come. High Throughput Satellite (HTS) LEO systems can support multi-Gbps speed per satellite. Orbiting around 800-1600 km from the Earth’s surface, LEO systems offer a major advantage of low latency between 30-50 milliseconds, enabling LEO broadband services to support live video streaming," said Khin Sandi Lynn, industry analyst at ABI Research.

Traditionally, Geostationary Earth Orbit (GEO) satellites are mainly used to provide broadband services to homes and businesses in remote or rural areas where the deployment of mobile or fixed broadband connectivity is challenging.

Although GEO satellites support a viable speed for broadband internet access, their distance from the Earth surface -- approximately 36,000 kilometers -- creates a drawback of longer latency time at about 600 milliseconds, limiting the use of most applications requiring network low latency.

LEO satellite operator SpaceX first launched its Starlink broadband services to residential users in 2020, supporting 100 Mbps broadband speed with unlimited data caps per month. SpaceX has launched over 1000 LEO satellites and aims to serve more than 600,000 homes and businesses within the United States market.

SpaceX is now working toward the expansion of its Starlink broadband service to some markets in Latin America. Other companies, such as OneWeb and Telesat, have launched LEO satellites providing connectivity to the business market segment.

Amazon, which plans to launch LEO constellations named project Kuiper, received FCC approval for its project in mid-2020, although the first satellite launch date is yet to be confirmed.

As global internet connectivity becomes more pervasive, satellite broadband access will remain an important part of the wireless broadband market. However, there is still competition from terrestrial broadband networks, due to the continued expansion of fixed and mobile network infrastructure.

The expansion of LTE and 5G terrestrial wireless networks will challenge the satellite broadband industry by supplying fixed wireless access (FWA) services. However, the investment cost and time associated with terrestrial network deployments can limit availability in rural and remote areas.

Outlook for Satellite Broadband Service Growth

That said, the challenge of LEO-based broadband service currently is the cost of terminals, which are relatively high compared to existing satellite or terrestrial platforms. LEO satellite operators need to find ways to lower the up-front broadband terminal cost.

"Flexible packages and pricing could make the services affordable for users in both developed and emerging markets. Even though heavy subsidizing of hardware costs may be required initially, the ability to boost adoption rates will help ecosystem development and eventually lower the hardware cost," Lynn concludes.

I've been researching the LEO satellite communications sector since 1996, during my role while working on the Iridium project, and I've witnessed significant advancements in all the related space technologies. I'm now anticipating that more people around the globe can benefit from broadband internet access services within both under-served and un-served areas.

Business Technology Investment will Reach $4.1 Trillion

Enterprise CIOs crave practical insights and guidance to help them drive digital business transformation projects. They've been tasked to develop comprehensive IT investment strategies across hardware, software, professional services, and telecom networks. That, in turn, drives IT vendor revenue growth.

Worldwide IT spending is projected to total $4.1 trillion in 2021 -- that's an increase of 8.4 percent from 2020, according to the latest worldwide market study by Gartner.

The source of funds for new digital business initiatives will more frequently come from groups outside the traditional IT organization and charged as a cost of revenue, or cost of goods sold.

Business Technology Market Development

Gartner’s IT spending forecast methodology relies heavily on the analysis of vendors across the entire range of IT products and services. They use primary research, complemented by secondary research sources, to build a database of market size data on which to base their forecast.

"IT no longer just supports corporate operations as it traditionally has, but is fully participating in business value delivery," said John-David Lovelock, vice president at Gartner.

Not only does this shift IT from a 'back-office' role to the 'front of the business', but it also changes the source of funding from an overhead expense that is maintained, monitored and sometimes cut, to the key thing that drives digital growth.

All IT spending segments are forecast to have positive growth through 2022. The highest growth will come from devices (14 percent) and enterprise software (10.8 percent) as organizations shift their focus to providing a more comfortable, innovative and productive environment for their hybrid workforce.

As one example, the increased focus on the employee experience and well-being are propelling technology investments forward in areas such as social software and collaboration platforms and human capital management (HCM) software.

Although optimization and cost savings efforts won’t disappear simply because there’s more economic certainty in 2021, the focus for CIOs through the remainder of the year will be completing the digital business plans that are aimed at enhancing, extending and transforming the company’s value proposition.

"Last year, IT spending took the form of a 'knee jerk' reaction to enable a remote workforce in a matter of weeks. As hybrid work takes hold, CIOs will focus on spending that enables innovation, not just task completion," said Mr. Lovelock.

That said, according to the Gartner assessment, recovery across countries, vertical industries and IT segments still varies significantly, prompting an uneven K-shape economic recovery.

Outlook for Digital Business Transformation Growth

As an example, from an industry perspective, banking, securities, and insurance spending will closely resemble pre-pandemic levels as early as 2021, while retail and transportation sector spending won’t see a similar recovery until closer to 2023.

Regionally, Gartner predicts that Latin America is expected to recover in 2024, while Greater China has already surpassed 2019 IT spending levels. Moreover, North America and Western Europe are both expected to recover in late 2021.

Beyond the anticipated industry and regional IT investment differences, forward-thinking CIOs and CTOs will likely use the disruption presented by the global COVID-19 pandemic to accelerate past their less progressive peer group in other organizations.

So, across the globe, there will very likely be market winners and losers, as a result of the IT investment disparities. That's the outcome of a K-shaped economic recovery.

How Instant Payments Impact Global Money Transfers

The COVID-19 pandemic has been a growth driver for the transformation of remittance services, partly due to the closure of traditional money transfer agent locations as part of numerous national market lockdowns.

Many of the major domestic and international remittance providers -- both those with physical branches and agent networks -- and digital-only players have posted significant growth in their online customer base during 2020.

In contrast, consumer cash transactions fell sharply in 2020. Although there may be a return to cash-use post-pandemic, digital remittance use will likely become a permanent trend in customer behavior.

Online Instant Payments Market Development

According to the latest worldwide market study by Juniper Research, digital domestic money transfer transaction values will rise from $2 trillion in 2020 to $3.4 trillion in 2025 -- driven in part by the rapid growth of mobile money transfers.

Mobile transactions will represent an 89 percent share of total global transaction value by 2025, with drivers of volume growth being peer-to-peer (P2P) payment applications in developed markets and mobile money in emerging markets.

The research findings identified that to compete in a congested online payments market, mobile money transfer apps must leverage instant payment capabilities to ensure the best user experience.

The new global market study found that services such as Venmo and Zelle have propelled mobile apps to dominance in domestic money transfers.

The research also identified that conversational platforms, such as WhatsApp, are poised for growth, with the successful launch of its mobile payment feature in India and the recent green light for the roll-out of its payment solution in Brazil.

Juniper analysts recommend that money transfer vendors develop the social elements of their software apps, in order to combat the increased competition from conversational commerce providers.

This latest study has uncovered that with shifting customer expectations, existing money transfer models face an increasing threat from instant payments, with domestic instant payment transaction values forecast to grow from $524 billion in 2020 to reach $2 trillion in 2025.

According to the Juniper assessment, instant payments can significantly increase transaction speed and reduce cost, compared with digital wallet and app-based solutions, and therefore pose a significant threat to the monetization models of established P2P payment options which levy fees for fast transfers.

"It is critical for money transfer players to create user-friendly app experiences around their new instant payment capabilities to ensure that they fully leverage the benefits, and that they remain relevant in this rapidly advancing market," said Susannah Hampton, senior analyst at Juniper Research.

Outlook for Instant Payment Applications Growth

With the steady growth of digital-only remittance providers, established industry players -- such as Western Union and MoneyGram -- have been forced to invest heavily in online service offerings. However, due to the continued disruption from the pandemic, they've struggled to drive consistent top-line growth.

I believe that the traditional consumer payments and money transfer markets will continue to evolve as more fintech startups dislodge the prior influence of legacy service providers. It's inevitable that the incumbents that failed to react quickly to the apparent market trends will suffer the consequences of their delayed reaction.

Unified Communications and Collaboration Trends

Modern business communication and collaboration solutions are an essential platform for a distributed workforce. The global COVID-19 pandemic has brought these platforms to the forefront of digital transformation. Together, they'll form a foundation for many 'digital workspace' deployments.

These multifaceted offerings aren't deployed because they're the best technology. They're used to drive meaningful advances in employee productivity, agility, and flexibility that are proven to help achieve desired business outcomes.

The Unified Communications & Collaboration (UC&C) market grew 29.2 percent year-over-year and 7.1 percent quarter-over-quarter to reach $13.1 billion in the fourth quarter of 2020 (4Q20), according to the latest worldwide market study by International Data Corporation (IDC).

IT vendor revenue growth was also up by an impressive 24.9 percent for the full year of 2020 to reach $47.2 billion. Regardless, not all the IT vendors benefited from the growth in global market demand.

Unified Communications & Collaboration Market Development

How business was conducted changed dramatically in 2020 due to the COVID-19 pandemic, driving companies of all sizes to consider and adopt scalable, flexible, cloud-based offerings as part of their UC&C enabled 'digital workspace' solution.

Several IT vendors and managed service providers also saw exponential growth in the number of video and collaboration end-users in 2020, as more knowledge workers stayed home and worked online.

Besides, the study uncovered interest in live video meetings, online collaboration, Unified Communications-as-a-Service (UCaaS), and better mobile applications.

IDC reported the following UC&C market findings:

Hosted Voice or UC Public Cloud (UCaaS) grew 26.1 percent year-over-year and 6.8 percent sequentially in 4Q20 to reach nearly $4.6 billion in revenue. For the full year of 2020, public cloud UCaaS revenue increased 21.2 percent to reach $16.4 billion.

UC Collaboration (including video conferencing software and cloud services) increased 48 percent year-over-year and 5.1 percent sequentially to reach almost $6.2 billion in revenue within 4Q20. For the full year of 2020, UC Collaboration revenue increased 45 percent to reach $22.1 billion.

Meanwhile, revenue for internet protocol (IP) phones declined 20.4 percent year-over-year but grew 20.3 percent sequentially in 4Q20. For the full year of 2020, IP phone revenue declined 22.8 percent to reach $1.9 billion.

Shipments of IP phones also declined 23.1 percent year-over-year but increased 14.7 percent sequentially. For the full year of 2020, shipments of IP phones were down 22.2 percent.

Enterprise videoconferencing systems (i.e., videoconference room endpoints) surprisingly increased 26.1 percent year-over-year and 36.5 percent sequentially to more than $827 million in 4Q20. For the full year of 2020, revenue increased 12.4 percent to reach almost $2.6 billion.

"In 2020, COVID-19 caused many businesses and organizations to re-think their plans for leveraging digital technologies and accelerated interest in and adoption of solutions such as team collaboration, team messaging, videoconferencing, and UCaaS, among other technologies," said Rich Costello, senior research analyst at IDC.

In 2021, IDC analysts expect positive growth across these key UC&C segments to continue, with slightly more modest rates. IDC also shared the following geographic market insights from 2020:

• From a regional perspective, the UC&C market saw positive numbers across the board in 4Q20 and for the full year 2020.
• In North America, UC&C revenue was up 3.1 percent quarter over quarter and 30.1 percent annually in 4Q20 to almost $6.3 billion. For the full year of 2020, revenue was up by 26.1 percent to reach $22.9 billion.
• Asia-Pacific (including Japan) revenue was up 14.9 percent sequentially and 36.9 percent year-over-year to more than $2.4 billion in 4Q20. For the full year of 2020, revenue was up 28.1 percent to reach almost $8.4 billion.
• Europe, the Middle East, and Africa (EMEA) revenue was up by 9.5 percent quarter-over-quarter and 23.8 percent annually in 4Q20 to reach $4.0 billion. For the full year of 2020, revenue was up 20.9 percent to reach $14.3 billion.
• Latin America revenue increased 3.6 percent compared to 3Q20 and 27.3 percent year-over-year in 4Q20 to reach more than $441 million. For the full year of 2020, revenue was up 27.6 percent to reach over $1.6 billion.

Outlook for UC&C Platform Applications Growth

In 2021 and beyond, IDC expects worldwide UC&C growth will be driven by companies across all business size segments (small, midsize, and large enterprise) within the Global Networked Economy.

I believe the definition of 'digital workspace' capabilities will become clearer, as more CIOs and CTOs follow the lead of Line of Business (LoB) leaders that will specify their requirements. These business leaders are the key decision-maker for a preferred solution.

That said, technology-centered or product-centered IT vendors will struggle to gain market share. In contrast, those savvy vendors that can demonstrate how to apply these platforms -- in the most effective way -- will advance rapidly past their competitors.

Also, incumbent IT vendors likely have a challenge if their SaaS pricing is seen as excessive by current customers or new sales opportunities. More organizations focus on the cloud end-user subscription price, in comparison to the perceived cost of an equivalent on-premises solution.

Mobile 5G Network Security Protects Enterprise Apps

Next-gen mobile technology is being deployed globally, and cloud-native apps on fifth-generation (5G) networks will drive advances within the IT security industry. According to the latest worldwide market study by ABI Research, 5G network security will be a $9 billion enterprise market opportunity in 2025.

The deployment of cloud edge computing infrastructure and network-function virtualization (NFV), plus API-driven platforms, and the isolation capabilities of network slices provide significant growth opportunities for new offerings.

Both security software and services will be in demand from large enterprises seeking to leverage Massive Machine-Type Communications (mMTC), and Ultra-Reliable Low Latency Communication (URLLC) technologies.

5G Network Security Market Development

"Initial spending on security will be by Communication Service Providers (CSPs) as they focus on securing their own mobile infrastructure and network. As CSPs advance, there is an opportunity for them to recoup that investment and monetize it through enterprise security offerings," said Michela Menting, research director at ABI Research.

This will most likely be in partnership with network equipment providers and pure-play cybersecurity vendors. There's an upside for public cloud hyperscalers as well. The 5G core will introduce apps and a data ecosystem into mobile edge computing distributed environments -- including app-level and interface API security.

The integration with the public cloud infrastructure offerings will be key and allow value to be delivered initially via software, and eventually through managed services.

"There is serious potential to explore OPEX delivered security models through the cloud once requirements around performance and latency can be met. CSPs, notably Tier Ones, are keen to attract security-sensitive industries to 5G and this is driving them to integrate security software and services into their 5G networks," says Menting.

At present, many traditional IT cybersecurity solutions do not adapt to cellular wireless core networks, so a period of transformation will be required. There will be an ongoing effort for CSPs to create a security portfolio for enterprises, as well as for solutions vendors to provide carrier-grade offerings.

Currently, network security appliances remain easier to implement, particularly from CSPs who continue to consume hardware for performance and scale, and particularly for hybrid networks (4G/5G).

In time, security software and services offerings for enterprises will increase once the 5G core standalone mode becomes mainstream. ABI Research believes these will likely emerge post-2023.

Outlook for 5G Network Security Apps Growth

According to the ABI assessment, it's clear there will be an opportunity for new entrants to penetrate the network security market as 5G is deployed; especially for pure-play cybersecurity providers, as demands for network security appliances soar.

"But increasingly, hyperscale public cloud providers and new innovative software and cloud vendors will see opportunity, notably in the private 5G network market," Menting concludes.

I believe that more CIOs and CTOs around the globe are evaluating 5G private network application opportunities. They anticipate wireless technology security advances will become the catalyst of change that empowers forward-looking organizations to adopt Industry 4.0 initiatives.

Private 5G infrastructure will support industrial-scale internet of things (IoT) wireless network connectivity -- with inherently low latency, mission-critical reliability, and a high degree of data security -- applied to enable new digital transformation use cases.

Solving IT Security and Risk Management Challenges

Business and technology leaders must address the key IT Security and Risk Management issues, as the COVID-19 pandemic impact accelerates demand for digital transformation, and creates new challenges for traditional cybersecurity practices.

"The first challenge is a skills gap. 80 percent of organizations tell us they have a hard time finding and hiring security professionals, and 71 percent say it’s impacting their ability to deliver security projects within their organizations," said Peter Firstbrook, vice president at Gartner.

Other key challenges facing IT security and risk leaders in 2021 include the complex geopolitical situation, increasing government regulations, the migration of workloads off traditional data networks, more endpoint device diversity, and a shifting cyber-attack environment.

The following trends are expected to have a significant potential for disruption.

Comprehensive IT Security Market Development

A cybersecurity mesh is a modern security approach that consists of deploying controls where they are most needed. Rather than every security tool running in a silo, a cybersecurity mesh enables tools to interoperate by providing foundational security services and centralized policy management and orchestration.

With many IT assets now outside traditional enterprise perimeters, a cybersecurity mesh architecture allows organizations to extend security controls to distributed assets.

For many years, the vision of access for any user, anytime, and from anywhere (often referred to as "identity as the new security perimeter") was an ideal. It has now become a reality due to technical and cultural shifts, coupled with a now majority remote workforce during COVID-19. 

Identity-first security puts the user's identity at the center of IT security design and demands a major shift from traditional local area network (LAN) edge design thinking.

According to Gartner's survey, 64 percent of employees are now able to work from home. Gartner findings indicate that at least 30-40 percent will continue to work from home post-COVID-19.

For many organizations, this shift to a distributed workforce requires a total reboot of policies and security tools suitable for the modern remote employee workspace.

For example, endpoint protection services will need to move to cloud-delivered services. Security leaders also need to revisit policies for data protection, disaster recovery, and backup to make sure they still work in a remote environment.

According to Gartner's survey, boards of directors rated cybersecurity the second-highest source of risk for the enterprise after regulatory compliance. Large enterprises are now beginning to create a dedicated cybersecurity committee at the board level, led by a board member with security expertise or a third-party consultant.

Gartner predicts that 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.

Gartner's survey found that 78 percent of CISOs have 16 or more tools in their cybersecurity vendor portfolio; 12 percent have 46 or more tools. A large number of IT security products in organizations increases complexity, integration costs and staffing requirements.

In a recent Gartner survey, 80 percent of IT organizations said they plan to reduce and consolidate security vendors over the next three years.

New privacy-enhancing computation techniques are emerging that protect data while it's being used -- as opposed to while it's at rest or in motion -- to enable secure data processing, sharing, cross-border transfers and analytics, even in untrusted environments. 

Privacy-related implementations are on the rise in fraud analysis, intelligence, data sharing, financial services (e.g. anti-money laundering), pharmaceuticals and healthcare sectors.

Gartner predicts that by 2025, 50 percent of large organizations will adopt privacy-enhancing computation for processing data in untrusted environments or multiparty data analytics use cases.

New breach and attack simulation (BAS) tools are emerging to provide continuous defensive posture assessments, challenging the limited visibility provided by annual point assessments like penetration testing.

When CISOs include BAS as a part of their regular security assessments, they can help their teams identify gaps in their IT security posture more effectively and prioritize security initiatives more efficiently.

Machine identity management aims to establish and manage trust in the identity of a machine interacting with other entities -- such as devices, applications, cloud services, or gateways.

Increased numbers of non-human entities are now present in organizations, which means managing machine identities has become a vital part of the IT security strategy.

Outlook for IT Security and Risk Management Growth

Most enterprise CISOs, and even CIOs, recognize that the lack of skilled and qualified security professional candidates will increase the ongoing demand for IT security vendor professional services. I believe that this trend is, by far, one of the most pervasive and the most compelling challenges.

Clearly, the other key challenge that must be resolved is the abundance of stand-alone IT security software tools that the typical enterprise organization has acquired over the last decade. The migration to comprehensive cloud-based security offerings is part of the solution to this known problem.

There's also a growing mandate for new Hybrid Services that support both on-premises data centers and multiple public cloud use cases. However, very few IT vendors appear to have the ability to scale their global support of all customer needs and wants.

Therefore, I anticipate those unique vendors must demonstrate a proven track record of addressing complex enterprise networking and security environments. I envision this scenario as a 'Hybrid-Next' era that will further advance digital transformations across the globe.

AI Conversational Commerce Fuels eCommerce Apps

More organizations are adopting new technologies that improve online commerce automation. Conversational commerce is the process by which end-users of smart devices are able to leverage them for commercial purposes, including applications within the retail and banking sectors.

The ecosystem for conversational commerce has evolved with many telecom providers acting as the primary point of connection between the end-users of these devices and the brands, enterprises and financial institutions that provide them to their customers.

According to the latest worldwide market study by Juniper Research, the total spending over conversational commerce channels will reach $290 billion by 2025 -- that's an increase from $41 billion in 2021. This forecast growth represents a rise of 590 percent over the next four years.

Conversational Commerce Market Development

Juniper analysts predict that communications platforms that provide the connection between brands and end-users will be crucial in increasing the adoption of conversational commerce channels.

The new study findings highlighted that the ability to offer conversational commerce as a component of an omnichannel retail strategy will increase confidence in the channels among retailers.

This strategy enables these retailers to expand their reach while allowing a fallback on more established commerce channels. Conversational commerce leverages artificial intelligence (AI) to automate retail transactions and payments through channels including chatbots, messaging, and digital voice assistants.

The Juniper study predicts that three countries in the Asia-Pacific region will account for over 90 percent of chatbot spend by 2025: China, Japan, and South Korea.

Mobile messaging apps popular in these countries -- such as WeChat, LINE, and Kakao Talk -- have all established chatbot ecosystems in which retailers play a significant role in the development of chatbot and conversational commerce functionality.

The Juniper analyst urges other emerging conversational commerce channels to emulate the chatbots ecosystems in these countries. They have demonstrated the proven path to meaningful progress.

To maximize the potential of other conversational commerce channels, such as voice commerce and RCS messaging, Juniper recommends that retailers and communications platforms explore the possibility of a revenue-sharing model, in which a small proportion of the transaction value is paid to the conversational commerce service provider.

Outlook for Conversational Commerce Growth

"Revenue-sharing models will enable conversational commerce channels to monetize their services by levying costs on brands and enterprises, rather than the end-users themselves. This revenue can be used to improve commerce channels to generate further investment from brands and enterprises," said Sam Barker, lead analyst at Juniper Research.

Today's eCommerce chatbots can benefit organizations by automating sales and after-sales support. In the role of a customer service agent, chatbots can answer simple questions such as store locations and opening hours.

In addition, they can confirm and track customer orders, as well as answering questions about products, warranties, invoices and returns. Chatbots can also help users searching for products, thereby removing the need for consumers to sift through irrelevant search results.

I believe that chatbots have also been proven to help increase sales by taking payments within the chat interface, therefore streamlining the online payment process. The entire sales process, from product discovery to checkout can now be automated by chatbots, via conversational commerce use cases.

European CISOs Drive Increased IT Security Investment

The Chief Information Security Officer (CISO) role has gained new importance, due to increased cyber threats. Moreover, the COVID-19 pandemic has had a significant impact on security-related IT investment in Europe, which will continue to grow rapidly in 2021.

During the pandemic, organizations have been re-architecting their IT security perimeters to protect operations and critical data. The pandemic, and measures to curb it with remote working, have pushed the enterprise network outwards and heightened the risk for CISOs.

According to the latest worldwide market study by International Data Corporation (IDC), overall investment in IT security within Europe is projected to exceed $35.6 billion during 2021 with a compound annual growth rate (CAGR) of 8.8 percent between 2020 and 2024 -- now forecast to reach $46.4 billion in 2024.

IT Security Market Development

The banking sector traditionally has the highest spending on IT security due to the particularly sensitive customer data that is integral to the industry. Besides, financial service organizations are eager to optimize their IT infrastructure via digital transformation.

The COVID-19 pandemic also increased focus on remote servicing of clientele, making data protection and identity and digital trust solutions even more invaluable. Additionally, the European banking sector is leading in terms of spending on services for integration, consulting, support services, and more.

Spending on IT services in the sector is projected at 7.3 percent year-on-year growth in 2021 to reach $4.8 billion. The second-place vertical market is discrete manufacturing with 7 percent projected to reach $3.8 billion, followed by process manufacturing with $3.1 billion in spending based on 7.6 percent growth.

IT Security spending also varies according to regions. In Central and Eastern Europe (CEE), for example, the second-largest vertical is federal or central government, with discrete manufacturing in third place.

In Western Europe, conversely, banking is still the largest industry by IT security spending, followed by discrete manufacturing in second place and process manufacturing in third.

Broken down by services category, security services are projected to comprise the greatest share of IT security investment in 2021, with spending expected to accelerate further as organizations in Europe accelerate their digital transformation and migrate systems and workloads to the cloud. However, security software and hardware investments are expected to grow at a slightly lower rate.

"After the initial response to the pandemic, organizations in Europe began to plan more strategically for an increasingly digital future, where interactions between businesses, their employees, partners, and customers (or citizens) are predominantly digital rather than physical," says Mark Child, research manager at IDC.

According to the IDC assessment, this transition will require secure infrastructure and processes, and not every organization has the resources and expertise in-house. This is also driving strong growth in security services -- particularly public cloud services, managed security services, and IT security consulting.

Outlook for IT Security Investment in Europe

CEE governments invested heavily in IT security during 2020 and are expected to continue doing so through 2024, owing to the need to provide digitalized services to citizens and businesses, and to enable remote working, distance learning, or other operations in which a physical presence is not possible.

IDC analysts believe that Central and Eastern Europe are catching up to Western Europe when it comes to the maturity of IT security spending in the government sector, and the current spending levels of verticals illustrate these trends.

That said, I anticipate that the adoption of Hybrid Workforce models will motivate all CIOs to reassess their organization's secure network access requirements. Home-based workers will likely need to reach software applications within a managed data center, plus a variety of public cloud-based SaaS apps.

Cloud Edge and IoT will Improve Pharma Manufacturing

The global COVID-19 pandemic has accelerated changes in many industries. One of the most impacted was the pharmaceutical sector that had to reimagine business processes and rapidly adopt new technologies. It's yet another example where applying cloud computing had become a strategic imperative.

Today, next-generation pharma concepts are fueling ongoing innovation. In particular, the industry’s unique characteristics are driving investments in Digital Transformation by forward-looking pharmaceutical manufacturers. 

According to the latest worldwide market study by ABI Research, digital factory revenue will top $4.5 billion in 2030 with spending by pharma manufacturers on data analytics forecast to grow by a 27 percent CAGR and reach $1.2 billion in 2030, as these companies evolve to boost productivity.

Pharma Digital Transformation Market Development

That said, the industry’s competitive dynamics require pharmaceutical firms to optimize their production lines to maximize yield for the time a drug has patent protection. After patents expire, generics companies will produce similar products.

According to the ABI assessment, the utilization of data analytics can support each type of effort to increase yield. Moving from manufacturing drugs and vaccines in batches, to optimizing the manufacturing process with 'continuous production' can dramatically increase yields.

"But the active pharmaceutical ingredients are susceptible to changes in their immediate environment. The batch must be scrapped if the condition of the ingredients or formulation falls outside accepted parameters," says Michael Larner, principal analyst at ABI Research.

Therefore, pharma manufacturers can choose to invest in analytics that aid in the development of 'digital twins' of their operations, so that they can prepare their production lines for more predictable continuous manufacturing.

Another digitization focus for pharmaceutical firms is to remove paper recordkeeping. "Collecting and storing data via paper-based processes risks reducing productivity and increases the likelihood that errors happen on the production line due to administrative errors," Larner points out.

FDA 21 CFR Part 11 is one way the U.S. Food and Drug Administration is encouraging the adoption of digital technologies by publishing the criteria for submitting electronic records to the organization and the treatment of electronic signatures.

The prevalence of paper records illustrates the progress yet to be made by pharmaceutical firms regarding digital transformation. ABI Research has offered a five-stage 'digital maturity' model, outlining the progress made and steps required by drug manufacturers to optimize their operations.

Larner explains, "Currently, pharmaceutical manufacturers are at Stage 2 in that they have modern factory but lack foresight and struggle to adjust production, or Stage 3 where they have started to implement digital transformation but lack expertise reconfiguring production lines."

In the coming decade, many firms will upgrade their existing facilities or build new 'greenfield' manufacturing sites, and their operations will be digitally transformed (Stage 4) or operate without humans on-site (Stage 5).

A notable example of advanced manufacturing facilities is Sanofi’s digitally-enabled, continuous manufacturing facility in Framingham, Massachusetts where all processes are paperless with plant operators using digital collaboration tools, data analytics, and Augmented Reality (AR) solutions so they can make decisions and adjustments in real-time.

Outlook for Digital Transformation in Pharma

ABI analysts say that there is already a myriad of suppliers helping the pharma industry to digitize and optimize processes by moving from the pre-digital stage (Stage 1) to connecting their manufacturing plants (Stage 3).

Moreover, I believe that the introduction of advances within the Internet of Things (IoT) arena -- and the introduction of fifth-generation (5G) wireless infrastructure and cloud edge computing solutions -- will enable the development of automated production processes and eventually new business models.

It's estimated that the COVID-19 pandemic has already fast-forwarded the digital transformation of the pharma industry by more than five years. Cloud computing and cloud-based IT security solutions helped CIOs and CTOs to adopt 'remote working' and perform decentralized clinical trials of vaccines.

Indeed, the path ahead for continued progress looks bright. And, I'm encouraged by these latest research findings. I'll share more insights on this topic as they're announced by the leading industry analysts.