IDC Predictions 2015

Accelerating Innovation - and Growth on the 3rd Platform

Frank Gens
SVP & Chief Analyst
and Q&A with the
IDC Predictions 2015 Team

December 2, 2014

IDC Predictions 2015 Team

Larry Carvalho
Gary Chen
Ruthbea Clarke
Matt Davis
Marc DeCastro
Crawford DelPrete
Lynne Dunbrack
Matt Eastwood
Kitty Fok
Frank Gens
Al Gillen
Leslie Hand
Judy Hanover
John Jackson

Jialin Jiang
Keith Kmetz
Kimberly Knickle
Charles Kolodgy
Ramon Llamas
Carrie MacGillivray
Robert Mahowald
Tom Mainelli
Stephen Minton
Henry Morris
Courtney Munroe
Bob Parker
Melanie Posey
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Situation Overview
The 3rd Platform already drives 30% of ICT
spending and 100% of growth
The Innovation Stage will accelerate this
transition
An explosion of new apps on top of the
3rd Platform
An expansion of enabling technologies:
Innovation Accelerators

Three key developments to watch

Expanding adoption of 3rd Platform technologies
Expanding community of 3rd Platform
developers/innovators
Expanding use of 3rd Platform solutions to reinvent
and continuously transform every major
industry

#1 WW IT and Telecom (ICT) Industry

ICT spending will exceed $3.8T (up 3.8%)
Enterprise IT markets will show improved growth

Emerging markets will grow 7.1%, 5X

developed markets
Developed markets will poke along at 1.4%

The big story: A Tale of Two Industries

3rd Platform spending will account for about
one-third of all ICT spending in 2015
The 2nd Platform market will tip into recession
by 2H 2015

#2 Telecom Services
Wireless data will be the biggest ($536B)
and fastest-growing (13%) Telecom Services
sector
Eroding margins will drive faster innovation
Expanding portfolios of high-value, API-based
services
Rapprochement with major over-the-top (OTT)
service providers

Net neutrality will be mandated in the U.S.

A hybrid approach will leave room for mutuallybeneficial Telco/OTT deals

#3 Mobile Devices & Apps

Smartphones and Tablets will generate 40% of
all IT growth (excludes telecom services)
Phablet sales will grow 60%, cannibalize tablet sales
Chinese smartphone OEMs market share will surge

Wearables unit sales will underwhelm in 2015

A wrist-phone will ship, and flop

Mobile app download growth will slow, hit

150B
Apple, Google will account for almost 80%
Chinese independent apps stores: 18%

Enterprise mobile app development will more

than double

#4 Cloud Services
Public cloud services sales will near $70B
The greater cloud market including public, private
clouds, and enabling IT and services will hit $118B

IaaS competition will intensify

Amazon under attack, will hold/gain share
Many 2nd tier public IaaS clouds will drop out; Google,
Microsoft, IBM, China SPs will gain share

PaaS Wars will expand

# of apps in leading marketplaces will double
% of SaaS vendors using PaaS will hit 15%; 50% by
2018
Container adoption will disrupt VMware, Microsoft
IoT, Cognitive/Machine Learning new PaaS hot spots

Strange bedfellow partnerships multiply

Facebook, HP, Salesforce.com, et al.
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#5 Big Data & Analytics

Big data & analytics market will reach $125B
Rich media analytics will at least triple in
2015
Video, Audio, and Image analytics and search:
expanding use cases in many industries

Data supply chains will be a top priority for

PaaS and analytics vendors
25% of top IT vendors will offer Data-as-a-Service

IoT will be the next critical focus for

data/analytics services
30% CAGR over the next five years

The Year of Cognitive/Machine Learning

Growing number of apps and competitors

#6 The Internet of Things

IoT spending will exceed $1.7T, up 14%
1/3 of spending for intelligent/embedded devices
outside of the ICT industry

Cisco, IBM, Intel will form an IoT solutions

company
Challenging IT industry players (like Pivotal) and
industry-focused players (like Bosch, Schneider
Electric and GE)

IoT Backend as a Service will emerge from

PaaS and Industry Platform players
Predictive maintenance will lead the IoT solutions
category

#7 3rd Platform Data Centers

Data center growth will accelerate toward SPs
By 2016, over 50% of compute, 70% of storage
capacity will be installed in hyperscale data centers

Cloud SPs will drive a new renaissance in IT

hardware innovation
Lots of new workload-specialized system designs will
emerge from Cloud SPs in 2015/2016 and beyond

Consolidation will continue among OEMS

Across server, storage, and networking silos

Look for increasing number of OEM/ODM

strategic partnerships, M&A

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#8 3rd Platform Industries

1/3 of market share leaders in every industry
will be disrupted by 3rd Platform competitors
Expanded customer reach, faster offering launch,
expanded supply/distribution networks, transformed
cost model

The number of Industry Platforms/

Communities will double in 2015
At least 60 by year end; over 100 by YE2016

Numerous 3rd Platform-driven industry

disruptions emerge in 2015
Financial Services: Alternative payment systems
Government: Cities will play big roles in IoT roll-out
Retail: Location-based services will increase same
shopper sales through engagement; real-time
competitive pricing is next.

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#9 Innovation Accelerators
3rd Platform-optimized Security
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 YE2015 (80% by 2018)
Threat intelligence as a service: by 2017, 55% of
enterprises will receive customized threat intelligence
data feeds

3D Printing
By 2020, 10%+ of consumer products will be
available through produce on demand via 3D
printing
2015 spending will surge 27%, to $3.4B
Canon, Ricoh and Epson: prepping market entry
Stratsys and 3D Systems will continue to scale
through M&A

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#10 China
ICT spending of $465B+, growing over 11%
Accounting for 43% of total ICT industry growth

Domestic engines for 3rd Platform growth are

roaring
Mobile, Internet, Social, and Online Shopping

Chinas cloud and ecommerce leaders will

challenge for global leadership
Alibaba, Tencent, Baidu

Chinese smartphone OEMs will grab 40% of

global share
Lenovo/Motorola, Xiaomi, Huawei, ZTE, and Coolpad

Chinas 13th 5-Year Plan will be built on 3rd

Platform technologies, investments
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Essential Guidance
The 3rd Platform marketplace is now both
high-growth and large-scale
100% of resources, investment need to be focused

Innovation: @scale, @velocity, @low-cost

Amazon yourself (continuously)

Innovation community creation and

participation = the new oxygen
Attracting developers/innovators is priority #1

Reassessment of sustainable core value

Driving divestment and strange bedfellow deals

Massive (and continuous) value chain

reconfigurations are underway

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idc.com/predictions2015

IDC doc#252700

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Joining Us for Q&A

Larry Carvalho
Crawford DelPrete
Matt Eastwood
John Jackson
Keith Kmetz
Charles Kolodgy
Stephen Minton
Henry Morris

Courtney Munroe
Melanie Posey
Dave Schubmehl
Vernon Turner
Dan Vesset
Rick Villars
James Wester
Meredith Whalen
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