Huge competitive forces, consolidation and the Internet of things (IOT) will continue to be driving forces behind local innovation in 2015, say analysts.
The International Data Corporation (IDC) this week announced its top 10 predictions for the global ICT sector in 2015, placing the so-called "third platform" at the heart of these - which include consolidation, the increasing presence of over-the-top (OTT) players and the Internet of things. Identified by IDC in 2007, the third platform is built on four pillars: mobile computing, cloud services, big data and analytics, and social networking.
To say 2015 will be a pivotal year in the ICT industry is a gross understatement, says senior vice-president and chief analyst at IDC, Frank Gens. "We'll see the third platform finally reach massive scale, along with lots of vendor consolidation and drop outs, 'strange bedfellow' partnerships, death match battles for developers (and their apps), expanding cognitive/machine learning and IOT offerings, a growing focus on data supply chains, and skyrocketing influence for China."
IDC says the industry is entering the most critical period yet in the third platform: the "innovation stage".
Local transformation
BMI-TechKnowledge director Brian Neilson says the local landscape is transforming significantly, if only because of massive competitive forces, and consolidation is part of that trend, as it is in any maturing industry.
"The global shifts amplify this trend as they introduce a disruptive globalisation element. All the global megatrends apply to SA, but there are additional factors for small, localised economies (like SA) - most notably that globalisation and the power of scale means the big OTT players take over and local players become significantly less powerful. Some will become so much less relevant that their businesses will not be sustainable."
Neilson cites the cloud space as a case in point. "The market is gravitating towards global players like Amazon, Google, Microsoft, Rackspace, VMWare/EMC and Facebook."
He says acceleration in innovation is constant and the pace of change in technology and society - as well as knowledge - is an ever-quickening one. "Interestingly, this is not totally new, as futurist Alvin Toffler wrote in his book Future Shock a few decades ago, but now we are feeling the velocity so much more in the way whole industries are being disrupted, and the pace at which this is happening.
"Clearly IT is the main catalyst, including advances in networks and related ease of communication and sharing of ideas."
Putting a local spin on IDC's global forecast for 2015, ICT expert Adrian Schofield says: "OTT exists, but is inhibited by the lack of capacity of the networks to carry the traffic. Its growth will be related to investment in the networks. IOT has interesting possibilities, but can only advance as fast as embedding connectors into 'things' can happen, as fast as collectors, aggregators, analysers of the resulting data can make usable sense of what they connect, and (again) as fast as the networks can carry the traffic."
Mindset factor
Ovum analyst Richard Hurst says it is important to remember that innovation also revolves around a mindset. "We need to be able to create the appropriate schools of thought that assist and drive innovation."
He says, while there are a number of private sector initiatives designed to drive innovation in the technology field, [there would be] far greater momentum if government entities were to play a greater role in enabling technology adoption - and ultimately innovation - across the country, which would cater for the needs of users across SA.
Schofield adds innovation arises from a culture of encouraging curiosity, encouraging ideas and encouraging trial and error. "Sometimes, it looks like 'me, too' as companies copy the lead taken by others, but often it leads to cheaper, more efficient products that expand the market created by the initial player."
What inhibits innovation, he says, is where employees are not allowed to challenge the status quo, where the "chief" says "my way or the highway".
IDC's top 10 predictions for 2015:
1. ICT spending in emerging markets is forecast to grow 7.1% year over year while mature markets poke along at 1.4% growth.
2. Telecoms services will see wireless data emerge as the largest and fastest growing segment of telecom spending. Carriers will seek settlements with OTT cloud services providers through innovative performance and revenue-sharing arrangements.
3. Mobile devices and apps will continue to charge ahead in 2015, but not at the frenzied pace seen in recent years.
4. Cloud services will remain a hotbed of activity in 2015, with $118 billion in spending on the greater cloud ecosystem.
5. Big data and analytics will see important developments in 2015 as worldwide spending on big data-related software, hardware, and services grows to $125 billion.
6. The Internet of things is one of the most important innovation accelerators for growth and expansion of IT-based value in the third platform era.
7. Data centres are undergoing a fundamental transformation in the third platform era. IDC expects to see two or three major mergers, acquisitions, or restructurings among the top-tier IT vendors in 2015.
8. IDC believes a number of industry disruptions, driven by third platform developments, will emerge in 2015. Examples include alternative payment networks in financial services, expansion of IOT technologies into city safety, public works and transportation systems, and the expansion of location-based services in the retail industry.
9. In addition to the IOT and cognitive/machine learning systems, two other innovation accelerators will become important growth drivers in 2015: "third platform-optimised" security solutions will help to secure the edge of the cloud and the core, and threat intelligence will emerge as a killer data as a service category. Elsewhere, 3D printing will see significant activity among conventional document printing companies as they lay the groundwork for a looming battle for commercial and industrial markets in 2016.
10. China will experience skyrocketing influence on the global ICT market in 2015 with spending that will account for 43% of all industry growth, one-third of all smartphone purchases, and about one-third of all online shoppers.
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