Competing for 2020: Positioning to win in 2012 - this was the theme of the keynote address by Frank Gens, senior VP and chief analyst at IDC, at the Directions 2012 conference, held earlier this month in California.
According to Gens, the ICT industry is in the midst of a 'once every 20 to 25 years' shift to a new technology platform for growth and innovation. IDC calls it the '3rd platform', and it is one that is built on mobile devices and applications, cloud services, mobile broadband networks, big data analytics and social technologies.
By 2020, when the ICT industry reaches $5 trillion (some $1.7 trillion larger than it is today), at least 80% of the industry's growth will be driven by these '3rd platform' technologies, IDC predicts.
The research firm sees an explosion of new solutions, many of which will be intelligent industry solutions, built on this new platform, along with the rapidly expanding consumption of all of the above, especially in emerging markets.
These dramatic market changes will force the industry's leaders to make bold investments and fateful decisions - such that by the end of 2012, we'll have a very good idea of which vendors will, and of course won't, be among the industry's leaders in 2020.
In his presentation, Gens outlined the common themes that are necessary for 3rd platform success:
1). Urgency: The 3rd platform has already arrived and the lead pack for 2020 is forming right now. Are you pacing yourself quickly enough as a vendor?
2). Required competencies: These are different from the ones associated with the previous platform and include scale, community and context.
3). Competition: New players have already started to emerge and many come from new sources and are not the traditional IT vendors.
Some of the highlights from these three themes are as follows:
* Urgency:
* The spend on mobile services has already passed the spend on fixed-line services.
* The number of smart mobile devices (SMDs) shipped has already overtaken the number of PCs shipped.
* ICT spending through 2020 will see a compound annual growth rate (CAGR) of 15% associated with the 3rd technology platform as opposed to 2.5% with the 2nd technology platform.
* China will overtake Japan as the second-largest ICT market by 2013.
* Competencies:
* Scale: The number of mobile application downloads will rise from 26.8 billion in 2011 to 137 billion by 2016, and the number of accounts handled will escalate, eg Google is adding 5 000 firms a day.
* Communities: There will be a much larger inventory of offerings with iOS, Android and HTML5 Mobile Web being the leading platforms for mobile development, and it's possible that Microsoft may not make it with Windows Phone 7.
* Context: Everything should be considered in its next larger context, eg a chair in a room or a house in an environment. Vendors are looking at the whole customer value chain and, for instance, Amazon is already looking at hardware, and many intelligent industry solutions are emerging, such as smart buildings, payment fraud management and social media commerce.
* Competition: Many of the new players such as Google and Facebook were born based on the 3rd platform, so start-up companies are very important. At the start of the 2nd platform era, for instance in 1983, IBM was the largest IT vendor, Dell and Microsoft were tiny, and Cisco had not been established. Already, many new industry-centric 'business as a service' solutions/companies are emerging very quickly; three such examples are MetaScale, part of the Sears empire; OptumInsight, a provider of healthcare technology solutions; and Panoptix, a building efficiency solution from Johnson Controls.
The overall message from IDC is loud and clear. The 3rd platform is a totally different ballgame; don't delay embracing it, recognise what needs to be done, and go and do what's necessary in order to not just survive, but also benefit from it.
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