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IDC FutureScape: Worldwide IT Industry 2018 Predictions

Frank Gens, SVP & Chief AnalystOctober 31, 2017

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Logistics

Today’s Speaker

Frank GensSVP & Chief Analyst

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Extensive IDC FutureScape Web Conference Series Runs Through December 21, 2018

➢ IDC FutureScape: Worldwide IT Industry 2018 Predictions➢ IDC FutureScape: Worldwide CIO Agenda 2018 Predictions ➢ IDC FutureScape: Worldwide Digital Transformation (DX) 2018 Predictions ➢ IDC FutureScape: Worldwide Developers & DevOps 2018 Predictions ➢ IDC FutureScape: Worldwide Internet of Things 2018 Predictions➢ IDC FutureScape: Worldwide Robotics 2018 Predictions ➢ IDC FutureScape: Worldwide Consumer DX & Home IoT 2018 Predictions ➢ IDC FutureScape: Worldwide Manufacturing 2018 Predictions ➢ IDC FutureScape: Worldwide Connected Devices & AR/VR 2018 Predictions➢ IDC FutureScape: Worldwide Connected Vehicle 2018 Predictions➢ IDC FutureScape: Worldwide Imaging, Printing, Doc Solutions 2018 Predictions ➢ IDC FutureScape: Worldwide Intelligent ERP 2018 Predictions ➢ IDC FutureScape: Worldwide Healthcare 2018 Predictions ➢ IDC FutureScape: Worldwide Federal & Central Government 2018 Predictions ➢ IDC FutureScape: Worldwide Analytics & Information Management 2018 Predictions ➢ IDC FutureScape: Worldwide Financial Services 2018 Predictions ➢ IDC FutureScape: Worldwide Utilities 2018 Predictions ➢ IDC FutureScape: Worldwide Mining 2018 Predictions➢ IDC FutureScape: Worldwide Mobility 2018 Predictions

➢ IDC FutureScape: Worldwide Retail 2018 Predictions➢ IDC FutureScape: Worldwide Telecom 2018 Predictions ➢ IDC FutureScape: Worldwide Chief Marketing Office (CMO) 2018 Predictions ➢ IDC FutureScape: Worldwide Enterprise Infrastructure 2018 Predictions ➢ IDC FutureScape: Worldwide Manufacturing Product & Service Innovation 2018 Predictions ➢ IDC FutureScape: Worldwide Payments 2018 Predictions ➢ IDC FutureScape: Worldwide Oil & Gas 2018 Predictions ➢ IDC FutureScape: Worldwide Security Products & Services 2018 Predictions ➢ IDC FutureScape: Worldwide Manufacturing Supply Chain 2018 Predictions ➢ IDC FutureScape: Worldwide Datacenter 2018 Predictions ➢ IDC FutureScape: Worldwide Smart Cities 2018 Predictions➢ IDC FutureScape: Worldwide Cloud 2018 Predictions ➢ IDC FutureScape: Worldwide Operations Technology 2018 Predictions➢ IDC FutureScape: Worldwide Customer Experience (CX) 2018 Predictions➢ IDC FutureScape: Worldwide Hospitality, Travel, & Transportation 2018 Predictions➢ IDC FutureScape: Worldwide Services 2018 Predictions➢ IDC FutureScape: Worldwide SMB 2018 Predictions ➢ IDC FutureScape: Worldwide 3D Printing 2018 Predictions ➢ IDC FutureScape: Worldwide Social and Experiential 2018 Predictions

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Worldwide IT Industry Predictions Team 2018

▪ Frank Gens

▪ Crawford Del Prete

▪ Philip Carter

▪ Larry Carvalho

▪ Bill Fearnley

▪ Shawn Fitzgerald

▪ Scott Lundstrom

▪ Tom Mainelli

▪ Satoshi Matsumoto

▪ Deepak Mohan

▪ Tomoaki Nakamura

▪ Eric Newmark

▪ Sandra Ng

▪ Robert Parker

▪ David Schubmehl

▪ Vernon Turner

▪ Dan Vesset

▪ Richard L. Villars

Bold = Q&A participants

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IDC FutureScape: Worldwide IT Industry1

By 2021, at least 50% of global GDP will be digitized, with growth driven by digitally-enhanced offerings, operations and relationships; by 2020, investors will use platform/ecosystem, data value, and customer engagement metrics as valuation factors for all enterprises.

2By 2020, 60% of all enterprises will have fully articulated an organization-wide digital transformation (DX) platform strategy, and will be in the process of implementing that strategy as the new IT core for competing in the digital economy.

3By 2021, spending on cloud services and cloud-enabling hardware, software and services will more than double to over $530 billion, leveraging the diversifying cloud environment that is 20% at the edge, over 15% specialized (non-x86) compute, and over 90% multicloud.

4By 2019, 40% of DX initiatives will use AI services; by 2021, 75% of commercial enterprise apps will use AI, over 90% of consumers will interact with customer support bots, and over 50% of new industrial robots will leverage AI.

5By 2021, enterprise apps will shift toward hyper-agile architectures, with 80% of application development on cloud platforms (PaaS) using microservices and cloud functions, and over 95% of new microservices deployed in containers.

6By 2020, human-digital (HD) interfaces will diversify, as 25% of field-service techs and over 25% of infoworkers use AR, nearly 50% of new mobile apps use voice as a primary interface and 50% of consumer-facing G2000s use biometric sensors to personalize experiences.

7By 2021, at least 25% of the G2000 will use blockchain services as a foundation for digital trust at scale; by 2020, 25% of top global transaction banks, nearly 30% of manufacturers and retailers and 20% of healthcare organizations will use blockchain networks in production.

8 By 2020, 90% of large enterprises will generate revenue from data-as-a-service - from the sale of raw data, derived metrics, insights, and recommendations - up from nearly 50% in 2017.

9Improvements in simple ("low-/no-code") development tools will dramatically expand the number of non-tech developers over the next 36 months; by 2021, these nontraditional developers will build 20% of business applications and 30% of new application features (60% by 2027).

10By 2021, more than half of the G2000 will see an average of 1/3 of their digital services interactions come through their open API ecosystems, up from virtually 0% in 2017 - amplifying their digital reach far beyond their own customer interactions.

Note: The size of the bubble indicates complexity/cost to address. Source: IDC, 2017

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Chapter Two of the 3rd Platform Era

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The Second Chapter: “Multiplied Innovation” for the DX EconomyPlatforms & Developers

Open APIs

Hyperagile Apps

Cloud Everywhere for Everything

Expanding Human/Digital Interface

AI Everywhere

Everyone a Developer & Data Provider

Strengthening Digital Trust

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Becoming a Digital Native Enterprise: Digital Innovation Network at the Core

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Prediction 1: By 2021, at least 50% of global GDP will be digitized, with growth driven by digitally-enhanced offerings, operations and relationships; by 2020, investors will use platform/ecosystem, data value, and customer engagement metrics as valuation factors for all enterprises.

IT/Business Impact

DX will continue to rise on CEOs' and line of-business (LOB) executives' priority

lists.

By the end of 2019, DX spending is expected to

reach $1.7 trillion worldwide, a 42% increase

from 2017.

Guidance

Make IT investment decisions in the context of enabling competitiveness in the digitized economy –vs the narrow confines of

traditional IT priorities and investment models.

Work to transform the IT org to a digital native model over the next 3

years. The time frame for transforming the IT

organization to support enterprise DX goals is

shorter than many realize.

“DX Economy Tipping Point”

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Prediction 2: By 2020, 60% of all enterprises will have fully articulated an organization-wide digital transformation (DX) platform strategy, and will be in the process of implementing that strategy as the new IT core for competing in the digital economy.

IT/Business Impact

End-goal is integrated platform: foundation for sustainable digital

innovation & competitiveness.

IT must work closely w/ digital & business

teams to redefine links between

processes & services.

Algorithms/code/ models within

“intelligent core” become key

differentiators.

Guidance

Tie to corporate DX strategy: View DX platform as key

enabler for business outcomes &

priorities.

Create the Digital Dream Team: Ensure

DX platform team spans IT, digital and

business areas.

Link to DX Maturity: The rate and extent

of DX platform rollout should be

directly correlated to your organizational

DX maturity

“DX Platforms”

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Prediction 3: By 2021, spending on cloud services and cloud-enabling hardware, software and services will more than double to over $530 billion, leveraging the diversifying cloud environment that is 20% at the edge, over 15% specialized (non-x86) compute, and over 90% multicloud.

IT/Business Impact

Cloud resource mgmt. & cross-

platform integration become critical capabilities.

“Cloud at the edge” brings new

opportunities, but also new IT

requirements.

Cloud adoption is most critical source

of sustained tech innovations for

enterprise.

Major IT supplier leadership

realignments occur.

Guidance

Develop structured integration

framework across cloud platforms to

reduce rework while retaining

agility.

Become involved in the early stages of

creation of new digital services.

Think strategically about vendor

choices; assess scope & strength of

both their ecosystems & their

in-house capabilities.

Look for vendors demonstrating

strong multicloudcapabilities.

Beware those too tightly hardwired to

a single megaplatform.

“Cloud 2.0:

Distributed

& Specialized”

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Prediction 4: By 2019, 40% of digital transformation initiatives will use AI services; by 2021, 75% of commercial enterprise apps will use AI, over 90% of consumers will interact with customer support bots, and over 50% of new industrial robots will leverage AI.

IT/Business Impact

Embedded AI enables

accelerated improvement

cycles.

Talent (AI engineers & data scientists)

needed to support.

High-quality data requirements dictate tech &

storage investments.

Privacy & security present serious

landmines for AI-based DX efforts.

Guidance

Create an AI center of excellence to

encourage discovery, learning,

and cross-organizational collaboration.

Plan for creating technology

capabilities that will empower the

enterprise.

Ensure availability of best-in-class API management tools that interface with data feeds for AI-

powered applications &

services.

Define robust privacy & security rules for cognitive computing apps that dictate what

data can be collected &

permissible uses.

“AI Everywhere”

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Prediction 5: By 2021, enterprise apps will shift toward hyper-agile architectures, with 80% of application development on cloud platforms (PaaS) using microservices and cloud functions, and over 95% of new microservices deployed in container.

IT/Business Impact

Will need a modern app architecture that

optimizes infrastructure using microservices.

Containers are a relatively new technology & may force introduction of open source approach

& culture.

Fine grained services help app developers

create apps in the right form factor to respond to data or app events.

Guidance

Deploy a microservice-architected, container-

packaged application in a PaaS environment as a

safe, reliable way to deploy applications.

Develop effective container management

strategies with application developers

and operations teams to support business

innovation.

Conduct a detailed evaluation of function

computing. This segment still carries a buyer-

beware caution.

“Hyper-agile Apps”

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Prediction 6: By 2020, human-digital (HD) interfaces will diversify, as 25% of field-service techs and over 25% of infoworkers use AR, nearly 50% of new mobile apps use voice as a primary interface and 50% of consumer-facing G2000s use biometric sensors to personalize experiences.

IT/Business Impact

New interfaces promise to improve some

workflows, but others may be disrupted.

AR, voice, & biometric sensing revolutionize

processes, but challenge IT’s procurement, integration, etc.

New interfaces can come with steep

learning curves for users; expect complaints

along with praise.

Guidance

Build close relationships with AR hardware,

software and services vendors, as AR

technologies (and suppliers) are still in

early deployment stages.

Research & trial voice-powered platforms, &

conduct risk assessment on biometric

data/devices, to ensure max compatibility & security of new tech.

Involve primary users very early & throughout

the decision-making process. Employee

advocacy & acceptance will be key to success.

“HD Interfaces”

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Prediction 7: By 2021, at least 25% of the G2000 will use blockchain services as a foundation for digital trust at scale; by 2020, 25% of top global transaction banks, nearly 30% of manufacturers and retailers and 20% of healthcare organizations will use blockchain networks in production.

IT/Business Impact

Blockchains require interconnectivity with industry ecosystems

& related ledgers.

Orgs not participating in blockchains will be at significant speed & cost disadvantages.

Early adopters have the opportunity to

establish very strong positions.

Guidance

Investigate blockchain

consortiums for potential peers &

partners to help get your org started.

If already pursuing an aggressive DX journey

(maturity stage 3+), ensure org has a

blockchain strategy and plan in place.

Slower-moving DX travelers: in 2018,

start learning about tech, suppliers, experiences; &

develop use case scenarios for your

org.

“Blockchain & Digital Trust”

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Prediction 8: By 2020, 90% of large enterprises will generate revenue from data-as-a-service from the sale of raw data, derived metrics, insights, and recommendations - up from nearly 50% in 2017.

IT/Business Impact

IT’s responsibilities for data integration,

aggregation, quality, storage become even

more rigorous.

Customers begin to view DaaS as integral

part of purchased product or service.

SLAs around access to data will tighten.

Guidance

Ensure a closer collaboration

between IT and the line of business responsible for

bringing DaaS to market.

Seek partnerships with existing

dedicated DaaSproviders or your

preferred analytics & info management

vendors.

Hone capabilities for curating the rising volume of external

data sources required for digital innovation

teams.

“Everyone a

Data Provider”

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Prediction 9: Improvements in simple ("low-/no-code") development tools will dramatically expand the number of non-tech developers over the next 36 months; by 2021, nontraditional developers will build 20% of business applications and 30% of new application features (60% by 2027).

IT/Business Impact

Infrastructure to disseminate info & training on these

apps will be needed.

IT must mature processes for

authorizing use of low code/no code apps &

related data.

Apps will need to comply with org's security and HR

protocols.

Guidance

Integrate API-based data into low-code/

no-code applications, particularly if data

originates from company databases &

systems.

Designate an application owner to govern best practices

around usage for each low-code/

no-code application.

Define protocols and procedures for usage of low-code/no-code

applications, & determine who has

access to application & admin rights.

“Everyone a

Developer”

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Prediction 10: By 2021, more than half of the G2000 will see an average of one-third of their digital services interactions come through their open API ecosystems, up from virtually 0% in 2017 - amplifying their digital reach far beyond their own customer interactions.

IT/Business Impact

External APIs allow enterprises to accelerate innovation by

expanding the types of products & services on offer.

Enterprises without aggressive, open API-based

digital distribution strategies will stunt their own growth &

share in the DX economy.

Guidance

Developing a successful open API digital ecosystem is not a short-term tech project, but a new business model requiring sustained focus & multi-year

investment.

API management solutions and platforms will be an

essential new ingredient for supporting open API

ecosystems.

“Open API

Ecosystems”

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Q&A

Note: The size of the bubble indicates complexity/cost to address. Source: IDC, 2017

Today’s Experts

Frank Gens

Crawford Del Prete

Bob Parker

Bill Fearnley

Rick Villars

Deepak Mohan

Dave Schubmehl

Al Gillen

Larry Carvalho

Tom Mainelli

Cost and Options For information on IDC workshop pricing

and options please contact your IDC Account Manager,

call 508-872-8200, or email insights@idc.com.

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IDC Helps You Succeed on Your DX Journey

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IDC is Uniquely Qualified to Assist with Your DX Initiatives

450+ digital transformation use cases for inclusion in your digital roadmap

Digital maturity benchmarks to assess how your organization compares with peers

Architectural maps for an enterprise digital platform

Dozens of KPIs specifically developed for the digital enterprise

Research on the most appropriate organizational structures for your stage of DX

Blueprints of DX capabilities

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