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IDC: More than 30% of current IT vendors will not exist by 2020

09 Nov 2015

IDC is predicting that by 2020 more than 30% of IT vendors will not exist as we know them today, as digital transformation and adoption of the third platform drastically changes the IT industry.

The analyst firm, which has released its new FutureScapes predictions for ICT suppliers and buyers, says resellers and customers will be required to realign preferred vendor relationships, in the wake of the changing market.

Sandra Ng, IDC Asia Pacific group vice president, practice, says by 2017, more than 60% of Asia Pacific organisations’ ICT spend will be for third platform technologies, solutions and services – a figure that’s expected to rise to nearly 80% by 2020.

And the changes will begin to be felt much earlier – next year in fact. IDC says 2016 will see the ‘mega transition’ in digital transformation, as enterprises commit to a massive new scale of digital transformation and third platform technologies in an effort to take leadership roles in the ‘hyper-digital economy’.

By the end of 2017, IDC is predicting that 60% of APAC 1000 enterprises will have digital transformation (DX) at the centre of their corporate strategy, with the majority even creating an independent position to oversee the transformation strategy implementation.

Sandra Ng, IDC Asia Pacific group vice president, practice, says “In 2016, we will witness the mega transition in the DX era.

“Enterprises will ‘flip the switch’, committing to a massive new scale of DX and third platform technologies in order to stake out leadership positions in the hyper-digital economy,” Ng says.

Ng says three inter-related mega themes are guiding IDC’s top predictions for tech buyers and suppliers in Asia Pacific.

Her top 10 predictions for the year:

CEO-led strategy in DX By the end of 2017, 60% of the APAC top 1000 (A1000) enterprises will have digital transformation at the center of their corporate strategy.

Dedicated DX executive By 2017, 60% of companies with a DX strategy will deem it too critical for any one functional area and create an independent corporate executive position to oversee the implementation.

Third platform IT By 2017, over 60% of organisations' ICT spending will be for third platform technologies, solutions and services, rising to nearly 80% by 2020.

Customer/intimacy at scale By 2018, 80% of B2C and 60% of B2B organisations will overhaul their ‘digital front door’ to support 1000 to 10,000 times as many customers/customer touchpoints as they do today.

Leading in 3D Through 2018, two-thirds of CIOs will have embraced ‘Leading in 3D’, which requires them to simultaneously innovate, integrate and incorporate.

DX collaboration By 2018, 70% of silo-ed digital transformation initiatives will ultimately fail due to insufficient collaboration, integration, sourcing or project management.

Innovation capacity By 2020, enterprises pursuing DX strategies will more than double their software development capabilities; two-thirds of their coders will focus on strategic DX apps and services.

New digital revenue streams By 2018, 35% of IT resources will be spent to support the creation of new digital revenue streams.

Security and risk management By 2016, 40% of IT organisations will shift their focus to advanced 'contain and control' security and away from a perimeter mentality.

Data governance for insights By 2017, two-thirds of Asian-based CIOs will initiate a data transformation and governance framework to turn information into a competitive business differentiator.

“The digitalisation of nations, economies, industry ecosystems and enterprises are pushing new competitive benchmarks in areas of business process excellence and new monetization/business models,” Ng says.

“The new hyper-digital era presents opportunities and competition/challenges that go beyond geographic and industry boundaries. This is where scale becomes the competitive ingredient for the digital enterprise”, she adds.

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