International Data Corporation (IDC) expects ICT spending growth in the Asia/Pacific (excluding Japan) region to be 6.6% in 2013 followed by an accelerated growth of 8.7% this year. Although the growth outlook for overall ICT spending of the region in 2013 is slightly lower than what IDC anticipated in last year's Predictions, IDC expects the region to rebound in 2014, driven by large markets like China, and emerging markets like India and Indonesia. The nature of spending has changed significantly. Smartphones continue their grip on overall IT spending in the region. Smartphones will account for more than 35% of overall IT (which excludes telecom services) spending in 2013 and IDC expects they will account for nearly 40% by 2017. But it is not just about devices. Big data, cloud, mobility and social will have a huge impact on how IT is adopted in 2014. Marketing will be perhaps the biggest driver for the use of cutting edge IT as they seek new innovative ways to reach out to and sell to customers. No business safe from disruption IDC envisions 2014 to be a year of transformation for vendors and service providers in the ICT space. No vendor's or service provider's business is safe from disruption in today's market. Third platform technologies are revolutionizing the areas of software, communications, hardware and even services. IDC has been urging telecom providers to look at investing in adjacent areas of business, but the advice extends equally to other types of service providers and vendors. It is already happening - web companies are becoming banks; mobile apps and mobile commerce are opening up a Pandora's Box of new entrants with direct access to consumers and businesses alike. The following trends are what IDC believes will have the biggest commercial impact on the APeJ ICT market.
1. BYOD as an enterprise mobility strategy is dead BYOD will continue to dig deeper in Asia/Pacific. IDC believes that close to 90 million smartphones shipped in 2013 will be employee liable, or under a BYOD scheme - a 269% increase over 2012. But BYOD is a compromise between users and the enterprise; the company will reluctantly allow users to use their own devices at work, and in return users reluctantly do work on their own devices. In view of that, IDC expects a new trend to emerge: Eligible users will be given a choice of devices that they can use for work, also referred to as the "Choose Your Own Device" (CYOD) model. Organizations evaluating mobility strategically will look to CYOD as the main adoption model where management and security can be standardized and guaranteed, and business processes can be mobilized. Just as 2013 is the year where enterprises in Asia/Pacific realized they needed more than mobile device management (MDM) solutions, 2014 is the year where they realize BYOD as a mobility strategy is dead.
2. "A market of millions to millions of markets" - One-to-One marketing will be redefined to become socially and contextually aware
Personalized marketing is making a comeback, but this time the CMO is armed with new tools that are redefining the way they can identify and engage with their best customers. What is more, a new dimension has been added to the picture: Context.
As big data and analytics, cloud, mobility, and social come together in an unprecedented way to create entirely new business value solutions and change the technology field, they are enabling intelligent solutions and innovations that drive significant change. IDC predicts that 2014 will be the foundation year where we will see these methodologies and tools being introduced in Asia Pacific to realize the one-to-one marketing nirvana in the years to come. Applications and enterprise services will follow.
3. Geolocation data will drive organizations to push the boundaries of regulations and customer expectations
Across all major industries, there is a strong interest as to how to drive new revenue streams and optimize operations, leveraging big data and analytics. Many Asia/Pacific organizations will have access to or the ability to analyze consumer geolocation for the first time in 2014. Beyond creating applications that request legal permission to collect and sell behavior information, they will be thinking about personalized services. This approach will build positive relationships with consumers, and protect against them becoming advocates of stricter regulation.
Geolocation information will be the game changer in 2014, as it can enrich other forms of data, and paint a detailed story of a person's behavior, habits, and relationships. Having that information, as an organization that provides products and services, will create unique opportunities to engage individuals as individuals.
4. 2014 will mark the serious beginning of Big Data as-a-Service (BDaaS)
Significant infrastructure build-outs for cloud services were a hallmark of 2013. Large public cloud providers established or expanded their footprints in Australia, Singapore, and Hong Kong. Telcos and local systems integrators extended their cloud services across most markets in the region. The availability of cloud infrastructure, whether public or private, is the core which all services depend on.
Big Data as-a-Service (BDaaS) is an integration of four key offerings: 1) Non-transactional data (sensor readings, clickstream data, video, social interaction); 2) Data storage services with adequate availability zones or clusters; 3) Compute resources offered by the same cloud provider that hosts the data storage, and, 4) Analytic tools and products, or industry-specific applications, run on the same cloud services as the compute resources.
IDC expects that in Australia and Singapore, just enough of the four key offerings will come together to allow more agile organizations to leverage BDaaS, and take those initiatives to production.
5. xCommerce boom will give rise to new consumption models and industries Just as smartphones and mobile apps have drastically changed the areas of computing, software and communications, IDC expects mobile platforms to drastically change and expand the area of xCommerce in 2014 and beyond. Mobile commerce is particularly well suited for the Asia/Pacific region and IDC expects most eCommerce provider to expand their capabilities for mobile shopping in the near future. This will not only apply to companies with existing eCommerce platforms and it will not only be explored as a mere mobile extension of these platforms. IDC expects many types of mobile app providers to incorporate commerce functions in 2014, ranging from communications to social networking to gaming apps and more focused mCommerce apps. This, in turn, may help topple the dominance or near-monopolies of existing eCommerce players.
6. Technology and web-based giants will move into adjacent business areas signaling a new wave of business disruption The increasingly globalized, interconnected and borderless world has opened up countless new possibilities and paved the way for new Over-the-Top Providers (OTTPs), content media providers, web giants and many new age cloud providers to become the new ICT champions. IDC believes that 2014 will mark the beginning of the emergence of the "service provider of the future" as telecom service providers, web giants and OTTPs take the first tentative steps towards capturing new types of business opportunities.
7. Internet of Things will revolutionize products and business models In 2014, Asia Pacific will start to reap the benefits of the Internet of Things (IoT), with the groundwork being laid to fundamentally change the way that cities function, industries operate, companies compete, employees work and consumers live. The core technologies that will support this evolution are tried and tested, including the modules, networks and platforms that underpin the Internet of Things. However, in 2014, IDC anticipates much of the innovation that drives the industry forward not to come from the traditional vendors, but rather the entrepreneurial new IoT application vendors and analytics companies that will find new ways to leverage technology "products" and the data they capture to create the solutions that change the way we work and live.
8. Partner community platforms will become the melting pots of business innovation In 2014, IDC predicts the rising investment priorities of enterprises towards "ecosystem ICT" where technologies are harnessed from the enterprise to its partners and customers. Enterprises with business processes more aligned to "supply chain" other than manufacturing include healthcare, logistics, FMCG and oil and gas are ideal candidates for this transformative change. In regions such as ASEAN where a market and economic integration initiative like AEC2015 is also driving towards a B2B2B operating model. IDC also expects the rise of B2B2C where enterprises (and governments) will carefully select customer experience tools to solicit consumer inputs to create new opportunities, stickiness and loyalty.
9. "Software-defined" infrastructure will become a formal transformation agenda in 2014 The "software-defined" datacenter is an emerging set of software engineering and nomenclature that will cover a broad range of efficiency technologies that embrace the datacenter; from networking to storage and including the server platform. Software-defined infrastructure has the potential to resolve a number of complex issues that are inherent in the datacenter due to years of buying best-of-breed point solutions. IDC has already started to see a lot of Internet players like Google operating its datacenters with a lot of software embedment. The future of the data center will include general purpose servers and specialty systems that can manage varied workloads. Enterprises - especially those that are moving towards cloud in an aggressive fashion - will, in IDC's opinion, look for a software-defined datacenter as application-aware environment becomes increasingly critical to enterprises. 2014 will be the year where we will see the start of formal discussions with and among CIOs.
10. 2014 will see the perfect storm for project failure: The combination of Mobility, Analytics, Social and the Cloud While the potential for the four pillar technologies to enable new business value continues to receive attention, IDC predicts that by 2015 the increasingly frequent application of these technologies to meet business demands will increase the risks of project failure to unacceptable levels, forcing CIOs to adopt new risk mitigation strategies. While many projects may successfully reach production-ready status, ROI targets will be missed from inadequate planning for service management. When combined with the impact of 'cloud speed' and a region-wide drought of IT skills, the potential for serious project failure is large. Regional CIOs are not unaware of project risks, and in some cases the potential for failure will slow adoption of new technologies dramatically. However, demands for new services from business managers will force the CIO to find a way of risk mitigation.