Singapore and Hong Kong, November 27, 2012 – International Data Corporation (IDC) announces today that it expects Asia/Pacifc IT spending in 2013 to perform as well as it has in 2012, despite the ongoing world-wide economic risk environment.
“IDC expects eICT spending to increase by 26% to US$3,018B in 2013: US$775B from ICT and the rest from the rise of 'digital' commerce, consumer electronics and entertainment applications and services,” says Sandra Ng, Group VP, Practice, IDC Asia/Pacific.
As the commercial environment becomes more complex, she envisions that new business opportunities and challenges will drive organizations to enter into market adjacencies and new partnerships, beyond their traditional core and comfort zone, to improve market relevance and competitiveness in an Asian-dominated era.
“CIOs will continue to grumble about weak budgets, but will find that mission critical investments are protected for the most part,” adds Claus Mortensen, Principal for Emerging Technology Research, IDC Asia/Pacific.
More insights will be revealed in a forthcoming report, “IDC Asia/Pacific (excluding Japan) ICT 2013 Top 10 Predictions".
“The ongoing risk environment has now become ‘the new normal’ and there is no longer any excuse for not pursuing growth. Although most companies are now fiscally conservative, spending freezes are few and far between,” says Mortensen.
He notes that very few companies consider the economic outlook for the US and Europe a top concern for their business.
In contrast, they are much more worried about:
• how to grow and expand their business
• how to keep cost under control while doing so
• how to keep on innovating and finding the talent they need to do all this
The Asia/Pacific (excluding Japan) region continues its pattern of steady growth albeit at a slower pace than the double-digit growth seen before the 2008 crisis and in the rebound year of 2011.
“IDC expects overall ICT growth in 2013 to be similar to 2012 at 7.6%. We also expect the revenue split between hardware, software, services and telecom services to remain quite stable through 2016.”
Drawing from the latest IDC research and internal brainstorming sessions amongst IDC's regional and country analysts, the following are the top 10 key ICT predictions in 2013. These trends are what IDC believes will have the biggest commercial impact on the APEJ ICT market.
1. OS and application integration of social networking tools will drive enterprise uptake of consumer-grade social media and reduce the premium value of enterprise-grade UC and social software platforms
Microsoft and Apple alike are putting a lot of focus on integrating social into the newest versions of both their mobile and their desktop operating systems (OS). This not only makes social media a more seamless experience for users but it also allows for more seamless integration of social media into the applications that are being used. The integration into the native operating systems of BYOD devices may also make integration into company collaborative platforms easier and IDC expects many CIOs to see this as a good excuse for embarking on organization-wide projects aiming at consolidating the use of social platforms. This will not be an easy task however, as many employees and business units will be reluctant to give up their enterprise social networks of choice in favor of one that is sponsored by the corporate IT department. In the longer term, IDC believes that this will lead to a decline in the demand for pure enterprise-grade social collaboration platforms and for more traditional unified communications and collaborations (UC&C) solutions.
2. Usage of corporate tablets will see a surge but many enterprises will suffer from short sighted adoption plans
As employees are increasingly bringing their personal tablets into the workspace, CIOs are expressing serious concerns regarding security, compliance and support issued related to the current dominant tablet platforms – most notably iOS and Android. IDC therefore expects Windows 8 based tablets to be seen as the proverbial "savior" for many CIOs who will embrace the idea of an enterprise tablet that not only will answer the media tablet demands of their employees, but do so running an operating system that they are much more likely to be able to manage, integrate and secure than other platforms. Many companies will therefore issue Windows 8 tablets to their employees 2013, but this may prove be a very short-sighted approach however. Windows 8 tablets will only become broadly accepted work devices if they win the hearts and minds of the consumer - if not, many companies will see their employees ditch their company-issued devices in favor of their own in 2014 and beyond.
3. Talent shortage will emerge as major differentiator for innovation and constraint to enterprise technology adoption
In most mature countries, IT graduates have been declining. In Australia, IT graduates have been declining by 5.3% CAGR over the last five years and the Singapore government realizes that growing by importing labor has an adverse effect on inflation and the affordability of the general populace. This trend is seen even in growth countries like ASEAN, and notably the Philippines, as new demand is arising for IT management and outsourcing skills from its traditional BPO base. Talent shortages thus continue to be a problem for almost half of the employers in Asia/Pacific, and IDC believes that the situation will be exacerbated in 2013 and thereafter because of ongoing technological change and the need for technology driven innovation. For the CIO, 2013 will require attention to staff skills, rehiring where necessary and investment in training and certification to ensure the new on-premises infrastructure is efficiently and effectively managed, but in some scenarios, the use of external resources to supplement or replace in-house talent will be the best choice.
4. The push towards mobile will motivate OTT players to woo the telcos in 2013
Telecommunications operators and Over-The-Top (OTT) content providers have historically had a strained relationship. But OTT providers are now moving into areas that mobile service providers in particular have seen as their future domain - one of which is mobile advertising. Many mobile operators have been relying on their extensive mobile customer data to secure their space in mobile advertising, but today's ad networks already have very effective targeting technology in place, leaving OTT players very little incentive to cooperate with mobile service providers. But as the mobile platform is becoming increasingly important for bandwidth heavy, media rich content provisioning, IDC believes that this may change in 2013 and that OTT players will start seeking more alliances with mobile operators in the region.
5. 2013 will be the last call for CIO transformation
For a profession where one of the mantras of the last several years has been "CIO transformation" and "increasing IT relevance to the business", this is a very worrying sign – especially in times where the general trend is for lines of businesses to become more hands-on with their own IT adoption. In the US in 2013, IDC predicts that 56% of all new technology projects will involve the line of business. In many companies around the Asia/Pacific region, this number may become even higher, and the involvement of lines of business may extend to borderline self-determination when it comes to implementing IT. IDC believes that most CIOs who have not understood this and started reacting by the end of 2013 will have undermined the importance of their positions and their departments to the extent that they risk becoming pure support organizations with little or no input into what is adopted in the business.
6. Multi-Channel will define market success in 2013
The industry is undergoing dynamic transformation with customer lifecycle management becoming the number one priority for both consumer-driven and enterprise-driven businesses, making this a key investment area for many. Multi-channel engagement is now the norm as the proportion of customer interactions is shifting from conventional phone calls to instant messaging, email, video, social media and mobile apps, thus opening up new challenges and opportunities. Multi-channel is also now a must when it comes to other areas of sales and marketing. Social media is also fast becoming part of the sales cycle as the concept of social eCommerce is starting to gain foothold. In fact, IDC expects most of the major social networks in the region to explore solutions that allow brands and retail vendors to use their social network profiles as platforms for eCommerce in 2013.
7. Converged and integrated systems will play a key role in end-user infrastructure strategy
Convergence of hardware and software, as well as tighter integration with applications will be a key trend within datacenters in 2013. As the industry continues to struggle to do more with the same IT, vendors are bound to feel the pressure of providing infrastructure that is more tightly coupled and dynamically available as the need demands. Another form of convergence will be that of application driven hardware appliances as end-user customers are looking for faster, simpler, and more hardware optimized solutions in spaces like virtualization, cloud, big data, and many transactional database based applications. With the demand for more agility and better response times, some end-users will likely see the value in purchasing these solutions for specialized environments where better hardware-software integration can lead to more synergistic outcomes.
8. Myanmar will be the new frontier market
With companies in the region always looking towards new growth markets, IDC expects Myanmar to become a key battle ground for companies seeking an early-mover advantage in this market that is now beginning to open up. The Myanmar government is taking steps to establish new telecom operators and to select foreign investors to enter the telecom market in time for several regional and international events being held in Myanmar in 2013 and 2014. Apart from telecommunications, IDC expects a lot of opportunity and activity in areas such as banking and financial services; manufacturing; tourism; and software development.
9. Hunger for innovation will drive M2M deeper into enterprises
Machine-to-Machine (M2M) has played only a minor role in the telecom operator’s bottom line in the past, with offerings restricted to fleet management and basic monitoring service (meter reading). But IDC believes that this will change in 2013 and that M2M is set to take off over the next few years. Certain industries will lead the adoption of M2M, but the underlying key driver for all industries is the hunger and need for innovation. As the region is getting more and more competitive, technology is increasing being looked at as an enabler of business innovation. M2M is a prime example of this and IDC expects many more examples of innovative use of M2M to appear in 2013 and beyond.
10. Governance issues will take center stage
Several of the super trends that have been and are continuing to transform the ICT landscape over the next several years have significant implications with regards to compliance. Big Data has implications with regards to the data that is being processed; Cloud brings with it multiple issues with regards to data location and procurement patterns; mobility and BYOD create problems with regards to data management, identity control and access; Social creates issues concerning overall control, data and content sharing. As all four technologies continue to make their way into enterprises in 2013 and beyond, governance will become the perhaps biggest issue that CIOs and business units will have to deal with.
For more information about this report, “IDC Asia/Pacific (excluding Japan) ICT 2013 Top 10 Predictions" (forthcoming), please contact Madhura Moulik at +91 80 6699 1090 or firstname.lastname@example.org.