IDC 2017 Predictions: Dawn of DX Economy and Rise of Digital-Native Enterprise
January 04, 2017
Share this

International Data Corporation (IDC) announced its worldwide information technology (IT) industry predictions for 2017 and beyond.

IDC has been chronicling the emergence and evolution of the 3rd Platform, built on cloud, mobile, big data/analytics, and social technologies, for nearly a decade. Over the past several years, the adoption of these technologies has accelerated as enterprises commit to the 3rd Platform and undergo digital transformation (DX) on a massive scale. Looking forward, IDC predicts that digital transformation will attain macroeconomic scale over the next three to four years, changing the way enterprises operate and reshaping the global economy. This is the dawn of the "DX Economy."

"We are at an inflection point as digital transformation efforts shift from 'project' or 'initiative' status to strategic business imperative," said Frank Gens, SVP and Chief Analyst at IDC. "Every (growing) enterprise, regardless of age or industry, must become 'digital native' in the way its executives and employees think, what they produce, and how they operate. At the same time, 3rd Platform technology adoption and digital transformation is happening much faster than most expected and early competitive advantages will go to those enterprises that can keep pace with the emerging DX economy."

A closer look at IDC's top ten worldwide IT industry predictions reveals the following:

1. By 2020, 50% of the Global 2000 will see the majority of their business depend on their ability to create digitally-enhanced products, services, and experiences. For industry leaders, the fastest revenue growth will come from information-based products and services. To facilitate the development of these products and services, worldwide investment in DX initiatives will reach $2.2 trillion in 2019, almost 60% more than in 2016.

2. By 2019, 3rd Platform technologies and services will drive nearly 75% of IT spending – growing at twice the rate of the total IT market. This represents a major acceleration from last year's outlook, when IDC predicted that 3rd Platform technologies would account for over 60% of IT spending by 2020. This spending will be fueled by further evolution of the 3rd Platform's core technologies as well as the rapid adoption of Innovation Accelerators such as cognitive/artificial intelligence (AI) systems, augmented reality/virtual reality (AR/VR), and next-generation security.

3. By 2020, 67% of all enterprise IT infrastructure and software spending will be for cloud-based offerings. Today's "cloud-first" strategy is already moving toward "cloud-only." Driving this transition is the fact that almost every enterprise will be a cloud service provider of innovative services to its own marketplace, making cloud capability not just an IT issue, but also a core business operations issue. Just as important, the cloud will morph to become more distributed, more trusted, more intelligent, more industry-focused, more channel-mediated, and more concentrated with the top 5 IaaS/PaaS vendors controlling at least 75% share by 2020.

4. By 2019, 40% of all digital transformation initiatives – and 100% of all effective IoT efforts – will be supported by cognitive/AI capabilities. This is because the flood of data that comes from IoT devices and DX initiatives have limited value without AI technologies that are capable of finding valuable insights in the data. As developer adoption accelerates (by 2018, 75% of developer teams will include cognitive/AI functionality in one or more applications), the stage will be set for a "Battle of AI Platforms" as the competing cloud megaplatforms – including Amazon, Google, IBM and Microsoft – battle for developers in the cognitive/AI space.

5. In 2017, 30% of consumer-facing Global 2000 companies will experiment with AR/VR as part of their marketing efforts. Interfaces are the essential gateway to customer engagement and they are evolving much faster than many have anticipated. IDC expects AR/VR to reach mass adoption levels by 2021, when more than a billion people worldwide will regularly access apps, content, and data through an AR/VR platform.

6. By 2018, the number of Industry Collaborative Clouds (ICCs) will triple to more than 450; by 2020, over 80% of the Global 500 will be digital services suppliers through ICCs. ICCs are cloud-based platforms through which multiple companies in an industry collaborate in some fashion toward a common goal, such as improving industry insight and/or capability. IDC expects these "industry crossroads" to take off over the next several years with ICCs focused on information and data tripling from 50 in 2016 to more than 150 by the end of 2018.

7. By the end of 2017, over 70% of the Global 500 will have dedicated digital transformation/innovation teams. To meet the challenges of the DX economy, enterprises will have to grow their developer teams more quickly – look for growth of 2-3x by 2018. At the same time, the pace of software-based innovation will accelerate – enterprises that embrace DevOps and enabling technologies will increase the number of annual application code releases by 50%. The result will be a dramatic increase in enterprises' ability to monetize the value of software through "things" and services.

8. By 2020, over 70% of cloud services providers' revenues will be mediated by channel partners/brokers. As enterprise use of the cloud becomes more complex, traditional IT channel partners – and a new generation of cloud-capable channel partners – will evolve to provide the help needed to support the expanding variety of cloud users and uses. By 2018, IDC expects major channel partners to have transitioned at least one third of their business from hardware sales to cloud services sales/brokering.

9. By 2020, all enterprises' performance will be measured by a demanding new set of DX-driven benchmarks, requiring 20-100% or better business performance. Competing and thriving in the DX economy means that every enterprise, in effect, must think and operate like a digital native organization. CEOs must have critical technology leadership experience. Growth will come from information-based (digital) products. Customer engagement and operational efficiencies must improve dramatically. Not surprisingly, IDC expects at least one third of every industry's top 20 companies will fail to reach these new benchmarks, thereby opening the door to heightened competition and disruption.

10. By 2020, one third of health/life sciences and consumer product companies will begin to develop the first wave of products and services tightly integrating 3rd Platform technologies with the human body; "Augmented Humanity" offerings go mainstream in the mid-2020s. The integration of digital technologies with human biosystems as well as the use of digital technologies to engineer biological systems at the cellular and sub-cellular level are starting to enter early R&D stages. The next four years are the "proto" period where we’ll see proof of concept/prototype offerings, and the first Amazons, Googles, and Facebooks of the next era are likely to emerge.

Share this

The Latest

May 19, 2022

Recently, a regional healthcare organization wanted to retire its legacy monitoring tools and adopt AIOps. The organization asked Windward Consulting to implement an AIOps strategy that would help streamline its outdated and unwieldy IT system management. Our team's AIOps implementation process helped this client and can help others in the industry too. Here's what my team did ...

May 18, 2022

You've likely heard it before: every business is a digital business. However, some businesses and sectors digitize more quickly than others. Healthcare has traditionally been on the slower side of digital transformation and technology adoption, but that's changing. As healthcare organizations roll out innovations at increasing velocity, they must build a long-term strategy for how they will maintain the uptime of their critical apps and services. And there's only one tool that can ensure this continuous availability in our modern IT ecosystems. AIOps can help IT Operations teams ensure the uptime of critical apps and services ...

May 17, 2022

Between 2012 to 2015 all of the hyperscalers attempted to use the legacy APM solutions to improve their own visibility. To no avail. The problem was that none of the previous generations of APM solutions could match the scaling demand, nor could they provide interoperability due to their proprietary and exclusive agentry ...

May 16, 2022

The DevOps journey begins by understanding a team's DevOps flow and identifying precisely what tasks deliver the best return on engineers' time when automated. The rest of this blog will help DevOps team managers by outlining what jobs can — and should be automated ...

May 12, 2022

A survey from Snow Software polled more than 500 IT leaders to determine the current state of cloud infrastructure. Nearly half of the IT leaders who responded agreed that cloud was critical to operations during the pandemic with the majority deploying a hybrid cloud strategy consisting of both public and private clouds. Unsurprisingly, over the last 12 months, the majority of respondents had increased overall cloud spend — a substantial increase over the 2020 findings ...

May 11, 2022

As we all know, the drastic changes in the world have caused the workforce to take a hybrid approach over the last two years. A lot of that time, being fully remote. With the back and forth between home and office, employees need ways to stay productive and access useful information necessary to complete their daily work. The ability to obtain a holistic view of data relevant to the user and get answers to topics, no matter the worker's location, is crucial for a successful and efficient hybrid working environment ...

May 10, 2022

For the past decade, Application Performance Management has been a capability provided by a very small and exclusive set of vendors. These vendors provided a bolt-on solution that provided monitoring capabilities without requiring developers to take ownership of instrumentation and monitoring. You may think of this as a benefit, but in reality, it was not ...

May 05, 2022

Mohan Kompella, VP of Product Marketing at BigPanda, answers the question: How can AIOps contribute to greater achievement in global enterprises? ...

May 04, 2022

Increasingly, more and more software is being delivered as software as a service (SaaS). Gartner forecasts the SaaS market to continue to expand to $145B in 2022. Consumers and businesses not only have become accustomed to, but also expect SaaS-based solutions, even more so in the post-COVID world. This new frontier allows features to be rolled out at an unparalleled velocity paving the way for continuous innovation and sustainable competitive advantages ...