IDC Predicts the Emergence of "the DX Economy" in a Critical Period of Widespread Digital Transformation and Massive Scale Up of 3rd Platform Technologies in Every Industry
FRAMINGHAM, Mass.--(BUSINESS WIRE)--International Data Corporation (IDC)
today announced its worldwide information technology (IT) industry
predictions for 2016 and beyond. The predictions were published in a new
IDC FutureScape report and presented in a live Web conference hosted by
Chief Analyst Frank Gens. Both the report and an on-demand replay of the
Web conference will be available at http://www.idc.com/idcfuturescapes2016.
In 2007, IDC identified the 3rd Platform - built on the technology
pillars of mobile computing, cloud services, big data and analytics, and
social networking - as the foundation for the IT industry's future
innovation and growth. Since then, the rapid adoption of 3rd Platform
technologies has moved into the "Innovation Stage" - an explosion of
innovation and transformation on top of the 3rd Platform's foundation.
IDC predicts that this phase will accelerate over the next three to five
years as enterprises commit to digital transformation (DX) on a massive
scale, leading to the emergence of the "DX economy."
"The disruptive impact of digital transformation is about to be felt in
every industry as enterprises 'flip the switch' and massively scale up
their DX initiatives to secure a leadership role in the DX economy,"
Gens, Senior Vice President and Chief Analyst at IDC. "In the next
two years, two-thirds of Global 2000 CEOs will put DX at the center of
their growth and profitability strategies. By the end of this decade,
IDC predicts that the percentage of enterprises with advanced DX
strategies and implementations will more than double."
IDC predicts that the scale-up of digital business strategies will drive
more than half of enterprise IT spending within the next 24 months,
rising to 60% by 2020. Mastery of 3rd Platform technologies will be
table stakes for successfully executing DX business initiatives and
"Cloud First" will become the new mantra for enterprise IT. Virtually
none of the other 3rd Platform technologies or major DX initiatives is
possible in scaled-up implementations without the Cloud as the
foundation. By 2020, IDC predicts that enterprise spending on cloud
services, the hardware and software to support cloud services, and the
services for implementing and managing cloud services will exceed $500
billion, more than three times what it is today.
The DX economy - operating at scale - will be driven primarily by code.
Enterprises' ability to grow and compete will increasingly depend on
their digital "innovation capacity": the size and talent of their
software development teams. In this regard, every company will
increasingly be a software company. By 2018, IDC predicts that
enterprises pursuing DX initiatives will more than double the size of
their developer resources, focusing those developers almost entirely on
Data will be equally important to the DX economy - without large volumes
of quality data "fueling" innovation, the process will stall. IDC
believes that success in the DX economy will depend on the ability to
build robust "data pipelines" that flow both in and out of the
enterprise. By 2018, IDC predicts that the flow of external data into
organizations with advanced DX strategies will increase by as much as a
factor of five while high-end DX performers will increase their "data
out" by 500-fold or more.
The Internet of Things (IoT) will be one of the most fertile areas for
DX. By 2018, IDC predicts the number devices on the IoT will more than
double to 22 billion and drive the development of 200,000 new apps and
solutions that take advantage of them. These devices and solutions have
the potential to redefine competitive advantage in virtually every
industry. IDC predicts the most active IoT development will cluster
around the manufacturing, transportation, retail, and healthcare
Cognitive systems are already providing critical assistance to
organizations dealing with the tsunami of data. Spending on cognitive
software platforms is forecast surpass $1 billion this year and will
scale up dramatically over the next three years. IDC predicts that more
50% of developer teams - up from less than 1% today - will embed
cognitive services into their apps by 2018 to leverage their data
pipelines and to improve customer personalization.
In the expanding DX economy, industry cloud platform and community
participation will become increasingly vital to scale up digital supply
chains and digital distribution channels by as much as 100- to
1000-fold. By 2018, IDC predicts that more than 50% of large enterprises
- and more than 80% of enterprises with advanced DX strategies - will
create and/or partner with industry cloud platforms to scale up their
digital supply and distribution networks. IDC predicts that as the
number of industry clouds will reach 500 or more by 2018, up from
As the DX economy compresses pricing in many sectors, IDC predicts that
60% of B2B and 80% of B2C enterprises will overhaul their "digital front
doors" - and the customer engagement systems behind them - to support
1,000 to 10,000 times more customers and customer touchpoints than they
do today. At the same time, they will have to deliver dramatically more
personalized customer service. IDC predicts that Customer/Intimacy
@Scale will be the biggest, most complex enterprise-wide DX initiative
that organizations will have to face, requiring a fundamental cultural and
Finally, the DX economy will take its toll on the IT industry itself. By
2020, IDC predicts that nearly a third of today's IT suppliers will be
acquired, merged, downsized, or significantly repositioned. In this
environment, enterprises will have to constantly monitor and assess the
solutions offered by their suppliers and partners and be prepared to
realign these relationships as needed.
IDC's worldwide IT industry predictions are presented in full detail in
the report, IDC
FutureScape: Worldwide IT Industry 2016 Predictions: Leading Digital
Transformation to Scale (IDC #259850). Copies of this report are
available to qualified members of the media. To schedule a one-on-one
interview with Frank Gens, please contact Sarah Murray at 781-378-2674
An on-demand replay of IDC's Worldwide IT Industry Predictions Web
conference will also be available, along with more than 30 other
FutureScape presentations covering topics including Digital
Transformation (DX), the CIO Agenda, the Internet of Things (IoT), Smart
Cities, Big Data and Analytics, Cloud Computing, and more. To register
for any of these presentations, please go to http://www.idc.com/idcfuturescapes2016.
International Data Corporation (IDC) is the
premier global provider of market intelligence, advisory services, and
events for the information technology, telecommunications, and consumer
technology markets. With more than 1,100 analysts worldwide, IDC offers
global, regional, and local expertise on technology and industry
opportunities and trends in over 110 countries. IDC's analysis and
insight helps IT professionals, business executives, and the investment
community to make fact-based technology decisions and to achieve their
key business objectives. Founded in 1964, IDC is a subsidiary of IDG,
the world's leading technology media, research, and events company. To
learn more about IDC, please visit www.idc.com.
Follow IDC on Twitter at @IDC.
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