Firms will struggle to stay tech fit

It is the time of year when the big technology research shops gaze into the near future to identify trends that will have the most impact on the tech industry over the next few years.

The yearly ritual, of course, is partly a marketing vehicle for them. Still, the forecasts can be thought-provoking, especially if sharpened by attaching numbers to their predictions.

IDC’s outlook is a 20-page document, full of detail, and its authors are not afraid of making numerical guesses about the future. By 2020, for example, IDC says more than 30 per cent of today’s tech suppliers will “not exist as we know them today,” having been acquired or failed.

Going beyond the detail in the IDC forecast, and reading reports published last month by Gartner and Forrester Research, the overall theme is that the pace of digital innovation is accelerating and broadening.

The digital technologies that are changing the economics and practices of traditional business – cloud computing, mobile devices, advanced data analysis and artificial intelligence – are better, cheaper and more widely available.

"Mainstream companies in every industry are realising they'll be disrupted if they don't get moving now," said Frank Gens, IDC's chief analyst and the report's principal author.

Many of these companies, according to IDC, are not moving fast enough. It predicts a third of the top 20 companies in every industry will be “disrupted” over the next three years, meaning their revenue, profits and market position will deteriorate.

The firms’ reports vary in their emphasis. The Forrester outlook focused on organising technology and corporate strategy around the “age of the consumer”.

The Gartner study featured the likely impact of advances in artificial intelligence, with “autonomous software agents” expected to play a crucial role in the economy and everyday life. “The future,” its report said, “will belong to the companies that can create the most effective autonomous and smart software solutions.”

Code is king in the IDC report as well. By 2018, IDC said corporations pursuing digital transformation strategies would “more than double the size of their software development teams”. So the job market for software engineers with cloud and web development skills should stay hot.

The same is true for data scientists. In the digital economy, the IDC report said, “innovation = code + data. Data is the grist of the innovation mill”.

The IDC report foresees big growth for Internet of Things devices and for the software needed to make sense of all the sensor data. By 2018, IDC predicts, the number of such devices will more than double, prompting the development of 200,000 new apps. Companies lacking an Internet of Things strategy and expertise, it said, will be “like individuals functioning without most of their five senses”.

Cloud computing is fast becoming the fundamental technology engine in corporations. IDC predicts that by 2020, spending on cloud services and related hardware and software will be more than $500 billion, three times the current level.

In the IDC view, there will be different tiers of the cloud business. One level will be several "industry cloud platforms", developed by mainstream firms such as "General Electric, John Deere, Johnson Controls and United HealthCare" that are "providing epicentres of innovation, growth and disruption in their own industries".

But for underlying cloud infrastructure, IDC sees a “significant consolidation,” with “six or fewer cloud platform vendors” holding 80 per cent or so of the market by 2020.

– (The New York Times 2015 )