Sustaining digitalization spurred by the lockdowns during the COVID-19 pandemic will increase demand for “as-a-Service (aaS)” products and processes, according to the latest predictions from market intelligence firm International Data Corp. (IDC.
Enterprises around the world will be battered by waves of interconnected economic, political, and social disruptions over the next several years, fracturing business plans and challenging their ability to adapt and survive. Industry leaders will slice through these storms of disruption by transforming their organizations into resilient digital businesses where value creation is based on the effective use of fast-evolving and innovative technologies.
“To succeed, IT and business leaders need to make the transition from implementing digital transformation to running a digital-first organization that connects technology to business outcomes,” said Rick Villars, group vice president, Worldwide Research at IDC. “The IT and communications industries themselves will be among the most transformed as they adopt as-a-service delivery and operating models, deal with radical alterations in ecosystems and value chains, and recognize that their primary tasks are to help CIOs and their enterprises share, use, govern, and increase the value of data.”
IDC’s FutureScape 2023 research focuses on the external drivers that will alter the global business ecosystem over the next 12 to 24 months and the issues technology and IT teams will face as they define, build, and govern the technologies required to thrive in a digital-first world.
IDC’s top 10 worldwide IT industry predictions reveals the following:
1. The Rise of as-a-Service Processes and Smart Products. IDC believes that the number of tech-centric organizations in the G500 will double in the next five years. Their expanded emphasis on adding as-a-Service (aaS) elements such as enhanced customer experience and intelligent process automation to digitally enhanced physical and virtual products will come to dominate future IT budgets.
2. as-a-Service Business Models Will Drive Growth of Tech-by-Wire. One of the most visible developments in the IT industry over the next several years will be the expanded delivery of technology via tech-by-wire (i.e., self-contained systems, software-defined functions, AI-assisted cloud-based control systems, data-driven decision-making). While cost will be a primary driver of tech-by-wire adoption, additional benefits include improved digital resiliency, faster access at scale to innovative technologies, and systems simplification and the reduction of technical debt.
3. Shortages in Critical Skills Will Limit the Benefits of IT Investments. Most companies will struggle to keep and find employees with the right skills, effectively putting more pressure on the remaining employees to meet expanding digital business requirements. Businesses and IT providers will both need to invest in the development of the right technical, collaboration, and critical thinking skills.
“Business strategy and learning strategy must go hand in hand with technology strategy to ease the current difficulties in finding the talent and skills required for digital business,” Villars noted.
4. Digital Sovereignty Will Impact Staff, Budgets, and Operating Processes. Cloud and as-a-Service offerings will be at the core of digital sovereignty developments with assertions related to assurance and residency driving some IaaS/PaaS workloads to local cloud providers while mandates for sustainable operations will spur interest in sovereign offerings (with local partners) among global cloud providers.
5. Rapid Growth in aaS Spending Will Bring Greater Scrutiny. While cost is a major concern for most enterprises, it conceals the most important benefit from the effective use of aaS: significant and sustained reductions in operational burdens and much faster access to innovation. Efforts to contain spending must focus on evaluating which services are delivering on the promised operational and innovation values.
6. Service Providers Will Be Better Able to Provide Expertise. With the shift to more standardized control plane-based aaS offerings, and greater use of AI and automation, providers of security, data, and critical industry-specific knowledge and processes will be able to economically spread the cost and knowledge base of very high value experts across more customers in an easy-to-consume fashion.
7. Technology Supply Chains Will Remain a Critical Concern. In 2025, IDC expects a number of highly visible digital product launches will face major delays due to global or regional silicon and code supply chain issues. To avoid such delays, decision-makers will push for quantifiable outcomes from their cloud providers, invest in supply chain intelligence, and adopt multisourcing strategies.
“Having confidence in one’s tech supply chain will no longer be the concern of the CIO – technology must become the primary concern of the Digital Business C-Suite,” added Villars.
8. The Transition to Control Plane-based Systems Will Not Be Easy. One of the most challenging tasks for IT teams in the next several years will be navigating the maturation of control plane design and the gradual consolidation of basic control systems onto a few standard platforms. IDC expects more than half of enterprises attempting to use tech-by-wire offerings will struggle with a proliferation of siloed control systems.
9 . Establishing Trust in Automation Will Be Critical to Success. The establishment of trust in automation will require a greater focus on the dynamics of human/organizational behavior in initiatives where automation plays a major role. And, while substantial risks stemming from a lack of trust may appear unlikely, their impact in terms of branding and a need to restart trust building will be significant.
10. Machine Vision Will Enable Dramatically Improved Experiences in Physical Locations. Those organizations that establish themselves as leaders in incorporating machine-augmented vision in digitally optimized work/play/health spaces will have a long-term advantage in capturing and retaining customer loyalty as well as improving business outcomes based on the intelligent use of data.