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24 Jan 2018

IDC Australia IT Industry Predictions, 2018: Digital Native Enterprises Amplify Innovation and Reach

SYDNEY, January 29th, 2018 – International Data Corporation (IDC) today announced its Australia information technology (IT) industry predictions for 2018 and beyond.

In the past few years, we have witnessed the rise of digital transformation (DX) and the disruptions and opportunities it poses for traditional businesses and society in Australia. Organisations of every size and industry risk fundamental disruption because of new technologies, new players, new ecosystems, and new ways of doing business.

While DX accelerates in Australia and globally, the half-life of companies shrinks, disrupted by new business models and 3rd Platform technologies. The imperative is not just keeping pace with business change but also increasing the speed of business operations. In an attempt to go faster, organisations struggle under a forest of silos, and business innovations stagnate with redundancy and inconsistency.

According to Sabharinath Bala, Senior Research Manager IDC Australia, “The digitalisation phenomenon will continue to push DX as the top priority for IT executives, as innovation through DX is permanently reshaping the future of Australian organisations. The pace at which organisations generate digitally enhanced products and services will amplify their reach in the market and be key to their success.”

The urgency to transform digitally continues to drive a large portion of ICT budgets. With business units in Australian enterprises holding 46% of IT budget, the involvement of BU leads in DX initiatives has been on the rise over the last two years. Business unit heads and their staff are typically at the forefront of the organisation, either serving customers or collaborating with ecosystem partners.

"Cognitive advances, combined with robotics and AR/VR, are now actively impacting experiential engagement, business and manufacturing processes, and strategies. Intelligent applications based on cognitive computing, artificial intelligence, and continual deep learning are the next wave of technology transforming how consumers and enterprises work, learn, and play.", he adds.

Sabharinath Bala and IDC Australia Research Analysts revealed the strategic top predictions that will unfold in 2018 and beyond, resulting in the biggest impact to organisations in the country.



1. DX economy tipping point: By 2021, at least 60% of Australia's GDP will be digitised, with growth in every industry driven by digitally enhanced offerings, operations, and relationships; by 2020, investors will use platform/ecosystem, data value, and customer engagement metrics as valuation factors for all enterprises.

2. DX platforms: By 2020, 50% of AU500 will have fully articulated an organisationwide digital transformation platform strategy, and will be in the process of implementing that strategy as the new IT core for competing in the digital economy.

3. Cloud 2.0 — distributed and specialised: By 2021, enterprises' spending on cloud services and cloud-enabling hardware, software, and services will more than double to over A$9.8 billion, leveraging the diversifying cloud environment that is 35% at the edge, over 15% specialised (non-x86) compute, and over 65% multicloud.

4. AI everywhere: By 2019, 50% of digital transformation initiatives will use artificial intelligence services; by 2021, 85% of commercial enterprise apps will use AI, over 65% of consumers will interact with customer support bots, and over 60% of new industrial robots will leverage AI.

5. Hyper-agile apps: By 2021, enterprise apps will shift towards hyper-agile architectures, with 85% of application development on cloud platforms (PaaS) using microservices and cloud functions (e.g., AWS Lambda and Azure Functions) and over 90% of new microservices deployed in containers (e.g., Docker).

6. HD interfaces: By 2020, human-digital interfaces will diversify, as 25% of field service techs and 20% of info workers use augmented reality, nearly 35% of new mobile apps use voice as a primary interface, and nearly 55% of the consumer-facing AU500 organisations use biometric sensors to personalise experiences.

7. Blockchain and digital trust: By 2021, at least 25% of ASX organisations will use blockchain services as a foundation for digital trust at scale. By 2021, at least 25% of Australian financial service providers, 40% of supply chain, 40% of agribusiness, and 20% of healthcare organisations will use blockchain networks in production.

8. Everyone's a data provider: By 2020, 80% of large enterprises in Australia will generate revenue from data as a service — from the sale of raw data, derived metrics, insights, and recommendations — up from nearly 35% in 2017.

9. Everyone's a developer: Improvements in simple ("low-code/no-code") development tools will dramatically expand the number of nontech Australian developers over the next 36 months; by 2021, these nontraditional developers will build 20% of business applications and 30% of new application features.

10. Open API ecosystem: By 2021, more than half of the ASX companies will see an average of 45% of their digital services interactions come through their open API ecosystems, up from 10% in 2017 — amplifying their digital reach far beyond their own customer interactions.

“The ability to deliver digital at scale and across the enterprise is critical to win in the DX economy. The increased complexity in measuring the success of DX outcomes will force the C-suite and the digital leadership teams to establish unambiguous metrics and KPIs as part of their DX road map.” adds Bala.

For more details on the implications of these 10 predictions to Australian organisations, please refer to the report: IDC FutureScape : Worldwide IT Industry 2018 Predictions — Australia Implications (#AP43499418).



For queries about IDC FutureScapes, please contact Sabharinath Bala snbala@idc.com.

-Ends-

About IDC FutureScapes

IDC FutureScapes are used to shape IT strategy and planning for the enterprise by providing a basic framework for evaluating IT initiatives in terms of their value to business strategy now and in the foreseeable future. IDC's FutureScapes are comprised of a set of decision imperatives designed to identify a range of pending issues that CIOs and senior technology professionals will confront within the typical 3-year business planning cycle.

About IDC

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 wholly-owned subsidiary of International Data Group (IDG), the world's leading media, data and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @ IDC Australia.

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Contact
For more information, contact:

Sabharinath Balasubramanian
snbala@idc.com
+61 2 9925 2262

Michelle Schaerer
mschaerer@idc.com
+61 2 9925 2258