In the age of the digital buyer, most companies that prioritize customer experience face the ongoing challenge of meeting ever-evolving expectations, emotional needs, and practical requirements. This is where generative AI technology comes into play. Generative AI is a powerful tool capable of generating vast amounts of content, uncovering information based on natural language prompts, and bringing unique ideas to fruition.

While generative AI tools excel in summarizing and responding swiftly, they lack the essential human element of empathy that defines a truly engaging experience.

Instead of displacing knowledge workers and content writers, vendors are leveraging generative AI to enhance their capabilities.

Marci Maddox – Research Vice President, Digital Experience Strategies

Active Learning: Enabling Empathy at Scale in Generative AI

For most humans, the ability to demonstrate cognitive empathy is intuitive during in-person interactions. They continuously listen, learn, seek new knowledge, and refresh their understanding based on the information acquired during and after each interaction. This dynamic cycle enables them to intelligently engage with others and foster meaningful connections.

To be perceived as empathetic, one of the core capabilities that enterprises must develop is the ability to actively learn about their customers so that they can communicate and engage in an intelligent manner that best resonates with customers.
– Future of Customer Experience framework, IDC

This is a yet untapped opportunity for generative AI. Once the tool learns to recognize the sentiment of a customer’s inquiry and respond in an appropriate, empathetic way, improved customer experience becomes scalable.

One way to apply active learning to the content that is created by generative AI is to adjust the model’s underlying customer data inputs in real time so that the returned results are the most relevant at that moment in time. Language learning models (LLMs) in generative AI shouldn’t rely solely on static information.

Instead, they should incorporate a range of data signals, responses, transactions, and other customer data to continually train for future content requests. By leveraging insights gained from each interaction, the precision of personalization increases, leading to better outcomes for the business.

Harnessing Generative AI: Implications for the Enterprise

AI-based deep learning capabilities are particularly suited for situations where organizations strive to deliver an enhanced customer experience but face limitations in scaling their resources effectively.

Marketing teams have long struggled to keep up with the increasing demand for content creation across multiple channels while meeting personalized expectations. This challenge is compounded by the difficulty of responding to customers in real-time with relevant and valuable content.

As a result, content authors often feel overwhelmed and time constrained. Automation has demonstrated its potential in enabling marketers to keep pace with the digital era’s fast-paced environment. However, there is still a significant apprehension among content teams regarding the potential replacement of their role by generative AI. Bridging this gap remains a significant challenge.

Generative AI and the Empathetic Content Life Cycle

The integration of generative AI in applications is poised to revolutionize the life cycle of persuasive text and media-rich content. Instead of displacing knowledge workers and content writers, vendors are leveraging generative AI to enhance their capabilities.

While AI-powered content creation and recommendation technologies have existed for some time, the introduction of ChatGPT, with its user-friendly prompt-response system, quickly captured the attention of one million users within its initial five days. Since then, it has gained further momentum as an embedded prompt response in various content-related technologies.

Generative AI finds widespread application throughout the content life cycle, including in the following common use cases:

Produce unique personalized content
Faster branded content creation
Improved content quality
Better content discovery
Unified content management

Authenticity of Gen AI-created content

Trust and security regarding the data used and generated by generative AI technology are a top concern for many enterprise leaders.

IDC sees an opportunity for generative AI vendors to apply objectivity to the output by leveraging a portfolio of prior approved assets and training the AI model to score the results based on trusted source elements and business logic tied to the derived assets.

Utilizing untrusted data sources in generative AI poses certain risks and challenges. These sources may lack accuracy, appropriateness for commercial use, or compliance with legal requirements, and could potentially introduce bias or include copyrighted content that necessitates legal approval for usage.

Additionally, there may be undiscovered flaws or faulty logic in these data sources. Consequently, it is crucial for generative AI projects in marketing to establish clear and explicit guardrails to govern the selection and usage of assets in training the learning models.

Advice for Emerging Tech Vendors

Don’t use generative AI as a replacement for existing content teams.
Train LLMs to incorporate customer context, e.g. sentiment, behavior signals, and intent.
Take time to assess the repetitive content tasks that have become commonplace in the course of content management tasks.
Review the implications of generative AI on the authenticity and tracking of content sources.

If your organization is interested in partnering with IDC to better understand how Generative AI will impact the markets most critical to your success contact us.

We also recommend you take advantage of these recent resources from our thought leaders and tech market experts:

IDC Webinar: Unlocking Business Success With Generative AI

IDC Blog: No Turning Back: AI Everywhere Causes a Seminal Shift in the Tech Market

IDC eBook: The Tech Vendor’s Guide To Embracing Responsible Generative AI

IDC Research: Future of Customer Experience Incorporates Generative AI into the Persuasive Content Supply Chain

Strike the Right Balance of Direct and Indirect Channels To Maximize Potential in North America

As the region with the largest share of global tech spend, North America—including the United States and Canada—is a critical geo for tech vendors to nail down. Competing in this region means you must operate at economies of scale to afford competitive price points and offer solutions that meet needs both broad and niche. With nearly 20 cents of every global dollar spent on tech moving through North America’s indirect channels, achieving and maintaining desired performance levels here requires a balance of vendor-direct and ecosystem sales.  

Looking at the 2022 calendar year, of the more than USD $2.9 trillion spent on technology in North America, over 40% was facilitated through indirect channels including dealers and VARs, retailers/e-tailers, service providers, system integrators, and distributors. In the three years from 2020 – 2022, indirect channels revenues also grew at a faster CAGR than direct channels.

While IDC predicts a slight reversal in this growth rate trend, particularly as the PC market goes through a difficult year, it is still expected that more than USD $578 billion in North American tech spending will move through indirect channels in 2023, compared to USD $874 billion in direct business. Therefore, vendors must avoid the temptation to over-rotate on direct channels at the expense of indirect routes-to-market. In fact, it is expected that the slowing growth rate will drive increased competition within indirect markets as vendors take offensive and protective measures to ensure nominal financial metrics are reached and growth is maintained. The most successful tech businesses will be those that master both channels in their North American play.

Use the Classic 4 Ps of Marketing To Frame Your Go-To-Market Roadmap for North America

To set and achieve realistic go-to-market goals for their North American businesses, tech vendors must start with clear market understanding. The degree to which vendors can accurately identify, track, and meet market demands, set baselines against which to measure performance, and predict buyer and market responses relative to competitors, will determine the quality of market insight decision-makers have at their disposal. However, not all go-to-market decision-making domains are created equal – some, like the 4 Ps of marketing, have a greater impact than others.

First proposed by Edmund Jerome McCarthy in his 1960 book “Basic Marketing: A Managerial Approach” and popularized by professors like Philip Kotler of the Kellogg School of Management in the decades since, the “4 Ps” presents a mix of elements for consideration when developing go-to-market plans. This generally agreed upon model looks comprehensively at the four domains contained within, including:

Product
Price
Place
Promotion

The product domain considers the total value proposition offered to both those buying and those consuming the solutions in question. Here, vendors must look beyond the sum of their components and think about the whole benefit they deliver – from technology, services, and partnerships to pre- and post-sales consulting, engineering, and support and other ancillary considerations, like financial, process, and personal gains and pain relievers.

The price domain considers the amount of money, time, and effort required by the customer to effectively gain the benefits promised by the product. By reflecting upon not just the selling price and available pricing models, but the total cost of ownership and the people, process, and technology required to support the product on an ongoing basis, vendors can better justify their own price upfront, and become a strategic partner for customers in the long run.

The place domain considers the channels and formats in which the customer can access the benefits of product. Within their often vast and complex technology ecosystems, vendors must build out reliable supply and value chains across various routes-to-market to meet the expectations of modern tech customers. This long-tail marketing approach goes further than internal competencies to consider synergistic value offered through a robust partnership model.  

The promotion domain considers all factors related to creating and maintaining a products’ “position” in the minds of customers – i.e., the unique standing or reputation one vendor occupies relative to competitors in the same market. In this domain, vendors need to think through the full experience they deliver across the entire buyer journey as customers become aware of, show interest in, drive sales for, and use a product, including their messaging, communications, events, and product-led strategies.

Modern incarnations of the 4 Ps have expanded the model, breaking down certain domains to provide a more granular decision-making model. Whether the classic marketing mix is followed, or an expanded version, the goal is the same – to develop a plan that comprehensively addresses all relevant considerations. Smart vendors will do this early and often in their process, while those less experienced vendors will find themselves with the implications of other vendors’ decisions thrust upon them.

Even though the 4 P marketing mix model is straight-forward, knowing which considerations are relevant and performing proper assessments can be anything but. To help, the IDC Data & Analytics team has developed a guide to assessing the 4 Ps of marketing for technology vendors. Read on to learn more about this template and how you can access it for free.

Give Your GTM Roadmap for North America a North Star with Insights from IDC

To get the most out of their North American play, tech suppliers must look beyond internal capabilities and work with other vendors and providers in the greater tech supply ecosystem. Without a partnership model, vendors risk losing out on a significant portion of the market—the indirect channel accounts for an average of over 40% of tech sales in North America.

Historically, indirect tech channels tend to grow faster than direct-to-buyer channels. However, recent market shifts have seen a slight reversal in this trend begin to emerge. Even if this is a temporary phenomenon, it could be enough pressure to disrupt the order of things in North America for years to come. Regardless of their ecosystem orientation, vendors and providers must pay attention to both sides of the tech spending coin to properly contextualize and strategize for their businesses.

Setting and achieving realistic goals starts with accurate market understanding. Tech suppliers must give themselves a clear baseline against which to measure performance, an understanding of what is possible given various market conditions, and an ability to predict likely buyer and competitor behaviours for both direct and indirect channels. Once this is confidently assessed, effective go-to-market actions for both channels can be planned across each of the classic “4 Ps” of marketing – product, price, place, and promotion.

To make it easy, IDC is giving away a go-to-market research and strategy template specifically designed for strategists within corporate, product, channels, marketing, and sales strategy teams for technology suppliers. Use this template to guide your high-level North American analysis and serve as an input to your strategic plans. To access the form, please fill-out the form available on this page.

Need a little inspiration? Read the Eaton customer success story to find out how the power management giant leverages data from IDC’s North America Distribution Tracker product to inform activities ranging from emergent trend analysis and market sizing to price skimming and acquisition evaluations. To get instant access to the story, please visit this page.

You can also learn more about IDC’s flagship market intelligence products that include coverage for North America by visiting our product pages, reading overview documents, and scheduling live demos with analysts and experts through our Data & Analytics site.

For more information on IDC’s North America Distribution Tracker, please visit this page.

For more information on IDC’s Black Book solutions coverage in North America, you can get started here.

IDC believes that the tech industry is at a seminal moment. Never have we seen a technology emerge with this much executive support, clearly defined business outcomes, and rapid adoption. In eight short months, Generative AI has simultaneously captured the attention, imagination, and concern of most tech and business leaders across the world. However, as Generative AI becomes front and center of conversations in the technology industry and beyond, the underlying question being asked by the market is: how do organizations accelerate their journey to deliver business value?

…the ambiguities over the authorship and copyright of AI-generated content are creating question marks around intellectual property management and ownership. All these risks need to be incorporated into a well-orchestrated trust and oversight program to ensure that these technologies can be deployed in a sustainable manner.

Philip Carter – Group Vice President, Worldwide Thought Leadership Research

To help answer this question, IDC has developed a framework highlighting the path to business impact. This framework helps organizations work through the key activities that need to be put in place, provides an explanation of the core technologies required, and proposes how organizations should be thinking about the new use cases to accelerate their own path to business impact for Generative AI technologies.

Key Activities

Before any of the core technologies are explored, IDC believes that the following set of key activities needs to be put in place:

A Responsible AI Policy that includes defined principles around fairness, transparency and accountability relating to the data that is being used to train models as well as the usage of the results. This activity should also include a methodology to provide explainability of any generative AI model output with clear transparency on roles and responsibilities of developers, users and any stakeholder involved with these initiatives.
Strategy and Roadmap with a set of defined and prioritized use cases to align the organization on the key areas that will most likely deliver the maximum business impact in the short, medium and longer term.
Intelligence Architecture to manage the lifecycle and governance of data, models and business context for every use case. This should also include protocols around data privacy, security, intellectual property (IP) protection.
Reskilling and Training to create a skills map for core AI technologies, adjacent AI tech as well as broader tech and business capabilities to deploy Generative AI at scale across the organization.  This activity should also include a training program personalized for key roles and an organizational readiness assessment to ensure that a change management program is incorporated.

Core Technologies

Once the foundational activities are in place, it is critical to develop a clear understanding of the core Generative AI technologies. At the center of this are the generative foundation models – including the well-known large language models (LLMs). The ability for these models to be trained on extraordinarily large amounts of data (primarily semi-structured and unstructured content) and then generate new content based on previously created data in response to prompts is the real game changer in the market. And we are not just talking about text (which is the basis for ChatGPT); it’s also about generating and managing images, videos, structures (e.g. DNA), audio and software code. The model lifecycle including ingesting, training, tuning, inferring, and running these models is hugely important, and will determine their quality over time. From the changing dynamics in the platforms and infrastructure down to the shift from CPUs to GPUs at the semiconductor level really highlight how this transformative set of technologies is impacting every part of the technology stack. The way these models are being infused in custom applications, generic enterprise applications, and other software development platforms are critical ‘sub-paths’ to impact that also need to be explored.

The Emerging Use Cases

IDC defines a use case as a business funded initiative enabled by technology that delivers a measurable outcome. There are three broad types of Generative AI use cases that need to be assessed:

Industry-specific – these use cases will generally require more custom work (and in some cases may even require building your own generative AI model). Examples include generative drug discovery in life sciences, or generative material design for manufacturing.
Business Function – these use cases will tend to integrate a model (or multiple models) with corporate data for a specific function (e.g. marketing, sales, procurement etc).  Many organizations are testing these types of use cases but are concerned about IP leakage and data governance.
Productivity – these are basic use cases such as summarizing a report, generating a job description or code generation in Java. This functionality is being infused into existing applications (E.g. Co-Pilot for Microsoft, or Duet AI for Google).

There are a mix of internal and externally facing use cases – each with their own level of potential risk and business impact which needs to be incorporated into a use case prioritization framework.

Trust & Oversight

Finally, there are numerous well-founded concerns around ethics, regulatory compliance, and governance associated with generative AI.  Due to its ability to generate fake code, data and images closely resembling the real thing, generative AI is likely to increase identity theft, fraud, and counterfeiting cases. The models are also vulnerable and will likely be a source of attack and manipulation and often generate hallucinations. Additionally, the ambiguities over the authorship and copyright of AI-generated content are creating question marks around intellectual property management and ownership. All these risks need to be incorporated into a well-orchestrated trust and oversight program to ensure that these technologies can be deployed in a sustainable manner.

As the industry moves forward with this fundamental transition, IDC believes that every CEO will need to have an AI strategy – and generative AI is the trigger. It is best to get started quickly; we are hopeful that this framework will help every organization develop their own ‘path to impact’.

If your organization is interested in partnering with IDC to better understand how Generative AI will impact the markets most critical to your success contact us.

We also recommend you take advantage of these recent resources from our thought leaders and tech market experts:

IDC Webinar: Unlocking Business Success With Generative AI

IDC Blog: Generative AI: Mitigating Data Security and Privacy Risks

IDC eBook: Unlocking the Power of Generative AI

IDC Blog: Can ChatGPT Transform the Customer Experience?

IDC Blog: No Turning Back: AI Everywhere Causes a Seminal Shift in the Tech Market

Better insights

The vast majority of nearly 800 CxO participants in our future enterprise survey experienced challenges in getting insight in the performance of their software development and DevOps teams. Most organizations have practices in place to help them to monitor and report on the performance, but this insight does not reach CxO level. What are the causes of this paradox and what can you do to align the insights in the organization to effective CxO information?

As you can see from the numbers there is a good chance that your development and DevOps teams are using at least one of the top 4 practices to monitor performance. What we encounter in practice is that the way these practices are implemented is either not consistent over all development and DevOps teams or inconsistent in a way that is prone to be influenced by personal judgment or taste. When you have implemented code quality management tools like SonarQube, Checkstyle or FindBugs, but have no rules on how these tools should be used, how do you know what the quality of the software is that your teams are developing or maintaining? If you don’t use it consistently throughout your whole application portfolio, how do you know where to direct improvement attention?

Team productivity is quite often determined based on DORA or Flow. These types of metrics are ideal on a team level to help the teams improve, but are not suitable for CxO level decisions because they have no consistent meaning beyond the team level.

IDC is all about data. With our KPI model, we can help you determine the right dataset you need to make fact-based decisions to direct teams to bring value to your organization. When you are already a value-driven organization, IDC can tie the right KPI’s to your objectives and key results. With an assessment of your data in your tools we can help you piece the right data together or we can help you fill the gaps based on best practices.

Some examples of real insight that we have helped set up for some of our customers:

Output of the teams. How much software are they producing, compared to similar teams in similar companies, based on standardized sizing metrics. This is real management information on top of the DORA, Flow and happiness metrics for the teams themselves.
Estimation erosion. When internal team processes evolve, so do internal estimates. Improved internal processes are not always reflected in more value per sprint. By comparing the internal metrics to standardized metrics you can determine whether estimation is improving or eroding.
Code analysis at system or portfolio level. Almost half of the organizations we interviewed are using automated code quality management tools. Most of these tools are limited to establishing the code quality of an individual piece of code. Code analysis at system or portfolio level looks deeper or wider, also taking account of the quality of the total code base. This can bring to light risks in your code base of interactions between individual pieces of code or of bad updating practices for open source components that are used in your code base.
Insight in the real Bill of IT. All IT costs, including cloud spent, can be mapped towards the right value stream.

By comparing the real insights from your company to the insights we have from our IDC global market data, we can give you insight into how you compare to similar organizations. By comparing like for like we show you the differences between you and your peers. With this information you can make fact-based decisions on whether or not you need to change something. Our insight can help you make better decisions in cooperation with external service providers, make better sourcing decisions, make better decisions on how to set up your IT organization, how to create more value or to transform your application landscape.

What we see with all of our clients is that better informed decisions lead to better outcomes. Examples of those better outcomes are:

To learn more about how IDC can help you and get connected with someone on our team, click the button below.

One can be forgiven for their quizzical expression on hearing that we still have a third of the world’s population without internet access. 

According to the International Telecommunication Union (ITU), an estimated 2.9 billion people, representing 35% of the world’s population, do not have access to internet. The least developed countries are the least connected, however, these connectivity gaps also extend to developed countries.

For example, approximately 19 million Americans representing 6% of the population still lack access to fixed broadband service at threshold speeds. Global connectivity gaps exist in parts of Europe and Asia, Africa, and South America.

It’s against this backdrop that a challenge to bridge the digital divide creates an opportunity for comms SPs (Communications Service Providers) partnering with LEO (Low Earth Orbit) satellite operators to offer highspeed cost-effective options. This will close the remote and rural connectivity gap, considering terrestrial network deployment has not been financially feasible to develop a robust digital infrastructure. 

The pairing of satellite providers’ constellations in LEO with comms SPs’ mobile networks promises to deliver highspeed satellite-to-cellular coverage and broadband internet access to connect the unconnected.  Comms SPs have high expectations to derive significant benefits including extended coverage with lower latency, resiliency, access to emerging markets, and the ability to offer new services and applications.

The Surge in LEO Satellite Constellations

Previously, satellites’ success has been hindered by substantial costs and invisible profit margins associated with launching and maintaining a fleet of satellites. This time, satellite companies have a higher chance of success because of several key reasons:

Building smaller, more capable LEO satellites that are placed in orbit at an altitude of 2,000km or less. The advancement in rocket technology has made reusable rockets a reality. This significantly improves the economics of launching satellites into lower Earth orbit, making the business case more viable.
Conventional satellite connectivity placed in more distant GEO and MEO orbits have had challenges with cost, signal delay, and high latency for many cases. Whereas LEO satellite services offer lower latency in the range of 20–50ms due to the satellites’ lower orbit, making them a more viable highspeed satellite connectivity option.
Combined private and public funding in the billions of dollars for LEO satellite ventures. Governments, driven by the desire to establish control in space are diverting resources away from other programs to invest in space-related initiatives. Prominent examples include the U.S., India, China, and the European Union.
Private companies such as SpaceX are outperforming governments in terms of deployment speed, shaving years off the process.   Also, previously struggling companies such as OneWeb and Iridium have been revived out of bankruptcy through public and private funds.

With these factors at play, the current landscape presents a more favorable environment for LEO satellite operators to thrive and overcome previous challenges in addressing a vast untapped market.

Comms SPs Tying the Knot with LEO Satellite Partners

The advent of LEO satellites signals an important new opportunity for comms SPs to extend the reach of their network.  Some of these early and notable comms SP and satellite operator partnerships capitalize on this opportunity with first-mover advantage, including:

T-Mobile announced its technology alliance with SpaceX (Starlink) in August 2022 to develop satellite-to-smartphone connectivity in the United States by pairing the Starlink satellite constellation in LEO with T-Mobile’s wireless network.
Verizon announced its strategic collaboration with Amazon (Project Kuiper) LEO satellites in October 2021 to extend 4G/LTE and 5G connectivity solutions for both consumers and businesses in rural and remote communities in the United States.
Orange SA and OneWeb announced their partnership, in March 2023, to expand connectivity services across Europe, Africa, Latin America, and other global regions using LEO satellite communications.  
AT&T, Rakuten, and Vodafone have each separately partnered with AST SpaceMobile to use its LEO satellites to provide direct satellite-to-cellular communications. The partnership, in April 2023, tested the first-ever direct voice connection from space to an everyday cellular device.
NTT and SES announced in April 2023 a multiyear partnership to use MEO satellites to deliver NTT’s edge as a service to enterprise customers.
Apple in partnership with Globalstar unveiled satellite connectivity for its iPhone 14 and iPhone 14 Pro models in November 2022 to provide emergency SOS satellite service in remote areas without regular cell phone coverage.
Qualcomm and Iridium announced their partnership in January 2023 to bring satellite-to-cellular communications to Android smartphones connected to Iridium’s LEO satellite constellation.

It is evident satellite providers who also own the rockets to launch their LEO satellites have an advantage in building out their constellations versus those that rely on third-party rocket providers. IDC expects, due to the increased competition, smaller satellite operators will be either acquired or forced to partner to survive. Also, the right partnerships will be crucial for comms SPs to support their growth plans for satellite-to-cellular coverage as well as future road map development for broadband wireless services.

IDC’s Conclusion

IDC is projecting alliances with long-term implications will increase and become more significant through the pairing of satellite providers’ constellations in LEO with comms SPs.  Enabling comms SPs to evolve their network beyond terrestrial cellular with LEO satellite services that include high-speed internet, 4G/LTE and 5G broadband backhaul, and Internet of Things (IoT).

The partnering of terrestrial and satellite communications holds the promise of helping bridge the digital divide and open new economic opportunities for remote areas of the world.  It also aligns with the United Nations mandate that by 2030 every person in the world should have safe and affordable access to internet.

The coexistence of satellite and cellular networks will become increasingly prevalent and the continued standardization effort in the 3GPP ensures 5G systems integrate NTNs, such as high-altitude platform systems (e.g., LEO, MEO, and GEO satellites), with terrestrial options.

The new wave of LEO satellite deployments have placed them on the radar of government regulatory bodies. Regulators are taking note of next-generation satellite technologies and government oversight will continue to increase as nations look to establish protective borders in space.

LEO satellite constellations offer a pragmatic and more cost-effective option to close the remote and rural connectivity gap, considering terrestrial wireless network deployment has not been financially feasible to develop a robust digital infrastructure.

The opportunity presented to global comms SPs by integrating LEO satellite connectivity is huge to connect the unconnected and help bridge the digital divide. Hence the right alliances with satellite operators will be critical for comms SPs to support their growth plans for ubiquitous satellite-to-cellular coverage and 5G wireless data and broadband services.

For more insight and information on comms SPs expanding service and revenue opportunities with LEO Satellites please see IDC’s market perspective, “Communication Service Providers Expand Service and Revenue Opportunities with Low Earth Orbit Satellites.”