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DIGITAL INDUSTRIAL ECONOMY

Global IT spending to hit $3.8 trillion in 2014

Dubai, October 10, 2013

The global IT spending is poised to reach $3.8 trillion next year, up 3.6 per cent from 2013, but it’s the opportunities of a digital world that have IT leaders excited, according to Gartner. 
 
This results in every budget being an IT budget; every company being a technology company; every business is becoming a digital leader; and every person is becoming a technology company. This is resulting in the beginning of an era: the Digital Industrial Economy, said the technology research expert in its new report.
 
“The Digital Industrial Economy will be built on the foundations of the Nexus of Forces (which includes a confluence and integration of cloud, social collaboration, mobile and information) and the Internet of Everything by combining the physical world and the virtual,” explained Peter Sondergaard, the senior VP at Gartner and global head of Research. 
 
“Digitalization exposes every part of your business and its operations to these forces. It is how you reach customers and constituents; how you run your physical plant; and how you generate revenue or deliver services. Enterprises doing this today are setting themselves apart and will collectively lead the new Digital Industrial Economy,” stated Sondergaard.
 
Economic Impact of the Internet of Things
 
In 2009, there were 2.5 billion connected devices with unique IP addresses to the Internet, most of these were devices people carry such as cell phones and PCs. In 2020, there will be up to 30 billion devices connected with unique IP addresses, most of which will be products, said the Gartner report. 
 
This creates a new economy. In fact, Gartner predicts that the total economic value add for the Internet of Things will be $1.9 trillion dollars in 2020, benefiting a wide range of industries, such as , healthcare, retail, and transportation, its stated.
 
“Computing power will be cheap and covert. We won’t know it is there; it will be in our jewelry and in our clothing,” remarked Sondergaard. “We will throw more computers into our laundry in a week than we’ve used in our lifetimes so far,” he quipped.
 
According to Sondergaard, digital changes the IT market in a big way through the Internet of Things. “In the technology and telecom sectors, revenue associated with the Internet of Things will exceed $309 billion per year by 2020,” he stated.
 
He pointed out that mobile smart devices have taken over the technology world. "By 2017, new device categories: mobile phones, tablets, and ultra-mobile PCs will represent more than 80 percent of device spending," he noted.
 
In its report, Gartner also forecasts that by 2017, nearly half of first-time computer purchases will be a tablet. Therefore, Sondergaard said mobile is the destination platform for all applications.
 
Future of IT Suppliers
 
The digital world runs faster for many traditional IT suppliers. In the past, the top technology companies reigned over the industry for long periods of time. However, now the leaders in areas such as cloud and mobile were not on many CIO’s radar five years ago, said the report. 
 
“What many traditional IT vendors sold you in the past is often not what you need for the digital future. Their channel strategy, sales force, partner ecosystem is challenged by different competitors, new buying centers, and changed customer business model,” revealed Sondergaard.
 
“Digitalization creates an accelerated technology-driven start up environment across the globe. Many of the vendors who are on top today, such as Cisco, Oracle, and Microsoft, may not be leaders in the Digital Industrial Economy,” he stated.
 
Big Data and Security
 
All of these “things” connected to the Internet generate data. People and their activities create data. Smart machines consumer and produce data, and mobile devices are the windows into data, said the expert.
 
Sondergaard said the effective digital enterprises harness that data to change their business. "With all of this valuable data within the IT organization, cyber security will be an ongoing concern, both inside and outside the enterprise. IT leaders should anticipate events and headlines that continuously raise public awareness or create fear," he noted.
 
“The security of embedded technologies that your organization has right now may be the most important operational responsibility you will have in 2020,” Sondergaard said.
 
“Digitalization will create new infrastructures and new vulnerabilities in our infrastructures. We recommend that you build a portfolio of security vendors because no single vendor addresses more than a fraction of your problem. Everyone will need to establish more agile security processes,” he added.-TradeArabia News Service



Tags: Gartner | IT | Computer | Spending | Digital | Cloud |

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