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IoT 2014: Tiny Sensors, Open APIs and Hybrid Clouds

In 2014, IDC believes that we'll see big investments to scale up cloud services, mobile internet, big data capabilities

December 30, 2013

Throughout 2013 most senior executives have been exposed to the key emerging business technology trends. During 2014, you're going to see and hear a lot more about the Internet of Things (IoT) -- and the impact will reach just about every industry and all the major markets within the Global Networked Economy.

Let's consider the forward-looking outlook, from a leading industry analyst. International Data Corporation (IDC) recently offered their predictions for the coming year.

"The 3rd Platform's impact was felt throughout the ICT industry in 2013 as a high-profile CEO lost his job, a major IT player went private, numerous vendors endured cash cow stagnation, and billion-dollar bets were placed on new technologies," said Frank Gens, Senior Vice President and Chief Analyst at IDC.

In 2014, IDC believes that we'll see big investments to scale up cloud services, mobile internet, big data capabilities, and efforts to attract the independent developers who will create the solutions driving the next two decades of IT spending. Therefore, collaborative development will be a paramount ingredient of successful strategies.

A Summary IDC Predictions for 2014
Worldwide IT spending will grow 5 percent year-over-year to $2.1 trillion in 2014. Sales of smartphones and tablets will continue at the same pace -- while outlays for servers, storage, networks, software, and services will fare better than in 2013.

Meanwhile, the PC market will remain under stress, with worldwide revenues down -6 percent year-over-year. Emerging markets will return to double-digit growth of 10 percent, driving nearly $740 billion or 35 percent of worldwide IT revenues and, for the first time, more than 60 percent of worldwide IT spending growth.

In the BRIC countries, IT spending will grow by 13 percent year-over-year, led by an economic recovery in China. Furthermore, China's IT spending growth will match that of the United States, even though the Chinese market is only one third the size of the U.S. market. Elsewhere, emerging market growth will be uneven.

Regarding the cloud phenomenon, value will start to migrate up the stack -- from infrastructure as a service (IaaS) to platform as a service (PaaS) and from generic PaaS to data-optimized PaaS. The latter will be most evident as Amazon Web Services rolls out many platform-as-a-service offerings for developers and higher value services for businesses.

This hybrid cloud trend will force incumbent IT suppliers to urgently reconfigure themselves to fight for a position in the evolving marketplace. Joining them will be Google, which will realize that it's at risk of being marginalized in a market where it should be vying for leadership.

The mobile device onslaught will continue in 2014 with sales of media tablets growing by 18 percent and smartphones by 12 percent. The Android community will maintain its volume advantage. But Apple will hold on to its higher average selling price and an established ecosystem of software apps.

Google Play (Android) app downloads and revenues will be making dramatic gains and the app ecosystem value gap will be significantly narrowed in 2014. And, Microsoft will likely try to double mobile developer interest in Windows.

Cloud spending, including cloud services and the technology to enable these services, will surge by 25 percent in 2014 -- reaching over $100 billion. IDC expects to see a dramatic increase in the number of data centers as cloud players race to achieve global scale.

This will be accompanied by a similar expansion in the variety of workload-specialized cloud infrastructure services, leading to new forms of differentiation among cloud service providers. Moreover, there will be competition for developers that can create the best cloud-based applications and solutions.

Spending on big data technologies and services will grow by 30 percent in 2014, surpassing $14 billion as demand for big data analytics skills continues to outstrip supply. Here the race will be on to develop data-optimized cloud platforms, capable of leveraging high volumes of data and/or real-time data streams.

Social technologies will become increasingly integrated into existing enterprise applications over the next 12-18 months. In addition to being a strategic component in virtually all customer engagement and marketing strategies, data from social applications will feed the product and service development process.

As cloud-dedicated data centers grow in number and importance, the market for server, storage, and networking components will increasingly be driven by cloud service providers, who have traditionally favored highly componentized and commoditized designs.

IDC predicts that most of these industry platform players will not reinvent the cloud underpinnings they need, but will build on top Amazon, Microsoft, IBM, Salesforce, and other platforms. In 2014, it will be critically important for these IT leaders to find these emerging industry platform players and win their business.

Finally, growth will continue to expand beyond smartphones, tablets, and PCs in 2014 to the Internet of Things. IDC expects to see new industry partnerships to emerge as traditional IT vendors accelerate their partnerships with global telecom service providers and semiconductor vendors.

This kind of creative collaboration and coordination will be necessary to reach the 30 billion autonomously connected end points and $8.9 trillion in revenues that IDC believes the IoT will generate by 2020 -- as the trend unites tiny sensors, open APIs and hybrid cloud services.

More Stories By David H Deans

David H. Deans is the Managing Director at the GeoActive Group. He has more than 25 years of experience in the Technology, Media and Telecom sectors.

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