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How to navigate the DX (digital transformation) economy: IDC

How to navigate the DX (digital transformation) economy: IDC

Outlines what’s next after the rapid adoption of ‘3rd platform’ technologies

In 2007, IDC identified the 3rd platform – built on the technology pillars of mobile computing, cloud services, big data and analytics, and social networking – as the foundation for the IT industry's future innovation and growth.

Since then, IDC says the rapid adoption of 3rd platform technologies has led to widespread innovation and transformation on top of this foundation.

IDC predicts this phase will accelerate over the next three to five years as organisations commit to digital transformation (DX) on a massive scale, leading to the emergence of the "DX economy”.

"The disruptive impact of digital transformation is about to be felt in every industry as enterprises 'flip the switch' and massively scale up their DX initiatives to secure a leadership role in the DX economy," says IDC chief analyst Frank Gens.

'Cloud first' will become the new mantra for enterprise IT

IDC FutureScapes 2016

"In the next two years, two-thirds of Global 2000 CEOs will put DX at the centre of their growth and profitability strategies,” says Gens in a statement on IDC’s FutureScapes (top predictions) 2016.

“By the end of this decade, IDC predicts that the percentage of enterprises with advanced DX strategies and implementations will more than double,” says Gens.

Mastery of 3rd platform technologies will be table stakes for successfully executing DX business initiatives and “cloud first” will become the new mantra for enterprise IT, according to IDC.

Read more: Internet of Things spectrum: Cool, hot to extreme
Frank Gens: 'The disruptive impact of digital transformation is about to be felt in every industry as enterprises 'flip the switch' and massively scale up their DX initiatives to secure a leadership role in the DX economy.'
Frank Gens: 'The disruptive impact of digital transformation is about to be felt in every industry as enterprises 'flip the switch' and massively scale up their DX initiatives to secure a leadership role in the DX economy.'

Virtually none of the other 3rd platform technologies or major DX initiatives is possible in scaled-up implementations without the cloud as the foundation. By 2020, IDC predicts enterprise spending on cloud services, the hardware and software to support cloud services, and the services for implementing and managing cloud services will exceed $500 billion, more than three times what it is today.

The DX economy – operating at scale – will be driven primarily by code, says IDC. Enterprises' ability to grow and compete will increasingly depend on their digital "innovation capacity", or the size and talent of their software development teams.

“In this regard, every company will increasingly be a software company,” it states.

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By 2018, IDC predicts enterprises pursuing DX projects will more than double the size of their developer resources, focusing those developers almost entirely on DX initiatives.

IDC reports the Internet of Things (IoT) will be “one of the most fertile areas” for DX.

By 2018, IDC predicts the number devices on the IoT will more than double to 22 billion and drive the development of 200,000 new apps and solutions that take advantage of them.

These devices and solutions have the potential to redefine competitive advantage in virtually every industry. IDC predicts the most active IoT development will be around the manufacturing, transportation, retail, and healthcare industries.

Read more: ​Phil Brimacombe: Technologists to business leaders

IDC predicts digital transformation will likewise drastically change the IT industry.

Internet of Things (IoT) will be one of the most fertile areas for DX.


“By 2020, more than 30 per cent of the IT vendors will not exist as we know them today, requiring realignment of preferred vendor relationships,” IDC states.

Read more: ​Mike Foley resigns as head of information services at Auckland Council

Across the Asia Pacific, IDC predicts by the end of 2017, 60 per cent of APAC 1000 (A1000) enterprises will have digital transformation (DX) at the centre of their corporate strategy, with majority even creating an independent position to oversee the DX strategy implementation.

Sandra Ng: Through 2018, two-thirds of CIOs will have embraced 'leading in 3D', which requires them to simultaneously innovate, integrate, and incorporate.
Sandra Ng: Through 2018, two-thirds of CIOs will have embraced 'leading in 3D', which requires them to simultaneously innovate, integrate, and incorporate.

Related: The Internet of Things outpaces other technologies: IDC

Read more: CIO Upfront: Challenging the status quo

10 challenges for the current CIO model


In a statement, Sandra Ng, group VP, Practice, IDC Asia/Pacific, lists the top 10 predictions that will have the greatest impact in the region in the coming year:

CEO-led strategy in DX. By the end of 2017, 60 per cent of the APAC top 1000 (A1000) enterprises will have digital transformation (DX) at the centre of their corporate strategy.

Dedicated DX executive. By 2017, 60 per cent of companies with a DX strategy will deem it too critical for any one functional area and create an independent corporate executive position to oversee the implementation.

3rd platform IT. By 2017, over 60 per cent of organisations' ICT spending will be for 3rd platform technologies, solutions and services, rising to nearly 80 per cent by 2020.

Customer/intimacy at scale. By 2018, 80 per cent of B2C and 60 per cent of B2B organisations will overhaul their “digital front door” to support 1,000 to 10,000 times as many customers/customer touchpoints as they do today.

Leading in 3D. Through 2018, two-thirds of CIOs will have embraced “leading in 3D”, which requires them to simultaneously innovate, integrate, and incorporate.

DX collaboration. By 2018, 70 per cent of silo-ed digital transformation initiatives will ultimately fail due to insufficient collaboration, integration, sourcing or project management.

Innovation capacity. By 2020, enterprises pursuing DX strategies will more than double their software development capabilities; two-thirds of their coders will focus on strategic DX apps and services.

New digital revenue streams. By 2018, 35 per cent of IT resources will be spent to support the creation of new digital revenue streams.

Security and risk management. By 2016, 40 per cent of IT organisations will shift their focus to advanced 'contain and control' security and away from a perimeter mentality.

Data governance for insights. By 2017, two-thirds of Asian-based CIOs will initiate a data transformation and governance framework to turn information into a competitive business differentiator.


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Tags leadershipdatafrank gens3dCIO rolemobileAsia Pacific regionSandra NganalyticsretailIDCCloudInternet of ThingssocialManufacturingtransportation3rd PlatformHealthcareFutureScapes 2016technology predictions

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