The Only Certainty is Uncertainty in 2012; But Cautious Spending will Create ICT Growth, says IDC

Kuala Lumpur, November 22, 2011 – International Data Corporation (IDC) announces today that the prospect of a turbulent and uncertain economic climate in 2012 was the basis for its annual Asia/Pacific excluding Japan (APEJ) Top 10 ICT Predictions for 2012. Although market volatility is at an all time high, companies will still expect growth in this region. Business leaders are likely to face difficult investment decisions; to maintain growth, businesses will be looking to leverage ICT in newer and more robust ways. More insights will be revealed in a forthcoming report, “IDC Asia/Pacific (excluding Japan) ICT 2012 Top 10 Predictions".

"As we head into what looks to be a turbulent 2012, the only certainty is uncertainty. While this region is becoming increasingly resilient to the economic woes of other regions, companies are likely to hedge their bets when investing in ICT in 2012. Pairing caution with ambition, companies will still seek to profit from the growth in the region. But as consumers and workforces are becoming smarter, more affluent and demanding, companies will need to match their efforts with intelligent spending to avoid getting their fingers burnt in case another world-wide crisis hits," says Claus Mortensen, Principal for Emerging Technology Research, IDC Asia/Pacific.

Although IDC acknowledges the risk of a global recession in 2012, IDC does not expect a major impact on ICT spending in Asia/Pacific. Against the backdrop of the very uncertain economic outlook for 2012, IDC does expect that companies in the region will have a somewhat cautious approach to ICT spending in the coming year. IDC expects ICT spending in the APEJ region to reach US$653 billion in 2012, which is a 10.4% growth over 2011. Growth will not be high as in 2011 and IDC does expect growth rates to drop over the next 4-5 years but still remain above 9% by 2015.

Drawing from the latest IDC research and internal brainstorming sessions amongst IDC's regional and country analysts, the following are the top 10 key ICT predictions in 2012. These trends are what IDC believes will have the biggest commercial impact on the APEJ ICT market.

1. In Emerging, To Emerging: Alternative Commercial and Delivery Models for the Emerging Asian Enterprise Will Drive a New Wave of ICT Spend in 2012
IDC is seeing a new type of enterprise shaping the marketplace: The “Emerging Asian Enterprise”. These enterprises are looking to aggressively challenge the traditional MNC model, are hungry for growth and geographical expansion and have a DNA very different to organizations from mature economies. In these organizations, CIOs are looking at new ways to compete more effectively and shorten the time to market for their IT investments. IDC expects Emerging Asian Enterprises to drive a "new wave" of ICT spend in 2012, as they look to invest in disruptive IT, such as mobility, cloud, analytics and social media.



2. The Value of 1: Asian Businesses Appreciate the Value of Singularity in IT Offerings
The complexity of the Asia/Pacific market has led to a need and appreciation of “singular” offerings and players where a single portfolio can generate a successful and sustainable business model for the vendor/provider. The classic example is Apple with its focus on simplicity: one mobile phone offering, and one media tablet offering. Prior to Apple, many had touted diversity as the critical success factor in the mobile devices sector but IDC expects ICT companies across the board to consider the "singular" model in 2012 and beyond.

3. Making 2 + 2 = 1: Cloud Service Orchestration Services Lead the Drive to Outsourcing 3.0
In 2011, IDC estimates that 80% of new enterprise application development will be for the public cloud, and by 2015, 20% of enterprise application spending will be cloud-sourced. As a result, cloud service buyers will now have to manage a much larger number of services and vendors, adding a level of management difficulty to what should have been an easier adoption of new services. To counter this, cloud service providers will provide integrated management of disparate cloud services – cloud orchestration – in 2012 and beyond. As a result, the market will not be talking so much about cloud services by 2015, but will consider these as a natural evolution of outsourcing, or Outsourcing 3.0.

4. The Chief Data Scientist will make “Big Data” Relevant to the Business
IDC expects that 2012 will see the arrival of the “Big Data” era in the region. Social media interactions, real-time sensor data feeds, geospatial information and other new data sources are presenting organizations with a range of challenges in terms of next generation information strategies, but also significant opportunities. The most useful insights will come though the high-end analytics that can be performed on the increasing volumes, velocity and variety of data that organizations are generating – or Big Data analytics. But the variables and models for Big Data analytics are likely to be entirely new, requiring new analyst skill sets, and IDC believes that the Chief Data Scientist will emerge in 2012 as a job title to help organizations define their “Big Data” strategies.

5. New Cloud Workloads will Emerge: Leading with Automation
In 2012, IDC expects that as IT looks to adapt to the changing business demands in the light of the current economic uncertainty, the ability to quickly provision IT capabilities and resources will become a key differentiator in the market. As the next wave of workloads move into cloud, IDC believes that it will become increasingly important to standardize and automate IT processes and that automation will be a key focus point for CIOs in 2012. Investments in standardization and automation will enable organizations to dynamically design, deliver and operate agile business services that will enable the flexibility to align with the key business processes and ensure that IT becomes more ingrained within the overall business operations.

6. The Apps Aggregator: Telco's Innovation Scout Team to Deliver Connected Homes and Hotspots
The explosion of digital contents and applications delivered on multiple devices over both fixed and mobile networks has brought about new opportunities for the Telcos. Now, they have the chance to aggregate applications and contents to deliver connected, personalized and user-centric solutions to the end-user. But Telcos can only deliver these through focused and dedicated teams that can identify, bundle, integrate and launch the "right" business or consumer applications. IDC believes that in 2012, the more forward looking Telcos will form dedicated innovation scout teams to find and deliver appropriate applications and content to connected homes, businesses and hotspots.

7. Predictable Failure will Become a Strategic Platform Choice
Unpredictable IT systems have a big impact on business performance and to overcome this, organizations invest heavily in duplicate copies of servers, systems, data and networks -- also known as redundancy. But IDC expects forward-looking organizations to think differently in 2012. Instead of relying on redundancy, virtualization will allow them to build a margin of error into their IT platforms that permits failure. IDC expects this concept to gain traction in 2012 and to become the preferred approach when deploying larger virtualized x86 environments within the next few years.

8. Companies will Return to Customer-Centric IT
Due to the uncertain economic outlook, IDC expects "customer-centricity" to be on the top of the agenda for companies in Asia/Pacific in 2012, together with a focus on technologies that help companies increase customer focus, customer engagement, and increase their knowledge of those customers who contribute the most to their business. “Customer-centricity” may not have the same mind share in 2013 if the economic outlook gets better but IDC expects this customer-focus approach to be an integral part of most companies’ IT by 2015.

9. The Fusion of Mobile and IT will Pave the Way for a New Workspace
IDC expects organizations to start creating new workspace architectures built around mobility, cloud and data services in 2012. Consumerization has created new demands on the work environment and IDC expects organizations to use desktop refreshes, green field deployments and remote/small site operations as opportunities to pilot new mobile services and solutions in 2012.

10. Becoming “Middleclass”: Sub-US$100 Smartphones Will Deliver New Revenue Streams
Smartphones have ushered in a new era of personal computing, with the shipment of smartphones expected to exceed the shipment of PCs in the region in 2012, a milestone that is most likely never, ever going to be reversed. IDC expects the market to see the introduction of sub-US$100 smartphones in 2012, which will in turn create big opportunities for service providers in emerging Asia. IDC also believes that consumers in these markets will soon demonstrate the same addictive nature to mobile applications as seen in mature markets.

For more information about this report, “IDC Asia/Pacific (excluding Japan) ICT 2012 Top 10 Predictions" (forthcoming), please contact Juliana Lai at +603-2177-9255 or julianalai@idc.com.