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Martin Hingley, ITCandor, January 2018

ITCandor 2018 predictions for the IT and communications industry Siri, Alexa, Watson – what can I do now you’ve put me out of work?

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1.The global ITC market grows 1.8% to $6.7 trillion

2.EMEA ITC spending falls behind the Americas and Asia Pacific

3.UK the worst, Switzerland the best country for spending growth

4.SaaS, IaaS, PaaS – the fastest growing offerings

5.Cloud – local and regional CSPs gain against global giants

6.People are the product, but they don’t get paid

7.Enterprise computing shifts off premise – AWS replaces Cisco as top enterprise supplier

8.Storage commoditisation puts more suppliers out of business

9.Oracle makes strong headway as an enterprise supplier

10.Automation will create social disorder

ITCandor 2018 predictions for the IT and communications industry

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1.The global ITC market grows 1.8% to $6.7 trillion

•Global ITC spending has recovered from the credit crunch of 2008-9 •2018 will see growth in spending of 1.8% to reach $6.7 trillion •The Americas have the ideas and innovative marketing •Asia Pacific has manufacturing •EMEA is virtually a vassal state

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2.EMEA ITC spending falls behind the Americas and Asia Pacific

•EMEA has fallen behind the Americas and Asia Pacific consistently •The USA is dominant in the Americas – home to marketing innovation and IP •Asia Pacific is home to manufacturing •The EU fails to promote regional champions •NXP and ARM Holdings have been sold to foreign suppliers

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3.UK the worst, Switzerland the best country for spending growth

•The USA is by far the largest country market and will grow in 2018 •Spending in Switzerland will grow by 17.1% making it the strongest country market •The uncertainty of Brexit is lowering confidence and spending, which will by 13.7% lower in 2018

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4A.SaaS, IaaS, PaaS – the fastest growing offerings

•Of the four ITC categorise IT service and software will perform best in 2018 •Hardware sales will be similar to 2017 levels •Software will grow, but remain behind the other three categories •Despite offering ever cheaper services telecom service will see no growth in the year

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4B.SaaS, IaaS, PaaS – the fastest growing offerings

•Wireless and Fixed line telecom, implementation services, applications and mobile devices will be the largest offerings in 2018 •Cloud services – SaaS, IaaS and PaaS will be the strongest growing offerings of all •Operating systems will be the next strongest of the non-cloud products

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5.Cloud – local and regional CSPs gain against global giants

•AWS has led the phenomenal success of cloud computing IBM Softbank has also been tremendously successful •Microsoft Azure, Google and Alibaba are doing well •In 2018 this top-down train will be met head-on by the growth of regional and local CSPs •This bottom-up change will be significant in 2018 •Examples include AI Telekom, OVH, Atos and UKCloud

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6.People are the product, but they don’t get paid

•Consumer spending on ITC offerings will have lower growth than business spending in 2018 •Web scale companies make the majority of their revenues from exploiting personal data by selling it to other suppliers •People are the product – but they won’t get paid for the data they provide in 2018

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7.Enterprise computing shifts off premise – AWS replaces Cisco as top enterprise supplier

•Cloud services and Outsourcing/managed services are similar in providing organisations with off premise services to replace designing, building and running their on data centers •They differ in their contracts – the former are 3-5 year inflexible fixed priced, the latter are closer to ‘pay as you go’ •Cloud is rising rapidly – AWS will replace Cisco as the leading enterprise IT supplier in 2018

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8.Storage commoditisation puts more suppliers out of business

•Moore’s law gives us twice as much capacity every 18 months for the same price in raw storage •Storage systems suppliers have struggled as the majority of new applications don’t require 100% reliability and security •More storage systems vendors will be acquired or go out of business die to this commodisation in 2018

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9.Oracle makes strong headway as an enterprise supplier

•Sun was once the leader of the server market before being acquired by Oracle in 2010 •Oracle is an idiosyncratic vendor, preferring to provide solutions from its own IP •Like Apple in 2009 it approaches 2018 with a winning set of offerings including its new Netsuite ones •As the enterprise market moves to cloud services, fewer prospects will be put off by Oracle’s proprietary approaches

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10.Automation will create social disorder

•The ITC industry is removing millions from the workforce as a result of automation •New nationalism is – in part – an attempt to define societies in a less global way •The super rich are squirreling away their money into stateless off-shore funds •Automation unemployment is spreading from manual to office-based roles •New Luddites will create social disorder in protest in 2018

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For more information about this presentation and our underlying research please contact: info@itcandor.com