Digital upheavals

Back in 2007, IDC described the third platform as the basis for innovation and growth in the IT sector based on the technological foundations of mobile computing, cloud services, big data and analytics as well as social networks.

Due to the rapid introduction of these technologies in companies, the third platform is now in a phase of further development, the "innovation stage": countless innovations and transformations have seen the light of day on the basis of the third platform.

DX Economy

IDC expects this phase to gain further momentum over the next three to five years as companies engage in digital transformation (DX) on a large scale. This development will lead to the formation of a "DX Economy".

"The upheaval of digital transformation will be felt across industries when companies flip the proverbial switch and significantly expand their digital transformation efforts to secure a leading position in the DX Economy"

explains Frank Gens, Senior Vice President and Chief Analyst at IDC.

"Over the next two years, two thirds of the world's 2000 leading CEOs will place digital transformation at the center of their growth strategy.

IDC expects the proportion of companies with advanced digital transformation strategies and corresponding implementations to more than double by the end of this decade."

IDC predicts that the expansion of digital business strategies will take up more than half of companies' IT expenditure within the next 24 months and that this proportion will rise to up to 60 percent by 2020.

Mastering the third platform is essential for the successful implementation of digital business initiatives. "Cloud first" is becoming the new mantra of corporate IT: almost none of the technologies of the third platform or the central digital initiatives can be implemented without the cloud.

IDC expects that by 2020, corporate spending on cloud services, hardware and software for cloud support as well as the implementation and management of cloud services will exceed 500 billion dollars. That is more than three times the amount spent today.

The DX Economy will be primarily code-driven. The ability of organizations to grow and compete in the market will increasingly depend on their ability to innovate.

This in turn is determined by the size of the software development teams and their skills. From this perspective, all companies are increasingly becoming software companies.

IDC assumes that companies implementing digitalization projects will more than double their development capacities by 2018. Developers will focus almost exclusively on digital transformation.

Internet of Things

The Internet of Things (IoT) plays a prominent role in the digital transformation. IDC expects the number of devices in the IoT to double to more than 22 billion.

This in turn will result in the development of 200,000 new apps and solutions that will benefit from this. These devices and solutions have the potential to redefine competitive advantages in almost every industry.

IDC predicts that the most interesting IoT developments will be in the areas of manufacturing, transportation, retail and healthcare.
Cognitive systems have already established themselves as an indispensable tool in companies that operate with a flood of data.

According to forecasts, companies will spend over one billion dollars on cognitive software platforms this year. This area will grow dramatically over the next three years.

IDC expects over half of development teams to integrate cognitive services into their apps by 2018 to leverage their data pipelines and further improve customer-specific personalization. Currently, just one percent of developers use this option.