XChange: Four Technology Forces Creating 'Intelligent Economy' - IDC

Four new technologies are intersecting and will transform social and business relationships, IDC's chief of research said Tuesday at XChange 2012 in Dallas, Texas.

The technologies -- mobility, cloud, big data/analytics and social business -- are being integrated and rapidly adopted by companies, creating new ways of conducting business and building social relationships, said Crawford Del Prete, IDC's executive vice president of worldwide research.

"These four forces are coming together to create an intelligent economy," Del Prete told about 400 people attending the conference. "It's not one of these four forces alone, but how they interact with each other.

[Related: XChange 2012: Moving Customers To The Cloud Takes Patience ]

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"They don't exist in silos. That's different than in the past," he said. "They are all coming together and transforming business."

This intelligent economy will be built on what Del Prete termed a "third platform" of these merged technologies and will drive industry growth through 2025, with millions of new apps and services built on "innovative mashups of cloud, mobile devices, mobile apps, social technologies and big data/analytics and more."

In the short term, U.S. IT spending growth is expected to reach 4.98 percent in 2012, he said.

But, Del Prete presented an outline for the future that shows marked changes in the IT landscape.

Cloud adoption will be significant.

From 2010 to 2020, traditional IT spending will go from 69 percent of business budgets to 36 percent; budgeting for public clouds will rise from 11 percent to 27 percent; in-house private cloud budgeting will go from 2 percent to 21 percent; budgeting for hosted private clouds will go from 2 percent to 7 percent; and budgeting for outsourcing will decrease from 16 percent to 9 percent.

Enterprise cloud adoption will result in an explosion of new applications that will be integrated with existing on-premise IT applications.

By 2020, 90 percent of public cloud platform providers will have technology that includes an app store and private and public cloud capabilities. While mobile platform development is now focused on desktop apps, "often as an afterthought," by 2020, mobile platform support will be the primary development effort, Del Prete said.

Next: Packaged Apps Continue Downward Slide

The percentage of revenue derived from sale of packaged apps will drop from 87 percent in 2010 to 66 percent in 2020, with prices of cloud apps dropping to 35 percent of 2010 levels. In contrast, the percentage of new apps consumed via SaaS will jump from 20 percent to 41 percent.

Big data technologies to handle massive demands of hosting IT resources will rise in importance, IDC's Del Prete said.

The use of big data by businesses will become more commonly used as smaller enterprises adopt it. By 2020, Oracle, HP, Microsoft and IBM will have adopted social media technologies.

Mobility will continue its explosive growth.

The use of employee-owned devices in business is already happening, increasing from 31 percent of the workforce in 2010 to 51 percent in 2012.

Products will evolve. While netbooks shipped 40 million units in 2010, ultrabooks will grow in popularity by 2020, shipping more than 175 million.

While iPad was the netbook market leader, shipping 19 million in first year, Amazon kindle devices will be the price and volume leader.

While communication devices installed in 2010 numbered 7 billion, the number of devices installed will reach 29 billion by 2020.

These forces will drive demand, Del Prete said.

"Companies that sell technology will have a profitable future," he said. "People are wondering what is the right mix of technology. So, companies selling gear now can sell software to help companies figure out how they are going from private to public clouds."

Del Prete said businesses will use hybrid, or "blended" clouds," as technology evolves to support sophisticated platforms, applications, devices, and infrastructure.

"To manage apps in the cloud, everybody will be needed. Businesses will want one suite that will give a combination of Oracle, HP and Microsoft software to manage how to get a single dashboard of features from different cloud suppliers."