21 Jan 2016

Singapore, 22 January, 2016 – IDC Asia/Pacific recently released its latest IT Services Predictions for 2016 and beyond for the Asia Pacific region (excluding Japan) highlighting the impact on services of Cloud First and Digital Transformation expectations in the next 1-3 years. The presentation titled IDC FutureScape: Worldwide IT Services Predictions 2016 – APeJ implications provides 10 predictions for services in 2016 and the implications for IT suppliers and buyers.

While 2016 is shaping up to be the banner year for Digital Transformation (DX) to take root in many Asia/Pacific organizations, IDC expects Innovation Accelerators like IoT, cognitive computing, robotics and 3D printing to accelerate this transformation in years to come.

According to IDC‘s latest services survey¹ , it has shown that majority of APeJ enterprises are claiming to have DX projects in some form or another. It is becoming a competitive requirement and the source of a massive wave of new investments in services to support changes to business operations and customer experiences.

"Getting on board the DX train is going to be fraught with challenges, starting with the ability to define DX. Most early stage projects involve experience transformation but little attention is being paid on the other dimensions like information governance and worksource, which often leads to disillusionment on the benefits of DX", says Linus Lai, the Research Director with IDC’s Asia/Pacific Services Research Group.

Lai continues, "As part of enabling enterprises on its DX journey, service providers need to emphasize their ability to bring a full suite of services capabilities that includes integration of cloud, cognitive, mobile and analytics delivered ’as a service’. In addition, industry expertise can offer functional insights which are also needed.”

Progressive adoption of 3rd Platform technologies in the region is not only driving demand for related services, but is also fundamentally changing the way they interact with their broader ecosystem.

Cathy Huang, Research manager, Services and Cloud Research Group states, "This year's Services predictions highlights "Cloud-first", suggesting 33% of Asia/Pacific Enterprises will pursue a “Cloud first” strategy”.

“The switch to cloud-first/cloud-only points to two opportunities in the APEJ services market. Enterprises are looking for differentiated capabilities or cost competitiveness based on cloud-based offerings. In addition, it also means sourcing strategies in the past may be incompatible as organizations leverage a cloud-first strategy”, adds Ms. Huang.

In addition, this year’s Services predictions deep-dives into the impact of 3rd Platform technologies and innovation accelerators such as IoT and Next-Gen Security. As a result, more focus on governance between the IT organization and the lines of business (LOB) is demanded to ensure risk, supplier choices, fail-over, innovation, and agile development is understood between both parties, and the value of integration, management and security is brought to the front.

IDC reports that the rest of the predictions for the fast-evolving Services market for the next three to five years include the following:

#3 Cloud First : 33% of Asia/Pacific Enterprises Will Pursue a “Cloud first” strategy and the share of overall IT budgets dedicated to cloud services will increase to 26% by 2016.

#4 XaaS substitutes for managed services : By 2016, 50-55% of traditional outsourcing managed services will have a cloud delivery model.

#5 DX: By 2016, 65% of APeJ enterprise strategies will include a significant “digital transformation” component.

#6 LOB/IT Partners: By 2018, 80% of major IT decisions will involve a partnership between the IT organization and LOBs.

#7 Software-defined IT infrastructure: By 2016, 30% of enterprises will implement software-defined infra in their datacenter.

#8 Platforms from Digital Disruptors: By 2018, 20% of all enterprises will be leveraging digital platforms from such firms as WeChat, Uber, GE/Predix and PTC to achieve the DX goals.

#9 Ecosystems of Engagement: In 2020, in excess of 75% of Ideas, Talent, and Innovation will be sourced through ecosystems of engagement.

#10 Next-gen Security Management: By the end of 2017, 55% of enterprises will rely on third-party management of their security infrastructure.

To share more information about IDC’s IT Services predictions for APeJ, IDC Asia/Pacific is hosting a free webcast titled "Top 10 IT Services Predictions 2016" on January 29, 2016; to be led by IDC analysts, Linus Lai and Cathy Huang.

To register for this webcast, please click

http://event.on24.com/wcc/r/1106677/F8D5A920439884BBF1663D91EC6AE7FC

IDC’s Top 10 IT Services Predictions for the Asia/Pacific market are presented in full detail in

IDC FutureScape: Worldwide Services 2016 Predictions – APEJ Implications (AP40352115)

For inquiries on any of the FutureScapes documents, please contact your IDC account manager or Shari Jane Jansen at sjansen@idc.com. For media inquiries, please contact Tessa Rago at trago@idc.com or Alvin Afuang at aafuang@idc.com.

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