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IDC Predictions 2015

Accelerating Innovation - and Growth -

on the 3rd

PlatformFrank Gens

SVP & Chief Analyst

December 2, 2014

and Q&Awith theIDC Predictions 2015Team

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IDC Predictions 2015 TeamLarry Carvalho

Gary ChenRuthbea Clarke

Matt Davis

Marc DeCastro

Crawford DelPreteLynne Dunbrack

Matt Eastwood

Kitty Fok

Frank Gens

Al Gillen

Leslie Hand

Judy Hanover

John Jackson

Jialin Jiang

Keith Kmetz

Kimberly Knickle

Charles Kolodgy

Ramon Llamas

Carrie MacGillivray

Robert Mahowald

Tom Mainelli

Stephen Minton

Henry MorrisCourtney Munroe

Bob Parker

Melanie Posey

2

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Situation Overview

The 3

rd

Platform alreadydrives 30% of ICTspending and 100% of growth

The Innovation Stage will accelerate this

transitionAn explosion of new apps on top of the

3rd

PlatformAn expansion of enabling technologies:Innovation Accelerators

Three key developments to watchExpanding adoption of 3rdPlatform technologies

Expanding community of 3rd

Platformdevelopers/innovators

Expanding use of 3rdPlatform solutions to reinventand continuously transformevery majorindustry

3

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#1WW IT and Telecom (ICT) Industry

4

ICT spending will exceed $3.8T (up 3.8%)Enterprise IT markets will show improved growth

Emerging markets will grow 7.1%, 5Xdeveloped markets

Developed markets will poke along at 1.4%

The big story: A Tale of Two Industries3rdPlatform spending will account for aboutone-third of all ICT spending in 2015

The 2ndPlatform market will tip into recessionby 2H 2015

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#2Telecom Services

5

Wireless data will be the biggest ($536B)andfastest-growing (13%) Telecom Servicessector

Eroding margins will drive faster innovationExpanding portfolios of high-value, API-based

servicesRapprochement with major over-the-top (OTT)service providers

Net neutrality will be mandated in the U.S.A hybrid approach will leave room for mutually-

beneficial Telco/OTT deals

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#3Mobile Devices & Apps

6

Smartphones and Tablets will generate 40% ofall IT growth (excludes telecom services)

Phablet sales will grow 60%, cannibalize tablet sales

Chinese smartphone OEMs market share will surge

Wearables unit sales will underwhelm in 2015

A wrist-phone will ship, and flop

Mobile app download growth will slow, hit150B

Apple, Google will account for almost 80%

Chinese independent apps stores: 18%

Enterprise mobile app development will morethan double

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#4Cloud Services

7

Public cloud services sales will near $70BThe greater cloud market including public, privateclouds, and enabling IT and serviceswill hit $118B

IaaS competition will intensifyAmazon under attack, will hold/gain share

Many 2nd

tier public IaaS clouds will drop out; Google,Microsoft, IBM, China SPs will gain share

PaaS Wars will expand# of apps in leading marketplaces will double

% of SaaS vendors using PaaS will hit 15%; 50% by

2018Container adoption will disrupt VMware, Microsoft

IoT, Cognitive/Machine Learning new PaaS hot spots

Strange bedfellow partnerships multiplyFacebook, HP, Salesforce.com, et al.

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#5Big Data & Analytics

8

Big data & analytics market will reach $125B

Rich media analytics will at least triple in2015

Video, Audio, and Image analytics and search:expanding use cases in many industries

Data supply chains will be a top priority for

PaaS and analytics vendors25% of top IT vendors will offer Data-as-a-Service

IoT will be the next critical focus for

data/analytics services30% CAGR over the next five years

The Year of Cognitive/Machine LearningGrowing number of apps and competitors

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#6The Internet of Things

9

IoT spending will exceed $1.7T, up 14%1/3 of spending for intelligent/embedded devicesoutside of the ICT industry

Cisco, IBM, Intel will form an IoT solutionscompany

Challenging IT industry players (like Pivotal) andindustry-focused players (like Bosch, SchneiderElectric and GE)

IoT Backend as a Service will emerge fromPaaS and Industry Platform players

Predictive maintenance will lead the IoT solutionscategory

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#73rdPlatform Data Centers

10

Data center growth will accelerate toward SPsBy 2016, over 50% of compute, 70% of storagecapacity will be installed in hyperscale data centers

Cloud SPs will drive a new renaissance in IThardware innovation

Lots of new workload-specialized system designs willemerge from Cloud SPs in 2015/2016 and beyond

Consolidation will continue among OEMSAcross server, storage, and networking silos

Look for increasing number of OEM/ODMstrategic partnerships, M&A

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#83rdPlatform Industries

11

1/3 of market share leaders in every industrywill be disrupted by 3rdPlatform competitors

Expanded customer reach, faster offering launch,expanded supply/distribution networks, transformedcost model

The number of Industry Platforms/Communities will double in 2015

At least 60 by year end; over 100 by YE2016

Numerous 3rdPlatform-driven industrydisruptions emerge in 2015

Financial Services: Alternative payment systemsGovernment: Cities will play big roles in IoT roll-out

Retail: Location-based services will increase sameshopper sales through engagement; real-timecompetitive pricing is next.

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#9Innovation Accelerators

12

3rdPlatform-optimized SecuritySecuring the edge: 15% of mobile devices will beaccessed biometrically (over 50% by 2020)

Securing the core: 20% of regulated data will beencrypted by YE2015 (80% by 2018)

Threat intelligence as a service: by 2017, 55% ofenterprises will receive customized threat intelligencedata feeds

3D PrintingBy 2020, 10%+ of consumer products will beavailable through produce on demand via 3D

printing2015 spending will surge 27%, to $3.4B

Canon, Ricoh and Epson: prepping market entry

Stratsys and 3D Systems will continue to scalethrough M&A

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#10China

13

ICT spending of $465B+, growing over 11%Accounting for 43% of total ICT industry growth

Domestic engines for 3rdPlatform growth areroaring

Mobile, Internet, Social, and Online Shopping

Chinas cloud and ecommerce leaders will

challenge for global leadershipAlibaba, Tencent, Baidu

Chinese smartphone OEMs will grab 40% of

global shareLenovo/Motorola, Xiaomi, Huawei, ZTE, and Coolpad

Chinas 13th 5-Year Plan will be built on 3rdPlatform technologies, investments

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Essential Guidance

14

The 3rdPlatform marketplace is now bothhigh-growth andlarge-scale

100% of resources, investment need to be focused

Innovation: @scale, @velocity, @low-costAmazon yourself (continuously)

Innovation community creation andparticipation = the new oxygen

Attracting developers/innovators is priority #1

Reassessment of sustainable core value

Driving divestment and strange bedfellow deals

Massive (and continuous) value chainreconfigurations are underway

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idc.com/predictions2015

15

IDC doc#252700

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Joining Us for Q&A

16

Larry Carvalho

Crawford DelPrete

Matt Eastwood

John Jackson

Keith Kmetz

Charles Kolodgy

Stephen Minton

Henry Morris

Courtney Munroe

Melanie Posey

Dave Schubmehl

Vernon Turner

Dan Vesset

Rick Villars

James Wester

Meredith Whalen