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High Tech Pioneers the Digital Economy: A Catalyst for Growth
The high tech industry is not just a key participant in the digital economy, but is its fundamental backbone. Technology is ubiquitous, powering every organization, network, transaction, piece of equipment, and consumer device. Software is embedded in nearly all tech products to deliver capabilities and to monetize them, trumping the role that hardware has played up until now.
As industries embrace digital transformation, they break down conventional business models, blurring industry boundaries, and accelerate the pace of innovation.
The high tech industry is poised to play a unique role, not just as an enabler of digital transformation, but also as a potential disrupter of all industries. 70% of all high tech revenue will be directly related to other industries adopting the digital economy by 2020.1
While the pressure for high tech companies to innovate at faster speeds increases, the economics of the industry are fundamentally shifting, driven by these key trends:
• The Internet of Things is the next growth engine. It is estimated that three out of four semiconductor devices manufactured in 2020 will be consumed in end-products supporting IoT applications2
• Hardware is now a commodity. For instance, worldwide server growth for original equipment manufacturers (OEMs) has recently been just 2.3% vs. 40.5% for original design manufacturers (ODMs) and will continue to decline.3
• Software is becoming the true differentiator. Competitive advantages in the tech world will be decided by software and the ecosystems and platforms around it.
These major shifts in the industry give rise to new challenges and opportunities for high tech companies, driving them to reimage their business models and processes, products, and how they engage with their talent.
This video and document offers a deeper perspective on digital transformation in our industry. Focusing on how companies in the high tech industry can stay competitive and in turn pioneer new growth and innovation across all industries in this new digital world.
Global Vice President High Tech Industry Business Unit
1. IDC Directions Conference Presentation, March 2015, Author approval on file https://www.idc.com/getdoc.jsp?containerId=IDC_P 30889&pageType=EVENTPROCEEDINGS
2. “Here's Why 'The Internet Of Things' Will Be Huge, And Drive Tremendous Value For People And Businesses” (derived from graph) http://www.businessinsider.com/growth-in-theinternet-of-things-2013-10
3. “Worldwide Server Market Revenues Increase 1.9% in the Fourth Quarter as Demand in China Once Again Drives the Market Forward, According to IDC” IDC Press release, March 2015, http://www.idc.com/getdoc.jsp?containerId=prUS25 461815
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