The 3rd Platform, including cloud, mobile, social and big data and analytics in addition to new technologies which IDC calls “Innovation Accelerators”, already accounted for more than 60% of worldwide ICT spending in 2016, and will grow to more than three quarters of industry revenue by 2021. But within that headline statistic, significant regional variations have emerged as 3rd Platform business models develop around the world.
Emerging Markets Leapfrog Legacy Technologies
Mature economies have a broader legacy of 2nd Platform infrastructure and software to maintain via operations and support services. In the USA and Western Europe, the 2nd Platform still accounts for almost 40% of ICT spending (in Canada, it’s currently more than 50%, although this is forecast to drop rapidly in the next 5 years as Canada rebounds from a sluggish economic period which stalled some early adoption of 3rd Platform technologies).
In contrast, Asia Pacific excluding Japan has already leapfrogged many 2nd Platform technology categories, with the 3rd Platform now accounting for almost 80% of ICT spending and forecast to be almost 90% by 2021. Central & Eastern Europe, the Middle East & Africa also have smaller 2nd Platform legacy markets compared to North America, Western Europe or Japan.
US Still Leads in Software Development
While the USA has a deeper legacy of 2nd Platform infrastructure to maintain, US businesses are still leaders when it comes to adoption of many new technologies. In particular, the US is streets ahead of other regions in the deployment of Big Data and Analytics (more than 50% of all worldwide spending), Cloud, Social and Cognitive AI (almost 80% of all global spend in 2016). In general, US enterprises are still maintaining their lead across a broad range of technologies, benefiting from a deep local ecosystem. This is especially true of software-driven solutions, with many US-based software innovators still setting the pace and defining the market.
New Global Leaders Emerge in Robotics, IoT, Mobility, 3D Printing
Other regions, however, have found pockets of innovation through which to claim positions of global leadership in these nascent days of the new 3rd Platform era. In Asia, it’s Mobility (thanks to dramatic smartphone proliferation across the continent in recent years), IoT and Robotics. The APEJ region now accounts for almost 40% of all worldwide IoT spending, and more than half of Robotics spend (rising to almost 60% by 2021).
In Western Europe, it’s 3D Printing, with European firms accounting for more than 42% of all 3D Printing spend during 2016. Central & Eastern Europe has also emerged as an early leader in terms of its share of overall 3D Printing investments. In the Middle East & Africa, it’s Mobility. In Japan, it’s Robotics, with a major focus on commercial robotics solutions as a potential solution to demographics and economic structural challenges which are facing the country.
The 3rd Platform represents a major opportunity for new global leaders to emerge, bypassing the restrictions and limitations which defined the 2nd Platform in terms of scalability, infrastructure challenges and skills shortages. Cloud and Mobile offer the building blocks for new solutions in technologies such as IoT, Robotics, Cognitive AI and AR/VR, and the absence of deep legacy infrastructure can suddenly be an advantage rather than a headwind.
Some Challenges Remain for Developing Economies
There are caveats, however. A lack of reliable, robust telecom infrastructure is one reason why Cloud adoption continues to lag in some emerging markets. Software piracy and inadequate local ecosystems continue to inhibit the growth of Big Data & Analytics, Enterprise Social and Cognitive AI. Investment in Security remains lower in many emerging markets than mature economies, which can put a brake on business acceptance of new data-intensive platforms.
Where new technologies can thrive on Mobile platforms, in particular, the opportunity for emerging markets is stronger than ever. Businesses in mature economies will seek to leverage their head start in fixed infrastructure and software development. The emerging 3rd Platform ICT market promises to be more diverse, dynamic and disruptive than any previous period in the history of the technology industry.
Learn more about IDC's Worldwide Black Book:3rd Platform edition and other 3rd Platform Spending Guides by visiting idc.com/customerinsights.