Technical debt accumulated during the pandemic will cause financial stress, a drag on IT agility, and “forced march” migrations to the cloud through to 2023.
This is a key prediction of the International Data Corporation (IDC) worldwide information technology (IT) industry predictions for 2021 and beyond, released this week. The predictions were published in a new IDC FutureScape report.
This year’s predictions are shaped by the disruptive forces of the COVID-19 pandemic, which will dramatically alter the global business ecosystem for the next 12–24 months and beyond. The impacts from COVID-19 are ubiquitous and affect the many external forces that are driving change. Yet despite the disruptions caused by the global pandemic in 2020, the global economy remains on its way to its “digital destiny” as most products and services are based on a digital delivery model or require digital augmentation to remain competitive. With this shift, 65% of global GDP is digitalized by 2022, driving $6.8 trillion of IT spending from 2020 to 2023.
To succeed in this period of change, CIOs and digitally driven C-suites need to focus on three areas over the next five years. In the near term, they need to remediate any shortcomings in existing IT environments that were introduced during the initial emergency response. They also need to identify where the crisis and their organization’s response has accelerated IT transformation trends and lock in these advances. Most important, they must seek opportunities to leverage new technologies to take advantage of competitive/industry disruptions and extend capabilities for business acceleration in the Next Normal.
“The COVID-19 pandemic highlighted that the ability to rapidly adapt and respond to unplanned/foreseen business disruptions will be a clearer determiner of success in our increasingly digitalized economy,” says IDC Group VP for worldwide research, Rick Villars . “A large percentage of a future enterprise’s revenue depends upon the responsiveness, scalability, and resiliency of its infrastructure, applications, and data resources.”
A closer look at IDC’s top ten worldwide IT industry predictions reveals the following:
1. The Shift to Cloud-Centric Accelerates. By the end of 2021, based on lessons learned, 80% of enterprises will put a mechanism in place to shift to cloud-centric infrastructure and applications twice as fast as before the pandemic. CIOs must accelerate the transition to a cloud-centric IT model to maintain competitive parity and to make the organization more digitally resilient.
2. Edge Becomes a Top Priority. Through 2023, reactions to changed workforce and operations practices during the pandemic will be the dominant accelerators for 80% of edge-driven investments and business model changes in most industries. The need to deliver of infrastructure, application and data resources to edge locations will spur adoption of new, cloud-centric edge and network solutions that enable faster responses to current business needs while serving as a foundation for boosting long-term digital resilience, enabling business scaling, and ensuring greater business operational flexibility.
3. The Intelligent Digital Workspace. By 2023, 75% of G2000 companies will commit to providing technical parity to a workforce that is hybrid by design rather than by circumstance, enabling them to work together separately and in real time. The result will be a more collaborative, informed, and productive workforce.
4. The Pandemic’s IT Legacy. Through 2023, coping with technical debt accumulated during the pandemic will shadow 70% of CIOs, causing financial stress, inertial drag on IT agility, and “forced march” migrations to the cloud. Smart CIOs will look for opportunities to design next-generation digital platforms that modernize and rationalize infrastructure and applications while delivering flexible capabilities to create and deliver new products, services, and experiences to workers and customers.
5. Resiliency is Central to the Next Normal. In 2022, enterprises focused on digital resiliency will adapt to disruption and extend services to respond to new conditions 50% faster than ones fixated on restoring existing business/IT resiliency levels. Leading enterprises must be able to rapidly adapt to business disruptions, leverage digital capabilities to maintain continuous business operations, and quickly adjust to take advantage of changed conditions for competitive advantage.
6. A Shift Towards Autonomous IT Operations. By 2023, an emerging cloud ecosystem for extending resource control and real-time analytics will be the underlying platform for all IT and business automation initiatives anywhere and everywhere. Achieving these objectives will require aggressive integration of proactive AI/ML powered analytics, adoption of policy driven automation, and greater use of low code, serverless workflows to enable consistent self-driving infrastructure.
7. Opportunistic AI Expansion. By 2023, driven by the goal to embed intelligence in products and services, one quarter of G2000 companies will acquire at least one AI software start-up to ensure ownership of differentiated skills and IP. Successful organizations will eventually sell internally developed industry-specific software and data services as a subscription, leveraging deep domain knowledge to open profitable new revenue streams.
8. Relationships Are Under Review. By 2024, 80% of enterprises will overhaul relationships with suppliers, providers, and partners to better execute digital strategies for ubiquitous deployment of resources and for autonomous IT operations. Reevaluating technology, service, and service provider relationships will be crucial to long-term success in an environment where the existing IT ecosystem is undergoing major transition.
9. Sustainability Becomes a Factor. By 2025, 90% of G2000 companies will mandate reusable materials in IT hardware supply chains, carbon neutrality targets for providers’ facilities, and lower energy use as prerequisites for doing business. As IT takes on increasing responsibility for driving positive change within the organization, it will be even more important to ensure that the IT vendors and datacenter partners share similar goals and help accelerate progress.
10. People Still Matter. Through 2023, half of enterprises’ hybrid workforce and business automation efforts will be delayed or will fail outright due to underinvestment in building IT/Sec/DevOps teams with the right tools/skills. To address the shortage of developer and data analytics talent, enterprises will turn to flexible talent sources, crowdsourcing, and internal staff to meet their development/automation and advanced analytics needs and to speed up innovation.
IDC’s worldwide IT industry predictions are presented in full detail in the report, IDC FutureScape: Worldwide IT Industry 2021 Predictions (IDC #US46942020).