With digital transformation initiatives flooding the enterprise, it’s no surprise that by 2023, more than half of all worldwide GDP is predicted to be driven by products and services from digitally transformed industries, an IDC report found. This amount of digital integration indicates that the global economy will reach digital supremacy in the next couple years.

IDC made predictions for 2020 and beyond during a live webcast on Tuesday. The findings were published in IDC’s latest FutureScape report. IDC has documented the rise of the digital economy and digital transformations for the last five years.

SEE: Tech Predictions For 2020: More must-read coverage (TechRepublic on Flipboard)

The webcast, hosted by chief research officer Frank Gens, uncovered the impact new technology and digital transformation initiatives will have on businesses in the coming years.

Digital transformation involves using technology to improve business operations, which often means modernizing or replacing legacy technologies. The Internet of Things (IoT), blockchain, big data, artificial intelligence (AI), machine learning, and cloud computing all contribute to digital transformation projects in organizations. Often, these technologies turn an organization’s data into actionable insights, helping companies stay competitive in an evolving market.

10 IT industry predictions

As technology grows, so does its use cases. To help businesses prepare for this changing tech environment, Gens outlined the following 10 IT industry predictions and presented guidance on how to handle them.

1. Companies hasten to innovation

By 2023, more than 50% of all ICT (information and communications technology) spending will go toward digital transformation and innovation, the report found, which is up from 27% in 2018.

“This is growing pretty fast. Enterprises that don’t reach digital supremacy in their IT budgets will essentially cripple,” Gens said in the webcast.

Companies must put in their own multiyear, multi-horizon integrated process for digital transformation planning and understand the critical success factors for execution.

2. Clouds get connected

To stay competitive in this digital-first economy, the report said, digital services must be able to run anywhere and anytime.

By 2022, 70% of enterprises will deploy unified hybrid/multicloud management technologies, tools, and processes, according to the report.

“This is new chapter in cloud competition. In the digital-first economy. An enterprise’s ability to compete will depend on its digital reach,” Gens said. “A key part of digital reach will be all about integrating the management of cloud silos.”

Organizations should prepare by prioritizing SaaS-based management and governance offerings, identify relevant business KPIs to drive, and reintegrate all IT around a digital-first infrastructure.

SEE: Digital transformation: An IT pro’s guide (free PDF) (TechRepublic)

3. Build out the edge

By 2023, more than 50% of new enterprise infrastructure deployed will be at the edge rather than corporate data centers, up from less than 10% today. And, by 2024, the number of apps at the edge will increase 800%.

“Digital reach is not just about connecting clouds, it’s about extending the cloud infrastructure, the data, apps, and the management, out to edge locations,” Gens said. “Over the next four years, IT services at the edge will be evolving rapidly and will expand beyond being just about customer experience and commerce experience. It will evolve to include more critical edge use cases, like AR-assisted surgery, or autonomous vehicles etc.”

To prepare, businesses must modernize IT to become virtualized, containerized, and software-defined to support edge. They should also consider new datacenter partners, which can bolster edge build out and prioritize infrastructure optimization and apps communication costs.

4. Digital innovation factories

By 2025, nearly two-thirds of enterprises will be prolific software producers, with code deployed daily. More than 90% of apps will be cloud native, 80% of code will be externally sourced, and 1.6 times more developers will exist than today.

“This is what will make or break enterprise success in digital supremacy,” Gens said.

Business leaders must prepare for this big culture change by investing heavily in automation and orchestration systems and engaging with OSS (open source software) communities. This, the report said, will help an enterprise’s ability to sustainably differentiate and compete in its own industry.

5. Industry apps explosion

By 2023, more than 500 million digital apps and services will be developed and deployed using cloud-native approaches – the same number of apps developed in the last 40 years. Most will be targeted at industry-specific digital transformation use cases.

“As apps and services explode, they will define new minimum competitive requirements,” Gens said.

To meet those requirements, businesses should develop strong competitive intelligence into their industry’s digital transformation landscape, integrate the idea of a digital innovation factory into core product planning, and ensure all hands are on deck to contribute with deployment.

6. AI is inescapable

By 2025, at least 90% of new enterprise apps will embed AI, making apps “smarter” and “more dynamic.” By 2024, more than 50% of user interface interactions will use AI-enabled computer vision, speech, natural language processing (NLP), and AR/VR (augmented reality/virtual reality).

“By 2025, we predict AI-powered enterprises will be able to respond to market conditions in half the time of their peers,” Gens said. “This wide and deep infusion of AI is going to impact every IT organization.”

Businesses should identify the enterprise’s key AI-led apps and services, establish joint business and IT governance around AI ethics, and prioritize the creation of new user interfaces that leverage AI.

7. Trust gets promoted

By 2023, half of the Global 2000 will name a chief trust officer, who orchestrates trust across security, risk, compliance, privacy, and ethical business operations.

“This one isn’t about cool, new technologies. It’s about relationships,” Gens said. “The approach to trust is going to need to change from a bolt-on to a built-in.”

Getting trust right will be fundamental for companies to stay competitive.This trust can start with creating company trust roles that establish accountability for managing and maintaining trust guidelines. Companies should also evaluate digital initiatives to assess trust risks and establish trust assessment best practices among stakeholders.

8. Every enterprise is a platform

By 2023, 60% of the Global 2000 will have a digital developer ecosystem with thousands of developers. Half of these enterprises will drive at least 20% of digital revenue through their digital ecosystem/platform.

“Every viable enterprise is going to need to become a platform, with a team of third party developers around them,” Gens said.

To do this, start by naming a senior executive to lead business, then identify critical systems and solutions to support this emerging part of business, before finally leveraging others’ platforms and marketplaces, including OSS communities.

9. Cross-industry mashups

Expect to see more digital ecosystem partnerships across industries.

By 2025, 20% of revenue growth will come from “white space” offerings, which combine digital services from previously unlinked industries. One-fifth of partners will be from previously unlinked industries.

“Develop really good peripheral vision, which means expanding your corporate development scope well beyond traditional intra-industry and adjacent industry partnerships,” Gens said. “You have to ensure to link emerging multi-industry efforts closely to your development of a digital platform and ecosystem.”

10. Tech platform wars continue

By 2023, the top five public cloud megaplatforms will consolidate at least 75% of IaaS and PaaS market share, while SaaS vendors becoming platforms will increase. The top 10 pure-play SaaS vendors will generate an average of nearly 20% revenue from expanding their PaaS services.

“The market is going to be consolidating around a small number of megaplatforms, so choose your core cloud megaplatform(s) wisely,” Gens said. Companies should also place multicloud technologies high on their technical standards list and select SaaS providers that are successfully delivering platform services and apps. SaaS providers will jockey to become key sources for enterprises’ digital innovation factories.

These predictions create a whole new species of digital-first enterprise, which will become evident in the next few years.

For more, check out Digital transformation: How to make sure your project is a success on our sister site ZDNet.

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