What’s Hot in ICT in 2014?

A View from Our Customers

Ajay Sule, Business Unit Leader Adrian Drozd, Research Director

ICT26 March 2014

© 2014 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.

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Today’s Presenters

Adrian Drozd, Research Director, ICT Europe

Frost & Sullivan

Responsible for Frost & Sullivan’s European ICT research programme, spanning areas including Mobile & Wireless, Cloud, UC&C and Network Security. In addition, Adrian is Global Programme Manager for the Connected Industries research stream.

Ajay Sule, Business Unit Leader, ICT Europe, Israel & Africa

Frost & Sullivan

Seasoned research industry professional, who has held executive level positions in key analyst firms such as Informa Telecoms & Media, Yankee and Probe Research. Strong international experience with 27 years in the ICT Research and Consulting sector.

http://www.linkedin.com/groups/Future-Growth-Opportunities-in-ICT-4876870

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Focus Points

During the briefing we will:

1. Identify the key trends to follow across the ICT industry in 2014

2. Show a true end-user perspective on hot topics

3. Provide Frost & Sullivan's opinion on key ICT growth drivers

Every year, Frost & Sullivan surveys its customers to gain true end-user insight into the trends that will deliver new growth opportunities across the ICT industry. From M2M and Cloud to UC and Big Data, we look at the major trends that will influence

strategies and revenue potential in 2014.

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CEO/Leadership

15%

R&D/Innovation

15%

Sales Leadership11%

Corporate Develop-ment

5%Market Research 8%Competi-tive Intelli-gence

4%

Investors/Finance

3%

Marketing16%

Corporate Strategy 9%

Other 16%

ICT Firms are Well Represented in the Survey Sample

Source: Frost & Sullivan analysis.

Industry Function

A&D5%

A&T14%

CMF 8%

EPS9%

EBT3%BFS

8%HC 13%

IPC3%

ICT 18%

MI 2%

Other17%

A&D = Aerospace & DefenceA&T = Automotive & TransportationCMF = Chemicals, Materials & FoodEPS = Energy & Power SystemsEBT = Environment & Building Technologies

BFS = Business & Financial ServicesHC = HealthcareIPC = Industrial Automation & Process ControlICT = Information & Communication TechnologiesMI = Measurement & Instrumentation

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Poll Question

For those of you who represent the ICT industry: based on your knowledge, how much will the whole ICT industry grow/decline in your region in 2014?

1. Decline by more than 10%

2. Decline by 0-10%

3. Remain relatively stable

4. Grow by 0-10%

5. Grow by more than 10%

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ICT Respondents are Optimistic About Growth Prospects

N=1,937Q Based on your knowledge, how much will the whole industry grow in your region next year? Q Based on your knowledge, how much will your business grow/contract next year?

Ind

ust

ry G

row

th

Bubble size = number of

respondents

Business Growth

4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14%4%

6%

8%

10%

12%

14%

A&D

A&T

CMF

EPS

EBT

HC

IPC

ICT

MI

Source: Frost & Sullivan analysis.

Strong growth potential exists across the global ICT industry – perhaps unsurprisingly, most respondents expect their company to outperform the wider industry in 2014!

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Voice of the Customer

784survey

respondents tracking ICT

Mobile & Wireless

Cloud Computing

IT Services

Big Data & Analytics

Comms Services

Digital Media

UC&C

Network Security

Digital Identification

Contact Centers Source: Frost & Sullivan analysis.

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ICT Hot TopicsWhat our Customers will be Focusing on in 2014

Unified Comms & Collaboration

Mobile & Wireless Cloud

Hosted/Cloud UCC Services

Mobile UC

The Future of Work

BYOD Trends

Video Collaboration

Smartphones & Mobile OS

Machine-to-Machine

4G Networks & LTE

Next Generation Tablets

Location-based Services

Big Data in the Cloud

Software as a Service (SaaS)

Cloud Security

Infrastructure as a Service (IaaS)

Platform as a Service (PaaS)

1

5

1

5

Big Data & Analytics

Business Intelligence

Customer Experience Management

Customer Experience Analytics

Online/Digital Analytics

Mobile Marketing

1

5

1

5

Source: Frost & Sullivan analysis.

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Mobile Trends 2014

Beyond 4G—SDN

starts to gain

mindshare

Chinese smartphone

manufacturers start to make a

dent in Western markets

Wearables gain wider

acceptance

Source: Frost & Sullivan analysis.

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Poll Question

Wearable devices are a hot trend in the mobile market, with leading vendors seeking to gain an early advantage – notably in the wrist-worn (or smart watch) arena. Which of the following statements best matches your opinion on the potential for such devices in 2014?

Smart watches…

1. Are nothing but a fad – by 2015, nobody will be talking about them

2. Will gain strong traction among early adopters

3. Will hit the mainstream in developed mobile markets

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Samsung & Apple Dominate in Developed Mobile Markets

Africa/ME Latin America

Asia Pacific

Europe NA0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

OthersNokiaSamsungApple

Mar

ket

Sh

are

of

Sh

ipm

ents

, 201

3

Source: Frost & Sullivan analysis.

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Android Set to Maintain European Dominance

18.5%

70.7%

1.0%

4.1%

5.6%

22.4%

67.0%

3.4%5.7% 1.5%

iOS Android BlackBerry Windows Phone Others

Europe 2012 Europe 2018

Source: Frost & Sullivan analysis.

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M2M is Transitioning Towards the Internet of Things

More than three-quarters of European

MNOs will offer M2M in 2014

Standardisation helps to break down market entry barriers

Presence of 2 MNO-driven M2M groups

simplifies efforts to

develop M2M offerings

New market creation in

industries such as retail and

industrial automation

Focus shifts to the Internet of Things

(IoT), as more data will be

generated by machines than by

human beings

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Cloud – 3 Hot Trends to Watch in 2014

Software-Defined Data Center (SDDC) solutions increase in the market

Bare Metal Cloud will be introduced by more

cloud providers

Enterprises increase adoption of Public

Cloud

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Digging Deeper into Cloud Security

Source: Frost & Sullivan.

Although security is recognised as an issue, few view it as insurmountable

OVERALL SAMPLE

9

25

50

16Our security concerns are such that our Cloud adoption will either be severely limited or delayed

Security is a concern, but not a roadblock

We think we shall improve security through adopting cloud

We have no real Cloud-related security issues

16

Cloud – Strong Growth Expected in 2014

Data Centre Services

Europe: $5.6bn

S. Africa: $342m

+16%

+12%

Platform-as-a-Service

APAC: $225m+68%

Infrastructure-as-a-Service

Europe: $2.3bn

U.S.: $8.4bn

APAC: $800m

+68%

+63%

+52%

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Big Data – Even the Vendor Ecosystem is Complex!

• 400+ providers

• 2014 will bring new offers and new competitors

• Consolidation will continue

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Poll Question

Which of the following best describes how your company is engaging with Big Data analytics?

1) We don’t have a Big Data strategy

2) We’re at the proof of concept stage

3) We have deployed it in one or two areas

4) We are using Big Data to analyse how customers use our services

5) We are using Big Data to optimize internal operations

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Big Data – What to Expect in 2014

Privacy advocates will shift their

focus from PII and CPNI to the NSA

Retail/Wi-Fi Analytics (RWA)

will level the playing field for

traditional retailers

Artificial General Intelligence (AGI)

becomes commercially

viable

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Big Data = Big Revenue Potential

2013 2014 2015 2016 20170

5

10

15

20

25

30

35

40

45

24.827.9

31.535.5

40

Global Market for Big Data, Analytics and Business Intel-ligence Solutions

Rev

enu

e ($

Bill

ion

)

13% Growth in

2014

Source: Frost & Sullivan.

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Increasing complexity of IT/comms infrastructure

(virtualization, UC)

Tough macro-economic conditions Maturing VoIP and cloud technologies

Large and untapped SMB market

The Perfect Storm for Cloud UCC

Growth of the virtual organization—increasingly dispersed and mobile workforce

Hosted IP Telephony & UCC Services—Market Readiness

Source: Frost & Sullivan

New business models: UCaaS, cloud UCC

Customer focus on flexibility and cost management Introduction of more compelling

hosted/cloud service offerings

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The Hosted IP Telephony and UCC Services Market

Source: Frost & Sullivan

2SMBs require simple, cost-effective solutions; larger businesses need advanced functionality for some user profiles.

3Nurturing a local channel with IP telephony/ UCC expertise and a consultative approach can be critical for service provider success.

4Service quality and reliability will be increasingly important as the market matures.

5Providers can differentiate and deliver greater customer value through customization and integration with other communications and business applications.

1There is a huge untapped potential for compelling hosted IP telephony and UCC services globally.

North America

$1.9bn +31%

Europe

$3.2bn +29%

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Mega Trends that will Drive Opportunities for the ICT Sector

Source: Frost & Sullivan analysis.

N=1,640 (All respondents interested in Mega Trends)Q Below you will see the list of the nine Mega Trends we just introduced. Please help us prioritizing these Mega Trends by ordering them of importance for you from one to nine.

Bricks and Clicks

Urbanization: City as a Customer

Innovating to Zero

Beyond BRIC: The Next Game Changers

Health, Wellness, and Well-Being

Smart is the New Green

Future Infrastructure Development

Smart Cities

Social Trends

New Business Models: Value for Many

Connected Living

Connectivity and Convergence

Future of Mobility

0% 10% 20% 30% 40% 50% 60% 70% 80%

12%

13%

15%

22%

25%

26%

34%

39%

41%

46%

51%

63%

68%

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Links to Mega TrendsA Visionary View for the ICT Industry

•Smart City Infrastructure •Pervasive Computing•Office of the Future•Enterprise IT in 2025•Smart Manufacturing•Smart Transportation•Smart Healthcare•Smart Energy•Etc

ICT Core Focus Areas

Visionary ICT Deliverables

Mega Trends Focus

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Vertical Market Focus is Essential

Vertical Markets

ICT Industry

Mega Trends

Visionary perspective –

globally relevant trends that will

drive societal and business change

Vertical-specific opportunities for ICT

providers

Visionary viewpoint – how will Mega Trends

impact the ICT landscape?

On average, ICT respondents track 2.2 additional industries, with M&I, IPC, A&D, HC, A&T being the most relevant

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Drawing on Frost & Sullivan’s Wider Vertical Expertise

• Smart Transport• Smart City Infra

ICT Spend Model

• Mobile Health• Smart City• Data Privacy

• Smart Energy• Meter Data Mgt• Smart City Infra

• Critical Infra• Smart City

• Smart Manuf• M2M / IoT• Big Data• Cloud

• M2M / IoT• Big Data• Cloud

• Biometrics• Managed Security

• LTE / NGN• M2M / IoT• Big Data

• LTE / NGN• Big Data• Mobile Devices• M2M / IoT• Cloud

• M2M /IoT• LTE • Data Privacy• Cloud

Core ICT Coverage

Connected IndustriesProgramme

Energy & Environment

Automotive

Industrial Automation

Healthcare

Aerospace & Defence

Measurement & Instrumentation

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For Additional Information

Chiara CarellaHead of Corporate CommunicationsFrost & Sullivan+44 (0) 207 343 8314chiara.carella@frost.com

Ajay SuleBusiness Unit Leader, EIAInformation & Communication Technologies+44 20 7343 8301ajay.sule@frost.com

Adrian DrozdResearch Director, EuropeInformation & Communication Technologies+44 1865 398699adrian.drozd@frost.com