Think ICT 2032! Position for ICT Everywhere (Detecon Executive Briefing)

8/8/2019 Think ICT 2032! Position for ICT Everywhere (Detecon Executive Briefing)

http://slidepdf.com/reader/full/think-ict-2032-position-for-ict-everywhere-detecon-executive-briefing 1/5

Detecon Executive Briefing

Think ICT 2032!

Position for ICTeverywhere

Information and Communication Technology (ICT) is one of

the most dynamic industry sectors of our times. The future of

the ICT industry is shaped by long term socio-economic

trends and at the same time ICT will shape the way we work

and live in the future. Accordingly, we have developed a

framework to set the scene for the year, when today’s ICT-

executives will reach the end of their careers: 2032!

What are the most important trends, what do future ICT

applications look like and what does this mean for players in

the market? This paper provides an extract of our recently

published Think ICT 2032! opinion paper and takes the

viewpoint of a telecommunications operator – or to be more

precise of a company which is now a telecommunications

operator, but will most probably not be so anymore in 2032.

We make ICT strategies work




Detecon International GmbH 11/2010 2 www.detecon.com

Global trends shaping the ICT market

In our opinion four mega-trends out of the plethora of demographic, macro-economic andsocial developments are of fundamental importance to the future ICT ecosystem:

Increasing and high life expectancy, in particular in the Western hemisphere, drives

the demand and overall costs for health services: Seniors emerge as a significant ICT

customer segment, while ICT is necessary to make health services better and more

efficient.

In 20 years more than 60% of the population will live in urban areas and several

mega-cities with more than 10 million inhabitants will become melting pots with the

economic potential of a G7 nation in terms of GDP: A smart ICT infrastructure will be the

life blood of these conglomerations.

Globalization of world trade carries on with an expected tripling of the current world

trade volume of 13 trillion USD to more than 50 trillion USD over the next two decades:

Not only MNCs, but also SMEs will become globally present based on ICT enabled

collaboration and digitalization of products and services. ICT becomes an ubiquitous

production factor and potential means for differentiation in almost all industries.

Automation of business processes will reach a next level and smart business

networks allow for ad-hoc build up of production, sales and services value chains with

near real time “add-in” and “phase-out” of business partners: Smart ICT is the

preconditions for these business networks to flourish and capture a market share of up

to 30% over the next two decades.

These four mega-trends stimulate the demand for smart ICT services and at the same time

ICT enables these trends following the law of mutually accelerating return.

ICT in 2032 in work and life

In our personal environment we will experience the power of ICT in various forms. Our

homes will become smart: appliances like washing machines, refrigerators, security

functions and utility supply will be linked to a centrally managed sensor network. Chips will

be implanted in human bodies to provide health or fitness related data. Pervasive ICTconstantly collects and processes status, usage or context information. Smart Agents,

software with artificial intelligence connected to the Internet, will help to manage the vast

quantity of data generated. They enable multi-modal semantic search engines, for example,

assisting and improving human decision making in an increasingly complex world.

ICT will not only have a significant impact on our daily life, but at the same time ICT evolves

as a, if not, the central production factor or differentiator in most industries. The energy

sector is one such example:





For the energy industry, digitalization means virtualization – similar to Cloud Computing in

the IT industry. ‘Managed energy’ based on information gathered at various points of the

energy supply chain leads to an abstraction of energy from the physical grid infrastructure. In

the future, connected batteries of electric or hybrid cars will constitute virtual energy storagesthat can be used to compensate for typical volatility of renewable energy (Vehicle-to-grid).

Virtual Power Plants, heterogeneous energy generators connected by ICT, serve a similar

purpose: distributed resources can be managed efficiently to best match demand and

supply.

The logistics industry is an example of how wireless communication and IT have already

fundamentally transformed business processes and production models. With the real-time

management of supply chains, fully automated warehouse systems and telematic

applications ICT made itself indispensable to modern logistics. Technologies such as near-

field communication, sensor networks and machine-to-machine communication play a pivotal

role in optimizing logistics processes. IT based planning and routing of components allows just-in-time production, RFID technology allows to exactly identify where components are.

Overall, ICT results not only in a higher flexibility, but also in an improved efficiency through

the end-to-end management of the whole supply chain.

A lot more examples can be provided on how ICT captures, enhances and transforms our

working environment and personal life. Obviously this transformation process does not only

generate benefits, but also comes with challenges, in particular with regards to data and

individual rights protection as the recent discussions about the Facebook data leakage,

Google street view and Apple’s patents for identifying unauthorized use of i-phones show.

Trust will be a major and determining factor for the future market position of any ICT

provider with direct end customer access in the future.

We expect that these challenges will not form ultimate barriers to the technological and

economic progress, but that the associated risks will - at least partly - be balanced by a

industry sector policy with intervention for/with advanced data security mechanisms.

Industry Dynamics

Convergence is and will remain the driving force behind the further development of the ICT

market till 2032. During the past years we have witnessed a “vertical” convergence,

supporting the paradigm of a horizontally layered organization (SalesCo-ServCo-NetCo-

Approach) and driven by the ‘unification’ of telecoms/IT, Content/IP or fixed and mobile. We

expect “tectonical” shifts in the market landscape by “horizontal” industry convergence,

challenging ICT players to ‘reposition for ICT everywhere’. The rather disruptive moves in the

music or publishing industry, or foreseeable in the energy sector, are only a first sign.

ICT is everywhere: significantly miniaturized ICT components (wearables, white

goods, wallpaper, medicine…) will be “IP-enabled”.

Smart Business Networks dominate industrial production: Rigid value chains

will “dilute” into a couple of central and very agile value creation networks. By the

means of self-learning business operating IT-systems, these will become

increasingly automated and “intelligent”.





Vertical ICT value chains will disintegrate quickly: Due to IP and increasingly

open APIs, the pace of change will be the highest in our industry.

„ICT everywhere” will be the “central nervous systems” for each individual andsocieties as a whole. Political governance in the digital age will center on consumer

protection and the homologation of socio-economically important technologies, like

smart agents1.

Life & l iving Transport & Mobili ty Health & Envi ronment Energy

ICT enabled industry convergence fields 2032ICT convergence 2010

Fixed-

MobileTC/IT

Content/

IP

ICT convergence 2010

Fixed-

MobileTC/IT

Content/

IP

Fixed-

MobileTC/IT

Content/

IP

Infrastructureas a service

Alternative Carrierselectricity/ gas, roads

PPPs infrastructures,

Cloud Computing andSupplier Players

Licensed fixed- andmobile operators

Business asa Service

Smart Business

Networks Facilitator

ConsumerICT

Mediation

B2B2C Enablers

Vertical integration only

with deep field experience

Horizontal economies of scale

depend on B2B2C maturity

Sales Co

Serv Co

Net Co

4,1 trillion $ ? trillion $

A new era of convergence

Increase customer intimacy

Decrease production modules

2032 market structure

We expect a multiplication of the global ICT market volume of currently 4,1 trillion USD. ICT

2032 will have a significant impact on the GDPs of the industry nations.

Driven by the vertical disintegration and increasingly diverging competencies necessary to

serve the consumer and business customer segment in horizontally integrated markets, we

expect three core areas of value creation for ICT in 2032:

Business as a Service (BaaS): players with excellent process, IT and industry

know-how enable “business operating systems” across several industries. BaaS iskey in 2032 for dynamic business networks which build up production, sales and

service value networks by ad-hoc “add-in” and “phase-out” of business partners.

Consumer ICT Mediation (CIM): Top brands and trusted partners provide

“intelligent customer intimacy” in ensuring a central technical mediation role, by

means of an easy to use ecosystem comprising smart agents, net phones, robots or

wearables.

1We define them as „cognitive e-Butlers“, an „artificially intelligent“ IT-application, which can process information,

apply knowledge, change preferences and take decisions on behalf of a consumer or business agent.





Infrastructure as a Service (IaaS): Converged ICT and possibly further

infrastructure components are provided by IaaS players. IaaS is primarily a

wholesale business model serving BaaS and CIM customers for instance with native

access, managed infrastructure services or dedicated network infrastructure(backbone, robot parks, sensor networks). In addition IT & data centres and device

fleets will be crucial infrastructure components in the future. A small portion of

consumers, with enhanced system integration capabilities will be served directly.

Conclusions for your “ICT 2032 Boardroom Agenda”

ICT is and will be a key industry. There are significant opportunities, but each ICT-provider

needs to assess its position individually.

BaaS, Consumer ICT Mediation and IaaS require new and different core

competencies. Individual ICT companies will not be able to take a leading role in

all three areas simultaneously. On which of the one or two of these three areas of

value creation should we focus?

Companies operating in the Consumer ICT Mediation Market find themselves in a

horizontal competition, which is marked by innovation and agility and requires

flexible organisation structures. Smart agent technologies and a strong trusted

retail brand play a pivotal role. Would todays and next generation customers really

choose us?

Ad hoc smart business networks will represent a large portion of an automated

and embedded economy. What are the strategic components of a “business

operating system? Where could we create a substantial industry intimacy?

The IaaS business model offers sustainable profits for few large ICT companies,

providing they generate international economies of scale and build capabilities to

manage the B2C/B2B wholesale business. Would we be capable of ensuring a top

3 position in our regional market?

Each strategy to position for ICT 2032 must start with an honest assessment of your core

competencies in the DNA of your company. Today’s telecommunication operators’

capabilities and business models are closest to IaaS value creation. However, they neither

explore the full potential of IaaS nor are operators prepared to compete successfully in the

BaaS and CIM environment. We believe it’s time now to think about the necessary strategic

and organizational transformation processes to prepare for playing a leading role in the

future ICT landscape.

For further insights see the Detecon Opinion Paper ‘Think ICT 2032’!

The authors

Dr. Karl-Michael Henneking

[email protected]

Lars [email protected]

Documents

Think ICT 2032! Position for ICT Everywhere (Detecon Executive Briefing)