Frost & Sullivan, leading IT market research agency, has shared outlook for Internet of Things (IoT), cyber security, digital services, data center and cloud computing, and unified communications and collaboration for 2016.
The size of the IoT market in Asia Pacific will be $24.2 billion in 2015 and will reach $79.3 billion in 2020 with a 26.8 percent CAGR from 2015 to 2020. IoT services will be accounting for nearly three quarters of the total IoT market in 2020.
The deployment and management of IoT projects will lead to a requirement for new skill sets which are currently scarce in the APAC region.
There will be a shift towards computing decentralization as the IT industry gradually shifts towards using more IoT technology. Examples include P2P networks becoming more widely used, allowing connected devices to communicate directly with each other rather instead of being routed through a centralized data center.
The Product as a Service model will become the norm in many industries. Over 70 percent of Fortune 500 companies will operate Product as a Service business models, with the Automotive Industry and Electronics Industry expected to lead this revolution at 15 percent and 13 percent respectively.
Prime examples of Product as a Service include auto makers offering car sharing services on a pay per use system (Automotive), medical device manufacturers offering health monitoring systems (Healthcare) and IT hardware providers offering separation of products and services businesses (IT).
The big opportunities in digital space in Asia Pacific are mobile payments and e-commerce. In South East Asia alone, the e-commerce segment is expected to grow at a CAGR of 23 percent from 2015-2020. Nearly $20 billion will be the value of e-commerce for ASEAN countries with Indonesia, Malaysia and Singapore expected to show the strongest growth. Indonesia will become the largest e-commerce market by 2020.
The drivers for e-commerce growth include expanding middle class population. Mobile payments will account for more than 10 percent of total payment transactions in APAC by 2020.
Data Center and Cloud Computing
The data center and cloud computing industry is witnessing large scale data center construction frenzy and with increasing demand from cloud-enabled technologies, such as Big Data and IoT. There is a price erosion in the market as well as industry consolidation due to lower than expected Return on Investments.
The industry will witness greater consolidation in the market, driven by the need to offload data center assets. This will drive the entry of new players, such as utilities and real estate companies, into the market as we see backward and forward integration.
25 percent of all enterprise IT workloads will move to the cloud by 2020, up from 12 percent in 2015. The data center and cloud computing services market is expected to grow at a healthy CAGR of 20.5 percent to reach $77.3 billion in 2020 from $30.4 billion in 2015.
The spending in cybersecurity is expected to grow in the upcoming years, especially the spending on security solutions to protect critical infrastructure and ICS systems. Investment in solutions and services to defend against advanced malware, advanced persistent threat, targeted attacks or DDoS attacks is also poised to increase significantly in the upcoming year.
The Industrial Control System Security market is forecast to grow rapidly at a CAGR of 45.2 percent from 2015-2020, reaching revenues of $1.5 billion.
The use of mobile devices and the spread of the IoT will offer more attack vectors, and increases the risks of successful attacks enormously. The convergence of operational technology with information technology will enable the attackers to have much greater impacts.
Industrial control systems are more vulnerable than ever before and security will be the number one consideration as these systems are modified or developed. In 2016, it is evident that security will be prioritized and built into the architecture of any new systems before they are implemented.
Unified Communications and Collaboration
The Asia-Pacific UCC market presents $9.1 billion opportunity by 2020, growing steadily at a CAGR of 5.2 percent.
The UC Services is expected to contribute up to 40 percent of the market in 5 years compared to current 30 percent.
Users will demand a converged communication platform that offers seamless experience where focus will be on business outcome rather than technology.