What’s Happening: Modern Adaptation = High Growth
Digital transformation initiatives have been prevalent for the majority of the last decade, but never more so than right now. The COVID-19 pandemic has served as a catalyst for the increased pressure to speed up digital transformation adoption, with an overnight increase in IT demand for remote workforces, distance learning and more prolific digital customer experiences.
Staying stagnant is not an option and companies that are are reducing the digital gap by adapting to transformation are seeing quicker returns. It’s also not specific to any one industry; whether it’s retail, finance, manufacturing, technology, transportation, healthcare or distribution — plans to digitize are being dramatically sped up by the pandemic.
According to Forrester, who recently organized a digital business maturity study, showed that organizations considered “advanced” were twice as likely to rely on services partners to accelerate digital practices than their “beginner” counterparts. In addition, advanced firms were also far more likely to use digital transformation to drive revenue, compared to beginning firms who were more likely to use it to reduce costs.
By the Numbers: Digital Transformation Spend
- $4.2 trillion — The expected global IT spend the end of 2021, according to Gartner. This is an 8.6% increased adjustment from their initial prediction of $3.9 trillion back in January, largely in part to digital transformation adoption.
- $1.78 trillion — Projected digital transformation technologies and services spend in 2022. This makes up approximately 43% of the entire IT spend around the world. By comparison, this number was at $0.6 trillion in 2017.
- 54% — Percentage of companies worldwide who are prioritizing digital transformation. 49% of these organizations are also prioritizing cybersecurity.
- 15.5% — compound annual growth rate (CAGR) of direct investment in digital transformation between 2020 and 2023. Non-digital transformation IT investments are expecting a -1.4% CAGR over the same period.
- 82% — Percentage of chief financial officers that plan to increase their investment in digital capabilities in fiscal year 2021 compared to fiscal year 2020 (Gartner survey).
- 65% — Percentage of the world’s GDP that is expected to be digitized by 2022 (IMF).
By the Numbers: Rise in Edge Computing
- $250 billion — Global edge computing market spend in 2024. From 2019 through 2024, the edge computing CAGR is expected to grow at 12.5%.
- >15 billion — Number of IoT devices that will attach to an enterprise’s infrastructure (many of which will be at the edge) by 2029.
- 14% — Rise in device spending year over year, worldwide. In 2020, device spending actually decreased 6.9%, making it one of the highest-growing IT markets in 2021.
- 46.2%, 32.2%, 21.6% — The split of edge spending for services, hardware, and software, respectively.
Business Opportunity: Data at the Edge
Kevin Kennedy, senior vice president and strategic advisor of Advanced Solutions at TD SYNNEX has experience leading both the Edge Solutions and Advanced Solutions business at legacy Tech Data for a number of years. This dual layer of experience helped provide visibility into the level of connectivity between the entire IT ecosystem. In our last interview with Kevin, he shared insights on the value of edge, and we captured additional insight on where the channel opportunity lies:
“The opportunity to provide our customers end-to-end solutions is immense,” said Kevin. “All of the hard work and the details that go into putting together a data center, you’re going to want your sales force and the rest of your colleagues to be able to access that information regardless of where they sit, especially in this work-from-home environment where individuals are distributed across the world. One way to do this is through edge devices. There are two elements to have full edge connectivity: the device itself where you’re accessing the data and the ability to get on the network regardless of where you sit. Our opportunity to truly build end-to-end solutions by leveraging our integration centers and global services capabilities is tremendous.”
I look at the edge today with my Advanced Solutions perspective and see opportunity, opportunity, opportunity.
Market Insights: The Future Opportunity with Edge and Next-Gen
For individuals or organizations that have relied on traditional storage and processing of data through the cloud or as data center customers, edge represents an excellent opportunity. Instead of only focusing on the data center technology itself, now channel partners can ask questions that matter to their customers, such as:
- “How are your employees going to be tapping into the data center?”
- “How are you going to use the data that’s created?”
- “How is the data going to be accessible to your customers and to your employees?”
By doing so, that’s going to help you start to frame a conversation around where edge solutions and its technology can start to come into play. Most customers are going to have a workforce with mobile phones, laptops and network requirements. The obvious opportunity is to go sell that infrastructure, but more importantly, to also build a services capability around both the data center and edge component, which presents a huge business opportunity for our channel partners.
Adding the services component is going to create a monthly or annual revenue stream once realized and it’s going to be repeatable. There’s a new opportunity to upgrade and refresh all of those devices. The chance to open a dialog with traditional data center partners into really creating the end-to-end solutions and then wrapping all that with managed services represents a profitable addition to their business that they may not be taking advantage of today.
To wrap, between the COVID-19 pandemic forcing organizations into an accelerated digital transformation timeline, and IoT-connected devices growing at an astounding rate, it’s a great time to be in tech, where the market opportunity is rewarding innovation and adaptation.