Canadian tech spending will rebound in 2017, but mobile device sales will continue to stall, according to IDC Canada’s IT predictions for the year ahead.
Although IT investment slipped on the low oil and gas prices that hampered Canada’s economy this year, “2017 will see stronger IT spending growth than 2016,” said Lars Goranssson, general manager and group VP at IDC Canada.
During the predictions webcast on Wednesday, Goransson did not provide a specific figure for Canadian IT spending growth overall. He added, however, that there will be “sustained double digit growth rates” next year in third platform technologies, defined by IDC as cloud, social, big data and mobile.
Turning to mobile devicehardware, “we can see that its growth has come to a halt,” Goransson said. “In 2017 in Canada, mobile device shipments will record another two per cent decline year over year.”
At IDC, the mobile device category is comprised of mobile phones, notebook computers and tablets.
“Reasons for this (mobile device) market slowdown are various,” Goransson continued, citing “the high penetration rate of all those devices, limited reasons for end users to upgrade the existing install base and increased competition from other categories within consumers’ budgets.”
While Goransson called mobile devices “a growth engine for our overall industry over the last five years,” he concluded that “this is no longer the case. Traditional mobile device shipments will not return to positive growth within the forecast period.”
The outlook for mobile isn’t all bad, though. Here are more highlights from the rest of IDC Canada’s 2017 IT predictions.
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Mobile part deux
Mobile device sales are slumping but mobile device use is climbing. Goransson said the focus is shifting from mobile hardware to the mobile experience.
“It will become less about carrying a device than about … contextual availability of computing,” he said. Users will start to care more about what they can do on their mobile device (payments, shopping, etc.) than having the latest make and model.
Digital divide
Only 13 per cent of the Canadian organizations surveyed for the forecast had attained the top two tiers of digital transformation (DX) progress; 21 per cent are “digital resistors” and 42 per cent are still just kicking the tires as “digital explorers.”
“Most Canadian organizations have a long way to go,” said Tony Olvet, group VP of research at IDC Canada.
IDC’s main concern is that “a digital divide” will form in 2017, he noted. As the gap widens between the DX early adopters and the slowpokes, the laggards will ultimately be left behind.
Cloud customization …
Over the coming year, “cloud gets tailored to fit digital transformation,” Olvet predicted. He expects many Canadian organizations to seek out specialized cloud services from suppliers based on their specific needs and sectors.
Canada will follow the global trend of forming collaborative clouds around industry verticals. But Olvet said the phenomenon will unfold more slowly here because “we don’t have the critical mass” seen among verticals in bigger markets like the U.S.
… and cloud security
Security was named as a critical concern or major challenge by 60 per cent of the Canadian businesses IDC surveyed, making it the top ranked technology priority for 2017. In particular, IDC believes cloud will emerge as the biggest security headache next year.
The problem, Olvet explained, is that most Canadian organizations don’t view cloud security holistically. He urged them to look at end-to-end encryption, consider the same security factors for cloud as in an on-premise data centre, and clearly define the security responsibilities of all parties involved in their cloud arrangements.
IoT gets vertical
2017 will see the Internet of Things “mature into industry and functional solutions” with “a real focus, in business and IT, on automation. That’s the name of the game,” Olvet said.
Enterprises see IoT as a way to automate business processes in order to boost efficiency and eliminate human error wherever they can, he said. As IoT gets more segmented, vendors with very broad offerings will lose out to players with strong, sharply defined vertical solutions, he warned.
AI/cognitive
By 2018, IDC expects 75 per cent of enterprise applications developed globally by large vendors and ISVs to be cognitively enabled. Yet Olvet said Canadian organizations will take another two to three years to begin embracing the technology.
Although AI adoption in Canada has occurred mostly in the finance sector, he said other Canadian industries should explore the technology for personalized marketing and sales.
Robotics gains speed
Goransson said a ‘robotics-as-a-service’ model (encompassing AI, cloud and in some cases IoT) will develop globally over the next five years, with Canadian spending on commercial service robots likely hitting $500 million in 2017.
Talent crunch
It wouldn’t be a Canadian tech forecast without a mention of the skills shortage, and this one was no exception. While over 70 per cent of companies on the Global 500 will have dedicated DX innovation teams in place by the end of 2017, Olvet said a severe talent crunch threatens the ability of Canadian firms to follow suit.
A top priority for Canadian enterprises in 2017, he suggested, should be collaborating with colleges, universities and other institutions on a “workforce transformation plan” to make sure their supply of IT talent meets demand.