What’s Happening: Modern Adaptation = High Growth
Digital transformation initiatives have been taking shape for the majority of the last decade, but never more so than the past two and a half years. 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 simply not an option; companies that are adapting to this transformation are seeing quicker returns and reducing the digital gap. It also hasn’t been specific to any one industry; whether it’s retail, finance, manufacturing, technology, transportation, healthcare or distribution — plans to digitize in all verticals are being dramatically sped up by the pandemic disruption and post-pandemic projections.
According to Forrester, who organized a digital business maturity study last summer, showed that organizations considered “advanced” were twice as likely to rely on services partners to accelerate digital practices than their “beginner” counterparts. In addition, these same 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
- $4.26 trillion — The total global IT spend in 2021, largely due to digital transformation adoption. This is an 8.6% surplus above from Gartner’s initial prediction of $3.9 trillion at the beginning of the year. Spend in 2022 is expected to grow to $4.4 trillion.
- $1.8 trillion — Projected digital transformation technologies and services spend by the end of 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 increased 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 the end of 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
From edge devices to advanced data center solutions and all of the many layers of high-growth technologies in between, the IT ecosystem has an enormous opportunity to capture growth trends across digital transformation, making it an optimistic business venture and career outlook. At TD SYNNEX, it’s our role to provide visibility into the level of connectivity across the IT ecosystem, while showcasing the value of edge technologies and advanced solutions.
The opportunity to provide our partners and their end user customers with end-to-end solutions is immense. Partners are encouraged to leverage our integration centers and global services capabilities to make this end-to-end vision a reality. There is a lot of blood, sweat and tears that go into putting together a data center, so all co-workers need to be equipped with the right resources to access vital information, regardless of where they sit around the world. One of the best ways to do this is through edge devices. There are two elements to have full edge connectivity:
- The device itself: A reliable piece of equipment where you can comfortably access data
- The network: The ability to connect, regardless of where you’re located in an often virtual or hybrid environment
Market Insights: The Future Opportunity with Edge and High-Growth
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 work in tech, where the market opportunity is rewarding innovation and adaptation.
