30% OF TECH SUPPLIERS "WILL NOT EXIST" IN 2020, NEW REPORT SAYS

A NEW STUDY FROM RESEARCH FIRM IDC PREDICTS MASSIVE DISRUPTION IN THE NEXT FIVE YEARS FOR TECH.

BY NEAL UNGERLEIDER

A new study from one of the world’s most respected research firms says the tech industry is headed for a period of chaos. The International Data Corporation's newFutureScape 2016 report claims, for starters, that 30% of the tech industry’s suppliers will "not exist as we know them today" in five years because they will either fail or be acquired.

According to the New York Times’s Steve Lohr, who wrote a detailed write-up of the study, new subsets of the tech sector such as cloud computing, mobile devices, advanced data analysis, and artificial intelligence are changing the business environment. However, IDC says, a lot of companies in the tech world are not making changes to help themselves survive in the long-term. A third of the top 20 companies in each tech industry covered by IDC will suffer either loss of revenues, loss of profits, or a deterioration in their market position, the firm predicts.

IDC also sees a wave of consolidation in the cloud computing industry, with "six or fewer cloud platform vendors" controlling approximately 80% of the market for cloud infrastructure by 2020. They also predict that individual vendors will create custom products that will dominate cloud app needs for areas like health care, energy, and manufacturing.

A bright spot in the disruption predictions, however, is the IDC's prediction that job prospects in software (especially in cloud- and web-based software) will continue to look bright. It expects that most companies with digital transformation efforts will double the size of their dev teams in the next three years and that there will be many opportunities for developers with experience in cloud computing or cognitive computing. It's also predicting a fifty-fold increase in the amount of developer teams that will fold cognitive computing services into their companies' products by 2020.

IDC also expects the number of Internet of Things devices will double in the next three years, sparking the development of more than 200,000 new apps.