Gartner Identifies China's Top 10 Strategic Technology Trends in 2014

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BEIJING, PRC, June 11, 2014

A new report from research and advisory firm Gartner, Inc. identifies the top 10 strategic technology trends that CIOs in China should consider in order to pursue business growth and remain competitive throughout the digital era.

Gartner said that the top 10 technology trends highlight the current state of technology adoption in China, as well as the maturity and traction of the technologies. Organizations in China are expected to spend $140.6 billion (RMB 854 billion) on technology products and services in 2014, according to Gartner's latest forecast.

Gartner defines a strategic technology as one with the potential for significant impact on the enterprise in the next three years. Factors that denote significant impact include a high potential for disruption to IT or the business, the need for a major dollar investment, or the risk of being late to adopt. A strategic technology may be an existing technology that has matured and/or become suitable for a wider range of uses, or an emerging technology that offers an opportunity for strategic business advantage.

"China is a large IT market full of potential and competiveness," said Amy Teng, principal research analyst at Gartner. "China's technology trends align with other regions worldwide - but with some variations because of unique market conditions. Enterprises in China are in various stages of adoption, with some mature organizations being early adopters of technology and some still in the early stages of evaluation."

"Although the top 10 technologies that Chinese companies should factor into their strategic planning processes are defined here, this does not necessarily mean investment in all of the listed technologies is essential," said Ms. Teng. "However, companies should look to make deliberate decisions about each of them during the next two years."

The top ten strategic technology trends for China in 2014 include:

Mobile Device Diversity and Management

The rapid adoption of BYOD makes enterprise mobility strategies more complex and challenging. Through 2018, the growing variety of devices, computing styles, user contexts and interaction paradigms will make managing this diversity a priority strategic initiative for enterprises CIOs. In China, CIOs experience an even more serious situation because the region exhibits a faster device replacement cycle due to the popularity of low-tier smartphones. Another distinct differentiation is created by the culture of Chinese employees, who tend to work longer hours and increasingly mix work with life, a trend that extends to their digital "self."

Mobile Apps and Applications

Mobile apps and applications will continue to grow in 2014 and there is no sign of that trend slowing down, driven by the strong demand for mobile services that have moved beyond the early stage of enabling information and content access to bringing new capabilities to consumers and businesses. With the popularity of using mobile devices to explore the physical world, Chinese companies are employing new interactive technologies such as quick response (QR) code, audio, augmented reality, gesture and Near Field Communication (NFC) with QR code being the most popular one. Enterprises are gearing up efforts on mobile applications and early adopters, including banks and airlines, have introduced mobile apps for consumers or employees, such as mobile banking, self-check-in services and in-cabin services.

Social Commerce

Social commerce is the use of social networks and social media to support sales transactions. China is well ahead of western counterparts by almost five years in successfully deploying all use cases of social commerce. The most common use case for social commerce in the U.S. and Europe is product reviews with limited success in social shopping and social network commerce. China proves contrary with social network commerce dominating the market. Tencent QQ, Tencent WeChat and Sina Weibo are the three major social networks in China that enterprises leverage to drive social commerce.

Internet of Everything

Gartner forecasts that the Internet of Things (IoT) will include 26 billion units installed by 2020 and related IoT product and service suppliers will generate incremental revenue exceeding $300 billion, mostly in services, in 2020. China's leaders have provided support and encouragement to bring China to the forefront of IoT development. A number of key policies have been developed to target IoT innovation, with nine areas being identified as the applications areas that the government will invest in. These are: smart industrial, smart logistics, smart agriculture, smart grid, intelligent medical, smart household, intelligent transportation, smart city security and management, and smart environment protection.

Hybrid cloud and IT as a Service Broker

Hybrid IT is the mission and the operational model for IT in a cloud computing world. As more cloud computing services emerge, the value of a trusted broker for the enterprise will increase. This broker will ensure maximum efficiency and effectiveness in provider selection, governance, payment, integration, management, security and compliance. Most Chinese enterprises have started leveraging cloud computing and their users are increasingly accepting the new modes of working. However, for reasons both external and internal, Chinese enterprises are yet to form successful Hybrid IT environments. Nevertheless Gartner expects that the demand for hybrid solutions will intensify over the next three years, forcing companies in China to deploy technologies to secure, manage and govern solutions across a hybrid architecture.

Cloud/Client Architecture

The high growth in smartphone sales and the thriving mobile apps ecosystem coupled with a broad choice of devices and brands have created a seedbed for enterprises to adopt a new cloud/client applications model in China. The availability of 4G telecom services and a few emerging public cloud services will further fuel the development of mobile services and change of client/cloud architecture in imminent future. CIOs and enterprises IT will need to think about how they can provide a unified and seamless integrated users experience across mobile endpoint devices and re-gain the software engineering best practices to balance among monolithic, modular, object- and service-oriented approaches. Fortunately, Chinese enterprises have relatively less legacy to abandon when adopting this new model.

The Era of Personal Cloud

Users in China are increasingly adopting various personal cloud services such as Tudou for streaming video, WeChat for social network, Qzone for cloud storage and data synchronization across devices and platforms. However, the major difference between personal cloud service in China and most other mature markets is the current revenue model. Most of the personal cloud services provided in China are currently free to customers - even the streaming video services. This looks set to change as Chinese businesses look increasingly at how they can develop their services over the personal cloud to their employees, business partners or customers to improve their operations and expand revenue.

Software-Defined Anything

Software-defined anything (SDx) decouples the IT services (such as computing, networking, security, and storage) from the hardware underneath, hence extending the concept of virtualization into a new level in which all data center resources are abstracted, pooled and automatically managed. The core components of SDx in data centers include compute virtualization, software-defined networks (SDNs), and software-defined storage (SDS). In China, SDN is rising very fast in Type A enterprises, as well as in large e-commerce and cloud services providers. Although SDS is at a very early stage, its potential market opportunity has attracted globally established providers such as EMC and HP, while Chinese vendors such as DataCore and global startups such as Nexenta have also introduced relevant solutions.

Web-scale IT

To most of Chinese enterprises, Web-scale IT is a new concept that will be driven by the trend of consumerization. The rise of consumer culture is changing the way enterprises do business. Digital marketing and e-commerce require an efficient and agile IT support and, given the large mobile and Internet population of China, scalability will be a big issue. All these factors challenge the conventional IT approach in terms of scalability, cost, and speed to respond. Web-scale IT focuses not only on potentially being able to scale IT-related facilities and technology, but also the associated operational processes and supporting organizational structure in the context of a more risk-embracing culture.

3D Printing

3D printing is achieved by using an additive process through a device able to create physical objects from digital models. The market is broadly divided into three segments: bioprinting, consumer 3D printing and enterprise 3D printing. The main advantage of 3D printing is to build custom or low-volume items that aren't being mass manufactured. There are many very real opportunities for 3D printing in China, from product design and manufacture of 3D printers and printing materials, bioprinting to 3D printing services provided as an export.

More detailed analysis is available in the report " Emerging Market Analysis: China's Top 10 Technology Trends in 2014." The report is available on Gartner's website at http://www.gartner.com/doc/2749619

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