AddressingIndustryChallengesThroughInterconnectionEcosystems

DE-CIXSummit,NYCDec5,2017

© IDC

Agenda

2

Challenges

Technology

Ecosystems

WhatDoWeMeanbyInterconnectionEcosystem?

3From... ...To

§ Avenuethataggregatesaccesstomultipleservice,technology,cloudproviders

§ Benefitsincludesecurity,latency,availabilityandsynergy

1.TopChallenges– BankingAccesstoNext-GenerationSecurity

30%

30%

28%

33%

20%

15%

23%

23%

Connectingtothirdpartiesoversecurenetworksinsteadofthe

Internet

Fraud,cybersecurity,DDoSprotection

Critical Serious Moderate Notachallengecurrently

4Q.Asanorganizationworkinginthebankingindustry,whatareyoumostchallengedbyatthemoment?

2.TopChallenges–MediaBigData,AI,GlobalCollaboration

22%

38%

38%

32%

22%

22%

19%

8%

Virtualproductionteams:collaboration,post-production,

etc.

Algorithmicordata-drivencontent

Critical Serious Moderate Notachallengecurrently

5Q.Asanorganizationworkinginthemediaindustry,whatareyoumostchallengedbyatthemoment?

3.TopChallenges– AutomotiveWorkingWithPartnerstoDeliverDriverlessCars

26%

39%

26%

21%

18%

10%

31%

31%

Collaborating&sharingdatawithsuppliers,techpartners,

cloudproviders

Vehicle-to-vehiclecommunication

Critical Serious Moderate Notachallengecurrently

6Q.Asanorganizationworkingintheautomotiveindustry,whatareyoumostchallengedbyatthemoment?

4.TopChallenges– SoftwareUserAnalyticsandRapidDevelopment

38%

33%

17%

29%

31%

31%

14%

7%

Bespokeapplicationdevelopmentathighspeedand

lowcost

Betterunderstandcustomerbehavior

Critical Serious Moderate Notachallengecurrently

7Q.Asanorganizationworkinginthesoftwareindustry,whatareyoumostchallengedbyatthemoment?

5.TopChallenges– ITServicesComponentizeSolutions,CloudifyInfrastructure

24%

29%

29%

31%

19%

29%

29%

12%

Movingtocloudinfrastructure(IaaS)

Assemblingsolutionsquickly,flexiblyfrom3rd-party

components

Critical Serious Moderate Notachallengecurrently

8Q.AsanorganizationworkingintheITservicesindustry,whatareyoumostchallengedbyatthemoment?

Francisco González, Chairman BBVADavos 2017

9

"Wecreatedaplatformwhichistotallycustomer-orientated,realtimeandintegrated.We’renow

migratingittothecloud"

"Consolidation[inthebankingindustry]isnotgoingtobethefullsolution.Thesolutionistomasterthetechnologies,suchasthecloud,AI,blockchain– everything"

"Therewillbeanewleagueofcompetitors:Paypal,Alipay,andsomephysicalbankswhichwereableto

turnintoarealdigitalhouse"

"We’recreatinganewbreedofprofessionals,blendinggoodbankersandgooddigitals"

"Wewillbeadata-drivenbank"

DisruptiveTechnologiesareBecomingtheNorm...

39%

34%

10

Cloudapps(SaaS)

AI/cognitive

InternetofThings

33%

31%

46%

30%

Planningtousein2years

Usingtoday

Q.Whichofthefollowingdoyouuse,orplantousewithintwoyears,withinyourcorebusiness(i.e.,notback-office,sales,marketing,etc.)?

...TheyAreBeingBuiltUsingThird-PartyServices

39%

34%

11

Cloudapps(SaaS)

AI/cognitive

InternetofThings

33%

31%

46%

30%

79%

68%

66%

Q.Forthose,doyou/willyouuseyourownsystems,athird-partyservice,orboth?

12

...AndTheyareAccessedWithinEcosystems

46%

54%

64%

68%

79%

Automotive

Media

ITservices

Banking

Software

EcosystemParticipationRates

Q.Doesyourorganizationtakepartinadigitalecosystemwithinyourindustryorplantowithintwoyears?

62%

EcosystemsDeliverBusinessBenefits,NotJustTechnology

26%

29%

29%

31%

34%

35%

43%

44%

49%

45%

45%

42%

Rapidorinnovativeproduct…

Makingmorestrategicuseofdata

Bettercollaborationwithpartners

Costreduction

Bettercustomerengagement,…

Top-linerevenuegrowth

Critical Important

13Q.Fromabusinessperspective,howmucharethefollowingfactorsdrivingyourecosystemstrategy?

SupplyinganEcosystemisaMajorRevenueGrowthDriver

14

Consumer42%

Supplier22%

Both35%

Businessderivedfromecosystems

Today 16%In2years 22%

Annualgrowthof19%

RolesinEcosystem

Q.Withinyourprimarydigitalecosystemareyouasupplierofservices,aconsumerofservices,orboth?Q.Approximatelyhowmuchofyourbusinessreliesondigitalecosystemstoday,andexpectedin2years?

InterconnectionEcosystemsAretheUnderpinning– AndTheyDirectlyAddressIndustryChallenges

40%19%

28%36%

26%26%

13%32%

48%32%

27%41%

31%31%

37%37%

47%35%

23%42%

MovingtoIaaS

Customeranalytics

Collaboratingwithpartners

Algorithmiccontent

Secureconnectivitytothirdparties

Critical Veryrelevant

15

Banking

Media

Automotive

Software

ITServices

Q.Foreachofthosechallenges,howrelevantdoyouthinkasecureconnectivityframeworkthatconnectedyourorganizationtothirdpartieswhilebypassingtheinternetcouldbetosolvingthem?

16

WhatDoesaSuccessfulInterconnectionEcosystemLookLike?

Geodiversity:Multi-countryfootprint

Robust:faultmonitoring

Programmable:APIaccess

Sustainable:long-termfocus

Secure:end-to-endencryption

Q.Howimportantdoyouthinkitisthataplatformlikethisprovidesthefollowingcapabilities/features?Q.Howimportantdoyouthinkthefollowingcharacteristicsareofthecompanythatoperatestheplatform?

NeutralInterconnectionPlatformsAreAlreadyaTop-TwoChoice:WatchThisSpace...

Letoutsourcerdecide,11%

Joinanindustry

cloud,13%

Useatelco'smulticloud

platform,19%

Buildsolutionsonaneutral

interconnectionplatform,28%

Standardizeon1-2hyperscalers,

30%

17Q.Overall,whichofthefollowingapproachestobuildingecosystemsormulticloudenvironmentsdoyoufeelismostappropriateforyourorganization?

Conclusions

1. Industriesfaceuniquechallengesintheirdigitaltransformation.

2. Technologiesthataddressthosechallengesandenableinnovationarequicklybecomingmainstream.

3. Theyareaccessedwithinecosystems,thatarealsobecomingasignificantrevenuedriver.

4. Neutralinterconnectionplatformsareapreferredlocationtobuildthoseecosystems.

18

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JamesEibisch

+442089877114

jeibisch@idc.com

@jeibisch_idc

ResearchDirectorEMEATelecommunicationsandNetworkingGroup

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