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Top 10 Strategic Technology Trends for China in 2015-2016
Published: Sep 23,2015Shanghai, China
Gartner has identified the 10 most important technology trends for China in 2015 and 2016. Internet businesses are key investors across the top 10 trends, led by the Baidu, Alibaba Group and Tencent (BAT) companies, while government plays an important role in driving and improving China's IT environment.
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China is the third-largest market for enterprise IT spending, after the U.S. and Japan, according to Gartner forecasts. Spending by Chinese enterprises on technology products and services is forecast to reach $146.4 billion (RMB 913.3 billion) this year, climbing 6.5 percent to $155.8 billion (RMB 972.4 billion) in 2016.
According to Amy Teng, research director at Gartner, China is on track to become a major force in both the use and creation of IT; however, it faces a range of challenges, such as global political issues, when it comes to adopting some technologies. The government plays an important role in driving and improving China's IT environment. With the "Internet Plus" initiative announced in March 2015 as a driving force, many conventional businesses will connect to the Internet initially, followed by digitalization of IT systems, to increase their competitiveness.
"CIOs must build flexibility into their IT systems, so they can deal with both the challenges from a rapidly moving and frequently changing digital business environment in domestic China, as well as support the increasingly widespread footprint of Chinese business offshore," said Ms. Teng.
While the list is similar to the global top 10, China's progress is inconsistent due to the local competitive landscape, industrial environment, technology maturity and even cultural differences.
1. Computing Everywhere Is Changing How People Experience Their Lives in China
The mobile Internet has become an important part of Chinese consumers' daily lives, with more than 1.4 billion mobile devices in use. The "computing everywhere" trend shifts the focus from individual mobile devices to the mobile experience of individuals surrounded by an ever-increasing number of devices — some that they carry with them and some in the environment around them. This trend, along with the Chinese government's effort to upgrade its industries through the Internet Plus initiative, is driving computing everywhere.
2. Internet of Things (IoT) Brings Computing Power to All Devices
The Chinese government is driving projects, such as smart cities and IoT, and Internet companies are promoting their smart device ecosystems. The government and consumer markets represent the two most promising opportunities for IoT products. Maturity in Chinese enterprises, however, is still below the average level of mature markets, so wider adoption and alignment will take longer. On the other hand, Chinese enterprises can have more agile strategies for IoT asset investment because most do not have much legacy IT.
3. 3D Printing Is Approaching a Critical Inflection Point
Advances in materials science and 3D printing methods, combined with lower-cost 3D printers, have brought the technology to a point in which it is having a greater impact across more industries and is reaching out into the consumer space. China's opportunity for 3D printing is to leverage its position as a global manufacturing center and drive demand of 3D printers. It is seen as a potential technology to create new opportunities for vendors, although the adoption of industrial-grade 3D printers remains lower than consumer-grade 3D printers.
4. Advanced Analytics Is on the Rise, Improving Business Operations and User Experiences
Advanced analytics (predictive and prescriptive knowledge) is on the rise, with strong promotion by IT vendors and increasing adoption by organizations in China. The Chinese government's Internet Plus program targets accelerated development of mobile Internet, big data, cloud computing, and the emergence of IoT and information technology/operational technology (IT/OT) converged manufacturing. As one of the critical technologies to support the growth of these themes, analytics is expected to move from a focus on historical data to a focus on more predictive and prescriptive data.
5. Context-Rich Systems Provide Agility and Responsiveness for Business Operations
The explosion of rich customer data collected from Internet activity, connected homes and IoT devices will make context-rich systems a reality. Context-rich solutions take human interactions to the next level by interpreting user inputs in relation to connected events or particular conditions. China's three major Internet giants (BAT) are driving development of context-rich systems to transform the way a consumer brand and/or manufacturer-retailer networks engage with their customers.
Gartner predicts that by 2015, context-aware promotions will comprise 10 percent of convenience-item promotions among consumer goods manufacturers in developed markets. With the rise of online commerce in China, Gartner expects China will catch up with this trend in 2016.
6. Smart Machines Extend Our Ability to Address Complex Situations
Smart machines are a hot topic in China since the government and enterprises have recognized both the challenges from increasing labor costs and the risks posed by an aging population. Although commercialization is still at an early stage in China, many types of smart machines are emerging. Much interest comes from manufacturing, mining, logistics, automotive, healthcare and other heavy labor-intensive fields. Smart machines are now seen as a "superclass" of emerging technologies that can help Chinese enterprises transfer core competencies from a labor cost focus to a high-technology focus.
7. Cloud Computing Is a Technology That Companies Cannot Afford to Miss
According to Gartner, by the end of 2014 China's public cloud services market reached almost US$7 billion, and is forecast to grow to US$20.7 billion by the end of 2018. With such a large mobile Internet population and a fast-growing market size of public cloud services, most Chinese enterprises have set up plans to deploy cloud computing to pursue business growth in Internet-driven, hyperconnected digital and e-commerce businesses.
Enterprises in China have the challenge of tackling the low average broadband connection speed. Public cloud service providers are making greater investment in network infrastructure to tackle this challenge. Although trust in public cloud remains low, the shift from client/server to cloud/client architecture is unavoidable and developing in China. As more cloud service providers have been building their reputation to resolve the concerns of both trust in the cloud and the fast-evolving public cloud maturity in China, public and community clouds will become the centers for business interactions and transactions. The cloud/client architecture will become the new norm for enterprises.
8. Software-Defined Architecture Reinforces Data Centers to Support Digital Business
Enterprises today are keen to find new approaches that can build their data centers with greater flexibility and agility, so they can agilely transform IT to adapt to challenges of competitive digital business. This is being reinforced by software-defined architecture (SDx), whether it be infrastructure, networking, storage or data centers.
In China, SDx is not developing equally. It is progressing at different speeds and maturity, based on the competitive landscape externally or operational requirement internally. Software-defined networking (SDN) is one area that is widely adopted and is maturely applied by the companies relying heavily on the Internet, such as e-commerce companies and cloud service providers.
9. Web-Scale IT Will Help Business Keep Pace With Digital Innovation
Web-scale IT is a pattern of global-class computing that delivers the capabilities of large cloud service providers to the enterprise. China's three major Internet companies (BAT) are expanding their business to cloud services. They are taking a different approach to building their IT infrastructure, and designing their development and operation processes, rather than using conventional methods that most enterprises are taking today. This will disrupt the service delivery capability of traditional IT in terms of scalability, cost and agility. As China has the world's largest mobile population, Chinese enterprises must embrace Web-scale IT to support their growing digital business needs.
10. Digital Business Demands Risk-Based Security and Self-Protection
Security and risk management has been a major challenge in China. This is due to its position as the world's largest, versatile growth engine with a large population of mobile and Internet users, various types of endpoint devices, multiple ecosystems and growing numbers of companies being digitalized. These factors lead China to high Internet exposure externally, making it a target of a high number of network attacks.
According to Gartner's 2014 CIO Survey, 90 percent of Chinese CIOs agree that while digitalization is bringing new opportunities to the business, it is also creating new and higher levels of risk.
As a result, security and risk management should be addressed from two complementary strategies: risk-based security (accepts the reality that risk generally cannot be reduced to zero) and application self-protection (security built into application design and development from the beginning in a runtime environment).
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