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Industry Trends


A Better Connected World: Driving Global Progress

Information technology has taken human beings from the industrial age into the digital age. Digital Age 1.0 – represented by personal computers, the Internet, and mobile phones – has changed how we live and work. Now, the Internet of Things (IoT), Big Data, artificial intelligence (AI), Internet+, and other new technologies and industries are ushering in Digital Age 2.0, a fully connected age.

Metcalfe's law reveals the link between a network's size and its value: The larger a network is, the more value it creates. In a fully connected age, networks are no longer just physical. Networks now combine digital connections, both physical and virtual, thus greatly increasing network value. In fact, networks and data are becoming a new basic resource of production, alongside land, tools, and labor. In the future, we will discover whole new lifestyles, new businesses, and new economic models.

Connectivity as a basic human right

The heartbeat of humanity will soon be as much digital as it is physical. The mobile Internet is a game changer for billions of people, both at work and in their personal lives. E-commerce is weaving its way into the very fabric of our lives, as the physical world and the digital world draw closer together. Via a plethora of phone apps, the basic necessities of life – clothing, food, accommodation, and transportation – are just one tap away.

As our reliance on networks grows, we are increasingly rendering our physical characteristics into digital forms, and storing, transmitting, and utilizing them online. Our cyber heartbeat – a unique multidimensional identifier of our online presence – will be with us throughout our lifetime, just like our physical heartbeat. We will be dependent on networks for emotional connections and for the resources of modern-day life. Connectivity will become a basic human right, and will be readily accessible to all. Over the next five years, there will be 1 billion new voice users, over 6.7 billion wireless broadband users, and 300 million new wireless home broadband connections around the world.

Connectivity as an enabler to help enterprises transcend the limits of capacity and resources

In the shift toward a digital economy, ICT technologies are penetrating deeper into traditional industries as they go digital. And, as ICT technologies are being adopted for production systems, they are reshaping enterprises in terms of O&M, organization, and innovation. In the fully connected age, what matters most to an enterprise will be their strengths rather than their weaknesses. Enterprises will focus on developing their greatest expertise and delivering it as a service; they will make up for their relative weaknesses through outsourcing. From their inception, future enterprises will be borderless, with a global presence.

Fully connected enterprises will organize their business around industry cloud services, which are specially designed to address the unique business systems of each industry. Enterprises will gravitate toward hybrid cloud architecture. With cloud services, enterprises can be better positioned to innovate their offerings, collaborate with industry partners, and boost their operating efficiency.

An example is the banking industry. As finance increasingly moves online, the banking industry will evolve to Bank 3.0, where customers – not financial service providers – will have the upper hand in deciding what services are offered and how. New digital strategies will mean that ICT systems are no longer a supporting tool for bank operations; bank operations themselves will take place in the cloud.

At the same time, telecom carriers will develop new, flexible business models to support everything as a service (XaaS), and establish digital ecosystems. They need to leverage virtual infrastructure and operations platforms in order to manage and share both services and resources from end to end. Cloud data centers will deliver critical support in this aspect.

Connectivity as a strategic engine for national economies

To drive sustainable economic growth, both developing and developed countries have launched national ICT strategies or development plans for their ICT industries. These include China's Internet+ and Made in China 2025; Germany's Industry 4.0; Industrial Internet in the US; the Digital Malaysia program; Indonesia's broadband plan; Smart City in the Netherlands; and Smart Nation 2025 in Singapore. According to a 2015 report by the ITU, 148 countries have published national ICT strategies, bringing ICT closer into industries.

The standards for broadband have been redefined globally. In early 2015, the US Federal Communications Commission defined a new broadband standard, lifting the minimum speed of broadband from 4 Mbit/s to 25 Mbit/s. In November 2015, the UK broadband regulator Ofcom officially set its minimum speed for ultra broadband to 300 Mbit/s. Even Thailand, a developing economy, views speeds of 10 Mbit/s as "yesterday's broadband". Today, more than 50 carriers around the world are offering gigabit broadband services. By 2020, all European families will have access to broadband of 50 Mbit/s or even higher. The same can be seen in urban China, and the country's most modern cities will have gigabit broadband.

A better connected economy is ready to change our world. Connectivity will fuel the modernization of the real economy, and create new types of virtual economy. The better connected economy will have six key features. First, real-time, accurate matching of supply to demand will become possible, making overcapacity a thing of the past. Second, resources can be efficiently utilized so they will no longer lay idle. Third, real-time data collection and remote data processing will help minimize resource waste. Fourth, the improved ability to quantify the value of information and a growing awareness of information sharing will end the dominance of money as the sole medium of exchange. Fifth, old economic silos will break down as innovation crosses the boundaries between industries. Sixth, user needs will become differentiated at the individual level, and one-size-fits-all mass production will become obsolete.

These waves of seemingly mysterious changes in the ICT industry actually give us clear pointers to the future. Humanity will soon enter a fully connected age, where the heartbeat of humanity will soon be as much digital as it is physical. With full connectivity, enterprises in every industry will digitize their business systems, and those who fail to go digital will perish. Additionally, more countries will launch national ICT strategies to embrace the better connected economy. Against the backdrop of these dramatic changes, the ICT industry is set to transform in five ways: Devices will be more personal and more connected; smart networks will be re-architected; platforms will migrate to elastic clouds; the industry ecosystem will become more open and enable shared success; and the user experience will be scenario-driven. About 1,000 years ago, a Song Dynasty poet captured the turbulence of our changing times: Billowing clouds surge into dawn's hazy mist; sails toss and dance as the Milky Way recedes.

Better devices: more personal and more connected

Device vendors will put users at their heart and redefine their value for users. Over the next few years, a consumer-centric business revolution will take place as we move toward smart lifestyles in every scenario. Three consumer trends will shape this revolution. First, consumers born in and after the 1990s – known as digital natives – will define future customer needs. Second, middle-class consumption will tilt toward healthcare, quality lifestyles, personalization, and social identity. Third, there will be more independent female consumers with strong buying power. Focusing on the new generation of consumers, device vendors will create greater value for users by providing personal services through smart devices that offer convenience, customization, and seamless mobility across scenarios.

Wearables are cutting the user-device distance down to zero to create greater value. From mainframe computers and personal computers to laptops and mobile phones, computing devices have come closer to the user, becoming richer sources of value. Now, wearables have brought the distance down to zero. Wearables for health & fitness, identification (e.g., for micro-payments and smart keys), ambient awareness, and enhanced interaction, will create value like we have never seen before. Wearables will generate more value if they are supported by more innovative technologies in digitization, miniaturization, and natural interaction.

Smart home products are getting connected. Most smart home products remain isolated from each other. This has made interconnectivity and information sharing impossible, and market growth has been slow. Smart home devices are now being connected in order to better serve users yearning for products that are simple, personal, and environmentally friendly. Digital technology can get devices online, and smart home platforms can connect devices to each other. Many vendors are now building smart home platforms and opening up their communications protocols and software development kits so that third-party devices can access them. Vendors are thus building an industry ecosystem to support smart homes.

Better networks: re-architecting smart networks

A Better Connected World will require re-architected telecom networks. It is estimated that, by 2025, the number of connections worldwide will grow to 100 billion, driven by the demand for full connectivity of people, things, and businesses. Applications in vertical industries will need different levels of network connectivity. For example, smart meters and smart buildings will require networks with deep indoor coverage, low power consumption, and minimum cost. The Internet of Vehicles and smart transportation will need networks that offer wide coverage, low latency, and high mobility. Industrial control systems will demand super high-density connections with ultra-low latency.

Faced with complex demands under diverse network scenarios, carriers will need new network technologies and architecture in order to move the industry forward. That is where 5G comes into play: It will support 100 billion connections, 1 millisecond latency, and speeds of 10 Gbit/s. SDN/NFV will help carriers establish an agile, open, and flexible network architecture, and build management systems that give them a global view for better management of their networks. With SDN/NFV, carriers can drive down costs, accelerate service innovation, and adopt new business models in which resources are deployed on demand and customers can purchase exactly the services they need.

The user experience in future networks will be Real-time, On-demand, All-online, DIY, and Social (ROADS). To deliver this experience, carriers are modernizing their networks and services, driving cross-industry and cross-border consolidation. The scope of the services which carriers can deliver is being redefined, and the service portfolio is shifting toward an organic combination of mobile broadband, fixed broadband, and digital content.

Better platforms: migrating to elastic clouds

The cloud platform will be a driver of ICT investment. In the digital age, many information services can be offered via cloud platforms, from basic lifestyle services to enterprise ICT services, from autonomous driving to AI. Extensive use of cloud services will become the new normal in enterprise ICT spending plans. With their capacity to centrally provide services and share massive data, storage, and computing resources, cloud platforms will deliver significant gains in service efficiency. And the larger the user base, the lower the cost, which means better returns on investment. But clouds will not just be a form of service provisioning: Cloud platforms can also support entire business processes, from planning and design to development. This extended functionality of cloud platforms will be a further spur to enterprise ICT investment.

Carriers – with their extensive broadband networks and ability to deliver local services – can provide enterprise customers with the hybrid cloud services they need to stay competitive over the long term. Demand for cloud data centers will grow rapidly following the widespread adoption of massive data storage, online analytics, and cloud services. By 2020, investment in cloud-based IT infrastructure is expected to exceed non-cloud IT investment, meaning that cloud will soon be the primary IT infrastructure market.

Better ecosystems: openness and shared success

Open ecosystems are reshaping the landscape in the ICT industry. As technologies and business models continue to evolve, enterprises can no longer succeed on their own. That is why cooperation across an open ecosystem is important: Upstream and downstream players should innovate together to develop superior products and solutions for customers. Ecosystems themselves will evolve from being semi-open or alliance-based, into fully open platforms where all players can socialize and share.

Enterprises in all industries – both traditional sectors and the emerging ICT industry – are embracing new technologies and business models like never before. They are establishing new ecosystems, where all players can collaborate openly to drive the digital transformation and redefine the industry landscape. Different ecosystems will also interact with and influence each other, further restructuring each industry. Leading ICT companies are losing no time in creating open API platforms, which allow them to share their capacities and services with third parties and partners. APIs are a new type of product that enables ICT companies to monetize their ICT capacity. Meanwhile, software vendors can offer software as a service (SaaS) to better serve individual users and SMEs. More and more carriers are building their platform-based open ecosystems, in the hope of taking on the role of service enabler or service creator. And open-source hardware will open up excellent hardware development platforms to makers – tech enthusiasts fond of creating new devices. They will catalyze innovation in ICT hardware.

Better user experience: scenario-driven

In the fully connected age, the user experience will be driven by usage scenarios. Cloud-pipe-device synergy, coupled with Big Data and AI, will make it possible to identify the scenarios in which users are involved, and then deliver the most desirable services by utilizing integrated resources from the entire ecosystem. These services will include digital assistants that can help coordinate your life and work schedules anytime and anywhere; virtual experiences, which allow you to be immersed in the outdoors from the comfort of your own home; and hassle-free lifestyle services, which deal with minor issues so that you can spend your time more meaningfully.

In these service scenarios, video will be a key part of the user experience in the fully connected age. As well as entertainment, video will find wider applications in production and the public sector: public safety, transportation management, VIP customer services, and remote fault diagnosis. 4K and 8K HD video is growing in popularity, and users are spending more time watching video each day. All these trends will make video a new key engine for carriers' revenue, so carriers are now set to make serious investments in video.

Video applications across diverse scenarios are becoming one of the basic metrics for assessing a carrier's network experience. Video data already makes up nearly 70% of all traffic across IP networks, and it will fuel network expansion and transformation. Over the next five years, video will drive a thirty-fold increase in mobile data traffic. Cloud computing will change how multimedia content is processed and transmitted, with video clouds at the core of global video delivery networks.

We live in an information age, brimming with new ICT technologies: 5G, virtual reality, augmented reality, heterogeneous multi-core processors, non-volatile storage media, graphene, chip-level optical interconnects, cloud-based security systems… These advances are the engines for the exponential growth in the number of connections, and in their value; and these advances will reshape business models across many industries and drive global progress. As the Song dynasty poet said: The mighty roc is taking to the skies. The entire ICT industry shares this vision: Together, we can build a Better Connected World for everyone.