IDC: Embrace cloud and mobile, or get left behind

July 14th, 2015 | by Aaron Tan
IDC: Embrace cloud and mobile, or get left behind

With cloud computing and mobility on the minds of most CIOs today, you’d expect IT service providers to double up on building their capabilities in those areas.

Yet, a recent Microsoft-commissioned study by IDC revealed that a number of them still question the need to move up the value curve and invest in building future capabilities.

Perhaps the reality hasn’t sunk in for this group of IT service providers. Or, maybe they are trying to resist change for as long as they can.

In any case, countless reports have been pointing out the same thing for a few years now – that spending on cloud and mobility will only continue to grow.

IDC, for one thing, is anticipating staggering growth opportunities for IT service providers betting on cloud and mobility solutions and services in the Asia-Pacific region.

The public cloud services market in region will double by 2018, growing from US$3.2 billion in 2014 to US$7.1 billion by 2018.

Mobility, too, is expected to grow by 46 per cent from US$20.3 billion in 2014 to US$29.1 billion in 2018.

Together, both cloud and mobility will command about US$36.2 billion in revenue potential for IT service providers in the region by 2018.

Those that have been riding the cloud and mobility wave are already reaping rewards.

For example, Microsoft’s cloud-oriented partners that derive more that half their revenues from cloud services make 1.8 times more revenues and 1.4 times more gross margins compared with non–cloud oriented partners.

In the mobility space, independent software vendors, or ISVs, tend to be more profitable and can grow their margins by 55 per cent because they are able to leverage the SaaS model of delivery.

These IT service providers tend to be the more forward-looking ones that have stayed ahead of the curve.

One of them is Vmob, which has developed a mobile marketing platform used by the likes of McDonald’s to enhance in-store experience through personalised content marketing.

As Mayur Sahni, senior research manager at IDC Asia/Pacific, puts it: “Given the increasing demand for cloud and mobile services, the time is now for partners to jump on the bandwagon, or risk getting left behind as the industry transitions to this new reality.”

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