On October 6th 2015, Ovum released the results of its extensive survey conducted with all types of digital ecosystem players. Invest Ottawa is pleased to share the highlights of Ovum’s view and key recommendations:
Connectivity will remain important to 2025: Next-generation connectivity, especially 5G, to be a leading opportunity. Next-generation broadband was also in the top four, as was Internet of Things/machine-to-machine (IoT/M2M) which promises to usher in a new era of hyper-connectivity. Cloud services and IoT topped the list of services that digital players expect will grow the fastest, while cloud services and broadband connectivity are still expected to contribute the most to revenues in 2025 along with digital media.
Telecoms service providers will lag in benefiting from the digital economy: Content owners and Internet platform providers such as Google to benefit most from the digital economy to 2025, rather than telecoms service providers.
Agility and ability to partner are seen as the most critical success factors: An overwhelming number of respondents listed these two factors as critical to attaining profitability by 2025. Several digital economy players recognize they will not be able to succeed on their own in 2025 but will belong to an increasingly complex web of interconnected partners and competitors. Telecoms service providers and vendors, however, rated agility far more highly than partnering.
Technology shifts are seen as the top disruptor: These shifts are seen as particularly disruptive to the healthcare and telecoms industry verticals. Among the types of digital economy players surveyed, telecoms service providers and their suppliers, the network equipment and component vendors, are seen to be most at risk in revenue terms. This is due to foreseen difficult times among telecoms service providers and vendors.
Subscription models will change but may not be sustainable: The subscription-based (per-service) business model that is dominant for consumers today is expected to fall away by
2025, and advertising-funded and pay-per-use/pay-per-view business models are seen as likely to gain. Respondents, surprisingly, do not expect that to happen for enterprises. Ovum does not believe, however, that the advertising-funded business model will be sustainable.
Recommendations
Fear of technology and competition should not swamp broader perspective on the future of the digital economy: The digital economy is increasingly bringing together diverse players, providing new types of competitors and both threats and opportunities for more-established players. Much of the disruption will be caused by emerging technologies, which are seen as the greatest threat to traditional players today.
Warning bells are ringing for vendors and telecoms service providers: The survey results reflect the degree of concern that employees of today’s telecoms service providers and vendors (i.e. equipment and component suppliers) have over the future of the telecoms industry. Senior management in both segments must acknowledge those concerns and make plans to leverage the changes that their employees anticipate will take place to 2025.
Telecoms players need to note differences in outlook versus non-telecoms digital players and vice versa: The results show a time of transition, as non-telecoms players influence industry outlook on opportunities and threats to the digital economy in 2025. Often the outlook of non-telecoms players was quite different from that of traditional telecoms players. As convergence across telecoms, IT, and media accelerates and digital players increasingly seek partners, both sides will need to take note of such differences.
Source: Ovum – Digital Economy 2025 Survey, Optimism about 5G and pervasive connectivity – October 6th, 2015