Collaborate With or Compete Against Digital Giants
The physical world of automobiles, homes, healthcare and fitness, and the workplace are increasingly being connected. As this happens, digital giants such as Apple and Google are seeking to make these physical domains a part of their digital ecosystems.
Gartner has ranked the top 100 largest tech companies worldwide, based on their revenue across IT (excluding communications services) and component market segments. The Gartner Global Top 100: IT is showing a shift from the Nexus of Forces (mobile, social, cloud and information) to digital business as the driver of IT purchasing.
“The needs of IT buyers are shifting. CEOs are focused on growth and are more focused on realizing business outcomes from their IT spend,” said John-David Lovelock, research vice president at Gartner. “The Nexus of Forces has been the focus of attention for many years, however, the impact of digital business is giving rise to new categories.”
“These next generation offerings, such as the Internet of Things (IoT), blockchain and smart machines, are fueled by business and technology platforms that will be the ‘engine’ for brand new categories of revenue. The shift is now on business activities and not purely technology: it is how technology is disrupting and enabling business,” said Mr. Lovelock.
This shift shows up in the top five vendors in the Gartner Global Top 100: IT — Apple, Samsung, Google, Microsoft and IBM.
In the figure below, the size of the bubble represents the 2016 IT revenue for these vendors, with blue representing growth and gray representing decline. Mobile phone revenue is down for three of the top four vendors that sell mobile phones. Servers and storage is similarly down, as are PCs/ultramobiles/tablets. However, the segments that support digital business — Internet-based IT products and services, digital media services and IT services — showed growth.
Digital Giants will leave their mark in 2017
As enterprises increasingly digitalize their products and services, digital giants (Google, Apple, Facebook, Amazon, Baidu, Alibaba and Tencent) can become involved in, or even take over, the digital experience.
So far, the focus of the digital giants has mainly been in the consumer, citizen and employee world. Digital business, however, is impacting all areas. For example, the industrial internet is a trend for asset-intensive enterprises to digitalize large assets and factories, and supply chains. Because the digital giants have not been involved in these B2B areas, there is opportunity for others to take the lead. A leader in the industry could create a digital ecosystem to coordinate how the combined airline, airport, aircraft engine — essentially the aviation sector — could work together to keep flights on time and operational costs lower. Cities could create a digital ecosystem to bring together public- and private-sector players to fulfill the vision of the smart city.
“In B2B industries, the opportunity to be a “digital giant” of an industry is up for grabs and remains uncontested by the digital giants in the consumer world,” said Mr. Lovelock.
Gartner clients can learn more in the report “Market Insight: Gartner Global Top 100 IT Vendors in 2016.” This report features Gartner’s ranking of IT companies by their revenue across IT (excluding communication services) and components market segments to help technology business unit leaders with their business planning, investment prioritization and competitive benchmarking. It is based on Gartner Vendor Revenue Profiles, which represent Gartner’s analysis of a vendor’s reported revenue mapped to Gartner’s market segmentation.
Learn more about digital disruption in the Gartner Trend Insight Report “Digital Disruption and the New Disruptors: Recognize, Prioritize and Respond,” a collection of research analyzing the impact of digital disruption on enterprises and technology service providers.
Learn more about how to drive digital innovation to the core of your business at Gartner Symposium/ITxpo 2017. Follow news and updates from the events on Twitter using #GartnerSYM.