What’s Hot in the ICT IndustryWhat’s Hot in the ICT Industry

Trends, Opportunities, and Challenges through the Eyes of Trends, Opportunities, and Challenges through the Eyes of

Key Players in the Sector Key Players in the Sector

May 2012May 2012

Key Players in the Sector Key Players in the Sector

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Table of Contents

Ø About this Market Insight

Ø Hot Topic Thought Leader

IntroductionIntroduction 5-75-7

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7

What’s Hot in 2012What’s Hot in 2012 8-178-17

9

10

11

Ø Key Perspectives on Growth in ICT in 2012

Ø Market Highlights for 2012

Ø What Participants see as Hot Topics in 2012

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11

12

15

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Ø What Participants see as Hot Topics in 2012

Ø Convergence with other Industries

Ø Global Hot Spots in ICT

Ø Four Big Predictions for 2012

About Frost & SullivanAbout Frost & Sullivan 17-2217-22

Introduction

5

About this Market Insight

Based on a survey of several thousand key companies conducted across Europe in December 2011, this Market Insight highlights the hot topics for growth that have been identified in the ICT sector for 2012 and beyond.

Data and opinions of key stakeholders, combined with analysis and commentary from Frost & Sullivan industry experts, have been used to present key market highlights, hot growth topics, global and regional hot spots, areas of market convergence, and bold predictions for 2012.

In this study, a summary of the highest growth areas for the ICT industry is presented.

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Adrian Drozd – Hot Topic Thought Leader

Functional Expertise

12 years’ of line of business operations experience. Particular expertise in:

- Team and project management / leadership

- Business services operations

- Developing and implementing business strategy

- New product launch and geographic expansion

Industry Expertise

� 10 years’ of analytical experience in the telecommunications and digital media industries, spanning coverage of areas including

- ICT in vertical markets

- Telecoms industry dynamics

- The digital entertainment ecosystem: from device to content delivery

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Adrian DrozdResearch Manager &

Principal Analyst

Frost & SullivanEurope

- The digital entertainment ecosystem: from device to content delivery

What I bring to the Team

� Strong analytic and project management skills

� Team and project management

� Telecom business services experience

Career Highlights

� Experience working for the following leading research firms:

- Canalys (Senior Analyst, Digital Content Analysis)

- Datamonitor (Senior Analyst, Media & Broadcast Technology)

Education

BSc in Geography & Statistics from Exeter University

What’s Hot in 2012

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Key Perspectives on Growth ICT in 2012

2Priority growth regions are CEE and Russia.

Then almost equally weighted interest in

Mid-East, APAC, China, India and Turkey.

Disruptive technologies, the convergence

1Companies’ primary focus is mature

markets: Western Europe and North

America.

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3Disruptive technologies, the convergence

of IT and Telecom and Cloud Services are

perceived as the 3 biggest opportunities.

4The major threat to short-term business is

considered the on going commoditisation

affecting core products and services.

5The three key industries that ICT players

track are: Automotive & Transportation,

Energy and Healthcare.Source: Frost & Sullivan analysis.

Market Highlights for 2012

• Economic environment continues to be a challenge, particularly as commoditisation continues to affect the

performance of core lines of business.

• Price-based competition continues to be a core tactical imperative for most companies in most sectors – this is

driving continuing focus on cost optimisation efforts.

• From a strategic perspective, the push for innovation continues unabated – many companies are exploring

vertical-market opportunities in this context, particularly in areas like Financial Services & Payments, Energy &

Key Market Highlights

10

vertical-market opportunities in this context, particularly in areas like Financial Services & Payments, Energy &

Utilities, Automotive & Transportation. This is bringing convergence back to the forefront.

• Disruptive technologies (including devices) and business models are a key consideration for most players – the

pursuit of innovation is increasingly about understanding how to create value through technology that leverages

an ecosystem of partnerships.

• Understanding how to monetise convergent and disruptive innovations is the next big challenge. Thus, the

industry is watching developments in the Analytics space as well as how the market for Payments is evolving.

ICT Top 10 Hot Topics

Rank Market Topic Popularity: How Often Topic

Selected in Top 3 Hot Topics

1 Disruptive Technology & Business Models 19%

2 Momentum in Cloud Services 14%

3 ICT as a Smart Enabler & Vertical Market Opportunities 13%

4 Continuing Convergence between IT and Telecom 12%

5 Developments in M2M and IoT 9%

ICT: Identification of Hot Topics (Europe), 2012

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5 Developments in M2M and IoT 9%

6 Commoditisation of Core Products & Services 8%

7 Payments: NFC and Beyond 7%

8 Social Media 5%

9 Data Analytics, Privacy & Security 5%

10 Sources of Industry Innovation 5%

Source: Frost & Sullivan analysis.

ICTConvergence with other Industries

Key Industries Tracked in Addition to Company’s Core Markets (Europe), 2012

Core Market Cross-interest 1 Cross-interest 2 Cross-interest 3 n

A&D Security 50% ICT 29% Electronics 24% 42

A&T Electronics 24% ICT 19% EPS 12% 86

CMF A&T 40% EBT 36% EPS 30% 53

Electronics M&I 53% EPS 47% IPC 47% 15

EPS EBT 32% IPC 21% A&T 15% 73

12

Source: Frost & Sullivan analysis

EBT EPS 58% ICT 15% M&I 15% 26

HC CMF 18% ICT 14% M&I 8% 90

IPC EPS 74% A&T 41% EBT 26% 27

ICT A&T 30% EPS 24% HC 21% 66

M&I EPS 25% EBT 25% IPC 25% 8

PPE A&D 17% CMF 17% EPS 17% 12

Security ICT 39% A&D 33% EBT 33% 18

A&D = Aerospace & Defence

A&T = Automotive & Transportation

CMF = Chemicals, Materials & Food

EPS = Energy & Power Supplies

EBT = Environment & Building Technologies

HC = Healthcare

IPC = Industry & Process Control

ICT = Information & Communication Technology

M&I = Measurement & Instrumentation

PPE = Personal Protective Equipment

ICTEnabling applications in Vertical industries is a key growth opportunity

SMART LIVING

SMART PUBLIC SPACE

Urban Planning

Retail

AutomotiveHealthcare

Electric Vehicles

Financial Services

13

*****

Solar PV Cells

Virtual Shopping

Travelling Wave Reactor (TWR)

Morphing

From 2D to 3D HDTV

Consumer Electronics Energy Biotechnology

ICTThe level of complexity implied in this transformation means everyone lacks a complete understanding

Convergence

IT-Centric Services

IT Consulting

IT Implementation

IT Outsourcing IT TrainingIT Support

Business-Centric Services

BPO Supply Chain BPO

Managed Services

Security HostingStorage

Finance & Accounting BPO

Application

TCO Selling with long-term contracts

Selling based on

Service-based

Outsourced

relationship� Complete outsourcing of the

Telecom and IT Infrastructure

Relationship-based� Strategic partner to the

customer, and not a

"utility" service provider

IT provider centric competition

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Data Services

Convergence Services

Professional Convergence Services

Managed Convergence Services

Voice services

Communications Services

Broadband & Media

Wholesale Voice

Transport Services

Wholesale Bandwidth

based on Features

Selling onPricing with short-term

contracts

Basis of selling

Infrastructure-based� Network coverage

� Direct presence

� Throughput

� Reliability

Service-based� Customer service

� SLAs & Quality of service

� Value added services

Basis of Service Offerings

Network Provider centric competition

Service Portfolio

Customer Mix –SME vs. large

Solution Selling

SLA management

Domain Knowledge

Global Hot Spots in ICT

ICT: Global Hot Spots (World), 2012

• Cloud Computing gaining traction

• Analytics leading to new revenue streams

Russia

EuropeNorth America

China

• Closing digital divide for high-speed broadband

• Mobile payment solutions come to the fore – NFC

• EU regulation: boost to broadband, M2M and beyond

• Significant expansion in both LTE networks and device availability

• Continued expansion into

European and North

American markets

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Source: Frost & Sullivan

The Middle East

Africa

Latin America

APACIndia

• Regional integration for

communication platforms

across Africa

• Terrestrial bandwidth

connectivity

• Value added services on the

back end of infrastructure

development

• Growth in infrastructure-

intensive services

• Growing consumer affluence

drives demand

• Mobile advertising

• Operational improvement/

transformation focus

• Valued added mobility

solutions

• BPO and contact centre

solutions

• Visual computing

• Visual analytics and

business

intelligence

• Smart Cities

Four Big Predictions for 2012

2Social network infrastructure will drastically change the way that personal data is handled; security and private data protection concerns will come to the fore.

1Machine-to-Machine will move beyond its core regulatory driven roots to encompass new vertical market opportunities such as home energy management, logistics, consumer electronics, smart cities and healthcare.

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3In 2012, the foundation will be set for a web-based platform to be the next big player to challenge Google and Apple in the mobile OS space.

4Successful entry of ICT companies as providers of vertical market specific solutions across Europe, e.g. as Smart Energy Technology Enablers.

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