28 February 2011 - "ICT Industry Outlook, Trends and Key Programmes" by RADM(NS) Ronnie Tay, Chief Executive Officer, IDA Singapore, at the SiTF ICT Business Forum
"ICT Industry Outlook, Trends and Key Programmes" by RADM(NS) Ronnie Tay, Chief Executive Officer, IDA Singapore, at the SiTF ICT Business Forum, 24 Feb 2011.
Ms Tan Yen Yen, Chairman of SiTF
Mr Vijoy Varghese, SiTF Business Outlook Organising Committee Chairman
Members of the infocomm industry
Ladies and gentlemen
1. Good morning. I am pleased to be here this morning at this SiTF ICT Business Forum. While we are still early into 2011, I thought it might be useful to highlight the outlook of the ICT industry for 2011, survey the industry trends and landscape, and discuss the opportunities that lie ahead for us this year.
Positive Outlook for the Economy and Infocomm Industry Despite an Uncertain Global Landscape
2. In 2010, the world emerged from a major recession and witnessed a stimulus-driven economy. In the coming year, we will see how the economy will fare. The Economic Intelligence Unit (EIU)1 expects the global economy to expand by 4.1%, a decrease from the 4.8% expansion in 2010. For OECD countries, the growth is expected to be 2.3%, down from 2.9% in 2010. In contrast, the EIU expects a continued vigorous recovery for non-OECD countries, with the expansion expected to be 6.4%.
3. Despite the uncertainties, the outlook for the global IT industry remains positive. Global enterprise IT expenditure is expected to increase in 2011. IDC predicts a 6.8% growth from 2010 to US$1.65 trillion in 2011, and sees hardware expenditure to grow the fastest, followed by software, operations management and services2.
4. In Singapore, our economic growth in 2011 is expected to moderate to between 4 and 6% after a year that saw sharp GDP growth of 14.5%3. The outlook for Singapore's infocomm industry is certainly positive for the years ahead. According to IDC, Singapore's IT spending is set to grow 6.8% in 2011 and about 5.2% in 2012. IT hiring is also expected to be more robust, with Frost and Sullivan predicting Singapore's infocomm industry manpower growing at a Compounded Annual Growth Rate of 5.4% till 2015.
5. Singapore's infocomm industry continues to play a critical role in Singapore's economy, contributing 7.4%4 to Singapore's GDP as of 3rd quarter last year, with Value-Add growing at 13%. The infocomm industry also contributed to Singapore's global competitiveness as can be seen in major global ICT and e-Government rankings. In 2010, Singapore topped the IMD World Competitiveness ranking, up from third position in 2009. Singapore also moved up two notches to take second place in the World Economic Forum Global IT Report ranking and maintained third place for the WEF Global Competitiveness ranking. Singapore was also among the two Asian countries in the top 10 positions of EIU's 2010 Digital Economy ranking. In the recently announced 2011 Waseda University e-Government ranking, Singapore was top again, for the third year running.
Key IT Trends
6. To ensure Singapore's competitive edge in the infocomm landscape, we are continually scanning for key ICT trends, and see how we could capitalise on these trends for further economic growth. Developments in the international arena would give us insights on what the world is looking for, enabling us to appropriately position the industry for such opportunities.
ICT-enabled mobility and consumerisation of IT
7. The first trend that I'd like to highlight is no surprise to all of us. Smart mobile devices have penetrated our life so much that mobile is set to be the dominant interface to the Internet. In fact, preliminary 2010 fourth quarter data from IDC revealed that smartphone shipments have exceeded PC shipments, and this trend is expected to continue. The mobile Internet will continue to grow, with mobile users exceeding desktop Internet users by 20145. The mobile app market will also boom over the next few years, growing from US$6.8 billion in 2010 to US$25 billion in 20156. In Singapore, the ecosystem of players developing mobile apps and services is correspondingly vibrant. The various industry communities, such as the SiTF Wireless Chapter, Mobile Alliance and e27, all have players involved in mobile apps and services. Tagit, a local IT company, has developed an iPhone app for Standard Chartered Bank, enabling its customers to complete a cheque to anyone on their phone; within a few days, the recipient will receive a physical cheque from the bank in his letterbox7.
8. This phenomenon of mobility is expected to transform the enterprise further. More enterprise IT departments will be motivated to enable mobile devices to access all corporate applications, moving beyond just email and calendar access. Sybase reported that 90% of IT managers will implement mobile apps in the enterprise in 2011. We are already seeing some early developments in this space. Sybase has released a software package, called Afaria, to help administrators maintain better control over iPhones and iPads within their domain. Salesforce offers APIs and toolkits to help businesses extend applications they have built on Force.com to the iPhone or BlackBerry phones. Tagit has also developed an Intranet-based mobile service for use by Stanchart staff worldwide, enabling bank staff to stay connected with the bank on HR and admin matters, anytime, anywhere.
9. One underlying enabling technology for this shift towards enterprise mobile apps is of course cloud computing. According to Juniper Research, the size of the mobile cloud market is expected to grow 88% annually, from US$400 million in 2009 to US$9.5 billion in 2014, and enterprises will form three quarters of the market8. When smartphones and tablets eventually outnumber traditional assets connected to the corporate network, there will be a need to support an array of mobile devices connected to the corporate network through the cloud.
The World is Looking to Unlock the Power of Big Data
10. A second phenomenon is the growth of big data and the potential to unlock the hidden insights inherent in large and complex data sets. IDC reports that stored digital information has broken the 1 Zettabyte barrier (21 zeroes) in 2010. This number would grow 44 fold by 20209, imposing a strong demand on storage and network capacities.
11. With more sensors embedded in machine to machine systems as well as machine to people communication, we will see a spike in data exchange. Terradata believes that within the next five years, sensor data will surpass unstructured data from social media, and subsequently dominate by a factor of 10 to 20 times that of social media10. In the US this year, we will see users of Chevrolet and Cadillac car models having access to mobile apps that can provide diagnostic information and trends about the car - tyre pressure, engine oil level, fuel economy, how much time you have left on the parking metre.
12. Apart from unstructured data and data exchange between sensors, governments are also keen to unlock insights from the data they have, by providing data to the public in various forms. Developers and companies could then take such data and build web and mobile apps and services that are useful to the public. We count at least 14 other countries that have embarked on this journey, including Singapore. Our i-Singapore initiative allows Government's geospatial data to be mashed up with private and people sectors data, and four companies have been supported in this initiative. To encourage more demand for public sector data by the general public, IDA is partnering the Mobile Alliance to organise the AppVenture Challenge, bringing together developers, students, academia and enterprises in the mobile industry to develop mobile apps, including those that use government data. The apps competition lasts from 1 Feb 2011 to 15 Apr 2011 and is open to both individuals and enterprises.
Convergence of Technologies will Fuel Innovative Platforms, Business Models and Services
13. In the new knowledge economy, technologies, industry sectors, devices and content exist less in silos. With challenges getting more multi-faceted and the need to tie in multiple perspectives, we will see the convergence of these different realms, resulting in new products and services. The innovation that comes along with this convergence brings tremendous opportunities to our infocomm industry as it could lead to larger scale platforms, new business models and more value-added services.
14. One example of convergence is the coming together of social networking, business analytics and cloud computing, providing what is called sentiment analysis - real-time analysis and insights of what consumers are saying about products, services and policies using Internet scale resources. One of our local companies, JamiQ provides a social media dashboard for companies to monitor social media across Asian markets and languages. JamiQ uses advanced data mining and natural language processing technology to give businesses the critical insights businesses need for immediate and strategic decision-making11. In Sep 2010, it launched ReputationWatch, a solution tailored for SMEs to track and analyse real-time online conversations12.
15. Another example is social commerce - the convergence of social networking and e-commerce. Through group buying websites, consumers can now exercise their collective buying power online, helped by the host of services and social networks that make it easier to organise group purchases. The inspiration behind this business model is US-based Groupon, which negotiates discounts with participating merchants and sells the discount coupons to its subscribers - the deal is completed if the minimum number of sales of the discount coupons is met. There are several retailers that used this model last year. At the end of last year, Walmart used Facebook to run its own group buying offer, which got the 5,000 'likes' needed to make the deal happen within 24 hours13. Another example - Taobao in China sold 205 Smart cars in three and a half hours14.
16. Social gaming - gaming through social networking platforms - is yet another example of convergence, and there would be many more. Indeed, the convergence of technology and various sectors will provide industry with new strategic opportunities, and IDA would want to look at how to support that. Our various initiatives, including those pertaining to infrastructure, manpower, and industry and sectoral development can be leveraged in that regard. Let me now give an update on some of them.
Key Industry-Related Programmes for the Coming Year
17. We are on track to put in place a nation-wide, open access, ultra-high speed broadband network by mid-2012, with the Next Gen NBN already rolled out to more than 60% of homes and businesses in Singapore today. OpenNet and Nucleus Connect have been offering downstream operators a broad range of dark fibre and wholesale bandwidth services on a non-discriminatory, open access basis with regulated prices.
18. Various Retail Service Providers (RSPs) have taken advantage of these offerings, and to date, seven of them have announced retail plans over the Next Gen NBN. Collectively, these RSPs offer more than 30 Next Gen service packages for enterprise and residential users. Several of them have also differentiated themselves by packaging their new ultra-high speed broadband services with value added services such as online storage, high quality video based applications and cloud based software as a service solutions. IDA expects more service providers to come on board the Next Gen NBN in the coming months, to provide impactful and innovative Next Generation broadband services and applications for the public, private and people sectors.
19. IDA has also undertaken various programmes such as the Next Generation Interactive Multimedia, Applications and Services or NIMS and the Next Generation Services Innovation Programme or NGSIP to engage and encourage the formation of RSPs on the Next Gen NBN. As part of the NIMS programme to foster the development of video-based services, IDA and MDA launched a RFP last September for a platform to enable video-based content, applications and services over the Next Gen NBN and it is currently in progress. The second NGSIP call for proposal was closed in Dec 2010, with proposals ranging from interactive TV services to cloud-based gaming. We expect to award successful companies by March 2011.
20. On the wireless side, IDA is paving the way for a faster 4G rollout in Singapore, given that 4G, as the next generation of ultra high-speed mobile communication, will offer end users higher data rates and shorter latency. We will be re-allocating the 2.3 and 2.5 GHz spectrum for 4G as early as next year, and also allowing the three mobile operators to deploy LTE (Long Term Evolution) on their existing Wireless Broadband Access (WBA) and 2G mobile telephony bands. IDA will continue to monitor global developments and facilitate the deployment of 4G to meet end users' increasing mobile communication needs.
21. In the transformation of the media sector, IDA's effort in the Media ICT blueprint for Mediapolis will help to develop the Mediapolis project as a world-class, globally connected and self-sustaining media ICT ecosystem. The Media ICT services will provide an added value proposition to local and international content companies looking to establish a presence in the region. The value proposition can be found in three ICT layers, namely world class communications networks and infrastructure, core media ICT enablement services and differentiated media ICT value-added services. IDA has issued a Request for Information in Dec 2010, inviting industry members to co-develop the ecosystem of Media ICT services for Mediapolis.
22. There is much interest in smart city solutions today, which almost by definition are enabled by ICT. Singapore is often being held as of one of the world's smart cities - a major trading hub and metropolis that is fully connected, both within its borders and beyond. Through the iN2015 Masterplan - and its predecessors, I should add - we have been putting in place many key capabilities and deployments which make Singapore a smart city, in both the horizontal enablers such as infrastructure, security and manpower, as well as the vertical solutions of the different sectors. On the more infrastructure domain side, our various government agencies including IDA and industry have also been working together to develop and implement smart city urban solutions. For example, ST Electronics is partnering with Accenture to design and implement an Intelligent Energy System pilot project for the Energy Market Authority15 with the aim of enhancing the smart grid in Singapore. Going forward, efforts in the formulation of the infocomm and data architecture and its components, development of purposed applications and services and the identification of promising areas for R&D will further the development of solutions in these areas.
23. Green ICT certainly also has a role to play in urban solutions, in ensuring the sustainability and energy efficiency of Smart Cities. In this regard, IDA is working on the greening of the ICT sector, as well as the greening of the various economic sectors through ICT. One important aspect of the former is the greening of data centres, which we know are guzzlers of energy. IDA, in partnership with the IT Standards Committee or ITSC has developed the Singapore Standard for Green Data Centre. This standard aims to help organisations establish the policies, systems and processes necessary to improve the energy efficiency of their data centres. To further encourage the adoption of green data centres, IDA is co-organising a Green Data Centre Forum with SPRING on 31 March to share with the industry the standards, best practices and innovations that can help data centres enhance their cost competitiveness. The Forum is a one day event where we will have Mr Ray Pfeifer, a thought leader on data centre energy assessment, and data centre service providers here to share their knowledge and experiences on greening data centres.
24. IDA's effort on the Internet of Knowledge is also related to Smart Cities. The IOK will focus on the infocomm building blocks of smart cities, namely Cloud Computing, Business Analytics and User Interfacing. The IOK involves the development of smart system-of-systems solutions to address large scale challenges and we will need Internet scale computing platforms in the form of cloud computing, combined with BA to provide insights-on-demand, and interactive user interfacing and enabling infrastructure to effectively and efficiently communicate with users.
25. In terms of industry development, IDA will continue to spur infocomm-enabled business innovation. The current iSPRINT scheme which was launched in March 2010 has enhanced SMEs' capabilities to innovate their businesses using infocomm technology and achieved encouraging results. More than 750 SMEs16 have received iSPRINT grants to innovate their business using infocomm; and this has generated an ICT expenditure of over $7million17 and a projected $400 million in Value-Add over the next three years. To-date, there are more than 80 pre-qualified infocomm solutions available for Accounting, Payroll, Point-of-Sales and Software-as-a-Service offered by over 50 ICT solution providers, that SMEs can use to kick-start their infocomm adoption. We look forward to greater IT industry support in furnishing more of such pre-qualified packages for SMEs' adoption.
26. IDA will also work together with the infocomm industry to enable local infocomm companies to be competitive in the global arena and strengthen their export capabilities. Two examples of local infocomm companies that have successfully productised their solutions are Elixir Technology and SQLVIew. Elixir Technology productised its platform-independent, business intelligence engine and exported to multiple countries including the US, China, Europe and ASEAN. Similarly, SQLVIew productised its record management solution and has succeeded in selling this in overseas markets. IDA will be exploring ways on how to assist local infocomm companies in the productisation process and facilitate the export of the infocomm solutions, and we look forward to working with industry towards that.
27. I have not talked about manpower development this morning. It is certainly a critical area, and IDA has been consulting our institutions, industry and end-user organisations closely on how we can continually attract, develop and retain talent in our industry and develop strong skills in key infocomm specialisations. We are finalising our new manpower development masterplan, and will share it on another occasion. Before I close, I would like to highlight a few events taking place in the near future that we welcome your active participation in.
28. In May, we will be conducting the 2011 Industry Briefing, to highlight some of the procurement plans and pipeline infocomm projects in the public sector. This is always a very well attended event, and I'm sure I will see many of you there.
29. The Infocomm Media Business Exchange (imbX), Asia's largest infocomm event, will be held in June this year. It brings together business leaders, companies and industry professionals to showcase their latest innovations, network, exchange ideas and tap into new markets. This event will be held at the Marina Bay Sands for the first time.
30. In conjunction with that, IDA and MOF will be jointly organising the eGov Global Exchange 2011, for the second time, with the theme "Collaborative Government in a Connected World". This year's eGov Global Exchange 2011 will bring together senior e-Government policy makers and practitioners from around the world, and we plan to share some of our pilot projects and launch our new e-Government Masterplan that will take us further on our e-Government journey. We are most honoured this year to have Singapore's Deputy Prime Minister, Minister in charge of the Civil Service and Minister for Defence Mr Teo Chee Hean, as the Guest-of-Honour and Keynote Speaker at the eGov Forum.
31. In August, IDA and SiTF will once again organise the Infocomm Industry Forum 2011 after the very well-attended event last year. Given the key role that business analytics plays in data and convergence as I have mentioned earlier, we think it will be most useful for this year's Forum to focus on Business Analytics, and we hope to bring together both industry as well as end-user organisations, to share the successful use of BA in enterprises and services, and how we can leverage that for our various organisations.
32. So till we meet again, I take this opportunity to thank all of you for your continued support and participation in IDA's various efforts to develop and grow the infocomm industry in the coming year, and I wish you and your companies all the best in leveraging the exciting opportunities in the year that lie ahead of us.
Notes to Editor:
1 Source: EIU Global Forecasting Service.
2 Source: IDC vQ4 2010 Worldwide Black Book (February 2011)
3 Source: MTI Forecasts GDP Growth of 4.0 to 6.0 Per Cent For 2011 Following Strong Rebound in 2010
4 Based on DOS' estimates from Q1-Q3 2010, IDA's infocomm cluster contributed 7.4% to GDP.
5 Source: Morgan Stanley's Internet Trends, Apr and Jun 2010.
6 Source: http://www.prnewswire.com/news-releases/marketsandmarkets-world-mobile-applications-market-worth-us25-billion-by-2015-114087839.html
7 Sources: http://www.juniperresearch.com/analyst-xpress-blog/2010/01/26/mobile-cloud-application-revenues-to-hit-95-billion-by-2014-driven-by-converged-mobile-services and http://www.readwriteweb.com/archives/mobile_cloud_computing_95_billion_by_2014.php
8 Source: http://www.emc.com/leadership/digital-universe/index.htm?pid=landing-digitaluniverse-131212
9 Source: http://www.zdnetasia.com/sensor-data-is-data-analytics-future-goldmine-62200657.htm
10 Source: http://jamiq.com/features
11 Source: http://www.smbworldasia.com/en/content/enhance-your-reputation-jamiq?page=0%2C0
12 Sources: http://thenextweb.com/us/2010/10/27/walmart-now-doing-group-buying-on-facebook
13 Source: http://www.cnngo.com/shanghai/shop/taobao-sells-205-benzes-just-over-three-hours-653638
15 As of 31 Jan 2011.