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 / Autumn 2012 / Issue 68(originally published by Booz & Company)


The Global ICT 50: The Supply Side of Digitization

The top 50 companies providing IT and telecom hardware, software, and services are facing dramatic change and convergence. Their response will transform life for the rest of us.

Driven by a combination of consumer demand and the development of new information and communications technology (ICT), the world is rapidly transforming. This process, called digitization, has been happening since the arrival of the computer 60 years ago, but in the past few years it has accelerated, altering everyday life in unprecedented ways. Technological developments such as handheld devices, pervasive sensors, “big data” analytics, digital supply chains, search engines, social networks, satellite-based geographic tracking, interconnected real-time digital infrastructure, and massive server farms have fundamentally altered our society. The 2010s are arguably as different from, say, the 1980s as 1950, with ubiquitous electricity, automobiles, and broadcast radio, was from 1850.

Digitization is being driven in part by the companies that make use of digital infrastructure and in part by consumers around the world. The enterprise market for online IT and digital telecom is booming — corporate sales worldwide grew 6 percent annually in 2010 and 2011 — while the market for consumer-oriented devices and services (including cloud-based online IT services) grew even more rapidly. At the forefront of change is Generation C, people born after 1990 who expect to be connected to everyone, everywhere, at home and at work. As members of this group come of age, moving into managerial ranks or starting their own businesses, the tools and habits of digitization will become second nature.

One might expect that because society is increasingly dependent on digital products and services, the producers of digitization would be affluent, assured of success, and complacent. But their industry is undergoing a parallel transformation, and it is not clear how many companies will last in their current form. The traditional sectors of the ICT ecosystem — a multi-trillion-dollar industry whose members include enterprise service providers, hardware producers, telecom companies, and software developers (including the purveyors of Internet services and social media) — are blurring and converging. For example, telecom, hardware, and software companies are moving into IT services. Offshore IT service providers are developing enterprise software, often in the form of low-cost, highly standardized systems delivered via the Internet, designed to take over large portions of the work of traditional corporate IT departments. The industry is also being invaded by a host of hungry new Internet players, who offer innovative Web-based solutions that bypass the systems of the past. In this context, even the wealthiest, most successful ICT providers, like Microsoft in the 1990s, Google in the 2000s, and Apple today, cannot be certain of sustaining their success. The title of the first book by former Intel CEO Andrew Grove — Only the Paranoid Survive — has never seemed so telling a comment on this industry.

How will the process of digitization play out? How will it affect the companies vying to supply these technologies, particularly in the business-to-business domain? The answers are essential for decision makers in any company, no matter its industry. The choice of ICT goods and services is a critical strategic factor: It deeply influences the quality and distinctiveness of a company’s capabilities. That choice, in turn, depends on a clear assessment of the future of these providers. It is all too easy to get locked into a technology system that will not be sustained in the marketplace.

At a more exalted level, the leading digitization providers are among the most influential companies of our time, and their influence is increasing. Their digital channels shape behavior for all other businesses and, indeed, for a great deal of human interaction.

Finally, these companies are a fascinating group in their own right. Some, like Hewlett-Packard (HP) and IBM, have existed for many decades, continually reinventing themselves; others are relative newcomers. Each, in its own way, has mastered innovation and struggled with disruption. Their story is our story.

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  1. Roman Friedrich, Florian Gröne, Alex Koster, and Matthew Le Merle, “Measuring Industry Digitization: Leaders and Laggards in the Digital Economy,” Booz & Company white paper, 2011: A background report describing more dimensions of digitization.
  2. Roman Friedrich, Alex Koster, Matthew Le Merle, and Michael Peterson, “The Next Wave of Digitization: Setting Your Direction, Building Your Capabilities,” Booz & Company white paper, 2011: Trends in changing technology and how they will affect business.
  3. Andrew Grove, Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company and Career (Currency Doubleday, 1996): Grove’s concept of strategic inflection points, and the vigilant creative execution they require, is apt for the current moment of digitization.
  4. For more thought leadership on this topic, see the s+b website at:
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