IDC FutureScape

IDC FutureScape: Worldwide Chief Marketing Officer

2023 Predictions
Laurie Buczek Alan Webber Wayne Kurtzman Marci Maddox
Karsten Weide Sudhir Rajagopal David Wallace Roger Beharry Lall
Frank Gillett Douglas Hayward Gerry Murray

IDC FUTURESCAPE FIGURE

FIGURE 1

IDC FutureScape: Worldwide Chief Marketing Officer 2023 Top 10 Predictions

Note: Marker number refers only to the order the prediction appears in the document and does not indicate rank or importance,
unless otherwise noted in the Executive Summary.

Source: IDC, 2022

October 2022, IDC #US49755622

EXECUTIVE SUMMARY

The flip from digital first to digital business is underway. IDC research shows the number of
organizations who now have a long-term financial commitment to digital increased by 16% during the
pandemic. Today, it is 53% compared with 37% in 2019.

Marketers have been on the forefront of leading digital transformation initiatives since the original big
swing into digital in 2007. Over the past couple of years, consumers and customers have shifted to be
digital first and digital always. As a result, marketing spending has reached a tipping point, with the
majority of spend on digital programming. Marketing leaders' hiring has been at a record high, working
to close critical skill set gaps in digital experience, storytelling, sophisticated data, and analytics.
Calmer waters should be on the horizon, right? Not so fast.

B2C and B2B customers are already making the next leap: getting more of their information from
emerging digital mediums and interactive and video-based content, desiring immersive brand
experiences, and conducting transactions without the need for direct human interaction.

As Peter Drucker famously stated, "The future has already happened." Your assignment as a
marketer, should you choose to accept it, is to act with anticipation of a world that has gone from digital
to experiential. To guide marketing leaders, IDC has identified the top 10 trends that marketing leaders
need to pay attention to and prepare for:

 Prediction 1: Web3 technology adoption will drive 45% of global brands to create new
immersive experiences, accessible content, and engaged communities, growing the customer
experience (CX) creator economy into a $300 billion market by 2024.
 Prediction 2: By 2024, customer data platforms (CDPs) will grow up to be enterprise customer
data services, using data streams and artificial intelligence (AI) to improve each interaction,
thus improving CX metrics by 10% for 55% of G2000 firms.
 Prediction 3: By 2025, deprecation of the Google advertising ID (GAID) will reduce the share of
Android-based advertising by 10 points, benefiting iOS-based advertising, Apple, and Amazon.
 Prediction 4: By 2025, G2000 brands will need to be transparent about and anchor marketing
messaging on contextual value outcomes for the customer, or risk losing up to 65% of their
lead to opportunity conversions.
 Prediction 5: By 2025, 48% of G2000 B2B-branded content will be immersive, interactive,
inclusive, and curated to meet buyers' expectations of "connected experiences in context" set
in motion by B2C brands.
 Prediction 6: By 2026, worldwide advertising spending on traditional TV will have declined by
20%, from $166 billion to $133 billion per year, benefiting mobile video and connected TV (CTV).
 Prediction 7: Growing engagements across social media, communities, and virtual platforms
will impact over 68% of all brand revenue by 2026.
 Prediction 8: Performance demands, personalization requirements, staffing constraints, and
technology maturity result in 34% of content marketing programs being managed
autonomously through AI/machine learning (ML) by 2027.
 Prediction 9: By 2027, 68% of G2000 marketing organizations will use AI to adaptively deliver a
blend of digital and human-delivered customer interactions across the whole customer journey.

©2022 IDC #US49755622 2

  Prediction 10: G500 marketing teams will base 35% of lead generation efforts on known
personal tokens — real-time customer sharing of identity and engagement preferences — by
2028, leading to higher quality relationships.
This IDC study provides IDC's 2023 top 10 predictions for chief marketing officers (CMOs).

"Early indicators show we have entered the next era of digital. B2C and B2B brand experiences and
engagement have shifted to a third dimension that exists within a blend of digital and physical
interactions, with customers gravitating to interactive and immersive content," states Laurie Buczek,
vice president of the CMO Advisory Practice. "It is not a matter of if we will see the next era of digital; it
is merely a matter of when it will go mainstream."

IDC FUTURESCAPE PREDICTIONS

Summary of External Drivers

 Storms of disruption — Accelerating, interconnected uncertainty
 Digital business — Stepping stone to the future enterprise
 Meaningful intelligence — Differentiated decision power
 Ecosystem-based innovation — Driving enterprise value
 Embracing the metaverse — New levels of immersion
 Work mode upheaval — New models and leadership
 Everything as a service — Thriving through the change

Predictions: Impact on Technology Buyers

Prediction 1: Web3 Technology Adoption Will Drive 45% of Global Brands
to Create New Immersive Experiences, Accessible Content, and Engaged
Communities, Growing the CX Creator Economy into a $300 Billion Market
by 2024
The world is on the verge of the next great revolution as we create new digital products and services.
These evolving Web3 technologies including blockchain, cryptocurrencies, smart contracts, and others
connect us to the evolving metaverse. The adoption of these technologies by younger generations of
employees and consumers are forcing brands to rethink the experience they provide their customers.
These emerging technologies are providing customers new ways to view and experience both
products and experiences, new ways to pay for them, and new ways to share that with others.

To maintain parity with their customers in this new digital world, brands are going to be forced to create
new immersive experiences that connect the more digital customer with their brand. This is going to
require content that is more accessible across a variety of platforms and channels while being more
expansive and deeper in engagement. It will also require brands to create and launch brand platform
communities while actively participating in off-brand communities. To do all of this, brands will need to
enable and support a growing army of internal, contract, and freelance creators.

The result of these new technologies and almost half of global brands trying to meet their customers in
this new multidimensional digital world is that the creator economy will explode to be a $300 billion
market by 2024. This will be supported by new toolsets such as Canva, Figma, Stencil, Adobe Spark,
VRSpace, Sandbox, and Omniverse. Creators will use learning platforms such as CreativeLive,

©2022 IDC #US49755622 3

Coursera, Udacity, and Adobe Learning with the deals happening across platforms such as Fiverr,
Upwork, 99Designs, and Freelancer.

Associated Drivers
 Digital business — A stepping stone to the future enterprise
 Embracing the metaverse — New levels of immersion
 Meaningful intelligence — Differentiated decision power
IT Impact
 The whole concept of a workforce and what a location for work is will shift, and IT will have to
enable multiple versions of what is hybrid work and the tooling that is necessary to enable it to
work effectively.
 The set of tools required by creators is much broader than just the normal office worker
tooling, and IT will have to integrate these into the enterprise architecture.
 These new digital worlds will also need an ever-expanding amount of online storage to both
support the creative process and act as a platform for engagement with customers, resulting in
the need for an even more robust cloud storage capacity and faster data transfer speed.
Guidance
 The foundation for any business is its business processes. Rethink what the hybrid digital
business processes will look like and what technology it is going to take to enable those
revamped processes.
 Creators require a unique set of tools that IT will need to provide and then integrate into new
processes. In addition, creative work can be hardware intensive, requiring IT to both provide
and support a more robust set of software and hardware.
Prediction 2: By 2024, Customer Data Platforms Will Grow Up to Be Enterprise
Customer Data Services, Using Data Streams and AI to Improve Each
Interaction, Thus Improving CX Metrics by 10% for 55% of G2000 Firms
Customer data platforms have played a minor role in martech stacks for several years since the
application software category was first named in 2013. In early 2020, however, like everything else in
the world, the CDP market suddenly changed. The problem of customer data silos has existed for
decades, especially in larger and more complex organizations. Firms knew their customers and their
data, of course, but mostly by specific engagement channel(s) that were a combination of physical and
digital experiences with the added dimensions of a specific brand or line of business. Firms moving to
digital first or digital only focused on customer experience as their top business priority over 15 IDC
global monthly survey waves. Customer experience can't be delivered well without the 360-degree
view of customers through the lens of all channels, all brands, and all business models (B2C, B2B,
B2B2C, and DTC). CDPs, as packaged SaaS applications, are designed to be easily and quickly
implemented to create unified customer data profiles from all existing and incoming real-time streams
of customer data (following data hygiene, identity resolution, and customer data privacy/consent
tagging). AI can then provide continuous insights about customers, enabling real-time personalization,
journey orchestration, and activation through all engagement channels that firms already have in their
martech stacks. CDPs can also ingest and share data with other customer-facing teams including
contact centers, customer service, and sales. Contact center and customer service data includes rich
sources of unstructured sentiment analysis data, which often provides the early warning of decreasing
customer satisfaction signals back to the CDP where AI and real-time orchestration can quickly trigger

©2022 IDC #US49755622 4

interactions that can intervene with positive messaging or suppress scheduled interactions such as
tone-deaf emails or texts.

As organizations move from the end of the digital-first era and into the digital business area, the
enterprise customer data service layer provided by CDPs will continue to grow in adoption, delivering
rapid positive business outcomes for brands. Continued improvement in CX and the metrics that firms
use to measure it will increase as customers receive the cognitive empathy that firms can deliver with
AI-based interactions based on all customer data continually updated in milliseconds like a central
nervous system. CDPs can also enable firms to rethink, rationalize, and re-architect other parts of their
martech stack for improved efficiency and greater agility, especially in engagement channels that are
often the majority of the 30 or more applications that were each purchased at a point in time for one
specific purpose. For example, how many enterprise firms really need six or more email service
providers (SPs) to deliver outbound emails? IDC expects the CDP market to grow in double digits
(20%+) over the next five years as adoption continues.

Associated Drivers
 Meaningful intelligence — Differentiated decision power
 Digital business — Stepping stone to the future enterprise
 Everything as a service — Thriving through the change
IT Impact
 The enterprise customer data service must provide data governance and consent
management to protect the organization from impermissible use of customer data and to track
customer consent as prescribed in global regulations.
 AI use within CDPs, orchestration engines, and customer engagement systems should be
assessed and monitored in line with other AI governance initiatives and policies that are in place.
Guidance
 For CIOs, work collaboratively with key CX stakeholders including the chief marketing officer,
chief experience officer, and chief customer officer (and other executives) to enable data
aggregation, analytics, and activation across front office functions in accordance with brand
and regulatory policies.
 Go beyond CX metrics by establishing metrics to measure the value of unified customer data
in delivering CX and revenue improvements, followed by data observability that can identify
the most valuable customer data elements that are being used to improve CX.
Prediction 3: By 2025, Deprecation of the Google Advertising ID Will Reduce
the Share of Android-Based Advertising by 10 Points, Benefiting iOS-Based
Advertising, Apple, and Amazon
Publishers, ad tech vendors, and advertisers should brace for another wrenching change coming to
digital advertising in the form of yet another privacy protection measure. Google recently announced it
would deprecate the use of the Google advertising ID for targeting and tracking advertising campaigns
on mobile devices under the Android operating system "by 2024." It is assumed in the industry that the
company would take that step in early 2024.

Deprecating GAID means that mobile advertising buyers will be less able to target users and track
campaign effectiveness. What effect exactly this step will have on Android's market share in mobile in-
app advertising is unclear. But it's possible that the impact will be like the one that took place when Apple
deprecated the Identifier for Advertisers (IDFA). If so, then spending on Android might experience as

©2022 IDC #US49755622 5

much as a 10-20% drop in worldwide sales, equivalent to a loss of 5-10 points of market share versus
iOS. In absolute numbers, a 10% Android revenue decline would translate into $10 billion of estimated
worldwide in-app display, video, and other advertising revenue (excluding search) for 2024.

This money will not go away. It will still be spent on digital advertising, just through different channels.
Some will go to ads on Google Play that, of course, retains knowledge of which users search for what
in the company's app store, allowing for targeting. Some will go to iOS ads, even if the demographic
there is different from the one using Android devices. Other portions will go to search advertising for
direct response campaigns and to connected TV (CTV).

If a publisher or vendor has a well-balanced portfolio of ad formats, they should be fairly insulated from
the fallout. Whatever they lose in Android, they can make up in iOS or somewhere else. If, however,
they are long on Android sales and short on iOS, they might be in trouble. Any business that still
heavily relies on retargeting sales for their business will likewise be challenged.

After GAID, the next privacy pothole is already in sight. Google also announced it would deprecate the
use of third-party cookies in its Chrome web browser by the end of 2024 (as Microsoft, Opera, Mozilla,
and Apple already have in their browsers). Given Chrome's large market share among browsers, the
impact of that step will be much more noticeable than when Apple deprecated third-party cookies in
Safari.

Associated Drivers
 Digital business — Stepping stone to the future enterprise
 Ecosystem-based innovation — Driving enterprise value
IT Impact
 Diversifying one's ad format portfolio will be key for both publishers and tech vendors, as a
more diverse ecosystem is more resilient.
 Likewise, work on targeting workarounds that could mitigate some of the signal loss from the
deprecation of GAID that must continue apace. Single sign-on (SSO), cohort targeting, digital
fingerprinting, and contextual targeting can all contribute.
Guidance
 Note that the more diverse one's advertising (tech) offering is, the more resilient one's
company will be. Diversify your ad format offer, and focus on in-app advertising and connected
TV.
 Develop targeting workarounds, and partner with consortiums that work on alternative
solutions.
Prediction 4: By 2025, G2000 Brands Will Need to Be Transparent About and
Anchor Marketing Messaging on Contextual Value Outcomes for the Customer,
or Risk Losing Up to 65% of Their Lead to Opportunity Conversions
As Warren Buffet famously wrote in one of his shareholder letters, "Price is what you pay, value is
what you get." More than ever before, today's customers demand more than features, pricing, or
product benefits and seek value in how the product/service fulfils a contextual outcome. This
imperative is heightened for the B2B market. In addition, the digital-first customer expects to see this
throughout their customer journey. IDC's 2022 Tech Buyer Survey shows that across the exploration,
evaluation, and purchase stages, customers most desire information that proves value and how the
solution fits their needs. However, enterprises aren't quite meeting this need. IDC's Value Selling

©2022 IDC #US49755622 6

Survey from January 2022 shows that only about one-fifth (21%) of enterprises have marketing teams
that develop and communicate customer value/outcomes throughout the customer journey. A similarly
low percentage (22%) of organizations use these assets as the basis for lead generation and sales.

Addressing this need has been further complicated for enterprises battling issues such as flattening
customer growth, in addition to fleeting attention spans from customers that are time poor and option
rich. If value outcomes are not contextualized or made transparent to customers, the value is for
naught. Further, with digital transformation, the transaction-level experiential advantages have been
levelled across the market. Hence, enterprises will need to expand their perspective in how to develop
and communicate value that result in customer-centered outcomes. To this end, enterprises can
consider a wider set of customer value elements such as utility value, experience value, monetary
value, or social value.

Communicating the customer value story begins with marketing. IDC research shows that three times
as many market leaders (organizations that are most advanced in their sales practices based on
business outcomes) currently communicate customer value outcomes during marketing efforts. These
organizations are also contextualizing the value story to customer outcomes with 64% of leaders
quantifying value outcomes. These efforts ensure that by the time the conversion stage (i.e., finalizing
evaluation or purchase) is reached, the customer is already aware of how the product/service will offer
value outcomes within their context. Finally, over 90% of leader organizations actively track ongoing
value delivered to customers throughout the customer relationship. As the customer value imperative
grows, organizations that are not walking their customers through the value story face a real risk of
losing most of their customer conversion opportunities.

Associated Drivers
 Storms of disruption — Accelerating, interconnected uncertainty
 Meaningful intelligence — Differentiated decision power
 Digital business — Stepping stone to the future enterprise
IT Impact
 IT and the data management teams will play a central role to help marketing teams translate
customer outcomes into specific data points that map back to various organizational elements
to communicate contextualized value for the customer (i.e., product features, customer
success features, service offerings, etc.).
 Digital marketing teams will require access to insights that communicate customer value in
real time, especially as campaign automation evolves to AI-driven processes. What becomes
essential are applications and tools to calculate and make value based on insights easily
accessible based on data from across multiple business applications.
 CIOs should work collaboratively with CMOs and other key CX stakeholders across the
customer life cycle (e.g., sales, support, and customer success) to build and provision relevant
tooling/applications that determine/calculate customer-value insights.
Business Impact
 CMOs and marketing teams will need to identify and understand customers' desired outcomes
based on cross-organizational insights. Value discussions and communication content that get
developed will need to be tailored in relation to those outcomes.

©2022 IDC #US49755622 7

  Customer segmentation strategies, content marketing, and campaign automation processes
will need to be redesigned to accommodate customer value communications. For example,
product/services marketing communication will need to include value differentiation elements.
 Customer value will impact customer segmentation strategies, content marketing, and
campaign automation processes. For example, product/services marketing communication will
need to include value differentiation elements and be distributed via channels where buyers
begin their journey.
Guidance
 Qualify and communicate value for the customer earlier on in the customer journey.
 Expand the perspective of how customer value can be determined (i.e., value elements such
as utility, monetary, experience, or social). Picking one or more value elements will need to be
determined in a way that best resonates with each customer's unique business outcome(s).
 Note that customer value that is compelling will rely heavily on data that is available not just
within marketing but also sales, support, engineering/product, and customer success. Core
systems and application integration to bridge data and application silos should begin
immediately and/or be further enhanced to reach across organizational functions.
 Identify gaps in data aggregation and analytics to develop compelling value metrics. This
should be followed by data observability to optimize metrics that maximize customer-value
outcomes by correlating customer data elements that are most used to deliver on marketing
outcomes.
Prediction 5: By 2025, 48% of G2000 B2B-Branded Content Will Be Immersive,
Interactive, Inclusive, and Curated to Meet Buyers' Expectations of "Connected
Experiences in Context" Set in Motion by B2C Brands
The line between the B2B and the B2C buyers' expectations for brand experience is no longer distinct.
IDC's 2022 B2B Tech Buyer Survey found that digital channels are over 60% of the most valuable
information sources for B2B buyers across their whole journey. In addition to a reduced preference for
human-delivered content and interactions, buyers identify short videos, interactive content (e.g.,
ebooks, interactive infographics, and maturity assessments), and immersive content (e.g.,
gaming/simulation of product/service, 360-degree video tour, and augmented reality) as the most
useful format. B2B tech buyers still want product reviews, technical product information, and industry
analyst recommendations. They also want thought leadership on how to solve their business problems
and technology trends. However, they no longer want it delivered in traditional content formats.

In a digital-first world, content is the experience. Brands can no longer afford anything but highly
creative content that is expertly produced in a personalized context, resulting in high customer value.
IDC research finds that marketing leaders identify content creativity as the most important for
marketing effectiveness. The classic email marketing playbook directing prospects to a microsite to
download a PDF needs to be retired. B2B marketers must adopt a mindset of executing campaigns as
micro stories over time, across different digital formats and omni-channel delivery. Now, B2B
marketing leaders are dusting off personas and journey-based delivery of the right information to reach
the highest effectiveness for demand generation.

The third-largest marketing program investment is content marketing. Yet most B2B marketers feel
they lack a cohesive strategy that lines content up to nurture personas across their journey. Even
worse, they lament that they play Whack-A-Mole with content governance and don't have a good
understanding of the value and ROI of their investment. With the significant shift in B2B tech buyer

©2022 IDC #US49755622 8

expectations, there is a greater sense of urgency to reimagine content marketing. Marketers need to
embrace a move from "analog" content on static websites into immersive and interactive content,
curated for various personas within a buying cohort. This shift will require a more inclusive lens to
ensure accessibility and delivery of insightful content that reaches a broad audience.

Associated Drivers
 Storms of disruption – Accelerating interconnected uncertainty
 Meaningful intelligence – Differentiated decision power
 Embracing the metaverse – New levels of immersion
IT Impact
 Marketing and IT leaders have significant skill sets gaps in digital experience and marketing
science. Both competencies are essential to tackle both more creative and emerging content
marketing formats.
 Future success demands full CMO and CIO alignment to invest in future capabilities including
automation, artificial intelligence, and machine learning to gain a better understanding what
content is changing buyer behavior and augment the creation process.
 Martech platforms must modernize to enable the delivery of interactive and more immersive
content globally. Technical capabilities must go beyond the corporate website and include
various channels, including blending digital and physical experiences together at vendor
hosted events.
Guidance
 CMOs should herd disparate website instances and consolidate into one comprehensive
digital experience platform. The platform should be comprehensive and include digital asset
management, personalization, digital journey management, and interactive elements such as
chat.
 CMOs and CIOs should assess the current digital experience platform and applications to
determine what is required to support emerging content and interaction types.
 CMOs need to get the right people on the bus. It's a real challenge to find people skilled at
designing connected digital experiences, storytelling, and using data and analytics for more
advanced tasks. While IDC's tech marketing benchmark showed a substantial YoY increase in
staff investment, the talent pool is small. Marketing leaders must budget for and begin the
recruitment process now.
Prediction 6: By 2026, Worldwide Advertising Spending on Traditional TV Will
Decline by 20%, from $166 Billion to $133 Billion per Year, Benefiting Mobile
Video and Connected TV
Even before COVID-19 hit, traditional TV advertising lost market share to digital video. It was a slow
attrition, by half a point a year and eventually by a point a year. But when the pandemic took hold and
everyone was stuck at home and began to stream video, the transition from TV to digital video entered
landslide territory. In 2020 and 2021 alone, spending on TV declined by $15 billion, losing 4 points of
market share. It will lose another 7 points by 2026.

Now if one wants to reach the demographic under age 45, one must go digital into mobile in-app video
or connected TV, which benefit from the TV budgets moved into digital in about equal measure. One
would only use broadcast and cable TV if one wanted to reach older demos or wanted to run certain
local advertising campaigns. Ironically, as advertisers that need to advertise to older users fear that TV

©2022 IDC #US49755622 9

inventory could run short, demand for inventory has gone up. This affected advertising fees, as the
cost per mille (CPM, cost per 1,000 times an ad is shown) has gone up.

Publishers and vendors must double down on their connected TV and mobile video offers. This is
especially true for those coming out of the TV industry and specializing in commercials, such as Disney
(ABC and ESPN), CBS, and NBC/U. They sit on multibillion dollar businesses that, however, will go
away over the course of the next two decades. For them, branching out into video streaming is a
question of survival. When Netflix launches its advertising-funded video offer in 2023, competing for CTV
ad dollars will dramatically intensify, underlining the importance of developing superior CTV offers.

Both companies coming out of the digital world and those coming out of the traditional one need to
feature mobile video and connected TV as part of a bigger omni-channel targeting and tracking
scheme. How can they offer digital video in a way that traditional TV brand advertisers understand,
and how can they teach digital advertisers how to use the big canvas of the TV screen effectively?

Associated Drivers
 Storms of disruption — Accelerating, interconnected uncertainty
 Digital business — Stepping stone to the future enterprise
 Ecosystem-based innovation — Driving enterprise value
IT Impact
 The resilience of one's streaming infrastructure — for both ads and content — is key.
Dependence on just one cloud vendor is risky and should be avoided.
 Automated trading of digital video inventory is par for the course, plus the best collection of
targeting signals that one can offer. Omni-channel targeting and tracking are crucial as well.
 Digital creative optimization (DCO) for video ads is important for better performance.
Guidance
 Make sure to run your digital video products on at least two different cloud platforms to guard
against downtimes.
 Embrace alternative targeting solutions for better effectiveness: not only single sign-on
networks such as UID 2.0 but also cohort targeting, digital fingerprinting, and solutions such as
contextual and location-based targeting.
 Note that DCO has come a long way in terms of its ability to customize video ads on the fly. It
is time to add this as a standard feature to your offer.
Prediction 7: Growing Engagements Across Social Media, Communities, and
Virtual Platforms Will Impact Over 68% of All Brand Revenue by 2026
Selling is social, and it is steeped in engagements and relationships. Being social, just like
entertainment and infotainment, can have a virtual component. These relationships built across social
media, communities, and virtual platforms have a "real life" connection element to them. This is where
the internet becomes a place where people can engage, collaborate, act, react, and affect transactions
in real time. This is where social proof can be in real life or virtual — and have the same impact.

Online media is evolving from text and images to higher production video. The accent of communities
for companies is creating a more protected or gated approach to bringing together partners,
customers, and prospects. These communities connect people "just like me" and create not only
connections but also a significant source of first-party data for company marketing efforts. As analytics

©2022 IDC #US49755622 10

continue to advance, we can measure interest in the community, advocacy, interest in virtual events,
and with CRM and other integrations, all the way to customer lifetime value.

Companies that fail to provide well-moderated community platforms will find that they are created by
others, fans, or even competitors. It is realistic to believe that companies that do not invest in these
communities may cease to become the subject matter expert on the product they make — once it is
shipped. IDC research has found numerous instances of these cases, and this is clearly on the
increase across all types of businesses and channels. There is no doubt of the impact that these
communities have across the brands.

IDC believes that the growing engagement around brands — and any company — will be impactful to
the brands revenue, positive or negative, by 2026. Even more important, these communities are the
on-ramp to the metaverse platform engagements. Fostering a community today will make the transition
to more immerse engagements, training, and events much easier.

Associated Drivers
 Digital business — Stepping stone to the future enterprise
 Ecosystem-based innovation — Driving enterprise value
 Embracing the metaverse — New levels of immersion
IT Impact
 The evolution of metrics is expected to accelerate. Integrations of major marketing and IT
stacks, including the CRM, will yield new forms of digital era metrics and insights that bridge
from internal ideation to customer outcomes and customer lifetime value.
 Integrations should include virtual event platforms.
 Additions such as data loss prevention (DLP) and other platforms will help protect the brand's
community assets and maintain governance and privacy.
Guidance
 Emerging is the conversational enterprise era where internal collaboration and communities
are a part of the digital business era. Consider accelerating this effort with empathic, business-
wise people.
 Crossing all business units to help be responsive is key. The benefit is a fresh supply of ideas
while customers and partners become more loyal to the brand.
Prediction 8: Performance Demands, Personalization Requirements, Staffing
Constraints, and Technology Maturity Result in 34% of Content Marketing
Programs Being Managed Autonomously Through AI/ML by 2027
As marketers strive to scale personalized engagement with their brand, they are constrained by a lack
of available creative staff and integrated technology to personalize content beyond "Dear <insert
name>". The use of embedded AI to augment — and ultimately automate — the creation, curation, and
dissemination of content will be increasingly commonplace.

Buyers are overwhelmed by irrelevant ads and promotions. To be noticed above the noise, leading
CMOs will need to level-up their production of highly selective persuasive and informative content, based
on dynamically generated material automatically aligned to company size, funnel stage, intent signals,
recent actions, industry, buyer persona, channels, medium/device, and more. To generate content
across all these variables at scale, with limited (often unspecialized) staff, marketing programs will need

©2022 IDC #US49755622 11

to embrace an expanded inclusion of curated content sources and new AI/ML-based content
management tools with access to deep troves of customer data. While deep implementation and
optimization of AI tools in an organization's existing martech stack will take several years, early adoption
has already begun. Recent in-market vendor examples of AI-based tools include reformatting (e.g.,
converting a long article to salient quotes or short blog posts), resizing (for the medium) and refinement
(for brand personality) of designs within marketing campaign tools; brand-specific visual imagery storage
and tagging automation; and search engine–optimized, autogenerated, long- and short-form copy.

IDC research indicates that AI spending against augmented content solutions will increase by a CAGR
of 167% for 2022–2026. Already, IDC surveys show that 39.8% of midsize growth companies (100–
1,000 employees) use some form of AI/ML for content creation/management with another 10.7%
adding this capability within 12 months. The move from AI augmentation of single content tasks to full-
scale, robust, AI automation across the entire content marketing life cycle, including curation and
dissemination, is predicted to be in place for many organizations by 2027.

Associated Drivers
 Digital business — Stepping stone to the future enterprise
 Work mode upheaval — New models and leadership
IT Impact
 Embedded AI capabilities will be part of larger, line-of-business purchases and may go
unnoticed by IT leaders. To manage organizational risks and explore opportunities for
consolidation, CIOs should perform periodic organization wide audits to establish a more
wholistic inventory of AI capabilities.
 IT teams should provide educational programs to ensure that AI implementations (whether
embedded, standalone, augmented, or automated) are treated with appropriate considerations
— training set diversity, employee comfort, result validations, and so forth.
 Many AI-based tools require a cloud infrastructure to run efficiently. To adopt these
technologies, IT teams will need to develop cloud plans to run these tools in accordance with
regulatory and data governance practices.
Guidance
 CMOs should encourage teams to leverage AI technology early and establish it as a grading
criterion for vendor evaluations. By executing small experiments, teams will learn quickly and
improve over time, thus creating a short-term competitive advantage and de-risking
future/larger deployments.
 Marketing organizations should invest in precursor infrastructure elements immediately:
establishing data cleansing and deduplication processes, deploying customer data platforms
or similar data lakes, defining data governance and AI ethics polices, and so forth. These
short-term tactics will facilitate more successful AI deployments in the future.
 Marketing content teams must shift their staffing focus from creators to curators, growing
expertise in tagging and classification, advanced search engine optimization (SEO), customer
metadata management, and other nontraditional skills. Embedded AI automations need not
replace the marketing staff, but they will require reskilling to add new layers of value.

©2022 IDC #US49755622 12

Prediction 9: By 2027, 68% of G2000 Marketing Organizations Will Use AI to
Adaptively Deliver a Blend of Digital and Human-Delivered Customer
Interactions Across the Whole Customer Journey
Creative, compelling, engaging, and/or immersive content across channels at scale was identified as
the most important factor to maximize overall effectiveness of marketing strategies by marketing
leaders in IDC's 2022 Marketing Effectiveness and Metrics That Matter study. IDC research clearly
shows that digital is the primary source of buyer decision-making information across the entire journey.
While interactive content has been an integral part of what B2C buyers consume, B2B buyers have
lagged behind. The daylight between B2C and B2B buying behaviors has shrunk. Now, 33% of B2B
tech buyers identified interactive content as the most useful format during the evaluation stage and
another 37% identified short videos. This is compared with 18% who still want a PDF white paper.

Artificial intelligence is a game-changing technology for marketers. AI enables the ability to deeply
understand customers and to sense and predict marketing and sales actions that change buying
behaviors. Harnessing the power of AI, marketers will adaptively orchestrate a personalized
experience, blending digital and human-delivered content, suited by persona and journey stage.

Associated Drivers
 Digital business — Stepping stone to the future enterprise
 Meaningful intelligence — Differentiated decision power
IT Impact
 The current state of disconnected data and analytics will create a barrier to adaptively deliver
the right content, right place, and right time. An enterprise-as-a-service data architecture is a
key dependency for AI-powered customer interactions.
 Future success demands that the CMO and CIO revamp their collaborative partnership. CMOs
need CIOs to successfully remove data and technology barriers.
 Marketing and sales must play a new team sport. Marketing and sales no longer run a relay
race with a handoff of the baton. The new sport has both marketing and sales on the field
together, ebbing and flowing to engage the customer. The new model requires leadership that
is highly collaborative and has a "one team" customer-centric approach.
Guidance
 Stop building data lakes and start building customer intelligence.
 Invest in enterprise-level foundational capabilities to deliver omni-channel experiences.
 Close critical skill set gaps and hire more advance marketing science experts who understand
how to build predictive models, overlay AI, and extract actionable insights from the plethora of
data sets.
 Add digital experience experts who can design cross-channel content, storytelling, and
experiences. Emerging roles include producers and content strategists.
Prediction 10: G500 Marketing Teams Will Base 35% of Lead Generation Efforts
on Known Personal Tokens — Real-Time Customer Sharing of Identity and
Engagement Preferences — by 2028, Leading to Higher Quality Relationships
Marketing teams have used various methods to capture the needs and preferences of its customers
including web browser cookies, navigation clicks, downloads, data capture, and AI-based behavior
analysis. The next evolution in identity, segmentation, and preference will build upon the token objects

©2022 IDC #US49755622 13

found on Web3 networks. Website cookies are an existing example of a token-based object that
captures data about the customer but does so with limited user control (e.g., allow or delete). New
personal identity tokens, also referred to as soulbound tokens (SBTs), represent social relations or
tokenized representations of various traits, features, and achievements that make up a person or
entity. These personal tokens will be user controlled and contributed to by other entities in validation of
credentials or affiliations.

Digital engagement happens in multiple channels making it difficult to capture the latest changes to
personal preferences. Marketing teams have an opportunity to target leads using their own personal
tokens, which will represent identities (customer preferences, transactions, social interactions, etc.)
and context (which can help articulate the real-time component). While lead targeting is the immediate
use case, personal tokens will gain more value throughout the life of the customer as more data is
collected. Further, since each entity in the tokenized relationship (brands and customers) is the
custodians of their own information, the value exchange is premised on trusted data. In turn, this offers
a mutually trusted and beneficial experience outcome to both parties. Customers can trust that the
targeted offers they receive are anchored on achieving customer-desired outcomes, and brands can
trust that the data shared by customers results in higher quality leads and potentially higher rates of
conversion. The personal token will not replace existing customer data platforms, which collect
adjacent transaction history. The personal token will grow to be the trusted and accurate personal
identity and preference mechanism that marketing teams can depend on and use to ensure greater
levels of customer stickiness.

Associated Drivers
 Embracing the metaverse — New levels of immersion
 Digital business — Stepping stone to the future enterprise
 Ecosystem-based innovation — Driving enterprise value
IT Impact
 Marketing teams will need to work with their IT counterparts to assess the timing and
availability of a Web3 network with access to personalized tokens as they become available.
 Campaign teams will rework their targeted audience segmentation rules and data usage to
accommodate the new personal tokens considering the customer's channel and product
preferences to improve engagement.
 Content marketing will complement content usage insights with customer content format
preferences from personal tokens to determine the best content types and distribution.
Guidance
 Note that capturing customer preferences is fundamentally changing as the ownership of
customer data management shifts to the customer themselves. When prioritizing your
investments in customer data, personal tokens should be included in the mix.
 Make Web3 and the metaverse an integral part of your digital strategy for content creation and
distribution options. Cross-functional collaboration is an ongoing requirement with access to
the latest customer preferences that are in sync across customer experience, marketing, and
operations leaders.
 Prioritize next-generation design thinking workshops on new types of content that align with
customer preferences then align with creative team skills to accommodate the real-time
updates based on evolving personal token data.

©2022 IDC #US49755622 14

ADVICE FOR TECHNOLOGY BUYERS

 Emerging technology is changing buying behaviors and subsequently places marketing

strategy at the doorstep of Web3. The martech stack for the next era needs capabilities to
deliver interactive and immersive experiences that blend digital and physical touch points
across the whole customer journey. Assess the timing and availability of a Web3 network with
access to personalized tokens as they become available. Shore up the core stack, and shift
into experimenting, testing, and adding new technology adoption to the road map.
 Powerful emerging technologies require a system of advanced skills to design connected
experiences, craft creative content formats, architect new business processes, and operate AI
and blockchain. Conduct a workforce skills assessment, identify gaps in digital experience
design, sophisticated data and analytical science, and advanced martech technologists. The
global shortage of these critical skill sets is real. Don't delay your action plan to close the gaps.
 The hybrid workforce is the new reality. Rethink what hybrid digital business processes will
look like and what enabling technology is required. Allocate investment in collaborative
toolsets for a hybrid workforce to effectively create and manage projects across time, regional,
digital, and physical boundaries.
 Marketers should diversify their ad format offerings and focus on in-app advertising, mobile
video, and connective TV as a critical part of your omni-channel targeting and tracking.
 Marketers should dust off their persona and journey maps. The one-size-fits-all approach to
content marketing is no longer effective. To deliver customer value, marketers will need to
deeply understand customers' intent, buying signals, and desired outcomes across their
buying decision journey, including post sales loyalty and renewal stages. This is critical to
dynamically deliver value discussions via content placed at the right moment, right channel.
 CMOs and CIOs need to move beyond the power struggles, turning data into gold instead of a
battlefield. An enterprise layer of abstracted customer data from customer-facing databases is
necessary to more deeply understand customers and shift into precision marketing.

EXTERNAL DRIVERS: DETAIL

Storms of Disruption — Accelerating, Interconnected Uncertainty

 Description: It's an extraordinary moment: We have our most impactful pandemic in 100 years,
our first invasion in Europe in 75 years, and our first global inflation in 40 years. While change
and disruption are nothing new, this year feels faster, more wide ranging, and farther reaching
— the most dramatic change in a generation — affecting the psychology of leaders. It's not just
a few things but the interconnected nature of them together, the domino effect, and the
unexpected yet consequential impacts that generate a perfect storm of instability. The global
order is under threat from the Russia-Ukraine War. The war's impact on energy has shocked
markets, resulting in both a renewed interest in expanded fossil fuels and a greater clean
energy imperative. "Climate action failure" and "extreme weather" are cited as severe
immediate and long-term risks. Disruptions in grain and fertilizer exports are adding to inflation
and threatening massive food insecurities. Rising interest rates challenge the economy and IT
spending. While some adaptations from the COVID-19 pandemic are now integrated into
global business and operating models, impacts are still felt in supply, labor, and more. Supply
chain difficulties and chip shortages are expected to continue until at least 2024. Developing
economies, seeking to digitize rapidly, have limited resources, while the speed of technology-
enabled solutions marches on. It's undeniable that these external forces are increasingly

©2022 IDC #US49755622 15

 interwoven, not temporary, impacting organizations' business and digital plans concurrently,
becoming storms of disruption.
 Context: With storms of disruptions, there is a lot of complexity, but it cannot be teased apart
easily. The multidimensional interactions among issues/people/companies drive constant
change and redefine competition continuously. In addition to individual drivers, seeing the
whole of the system is important. Concern about the future is heightened and growing. WEF
reports that 84% of experts are either "concerned" or "worried" about the outlook for the world
(www3.weforum.org/docs/WEF_The_Global_Risks_Report_2022.pdf). Yet 95% of business
leaders report that their crisis management needs improvement, according to PWC
(www.pwc.com/gx/en/issues/crisis-solutions/global-crisis-survey.html). Global supply chain
pressures increased in 2Q22. Global GDP growth is projected to slow sharply in 2022, to
about 3%, and remain at a similar pace in 2023. Crude oil prices have almost doubled since
2021, while natural gas prices in Europe have increased 4x to 5x, according to OECD
(www.oecd.org/coronavirus/en/data-insights/energy-prices-are-spiking). Fertilizer prices
surged in March, up nearly 20% since January 2022 and almost 3x higher compared with a
year ago. Currently, 193 million people globally are acutely food insecure, but FAO predicts
insecurity will worsen in at least 20 countries in 3Q22
(www.fao.org/3/cc0364en/cc0364en.pdf).

Digital Business — Stepping Stone to the Future Enterprise

 Description: A digital business sees value creation based on the use of digital technologies for
both internal and external processes, including stakeholder engagement, employee
commitment, and product and services experiences. Building and leading a digital business is
the next step toward the future enterprise, with CEOs indicating that digital product and service
revenue will jump from the current 30% factor to over 40% by 2027. While some parts of
operations may never be purely digital, digital businesses are committed to a digital-first
strategy that builds value and growth by aligning all parts of the business and IT landscape
with digital workflows. Both the supply side and consumption side face increased scrutiny for
investment, and development strategies for both digital and nondigital assets demand omni-
channel leverage for the digital business to get support or funding. Implications include
reprioritization of digital customer experience, evolution to fully digital operating models, more
resilient digitally enabled supply structures, and automation to address risks and challenges.
Regulatory factors are also driving digital business focus, where the use of data and the
trusted engagement with automation drive new risk mitigation investments. Businesses that
are launched or relaunched in the digital universe are gaining measured operational and
competitive advantage, driving digital-native considerations across most sectors. Digital
business is bringing together business and digital strategy, where technology is both a
common denominator and a dominant driver of value and growth.
 Context: According to IDC's 2022 Worldwide CEO Survey, "technology" is the number 1 word
of the year for CEOs. In 2021, the dominant solutions for major monetization workflows were
manual/custom, indicating a high greenfield focus. A 2021 IDC Survey of Monetization
indicates that digital investment is a focus for 95% of CEOs, and 27% self-assess as
"pioneers." According to McKinsey, in the next step in the digital journey, integration of digital
and operations capabilities will drive step change improvements in revenue, customer
experience, and cost (see IDC PeerScape: Future IT — Practices to Establish a New Digital
Business Operating Model, IDC #US47857221, June 2021). According to IDC's Future
Enterprise Resiliency and Spending Survey, Wave 7, operational efficiency (43%) and
customer satisfaction (42%) are higher priorities than profits (37%) (see Market Analysis
Perspective: Worldwide Digital Business Models and Monetization, 2021, IDC #US46247521,

©2022 IDC #US49755622 16

 September 2021). In the drive to the future enterprise, digital businesses will prioritize deeper
understanding of consumption models, recognizing usage intelligence as a critical driver for
development of value and growth strategies, with an expected 60% of IoT-using organizations
creating new data-driven offerings and recurring business models (see IDC FutureScape
Webcast: Worldwide Digital Business Models and Monetization 2021 Predictions, IDC
#US47028620, December 2020).

Meaningful Intelligence — Differentiated Decision Power

 Description: Data is now well embedded at the core of strategic capability for every
organization. Data-centric capabilities and infrastructure are now critical to empowering
performance-intensive computing and unleashing business value. Meaningful intelligence has
moved beyond technical challenges of speed and precision, and organizational intelligence is
now expected to enable better decisions, be more efficient, and improve knowledge across the
organization. Differentiated decision power leverages real-time insight as the critical capability
to keep up with the speed of change. Further, where trust is now paramount in all enterprise
activities, ethical data strategies demand a balance between the potential of data and the
critical respect for people's privacy and preferences; data and ethical use expectations have
reset the bar for privacy, trust, visibility, and responsibility — both with respect to customer
stakeholders and in the context of government interventions, regulations such as GDPR, and
antitrust actions. Speed and experimentation are now also critical to meaningful intelligence,
making digital twins a mainstream strategy that is broadly leveraged in support of measurably
differentiated decision power. Data literacy and democratization have shifted organizational
focus from straightforward distribution of data to more immersive strategies to find and
leverage truly differentiated decision power. Metadata is a critical decision support tool,
providing context through workflow linkages and automation. Data optimization and
democratization are core strategies to mitigate skills shortages, create data-driven decision
value, and deliver strong competitive advantage.
 Context: The differentiating power of data is a fact: IDC's August 2021 Future of Intelligence
Survey indicates that 77.3% of respondents have a senior-level executive responsible for
enterprise intelligence (see IDC FutureScape: Worldwide Future of Intelligence 2022
Predictions, IDC #US47913321, October 2021). According to IDC's 2022 Business Intelligence
and Analytics Survey, 40% of organizations have started tracking new KPIs in the past 18
months. IDC's Future of Intelligence Survey also indicates that investments in enterprise
intelligence (including data culture and democratization) improved employee retention and
productivity. Yet the focus on ethics and trust has never been higher, with the European
Commission proposing regulation of artificial intelligence systems described as "the first ever
legal framework" on AI (digital-strategy.ec.europa.eu/en/library/proposal-regulation-laying-
down-harmonised-rules-artificial-intelligence). If that regulation follows the GDPR path, it will
set the benchmark for most global economic sectors. The worldwide data integration and
intelligence (DII) software market grew over 10% in 2021, indicating an unprecedented focus
on gathering intelligence about data and leveraging data capture that "listens" to database
transactions to inform on what is happening in the business (see Worldwide Data Integration
and Intelligence Software Market Shares, 2021: Accelerated Growth in a Digital-First World,
IDC #US47920522, June 2022).

Ecosystem-Based Innovation — Driving Enterprise Value

 Description: Innovation has shifted from tactical DX investments that aggregate siloed strategies
to holistic, ecosystem-aligned enterprise commitments. Strategic innovation, led by the CEO,
boards, and C-suite, now demands clear and measured links between technology innovation

©2022 IDC #US49755622 17

 and outcomes. IT organizations are seeing a shift in investment priorities, with ecosystem-driven
models now materially impactful to strategy, planning, and execution. Ecosystem commitments
carry new challenges including consideration of IP protection and cybersecurity, where intelligent
innovation has hastened business evolution across the workload, enterprise, and ecosystem
control planes. Accelerated digitalization has also forced companies to fundamentally reimagine
how they can leverage ecosystem relationships. The enterprise that is positioned to be bold has
the most ecosystem leverage, realizing high-value outcomes to the benefit of both the enterprise
and discrete workloads. This next generation of innovation has moved beyond bridging historic
gaps and siloed investments with respect to customers, cost, and supply chain; it is now driving
long-term and measurable strategic integration of enterprisewide business functions. Successful
ecosystem alignment is now leading the C-suite discussion in terms of driving enterprise value
and what success looks like. Organizations are investing in creative ways to leverage the
ecosystem for both co-innovation and industry leadership.
 Context: Trusted ecosystem models are leading organizational response in the drive to digital
business, empowering high-value innovation and tangible outcomes that can be delivered at
scale. Ecosystem-based, multipartner solutions will drive speed and value through commercial
intelligence, operational value, and increased value and differentiation, with insights driven by
AI/ML (48%) and value metrics for pricing (49%) at the top of immediate digital business
priorities (see IDC FutureScape Webcast: Worldwide Digital Business Models and
Monetization 2021 Predictions, IDC #US47028620, December 2020). Tech spend by business
leaders will overtake spend by IT by 2023 (see Worldwide Line-of-Business Forecast, 2021–
2025: C-Suite Tech Spending in a Digital-First World, IDC #US48459721, December 2021).
The need to reassess use cases and ensure alignment will drive commitment across the
"digital dream team." Planning and budget cycles will be driven to become more dynamic in
response to evolving ecosystem models. Technology architectures will be driven to support
the needs on the broader C-suite for business models of the future (see The C-Suite Tug of
Digital Value in the Future Enterprise, IDC #US48052721, August 2021).
Embracing the Metaverse — New Levels of Immersion
 Description: While the metaverse and Web3 are still in the early phases and much is yet to be
seen, together they are already driving some business imperatives. IDC defines metaverse as
"a highly immersive future environment that blends the physical and digital to drive a shared
sense of presence, interaction, and continuity across multiple spheres of work and life." Web3
technologies, such as crypto, blockchain, and NFTs provide the trust and identities that these
new environments require. We can think about Web3 as enabling content, owners, and users,
and the metaverse as enabling the platform to provide new experiences and opportunities.
These new experiences will create new levels of immersion and change how people entertain,
socialize, shop, learn, work, and collaborate by using virtual reality (VR) or augmented reality
(AR) technologies that enable interactions, transactions, and content creation. New interfaces
for live bidirectional human interactions will change the virtual proximity of the engagement,
both in the consumer space and in the "work metaverse," which may radically change the way
people do their jobs. The "industrial metaverse" will harness the power of AR/VR, IoT, and
more to create virtual, collaborative design, manufacturing, and maintenance environments,
upping the importance of digital twins. Powering the metaverse will be new devices, interfaces,
virtual worlds, creator tools and services, platform tools, and infrastructure and connectivity.
However, there are many concerns with the metaverse, particularly security, privacy, and
negative impacts on mental health and behavior.
 Context: IDC states that the future objective of combining the metaverse and Web3 is to
enable people to have a persistent identity based on trusted data that is portable across

©2022 IDC #US49755622 18

 multiple mixed reality "worlds," supported by a fully decentralized business model with a
trusted exchange of value that gives full power to the users. This will require significant IT
investments in infrastructure. McKinsey predicts that global spending on the metaverse,
including ecommerce and advertising, could reach $5 trillion by 2030
(www.mckinsey.com/about-us/new-at-mckinsey-blog/meet-the-metaverse-creating-real-value-
in-a-virtual-world). Cybersecurity and revenue streams are some of the big hurdles that will be
faced. Still, the market for AR hardware is expected to grow to $45.6 billion by 2025
(www.mckinsey.com/business-functions/growth-marketing-and-sales/our-insights/marketing-
in-the-metaverse-an-opportunity-for-innovation-and-experimentation). IDC predicts that by
2026, industry leaders facing systemic or mandated transitions in the coming decade will triple
IT spend for new environments but struggle to achieve the needed 6x gains in IT operational
efficiency (www.idc.com/getdoc.jsp?containerId=prUS48329821).

Work Mode Upheaval — New Models and Leadership

 Description: The past two years have seen workforce dynamics disrupted through widespread
adoption of hybrid work, accelerated investment in automation, a new focus on employee
experience, and the pipeline of talent for both general and IT sector jobs. Automation and
augmentation of work have been accelerated, with technologies like AI and RPA making
everything from onboarding to secure access much more fluid. Modes of work have raised the
bar for skills and driven increased attention to employee experience. Remote and hybrid work
has gone beyond a focus on physical workplaces and digital workspaces to spotlight skills,
workforce management, automation, changing demographics, and as-a-service talent
resourcing. New modes of working are now intrinsic to leadership and organizational resilience
and go well beyond traditional staff planning methods. New work models require cross-functional
teams — including HR, IT, LOB, finance, and operations — to leverage new disciplines and modes
of work aligned with each company's business goals. Automation, multi-disciplinary capabilities,
and democratization of data and workflow add operational complexity, with dynamic resource
models like "as a service" causing planning and operational changes that extend beyond the
work and impact enterprise risk policies. Employee and customer experience leaders must work
together to recalibrate culture, augmentation, and space models that are competitive and aligned
with more dynamic and refined work models.
 Context: Who is working and what workers expect has changed: With a significant number of
workers expecting to change jobs in 2022, IDC's 2022 Future Enterprise Resiliency and
Spending Survey reports that, worldwide, over half of organizations have felt negative effects of
worker attrition resulting in increased workload on remaining employees, security risks, and loss
of critical knowledge. The recognized criticality of skill retention is pushing major technology
sector players such as Microsoft (www.wsj.com/articles/microsoft-boosts-pay-in-fight-for-talent-
11652738482) and Apple (www.wsj.com/articles/apple-boosting-pay-budget-for-workers-amid-
tight-labor-market-11653527996) to boost pay in the fight for talent and to visibly respond to
inflationary pressures. Work mode dynamics and labor-centric policies and strategies are taking
on new power across the business community, with HBR reporting a 658% increase in the
frequency of CEO discussions of equity, fairness, and inclusion during earnings calls
(hbr.org/2022/01/11-trends-that-will-shape-work-in-2022-and-beyond). The C-suite is critical in
representing organizational values; 69% of Gen Z workers prioritize diversity, according to a
survey by Tallo (tallo.com/blog/genz-demands-diversity-inclusion-strategy), and a New York
Times report indicates that tech firms will be deprioritized based on employee concerns about
the sector's moral qualities (www.nytimes.com/2020/01/11/style/college-tech-recruiting.html).

©2022 IDC #US49755622 19

Everything as a Service — Thriving Through the Change
 Description: Everything as a service (XaaS) is a driver for change in every sector and
ecosystem, with real impacts on both the supply side and the demand side of every business.
Organizations are adopting as-a-service models at varying speeds out of necessity, but the
multidimensional delivery strategies make requirements more complex and impacts less
predictable. The shorter decision cycles of on demand are letting industry leaders do things
differently, but the commitment models are fundamentally changing. On the supply side,
demand and customer expectations are rising, so suppliers are driven to convert and enable
offerings more quickly in a secure services–based model. Change is rampant in terms of
accountability and control, as suppliers are more committed in a shared-responsibility model.
Buyers are now making decisions based on commitments to measured outcomes in terms of
optimization, reliance, and financial models. Architecture and solution strategies are now
critical to the service provider, where proprietary systems that are being maintained or
migrated can materially impact the efficacy of the as-a-service solution. Nonproprietary
requirements are serving as a starting point for integration, so solutions and vendors are
pressed to be dynamic and interchangeable. Leaders are challenged to find new financial,
operational, and governance models that support success in an iterated move to as a service.
Critical factors for organizations to thrive through the as-a-service change landscape include
solution control, contractual clarity on roles and responsibility, and accountability alignment
including geoeconomic assurance and data sovereignty risks.
 Context: Typical 2020 enterprise workloads had 5 to 15 dependencies; that is expected to be
6x greater by 2025 (see IDC FutureScape: Worldwide Future of Digital Infrastructure 2022
Predictions, IDC #US47441321, October 2021). According to the IDC worldwide forecasts,
CAGR in spending is materially shifting toward as-a-service constructs over the next three
years, with infrastructure as a service projected to be up 21%, dedicated cloud projected to be
up 31%, and the services to support as-a-service investments projected to be up 16.9%.
Software as a service is projected to have CAGR at 15.3%. To support an as-a-service
foundation, software-defined everything will drive attention to policy automation,
programmability, and analytics instead of hardware-specific configuration and control. There is
also extensive evidence that the as-a-service segment is building in dominance: SaaS-based
APM solutions are expected to increase at a five-year CAGR of 23.7% compared with 2.8% for
on-premises solutions (see Worldwide Application Performance Management Software
Forecast, 2021–2025: Market Pivots to Observability, IDC #US48353021, November 2021);
SaaS-based network security solutions are creating traction, estimated to bring greater than
7% annual growth in the sector (see Worldwide Network Security Forecast, 2021–2025: SaaS
Adoption Brightens Market Outlook, IDC #US48185721, September 2021); the IoT security
market, enabling autonomous operations across all segments, has a CAGR of 16.3% (see
Worldwide IoT Security Forecast, 2021–2025: Critical Applications Accelerate Demand for
Contextualized Security, IDC #US48347020, December 2021).

LEARN MORE

Related Research
 From Digital to Experiential Buyers: Results from the 2022 B2B Technology Buyer Study (IDC
#US48536622, September 2022)
 The Top 5 Things to Know About Advertising in the Metaverse (IDC #US49670922,
September 2022)

©2022 IDC #US49755622 20

  Worldwide Customer Communications Management Software Market Shares, 2021: Visibility
to Customer Satisfaction Rebounds Growth (IDC #US49656122, September 2022)
 The Data Paradox Reshaping the CIO and CMO Relationship (IDC #US49248822, June 2022)
 The Metaverse: Separating the Hype from the Long-Term, Real-World Technology
Implications (IDC #US48466921, December 2021)
 B2B Marketing's Paradigm Shift: A Framework for the Ultimate Marketing Machine (IDC
#US47138321, June 2021)

©2022 IDC #US49755622 21

About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory
services, and events for the information technology, telecommunications and consumer technology
markets. IDC helps IT professionals, business executives, and the investment community make fact-
based decisions on technology purchases and business strategy. More than 1,100 IDC analysts
provide global, regional, and local expertise on technology and industry opportunities and trends in
over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients
achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology
media, research, and events company.

Global Headquarters

140 Kendrick Street

Building B
Needham, MA 02494
USA
508.872.8200
Twitter: @IDC
blogs.idc.com
www.idc.com

Copyright and Trademark Notice

This IDC research document was published as part of an IDC continuous intelligence service, providing written
research, analyst interactions, telebriefings, and conferences. Visit www.idc.com to learn more about IDC
subscription and consulting services. To view a list of IDC offices worldwide, visit www.idc.com/offices. Please
contact the IDC Hotline at 800.343.4952, ext. 7988 (or +1.508.988.7988) or [email protected] for information on
applying the price of this document toward the purchase of an IDC service or for information on additional copies
or web rights. IDC and IDC FutureScape are trademarks of International Data Group, Inc. IDC FutureScape is a
registered trademark of International Data Corporation, Ltd. in Japan.

Copyright 2022 IDC. Reproduction is forbidden unless authorized. All rights reserved.