According to a report from IDC, the 3rd Platform with cloud at its core will be the primary growth engine in the information and communications technology (ICT) industry, during the coming decade, offering 75% of new growth.
The report, The Coming of the 3rd Platform and What This Means for Software Business Models, revealed that the global ICT spending will reach more than $5 trillion in 2020 rising from the current $3.7 trillion in 2013.
The rise of 3rd Platform solutions and new customer expectations are responsible for rapid disruption of software business models, the report said.
IDC Software Licensing, Provisioning, and Delivery research vice president Amy Konary said that the 3rd Platform is not just a technology revolution; it’s also a customer revolution.
"As a result, expect the rise of new software business models that align more closely with business outcomes and customers’ experiences," Konary said.
"Customers should expect to see models that enable access to and consumption of applications when and where they want. Pricing will scale up or down according to consumption or need, allowing customers to pay only for what they use."
In addition, the 3rd Platform would allow proliferation of two important, value-generating overlays that include big data analytics and social technologies.
About 82% of the net-new commercial applications are being built mainly for cloud delivery in 2013.
By 2016, about $1 of every $6 spent on packaged software and $1 of every $5 spent on applications will be consumed through the software-as-a-service (SaaS) model.
About 16% of the top 100 software vendors generate over 50% of their revenue from subscription.
According to the research firm, disruption rarely, if ever, leads to wholesale replacement.
"IDC believes that while packaged software applications are being slowly re-platformed for vitalised use on converged systems in data centres, they will be available for distributed client/server computing environments (the 2nd Platform), and they will be priced and licensed accordingly," Konary said.
"These applications will just become less interesting than they once were, as software developers shift innovation to where the growth opportunity exists – the 3rd Platform."
