IT Through The Looking Glass – Why Your POV Matters

Lewis Carroll’s ‘Through the looking glass, and what Alice found there’ is the sequel to ‘Alice’s adventures in Wonderland’. In this sequel Alice explores an alternative version of the world by stepping through a mirror. Things are not quite the same in this alternative world. Chess pieces have come to life, flowers can speak and people celebrate un-birthdays. Through changing her point of view (POV) the world looks suddenly very different to Alice. Strategies for survival and winning that work in the ordinary world do not apply in the world behind the mirror.

We can all benefit from stepping through the mirror from time to time and look at the world from a different POV. A case in point is the way that the Dutch government statistics bureau CBS, the Dutch government owned innovation think tank TNO and the Dutch association of ICT vendors Nederland ICT look at the Dutch ICT market.

In July 2013, CBS and TNO published the study ‘ICT, Kennis en Economie 2013’. This study aims to analyze the role of ICT in the Dutch economy, yet fails to identify cloud computing as a trend. In the  258 pages of the report, cloud computing is mentioned only once. Concepts like SaaS, PaaS and IaaS get no mention at all. In the report the ICT sector is sized along the traditional segmentation of hardware, software, services and telecom.

The annual ICT Marktmonitor that Nederland ICT publishes presents a similar POV. Looking at the size of the Dutch ICT market we are presented with the following view (see Figure below).

ICT Marktmonitor

Looking at the data it appears the ICT world has not changed at all from 2009 to 2012. The market size remains at €29 billion, telecom remains at 54%, services at 10%, software gains a point from 16% to 17% and hardware drops a point from 20% to 19%. This picture is perfectly valid. However, when we step through the looking glass we get a very different view (see Figure below).

Looking Glass

Looking through the traditional lens of hardware, software, services and telecom, the viewer does not detect the shift from on-premise to as-a-service deployment models. The market is flat, the segments stay the same. However when we step through the mirror we find out that a new public digital infrastructure segment is emerging. This segment can be divided into a infrastructure, platform and software and services layer. IT deployment types can be segmented into co-location, hosting, IaaS, PaaS, SaaS and BPaaS. Looking at the market in a different way we find out that by 2016 parts of this segment have grown with 29% per year on average to represent a €1 billion market (see Figure below).

Enterprise Public Cloud Services Spending in the Netherlands

Some of us have stepped through the mirror already. The Dutch Hosting Providers Association (DHPA) recently performed a study into the size and importance of Digital Infrastructure in The Netherlands, concluding that the Dutch Digital Infrastructure sector (e.g. hosting, data centres, carriers and cloud) is invisible in the Dutch economic statistics due to traditional SBI codes that do not match the products and services in this new sector. The DHPA estimates the size of the digital market infrastructure in the Netherlands at around € 1 billion in 2012 and expects double-digit growth for the future. The value of the digital economy that is supported by this infrastructure is difficult to determine. But adding B2C and B2B commerce, online media and entertainment and SaaS a market size of approximately € 30 billion on the low-end does not seem unreasonable.

Have you, your organisation or your government stepped through the IT looking glass? What do you see? Let us know!

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About Pim Bilderbeek

2 Responses to “IT Through The Looking Glass – Why Your POV Matters”

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  1. Bert says:

    One source for confusion is – and probably will continue to be – the use of the word “service”. In the traditional CBS view “service” refers to labor (aka the tertiary sector of the economy), where people offer their knowledge and time. On the other side of the looking glass however, the “as-a-Service” offerings typically do not include labor but refer to the quaternary sector of the economy instead. My suggestion would be to continue to use services in the traditional view (i.e. the service sector), but to split the tertiary and quaternary part of it. To be decided whether telecom still needs its separate sizing or whether it’s also part of the quaternary sector.

  2. Pim – I really like your second diagram here. It makes me think about horizontal and vertical views of the industry and differences in the audiences we talk to. You should encourage others to comment on how they see the new v old stuff.
    Best Wishes – Martin