WHITE P APER

The 3rd Platform: Enabling Digital Transformation

Sponsored by: Tata Consultancy Services (TCS), Digital Software & Solutions Group

Frank Gens
November 2013

INTRODUCTION: A TIME OF
UNPRECEDENTED OPPORT UNITY AND RISK
www.idc.com

Today, CIOs and line-of-business executives find themselves in the midst of

unprecedented opportunity and risk as the IT industry shifts to a new set of core
technologies that — taken together — form a new platform for industry and enterprise
innovation and growth.
F.508.935.4015

The "3rd Platform" is built on a foundation of cloud, mobile, social, and Big Data The "3rd Platform" is
built on a foundation
technologies. It will enable the all-important digital transformation, evolution, and of cloud, mobile,
expansion of every industry over the next several years and beyond. Business social, and Big Data
technologies.
strategists, IT leaders, and solution developers are already conceiving and building
P.508.872.8200

disruptive new business and consumer services and business models, effectively
reinventing their industries.

Major new sources of competitive advantage are being built by creatively leveraging
cloud, mobile, social, and Big Data technologies. Enterprises and organizations alike
Global Headquarters: 5 Speen Street Framingham, MA 01701 USA

are grappling with how to address the impact of these technologies not only on their
decision-making processes, operations, product rollouts, and promotions but also,
most importantly, on how they engage with their customers. To respond to these
dynamics, enterprises are undertaking digital transformation initiatives. This is already
happening today and will accelerate over the next three to five years. Your future and
the future of your organization depend on your ability to master these 3rd Platform
technologies and use them to your advantage.

This white paper was written to provide a greater understanding of the disruption
caused by the onset of the 3rd Platform and how it is enabling critical digital
transformation today, describe ways that organizations in five different industries are
using the 3rd Platform to develop new sources of competitive advantage, and provide
IDC's recommendations to help you transform your IT organization into a "3rd Platform
IT organization" and your business into a "3rd Platform enterprise."

SITUATION OVERVIEW: THE 3RD PLATFORM

IS THE NEW BASIS OF DIGITAL
TRANSFORMATION
Figure 1 displays the three platforms of IT growth. The 1st Platform, dating back to the
dawn of computing, was based largely on mainframes and terminals. The 2nd Platform
emerged with the birth of the PC in the 1980s and was defined by the client/server
model, Ethernet, Wintel servers, RDBMSs, and a new class of business applications.
Today we are in the early stages of a whole new platform, with mobile devices and apps
extending the edge, cloud taking the place of client/server at the core, Big Data enabling
analytics that create deeper insights much faster, and social technologies bringing
human brains into digital, automated processes.

FIGURE 1

The Three IT Platforms for Business Innovation

Billions of Users
Millions of Apps

Hundreds of Millions of Users

Tens of Thousands of Apps

Millions of Users
Thousands of Apps

Source: IDC, 2013

Each growth platform is defined not so much by the technologies but by the scale and Each growth platform
is defined not so
scope of users and uses that the technologies enable. The 1st Platform touched much by the
millions of users, with applications and solutions in the low thousands. The 2nd technologies but by
the scale and scope
Platform involved hundreds of millions of users and tens of thousands of apps. And of users and uses that
the 3rd Platform is already touching billions of users (with over 2.4 billion people, or the technologies
36% of the world's population, currently connected to the Internet, more than half enable.

through mobile devices), and millions of new applications and solutions (with over 1
million apps available for iOS and Android devices alone).

The name of the game over the past 25 years was intelligently leveraging the 2nd
Platform. Over the next 25 years, the 3rd Platform will represent the basis for solution
development and business innovation.

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Most Innovations Are Being Built on the
3rd Platform

Figure 2 illustrates the magnitude of the shift from the 2nd Platform to the 3rd Platform.
IDC estimates that 2nd Platform technologies account for 74% of worldwide ICT spending
and over 80% of the infrastructure and applications in most datacenters today. But the
focus is shifting, and by 2020, the 3rd Platform will account for over 40% of IT spending.

FIGURE 2

Worldwide ICT Spending, 2013–2020

5,000,000
4,500,000
4,000,000
3,500,000
3,000,000
($M)

2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
2013 2014 2015 2016 2017 2018 2019 2020
3rd Platf orm 2nd Platf orm

Source: IDC, 2013

Even more remarkable is the difference in growth rates between 2nd Platform and From 2013 to 2020,
organizations'
3rd Platform technologies. IDC projects that organizations' spend on 2nd Platform investment in 3rd
technologies will grow at an 0.5% CAGR — only slightly higher than flat — between Platform technologies
will grow over 20
2013 and 2020. During that same period, organizations' investment in 3rd Platform times faster than
technologies will grow at a 10.6% CAGR, over 20 times faster than the investment in organizations'
2nd Platform technologies, and the 3rd Platform will account for 95% of the investment in 2nd
Platform technologies,
cumulative growth in investment. Business innovation budgets are increasingly with the 3rd Platform
centered on 3rd Platform technologies, and IDC expects they will continue to be the accounting for 95% of
the cumulative growth
basis for the next generation of digital innovation strategies. in investment during
that period.

Most Valuable Solutions Will Be in Industry-

Specific Cloud Platforms and Marketplaces

Cloud service platforms and marketplaces are key enablers of 3rd Platform solutions. Cloud service
platforms,
Also known as platform as a service (PaaS), cloud service platforms provide a home marketplaces, and
in the cloud for 3rd Platform solutions. Cloud service platforms, marketplaces, and developer
developer communities will be where the most sought-after solutions live, and the communities will be
where the most
choice of cloud service platforms will either expand or constrain a company's ability to sought-after solutions
find and leverage the best new solutions. live.

©2013 IDC #244515 3

The best-known cloud service platforms are those from IT leaders such as Amazon,
salesforce.com, Microsoft, IBM, and Google. These platforms are generally horizontal
in nature and were designed to serve broad, cross-industry communities and needs.
But since the platform model enables shared deployment and development, the
barrier to entry for new solutions is significantly lower. This is enabling an explosion in
the number of solutions and the development of industry-specific marketplaces.

As a result, we're seeing a new species of cloud platforms that IDC calls "industry cloud
platforms." With these industry cloud platforms, major players in specific industries are
developing and offering services tailored to the needs of their industry. These platforms
are where the highest-value, industry-transforming solutions will be developed.

Industry cloud platforms have already emerged in a wide variety of industries,

including finance, retail, healthcare, and manufacturing. Examples include the New
York Stock Exchange's Financial Trading Platform, Illumina's Genomic Platform,
Johnson Controls' Panoptix Platform for smart buildings, and GE's recently
announced Predictivity Platform for apps that link industrial equipment.

The Benefits of Being the First to Offer a Cloud Service Platform for
Your Industry
The emergence of industry cloud platforms not only helps the industry as a whole but
also can enable new types of digital transformation for the player or players that host
these industry-specific cloud service platforms. The industry benefits by having a
place where innovators can release products and services to their target customers,
and industry participants can leverage these innovations to improve their business
model. The player or players that host the service platforms benefit by being the place
where the "real" industry-transforming solutions are housed.

You should think not only about how to use cloud to address your business' traditional
IT needs but also about whether and how to expand your business model to become
a cloud platform provider yourself. Businesses that get there first can extend their
leadership and can build an ecosystem that can provide new sources of revenue and
competitive advantage. Cloud technologies not only can open new ways to add value
to customers but also can open new lines of business and business models.

This makes platform as a service a strategic choice for CIOs and their IT teams and a
business strategy decision for C-level and other line-of-business executives looking to
expand and evolve market opportunity and revenue. The 3rd Platform provides an
excellent point of focus for strategic collaboration between CIOs and their line-of-
business colleagues.

3rd Platform Expands Value from Silos to

New Integrated Industry Solutions

A key aspect of the 3rd Platform is that it's not just about mobile, social, cloud, or Big The real key is
weaving together two
Data taken in isolation. The real key is weaving together two or more of these or more of these
technologies to create high-value industry solutions. technologies to create
high-value industry
solutions.

4 #244515 ©2013 IDC

Figure 3 presents a great example of the value of these "mashups." In a recent IDC
study, we asked users to identify which IT applications and workloads they are most
likely to shift to the cloud. Two of the top 3 drivers of cloud are social solutions (email
and collaboration apps), two of the top 6 drivers are Big Data solutions (data
backup/archiving and storage cloud), and the number 4 driver is mobile apps. These
three technologies are all heavily dependent on the cloud services model. The
obvious message is that customers can already see the greatest value in cloud,
social, mobile, and Big Data not as standalone technologies but in solutions that are
mashups across all four technology silos.

FIGURE 3

Likelihood of Moving IT Workloads to Public Cloud

Email 3.87

Data backup/archive 3.77

Collaboration apps 3.72

Mobile apps 3.67

Personal productivity apps 3.6

Storage cloud 3.53

IT help desk 3.53

IT mgmt apps 3.52

Server cloud 3.51

Web site dev/mgt 3.51

Develop new apps 3.48

Partner apps 3.44

Marketing apps 3.43

App dev/test 3.41

CRM and SFA apps 3.41

HPC 3.4

"Big Data" apps 3.34

Other apps (f inancials, ERP, HR) 3.31

Migrate legacy apps 3.26

1 2 3 4 5
(Mean rating by respondents)
n = 493
Source: IDC's CloudTrack Survey, winter 2012

©2013 IDC #244515 5

3rd Platform Is Reinventing Established
Digital Models

There's nothing new about technologies such as digital commerce, customer

analytics, or intelligent infrastructure; each technology has been around in some way,
shape, or form for over a decade. What's new is that 3rd Platform innovations are
enabling new types of digital transformation, in effect creating a "second chapter" in
each area.

 Turbocharging digital commerce. Digital commerce already accounts for a The result is greater
customer
huge percentage of the economy. According to IDC's New Media Market Model, engagement,
total worldwide digital commerce spending (B2B and B2C) was $12.0 trillion in sustained
relationships, and
2012, representing fully 17% of global GDP. But 3rd Platform innovations are real-time insights.
ushering in a new era and being used to reinvent digital commerce. In its first
incarnation, digital commerce was all about creating Web sites with online
shopping carts, gathering eyeballs, and optimizing transaction close rates. Now
Big Data is enabling analysis of customer and transaction data in much greater
depth than ever before, while social network data is honing understanding of
consumer preferences and driving recommendation engines. And of course,
more and more transactions are coming from mobile devices and being driven by
the cloud. The result is greater customer engagement, sustained relationships,
and real-time insights.

 Faster time to insight. Big Data is enabling businesses to use customer The scalability of
cloud is enabling
intelligence on a wider scale and in far more granular fashion than was companies to gather
previously possible. Even more importantly, the scalability of cloud is enabling and apply insights in
real time.
companies to gather and apply insights in real time, providing a significant source
of competitive advantage. By using mobile devices, which consumers take with
them everywhere and can yield a tremendous amount of behavioral, preference,
and location-based data, companies can obtain deeper insights than ever before.
Social networks provide a unique view into customer intelligence. None of this
would be feasible without the use of cloud.

 Enabling intelligent infrastructure. IDC forecasts that by 2016, more than Companies will need
to expand their vision
5 billion intelligent connected devices will be shipped worldwide — more than of what mobility
twice the number of PCs, tablets, and smartphones combined. These devices means and consider
how to leverage 3rd
include cloud-connected cars, CCTV security cameras, Bluetooth-based traffic Platform technologies
monitoring systems, thermostats and energy regulators for intelligent buildings, to take advantage of
and even networked microscopes. Companies will need to expand their vision of the "Internet of
things."
what mobility means and consider how to leverage 3rd Platform technologies to
take advantage of the "Internet of things" to open new business opportunities.

6 #244515 ©2013 IDC

INDUSTRY VIGNETTES
The lion's share of new 3rd Platform solutions for the enterprise will focus on industry-
specific needs. These solutions will target not just top-level industry classifications
such as retail, financial services, and healthcare but also the dozens of subindustries
within those industries and even the dozens of industry-specific processes and
subprocesses within each of those subindustries. Add to that the hundreds of
countries and languages and thousands of legal frameworks, and the number of new
solutions rolling into the market will be in the hundreds of thousands.

These solutions will encompass technologies from two or more of the 3rd Platform
technology pillars, and since they will target the needs of individual subindustries,
they will represent much greater sources of value than purely horizontal solutions.
These solutions would not have been practical or profitable before — but they
become possible with this new platform.

This section describes a few of the innovative new solutions that leaders in the retail,
financial services, telecom, healthcare, and government industries are using to
revamp their business models, enable digital transformation, and drive new sources
of competitive advantage.

Retailers Are Bringing the Benefits of Online

and Mobile into the Store

Some of the world's largest retailers are using 3rd Platform solutions to transform
their business models. One example is emerging to combat the "showrooming"
phenomenon, in which customers visit a physical retailer to get an in-person look at
products and compare prices, then make the purchase online. Retailers are taking
an "if you can't beat them join them" approach to bring the online world into the
physical store.

A leading retailer is developing a mobile shopping app designed to transform its

customers' in-store experience and bridge the divide between physical and
mobile/online. The app provides an "in-store mode" that allows users to find products
and scan QR codes for prices and discounts. It also provides the ability to find
physical stores and access the consumer's online cart. New capabilities will include
a predictive function to automatically generate shopping lists based on customers'
weekly purchases as well as product recommendations based on specific user
criteria.

These solutions use a combination of 3rd Platform technologies to completely rethink

the customer's experience. Future plans call for the retailer to use Big Data to view
the shopper's history, the products purchased in combination with other products, the
impact of promotions, and the day of the week and time of day purchases are made.
It will tap into social technologies to make recommendations based on what
customers' friends or people with similar characteristics purchased. Of course, this is
all powered by cloud technologies.

©2013 IDC #244515 7

This 3rd Platform approach has already begun paying benefits. By providing By providing
contextually aware
contextually aware information to customers on their mobile devices, the retailer information to
believes it is delighting customers — and increasing its share of wallet. Customers customers on their
mobile devices, the
with the app make two more shopping trips a month and spend 40% more per trip; retailer believes it is
those most highly engaged with the app make nearly four additional trips per month delighting customers
and spend 77% more. Further, mobile already accounts for one-third of the retailer's — and increasing its
share of wallet.
traffic, a figure that rises to 40% during the holidays.

Financial Services Companies Are Revamping

Payments Using 3rd Platform Solutions

The 3rd Platform is also having a profound impact on the financial services industry.
A good example is the payments subindustry. Payments have traditionally been built
on a simple premise: providing a set of "rails" to move money from one party to
another while performing an accurate risk assessment and charging accordingly. But
today, providers are starting to use the information available through payment
operations as a source of competitive advantage.

Owning the payment relationship and data gives financial services providers an Owning the payment
relationship and
important link to the customer, and 3rd Platform payment mashups are emerging to data gives financial
leverage this information. Providers are using Big Data to gather and analyze vast services providers an
important link to the
quantities of information, including information obtained through social networks, and customer, and
taking advantage of cloud as a deployment mechanism. And they are increasingly 3rd Platform
offering payment services through customers' mobile devices. payment mashups are
emerging to leverage
this information.
Cloud is playing a critical role in the development of mobile wallets. Whereas retail
payments were once defined by the use of a credit or debit card at a point-of-sale
terminal, providers are now offering digital wallets that store the value in the cloud
(and not as data on the phone). Customers need carry only credentials to prove their
identity, not a specific piece of plastic. This can reduce security and fraud risks and
limit the amount of financial services providers' out-of-pocket costs as a result of lost
or stolen cards.

Many industry players are scrambling to adapt to the disruptive influence of the 3rd
Platform, while others are adapting more quickly. Financial services companies are
also using the 3rd Platform to team up with retailers to offer banking services through
mobile phones, offer mobile-only services such as "mobile phone transfers" (using the
counterparty's mobile number to designate the destination of the transfer), and
partner with Twitter to "pay by Tweet."

Telecommunications Firms Using 3rd Platform

to Gain Greater Relevance

In previous decades, it was sufficient for telecommunications companies to exact

economic rents simply by charging for the pipelines that carry voice and data. But
today telecommunications providers are fighting not to become a commodity and are
looking to digital transformation to better monetize their unique role in the value chain.

8 #244515 ©2013 IDC

One innovative initiative being pursued by a United States–based carrier consists of a One innovative
initiative being
mobile advertising service designed to make advertising more personalized and pursued by a
relevant to customers. This service uses a combination of 3rd Platform technologies, United States–based
carrier consists of a
including Big Data, to package information on its tens of millions of customers (on an mobile advertising
opt-in basis) into demographic data, behavioral data, and location data. This enables service designed to
advertising agencies to develop better-targeted campaigns and provide more relevant make advertising
more personalized
ads to consumers. Advertisers can better ensure that they are reaching the right and relevant to
audience in the right context — improving the experience for consumers and driving customers.
greater value to the advertiser. The solution has been in the market for about a year
and has proven successful as evidenced by the fact that the provider has already
struck strategic deals with a number of major advertisers.

In another example, a major European-based mobile operator is working to remain

relevant to subscribers who are engaging in "over the top" social network sites. This
provider is partnering with social networks, using Big Data to help social network
providers better understand the profile of the telco customers who use their sites. The
provider leverages this knowledge to target "best fit" customers within its customer
base to get them to sign up with the social networks in return for a cut of the
proceeds. Similarly, a number of mobile operators around the world have begun
promoting materials (such as images) to customers that can be posted on Facebook
or Twitter in exchange for operator-pocketed micropayments.

With these new offerings, telecommunications companies are carving out a niche
unique to their role in the value chain, deepening their relationship with customers,
and increasing their average revenue per user (ARPU).

Healthcare Using 3rd Platform Solutions to

Provide Information to Patients at Key
Decision Points

The healthcare industry in the United States is currently undergoing a rapid

transformation, driven by new business models inspired by the introduction of
government incentives for meaningful use of IT, the implementation of electronic
records and technologies, and the passage of healthcare reform legislation in 2010.
These changes moved business models from fee-for-service models toward fee-for-
value incentives, inspiring more collaboration between providers and payers.

3rd Platform solutions are playing a key role in this transformation. Industry-specific
solutions are being developed leveraging cloud-based portals, analytics, and mobile
to tighten patient engagement and drive surprises out of the process. The goal is to
improve the quality of care and outcomes while reducing costs.

Today's healthcare industry does a good job of addressing sudden and serious health
issues, including emergencies and accidents, and has made broad strides in public
health. But the primary cost challenge is treating chronic conditions found in aging
populations who are living longer. Treating these conditions is difficult and expensive
without appropriate technology, but new 3rd Platform solutions are beginning to make
a real difference.

©2013 IDC #244515 9

3rd Platform mashups are being used to engage patients with information to help 3rd Platform mashups
are being used to
them make the best choice with regard to key health-related decisions. Using engage patients with
predictive analytics enabled by Big Data, mobile, social, and cloud services, information to help
them make the best
healthcare providers are helping patients change their behavior through the use of
choice with regard to
reminders, social influence, and education. key health-related
decisions.
In the past, providing individualized care was an expensive proposition for healthcare
providers because their staff had to individually manage each patient's regimen.
Now 3rd Platform technologies provide much more cost-effective ways for providers
to automate these processes and provide proactive care such as prenatal information
services and tailor regimens to the needs of the individual. Nearly every large
health system around the world and a large number of U.S. private payers are
experimenting with these technologies to provide population health management.

Leading-Edge Government Agencies Using

3rd Platform to Improve Services and
Reduce Costs
Government agencies contain some of the most advanced and some of the most
lagging IT systems in the world. While government sectors such as defense, security,
and space are among the earliest adopters of 3rd Platform technologies such as Big
Data and cloud, other agencies are firmly rooted in the 2nd Platform paradigm.

Many agencies' IT environments contain duplicate legacy systems, resulting in low A number of
government agencies
asset utilization, resources with fragmented demand and that do not scale, and
are beginning to
systems that are difficult to manage and maintain. In response, a number of implement 3rd
government agencies are beginning to implement 3rd Platform technologies in a bid Platform technologies
in a bid to address
to address inefficiencies while improving government service delivery. inefficiencies while
improving government
One example at the national government level is the U.S. Department of Agriculture service delivery.
(USDA), which recently launched a private cloud service for other federal government
agencies that need to implement IT solutions consistent with federal information security
standards. By offering other government organizations the benefits of cloud computing,
including on-demand provisioning, resource pooling, elasticity, network access, and
measured services, the USDA is facilitating the ability of government organizations to
efficiently meet demand from citizens for better services delivered more quickly.

An example at the state/regional level is a recent initiative by the Washington State

Department of Labor and Industries, which is using Big Data to analyze data sets
across multiple government systems and agencies to detect possible instances of
fraud in its workers' compensation program. The initiative has been so successful in
its ability to recover millions of dollars each year that it is on track to pay for itself in
less than 24 months.

At the local government level, the Domain Awareness crime monitoring system was
recently developed by New York City in conjunction with Microsoft. It uses Big Data to
better collect, disseminate, and analyze data in real time using a series of mobile and
intelligent devices including cameras, license plate readers, and other resources around
the city. This system not only is improving the ability to fight crime but also is providing an
innovative new revenue stream for the city. Under the deal, Microsoft has the rights to
remarket the offering to other cities and local governments, with New York receiving 30%
of the proceeds.

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IDC OPINION: BEST PRACTICES FOR THE
3RD PLATFORM
IDC recommends that you consider the following best practices as you look to new
digital transformation initiatives using 3rd Platform solutions:

 Refresh IT competencies. Most of today's IT organizations were built around

2nd Platform technologies, and implementing innovative 3rd Platform solutions
can require skills and expertise that they currently lack. IT organizations must
revamp themselves with the goal of becoming "3rd Platform IT organizations."
You should refresh your technologies, skills, and business practices in the areas
of cloud, Big Data, mobile, and social technologies — the new core IT
competencies for the next two decades. You should look to become leaner and
in the process become comfortable outsourcing noncore activities so that you
can remain focused on your core competencies.

 Rethink the core business model. The changes enabled by the 3rd Platform
extend well beyond the IT organization and touch upon your company's very
business model. Organizations with new digital transformation initiatives will need
to decide whether to maintain old models such as keeping their most important
assets behind the firewall, work closely with a small number of partners, or
leverage 3rd Platform innovations to enable a community of potential partners to
work with them and leverage their core IP. The 3rd Platform enables new
business models and lets companies amplify their value by using cloud service
platforms to distribute their products and services and enable partners to deliver
their own value-added solutions.

 Leverage industry-specific cloud platforms. You should look to leverage one

or more of the new generation of 3rd Platform solutions being developed that
serve your specific industry's needs. As noted previously, IDC expects there will
be hundreds of thousands or more industry-specific cloud platforms — as well as
next-generation replacements for current core applications — and that they will
offer levels of value that go well beyond the value of the past decade's largely
horizontal core business systems such as ERP or CRM. You should move
quickly to take advantage of these new services.

 Extend the business model to become an industry-specific platform

provider. Beyond the idea of merely using industry-specific cloud platforms,
there is also a significant opportunity for companies to transform their business
by becoming industry-specific platform providers. A variety of business models
support this concept, including using the cloud as a place to market and
distribute your company's intellectual property content and using your platform to
enable a community of innovative players whose goal is to create, market, and
distribute their own services. By becoming a center of innovation in your own
industry and enabling other companies to distribute their content through your
portal, you can increase visibility and viability within your industry. This is very
similar to the iTunes model.

©2013 IDC #244515 11

 Fast track with preintegrated industry digitization solutions. Vendors are
providing a variety of approaches to support enterprises' digital transformation. At
one end of the spectrum are generic technology platforms for cloud, analytics,
social, and mobile solutions. At the other end are a new generation of narrowly
focused point solutions. Both of these approaches require customers to do quite a
bit of integration. IDC believes that we will increasingly see the emergence of
preintegrated industry solutions in key areas such as customer analytics, digital
commerce, supply chain management, management of intelligent infrastructure
(including the "Internet of things"), and more. Keep an eye out for these new
3rd Platform–based industry solutions; they can provide a fast track to digitization of
critical and fast-evolving processes.

 Engage in new levels of dialogue. With the 3rd Platform model, the role of IT is
changing. IT organizations must partner with line-of-business executives to
transform their businesses into "3rd Platform enterprises" capable of competing
and winning in the new economy. As an integral part of the offerings, services,
and support provided by the company, IT will need to partner with the rest of the
business while breaking down organizational silos.

 Revamp digital commerce, customer analytics, and intelligent infrastructure.

3rd Platform solutions are being used for a wide variety of digital transformation
initiatives, including reinventing the ways companies reach customers, learn about
customers' preferences and behaviors, and develop new innovations. The 3rd
Platform is disrupting business models and enabling the "Internet of things."
Organizations that can move quickly to leverage these new opportunities will find
themselves in an advantageous position relative to competitors.

 Find appropriate partners. Even as IT organizations add new skills to their

in-house teams, an important component of the 3rd Platform is that enterprises
should not try to do everything themselves. They should focus on their core
competencies while sourcing noncore activities from world-class partners and
take advantage of partners' expertise to accelerate their journey down the 3rd
Platform road to innovation and growth; however, selecting the right partners is
an important piece of the equation. You should seek partners that not only
provide world-class competence in 3rd Platform solutions but also have the best
practices and business consulting acumen to help in this transition.

CONCLUSION: THE TIME TO ACT IS NOW

The 3rd Platform has become the dominant strategic priority for enterprise IT leaders
and will represent 95% of the growth in strategic IT investments over the next seven
years. But the change from the previous computing paradigm does not come without
cost or risks, and IT organizations need to be prepared.

The 3rd Platform is being used to digitally transform entire industries and develop
major new sources of competitive advantage. Hundreds of thousands, if not millions,
of industry-specific cloud service platforms and marketplaces will emerge, and the
highest-value technologies and solutions will be found in these locations. Combinations
of 3rd Platform technologies will transform — and already are transforming — industries
such as retail, financial services, telecommunications, healthcare, and government.

12 #244515 ©2013 IDC

Organizations looking to maximize their use of 3rd Platform innovations must reinvent
themselves to become not only "3rd Platform IT organizations" by retooling their skills
and practices but also "3rd Platform enterprises." Any organizations that have not
already embarked upon a digital transformation path must consider doing so urgently
— before the competition leaves them behind. The 3rd Platform will be the essential
basis for competing in every industry on the planet, and IT organizations must lay the
foundations — and select the right partners — to succeed in this new world.

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©2013 IDC #244515 13