Global TMT Predictions 2021 has been saved
Global TMT Predictions 2021
What does the future hold for technology, media, and telecommunications?
TMT Predictions Series Presents: Hockey Legend and Olympian Nicci Daly & Google's Head of Telco & Media Juliet Bramwell
We are delighted to invite you to the TMT Predictions special event taking place on Tuesday, 18 May from 1:00pm – 2:00pm.
During the webinar, we will host two informative panel discussions, each covering a selection of our TMT Predictions including:
- Increased Visibility and Monetisation of Women's Sport;
- The Role of Data in Sport;
- Future of Cloud.
Please click here to register
The COVID-19 catalyst
Deloitte’s 2021 TMT Predictions report contains nine topics this year. The dominant theme is the way in which COVID-19 has acted like a chemical catalyst, making what was already happening anyway happen much faster. As leaders around the world have observed, ”We are seeing many years of progress in as many months!”
The pandemic has dramatically catalysed growth in cloud computing, the shift to the intelligent edge, unfounded fears over the health effects of 5G, and the use of video calling for virtual doctor visits.
To a lesser extent, growth in the use of digital reality headsets has been accelerated, although unit numbers are still low. The hyperquantification of athletes is thriving as spectators can’t attend matches in person, and 8K TVs are up at least in part to viewers spending more time at home.
On the other hand, progress of women in sports and open RAN networking solutions are relatively unaffected by the pandemic.
In a chemical reaction, when a catalyst is removed, the reaction returns to its slower rate. Will the post-pandemic world see change, disruption, and innovation decelerate from current levels? Or will the acceleration induced by COVID-19 persist for the long term—perhaps even permanently?
Welcome to TMT Predictions 2021.
2021 TMT Predictions
Click on each prediction to find out more
Cloudy with a chance of clouds
COVID-19 sparks growth in video doctor’s visits
Edge computing and intelligence could propel tech and telecom growth
Busting the radiation risk myth
Digital reality headsets in enterprise and education
The start of the 8K wave
On track for rising monetisation
Open and virtualised RANs are the future of mobile networks
Technology, measurement, and the business of sport
The cloud migration forecast: Cloudy with a chance of clouds
Cloud revenue growth will remain at or above 30% for 2021 through 2025 as companies move to cloud to save money, become more agile, and drive innovation.
Growth in cloud computing has been a megatrend over the last decade, with the market experiencing triple-digit annual growth as recently as 2015. Even though growth among the largest hyperscale public cloud providers had declined to “only” 31% annually by the end of 2019, and this rate was projected to (slowly) decline further in 2020 and 2021 as the industry matures, growth in cloud continued to outpace that in many other sectors.
It would have not been surprising to see cloud spending go down a few points in 2020, given the spending reduction in multiple areas driven by the COVID-19 pandemic and the associated global recession. Instead, the cloud market has been remarkably resilient. By some metrics, growth was more or less flat in 2020; by some other ways of measuring growth, it increased faster than in 2019, even in the face of the steepest economic contraction in modern history.
The Irish Perspective
“The growth we have seen in the cloud market in 2020 has no doubt been accelerated by Covid-19, lockdowns and ‘work-from-anywhere’ having increased demand for new digital services and collaboration tooling. We predict that global revenue growth will remain at or above 2019 levels – that is, greater than 30 percent – for 2021 through 2025, as companies move to cloud to realise efficiencies, become more agile and unlock innovation. We see this global trend reflected in the Irish market – in fact, Ireland is likely to exceed the global growth averages, as enterprises seek to enable business transformation and technical modernisation through the adoption of cloud.”
- Ruairí Allen, Consulting Partner, Deloitte
The bottom line
Thanks to COVID-19 driving enterprises toward cloud, the cloud market will likely emerge from the pandemic stronger than ever. Cloud providers and others in the ecosystem have the opportunity to capitalise on increased usage to grow and flourish, while cloud users can seek to explore new ways for cloud to create value. Already, cloud has become much more than an alternative computing approach; in the near future, it is poised to become standard operating procedure for all types of businesses.
5G is not hazardous to your health: Busting the radiation risk myth
1. Nobody’s health will be adversely affected by 5G radio waves.
2. Up to a third of people around the world will worry about it anyway.
As 5G becomes more widespread, some have sounded alarm bells about its supposed health hazards. Two main concerns have been voiced, both related to the radiation associated with the technology. The most common perception is that 5G causes cancer. The second fear is that 5G-emitted radiation weakens the immune system, enabling COVID-19 to spread.
Both of these fears, in our view, are grossly overblown. We predict that in 2021, it is very unlikely that the radiation from 5G mobile networks and 5G phones will affect the health of any single individual, be it a 5G user, a user of any other generation of mobile phones, or any individual in the vicinity of a mobile network but not actually using a mobile device. There is no link between the growth in COVID-19 infections and the roll-out of 5G networks.
The Irish Perspective
“5G is rolling out at pace, with operators heavily promoting its benefits. It is an area ripe for growth: our Digital Consumer Trends survey, released in November 2020, showed that just 5% of Irish consumers are using 5G, with a further 24% wanting to switch. The same survey, however, identified that 20% of consumers in Ireland are concerned about the perceived health risks associated with 5G.
“While extensive scientific evidence has proven that health concerns around 5G are unfounded, it would appear that the telco industry itself will still need to consider how it communicates with consumers to mitigate these concerns. In Ireland, currently only Vodafone has an FAQ on their 5G webpage addressing health concerns. With 64% of respondents to our Digital Consumer Trends survey stating that they do not know enough about 5G, there is work to be done in Ireland on this front.”
- John Kehoe, Audit Partner, Deloitte
The bottom line
It may not be possible to persuade everyone that 5G is safe. There is likely to be a niche—perhaps less than 1 percent of the population—that will remain convinced not just that wireless technologies are harmful, but that their deployment is deliberate and that the intent is to cause harm. Unfortunately, while such niche views have in the past lacked widespread amplification, social media has often provided the mechanism for conspiracy theories to flourish and proliferate. If education is to be effective in curbing popular fears, it needs to be compelling, consistent, and pervasive, and it needs to begin now.
Women’s sports gets down to business: On track for rising monetisation
Women’s sports is ripe for greater monetisation—if certain key elements fall into place. The challenge in 2021 and beyond will be for women’s sports to pull in substantial TV and stadium (as permitted) audiences consistently across multiple sports.
Deloitte’s TMT Predictions reports have historically required a base level of a billion dollars in revenue before an emerging industry would be considered for inclusion. On this basis, the global women’s sports industry (excluding mixed events), measured by the aggregate of TV rights, sponsorship, and matchday (live-event) revenues, is unlikely to qualify in 2021.
TV rights and sponsorship deals for most women’s sports, where they exist, are worth at most millions of dollars, with the majority below this value. In 2021, we predict women’s sports revenues will be well under a billion dollars—a fraction of the global value of all sports (men’s, women’s and mixed), which in 2018 reached US$481 billion in 2018, an increase of 45% over 2011.
But in spite of that, we are including this topic, as we believe we should, because we predict that women’s sports will grow to be worth a great deal more than a billion dollars in the years ahead. Its ability to generate substantial TV audiences, deliver value to sponsors, and draw tens of thousands of fans per event has been demonstrated on multiple occasions over the past decade. The fan interest is there: A recent multi-country study found that 66% of people were interested in at least one women’s sport, and among sports fans (of whom 49% are female), that figure rises to 84%. And the COVID-19 pandemic has catalysed fundamental reappraisals of many aspects of society, one of which is how women’s sports should be perceived, promoted, and commercialised.
The Irish Perspective
While the number of sporting events slowed during 2020, the potential for growth ultimately did not. Deloitte predicts that the increased monetisation of women’s sports will continue its upward trajectory.
The ability of women’s sports to generate substantial TV audiences, deliver value to sponsors and draw fans has been demonstrated on multiple occasions over the past decade. For example, the Irish Women’s Hockey Team attracted 40% of Irish TV viewers to watch the team win an historic silver medal in the 2018 World Cup. Their qualification for the Tokyo Olympics will ensure a continued spotlight. Rugby and GAA are other examples of women’s sport with appeal for viewers and brands, while Katie Taylor has paved the way for a generation of female boxers as one of the top sportspeople in the world today.
“The challenge in 2021 and beyond will be for women’s sports to pull in substantial TV and live (as permitted) audiences consistently across multiple sports. Then, the value to sponsors will be self-evident, which in turn should raise marketing spend and awareness. But for this to happen, the entire sports industry—spanning federations, leagues, teams, sponsors, and regulators—needs to invest on a sustained basis in creating more opportunities for women’s sports to prove its commercial worth.”
- Daryl Hanberry, Tax Partner and Head of TMT, Deloitte
The bottom line
The most important lesson from all this is that women’s sports has immense potential value, not just in monetary terms, but also in terms of what it signals for gender parity. For women’s sports to fulfill its potential, however, requires action by all interested parties:
• Broadcasters should continue to invest in women’s sports.
• Women’s teams should slipstream men’s teams, but also keep their distance.
• Video content creators should consider the value of female athletes’ stories.
• Significant women’s events should take place in the largest stadiums available.
• Sponsors should capitalise on their amazing opportunity in women’s sports.
• Sports apparel vendors can explore greater involvement in women’s sports.
• Sports federations at both the global and national level should set targets for female representation on boards
Change takes time, and it may take a decade, or even a generation, for women’s sports to attain its full potential. But its promise of delivering value to sponsors, investors, fans, and athletes and teams themselves is becoming more and more clear. We look forward to a world in which women’s sports has a fully equal status with men’s, in all respects.
Video visits go viral: COVID-19 sparks growth in video doctor’s visits
Five percent of all patient visits worldwide will be video calls in 2021, up from much less than one percent in 2019.
Of all the activities that COVID-19 brought online, video doctor’s visits may be the one that caused the most personal trepidation. After all, how can a doctor take your blood pressure, examine your throat, or evaluate a skin tumor over Zoom or Skype? But as it turns out, many consumers (and doctors) have been quick to change their minds about video visits’ efficacy and appeal, and they are now prepared to do it that way for the long term.
We predict that the percentage of virtual video visits to doctors will rise to 5% globally in 2021, up from an estimated 1% in 2019. While 5% may not sound like much, consider that 8.5 billion doctor’s visits, worth a total of approximately US$500 billion, took place in the OECD 36 countries in 2019 alone. Five percent of that would translate into more than 400 million video visits and about US$25 billion in value, depending on how much doctors are paid (either directly by a patient, by insurance, or by national health insurance) for video visits compared to in-person ones.
More video and other types of virtual visits mean more business for the companies providing the technologies to support them. We predict that the market for pure-play telehealth virtual visit solutions will reach US$8 billion in 2021. Partially driven by the growth in virtual visits, we also expect that more than US$33 billion of medical-grade home health care technology (mainly therapeutic and monitoring solutions) will be sold in 2021, up almost 20% over 2019.
The Irish Perspective
In March 2020, a survey for the Irish Medical Council suggested that only 4% of the population had ever used telemedicine (which includes all technology such as video, telephone, websites and apps delivered by a registered medical practitioner to provide healthcare to patients). A similar survey carried out in October 2020 saw that increase five-fold to 21%. While video only makes up a proportion of that interaction (32% of the total), it still demonstrates that Irish consumers and practitioners are adapting to the changing environment.
“The position in Ireland reflects the global trends. Covid-19 has challenged us all to reconsider the way we engage with the healthcare system. Notwithstanding the challenges in moving from the traditional ‘face to face’ model’ – everyone acknowledges the benefits that telemedicine has provided over the past year. It has played an important role in helping manage spread of the virus, enabling vulnerable individuals to safely access medical care and also providing mechanisms to access HSE COVID-19 testing. The introduction of telemedicine has also supported wider use of eprescribing which brings additional benefits.”
- Suzanne McDonald, Health Partner, Deloitte
The bottom line
Although we do not expect video visits to stay at pandemic levels, they will almost certainly not return to the pre-pandemic rate of about 1%. Evidence suggests that many caregivers agree: A summer 2020 webinar survey of US health care professionals found that only 5% anticipated virtual visits to return to pre-pandemic levels.
No one today expects a doctor, black bag in hand, to make house calls. But thanks to video visits, it’s now possible for patients to receive medical care at home once again. While video visits may never completely replace in-person consultations, we expect that over time, for those visits where they are appropriate, they will become as ordinary and acceptable an option as going to a doctor’s office is today.
From virtual to reality: Digital reality headsets in enterprise and education
Sales of XR headsets for the enterprise and education markets in 2021 will be around 200,000 units, or 100% larger than in 2019.
How can a company train workers to unload hazardous materials, configure a wind turbine, or service a jet engine when a pandemic makes it impossible to teach and learn these skills in person? One way to do it is to use virtual reality (VR), augmented reality (AR), and mixed reality (MR) to simulate those environments for workers to practice in. We predict that, led by purchases by corporations and educational institutions, sales for enterprise and educational use of wearable headsets for VR, AR, and MR—collectively known as XR or digital reality—will grow by 100 percent in 2021 over 2019 levels, as will sales of software and services related to this technology.
Overall spending on XR headsets, software, and services, including purchases by consumers, rose in 2020 to US$10.7 billion globally, up 35% from 2019. Although this figure is lower than the pre-pandemic forecast of almost 80% growth, it was much better than worldwide IT spending, which declined 8 percent for 2020. Post-pandemic, higher growth is expected to resume for XR, with one group predicting the industry will reach a total of US$137 billion in 2024, or a (possibly overoptimistic) 134% annual growth rate between 2021 and 2024.
Although the predicted growth rate in headsets specifically is off a low base, with fewer than 100,000 VR, AR, and MR headsets purchased annually by enterprises and schools from 2015 through 2019, the upward trend is clear. Market growth for these types of headsets has already accelerated in some markets due to the risk of COVID-19 infection driving their use in teaching employees and students virtually rather than in person. With the pandemic accelerating the opportunity to demonstrate their value, digital reality headsets may continue to gain ground after the pandemic ends due to a variety of other benefits, such as lower cost, greater safety, and better learning retention.
The Irish Perspective
“With Ireland acting as the EMEA home to a significant number of technology companies who are at the forefront of digital reality, we will be at the centre of any global uptick in demand. While the requirement for hardware such as virtual reality headsets, along with the capital costs, have restricted growth to date, the opportunities for training, education and other social activities remain significant. Adding in the use of AR and VR for remote and dangerous activities, then it’s clear that usage should trend upwards.”
- Daryl Hanberry, Tax Partner and Head of TMT, Deloitte
The bottom line
As enterprise and education XR headset sales grow, it is worth keeping in mind that these sales are likely to continue to represent a minority of total digital reality project spend compared to software, development, content, and services. Over time, however, the hardware component will likely grow as a percentage of project value, as many of the other costs tend to be upfront while headsets become more material as pilots turn into full deployments.
The next generation radio access network: Open and virtualised RANs are the future of mobile networks
We expect open RAN deployments to double in 2021 from 35 current active deployments in 2020.
Mobile network operators (MNOs) are known for their ability to build and operate massive, high-performance wireless networks. They rely on highly specialised radio access and networking equipment with tightly integrated proprietary software to deliver the cellular services that connect our cell phones, tablets, computers, and other devices. But high costs, limited flexibility, and constrained vendor choice are prompting MNOs to shift away from such systems toward more open, standards-based, software-centric virtual platforms.
Many MNOs are well on the journey toward opening and virtualising their core networks, achieving significant operational gains. They now have their sights on their distributed mobile edge networks: the radio access network (RAN). And because MNOs must replace or augment existing RAN equipment to deliver 5G service, they have the opportunity to adopt open and virtualised RAN architectures—which we will refer to simply as “open RAN”—as part of these deployments.
The open RAN market is still in its early days. We estimate that there are currently 35 active open RAN deployments across the globe, many of which involve MNOs testing open RAN in greenfield, rural, and emerging markets. Although deployments are starting slowly, they could easily double in 2021. While it may take anywhere from three to five years for the technology to fully mature, open RAN adoption should accelerate rapidly thanks to the logic of its network design and its strategic alignment with carrier needs. Economic and competitive forces are also converging to drive the market forward. If this trend continues, the open RAN market has the potential to grow substantially, with some estimating double-digit growth rates that will push open RAN to approach 10% of the total RAN market by 2025 from less than 1% today. Moreover, if governments force MNOs to replace installed 5G RAN equipment from restricted vendors, the growth rate may be even higher.
The bottom line
The traditional RAN represents one of the last bastions of closed proprietary systems. If history repeats itself, the adoption of open RAN may mimic the time it took the industry to transition to open and virtual core networks—the seven years between 2013, when the tenets underlying core network virtualisation were introduced, and 2020, when more than half of the industry’s core wireless shipments migrated from purpose-built to virtual network solutions. The expectation is that more than 80% of core wireless network deployments will be virtualised by 2023. Though open RAN is still in its infancy, the clear growing interest in the technology could be the start of a large and significant trend with the potential to revolutionise the telecom industry.
Gaining an intelligent edge: Edge computing and intelligence could propel tech and telecom growth
In 2021, the market for the intelligent edge will reach US$12 billion, up over 80% from 2019, driven by growth from telecoms and hyperscale cloud providers.
Rising from decades of instrumentation, automation, and connectivity, the intelligent edge is maturing into a revolutionary set of capabilities that are already transforming some of the largest technology and communications companies on the planet. Although market estimates vary considerably, Deloitte predicts that in 2021, the global market for the intelligent edge will expand to US$12 billion, continuing a CAGR of around 35%. Expansion in 2021 will be driven primarily by telecoms deploying the intelligent edge for 5G networks, and by hyperscale cloud providers optimising their infrastructure and service offerings. These highly capitalised leaders are establishing the use cases and best practices that may make it easier for companies across multiple industries to attain the capabilities of the intelligent edge. By 2023, 70% of enterprises may likely run some amount of data processing at the edge. As one leading GPU manufacturer has stated, “We're about to enter a phase where we're going to create an internet that is thousands of times bigger than the internet that we enjoy today.”
Though challenges and headwinds exist, we believe that the intelligent edge is poised to transform the computing landscape, propelling the world’s largest technology companies toward the next generation of connectivity and operational efficiency. By bringing powerful computing capabilities closer to where data originates and needs to be consumed, the intelligent edge unlocks the potential for faster, less expensive, and more secure operations in everything from autonomous vehicles to virtual reality to the Internet of Things—helping to accelerate the Fourth Industrial Revolution.
The bottom line
Each party in the intelligent edge ecosystem—telecoms, hyperscalers, CDNs, and tech providers—has a stake in the success of the intelligent edge and the next generation of cloud-to-edge architectures and services. The landscape is young and dynamic, but it also has decades of momentum behind it due to ongoing computing and network trends toward instrumentation, monitoring, and automation of facilities. With digitisation, connectivity, and data analysis now maturing rapidly, the intelligent edge is beginning to transform some of the largest physical systems on the planet.
Like previous large-scale infrastructure upgrades, innumerable unexpected innovations will likely emerge as intelligent edge adoption expands. Executives should wade in and develop pilots with a clear path to results and strategic value. They should move beyond buzzwords and terminology to focus on use cases, metrics, and outcomes. Most importantly, they should understand that “edge” and “intelligence” are just components of a more holistic solution for faster data handling, greater autonomy and transparency across operations, and a more flexible and adaptive enterprise.
TV’s New Year’s resolution: The start of the 8K wave
In 2021, more than one million 8K TVs will be sold.
If you have a 4K-resolution TV screen—and many consumers do these days—you’re used to seeing your favorite shows, movies, and videos in sharp-edged relief. But over the next few years, those images may be about to get even sharper. We predict that 8K—an upgrade and complement to 4K resolution—will generate US$5 billion in global revenue in 2021, with this amount rising steadily over subsequent years. These revenues will come predominantly from sales of 8K TV sets to consumers (an anticipated 1.5 million units with an average selling price of US$3,300), with the standard becoming increasingly popular for the largest television set sizes. In addition, sales of equipment (such as cameras, monitors, storage, and computers) related to the creation and production of 8K content should generate hundreds of millions of dollars globally for the year.
The bottom line
For virtually all consumers today, a television set is a necessary fixture of everyday life. A few households will, of course, prioritise bookshelves over TV girth, but these may well be increasingly rare: Arguably, books and TVs are alternate expressions of vanity. Besides 8K’s appeal in terms of video and sound quality, the mass market is likely to relish a screen that dominates and defines a room rather than one hidden in a corner, and many will be eager to claim the bragging rights of owning the latest, largest state-of-the art TV set. 8K televisions are eminently suitable for all these purposes—and this will position them to invade the TV market in 2021 and beyond.
The hyperquantified athlete: Technology, measurement, and the business of sport
By the end of 2021, multiple professional sports leagues will establish new formal policies around the collection, use, and commercialisation of player data.
From cricket to hockey, baseball to basketball, the digital transformation of sports is in full swing. Clubs, teams, leagues, broadcasters, venue operators, and athletes increasingly see the value in analytics and are working to realise that value. Technologies such as computer vision, machine learning, advanced wireless connectivity, and wearable sensors are transforming how athletes train, compete, and manage their careers. This explosion of data, however, is raising new questions about how best to use it—and how to do so ethically. To begin to address such concerns, we predict that by the end of 2021, multiple professional sports leagues will establish new formal policies around the collection, use, and commercialisation of player data.
The bottom line
For the hyperquantification of sports to succeed, the athlete will need to be at the centre of every decision and conversation. Athletes, trainers, coaches, player agents and representatives, and business leaders must become knowledgeable about the enabling technologies and their responsible use. Those collecting and using the data will need to convincingly demonstrate and effectively communicate its value. Athletes will need to see that it is in their best interest to share their data and allow for its thoughtful application. Above all, it is critical that trust be built and maintained among all parties. Without it, the potential gains may never be fully realised.