The Digitization of the World from Edge to Core

The Digitization of the World From Edge to Core David Reinsel – John Gantz – John Rydning November 2018 An IDC White Paper – #US44413318, Sponsored by ANALYZE THE FUTURE

Executive Summary Mankind is on a quest to digitize the world The focus of this digitization is anything and everything that intersects our business workﬂows and personal streams of life. This process of digitization is often referred to will drive even more automation into as digital transformation, and it is profoundly businesses and feed processes and changing the shape of business today, engagements that will deliver new levels of impacting companies in every industry and eﬃciency and products that are tailored to consumers around the world. Digital business outcomes and individual customer transformation is not about the evolution of preferences. devices (though they will evolve), it is about the integration of intelligent data into Traditional paradigms will be redeﬁned everything that we do. (like vehicle or white goods ownership) and ethical, moral and societal norms will be The data-driven world will be always on, challenged as genomics and advanced DNA always tracking, always monitoring, always proﬁling inﬂuence healthcare directives, listening, and always watching – because it will insurance premiums, and spousal choices. be always learning. What we perceive to be Entertainment will literally be transformed randomness will be bounded into patterns of before our eyes as virtual reality technologies normality by sophisticated artiﬁcial intelligence transport us into new digital realities and algorithms that will deliver the future in new augmented reality will dramatically change and personalized ways. Artiﬁcial intelligence the service industry as we know it today. The data-driven world will be always on, always tracking, always monitoring, always listening and always watching – because it will be always learning. IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 2

Data is at the heart of digital transformation, consumers were responsible for much of their Cloud is the new core manufacturing and ﬁnancial services are the engagements and resetting their expectations have data infrastructures that can meet this the lifeblood of this digitization process. own data, but their reliance on and trust of One of the key drivers of growth in the core is leading industries in terms of maturity, with for data delivery. As their digital world growth in real-time data. Today, companies are leveraging data to today’s cloud services, especially from the shift to the cloud from traditional media and entertainment most in need of a overlaps with their physical realities, they improve customer experiences, open new connectivity, performance, and convenience datacenters. As companies continue to pursue jump start. expect to access products and services Today, more than 5 billion consumers interact markets, make employees and processes more perspectives, continues to increase while the the cloud (both public and private) for data wherever they are, over whatever connection with data every day – by 2025, that number productive, and create new sources of need to store and manage data locally processing needs, cloud datacenters are China's Datasphere on pace to they have, and on any device. They want data will be 6 billion, or 75% of the world's competitive advantage – working toward the continues to decrease. Moreover, businesses becoming the new enterprise data repository. becoming the largest in the world in the moment, on the go, and personalized. population. In 2025, each connected person future of tomorrow. are looking to centralize data management In essence, the cloud is becoming the new core. Every geographic region has its own This places greater demand on both the edge will have at least one data interaction every and delivery (e.g., online video streaming, In 2025 IDC predicts that 49% of the world’s Datasphere size and trajectories that are and the core to be able to produce the 18 seconds. Many of these interactions are Global Datasphere expansion is data analytics, data security, and privacy) as stored data will reside in public cloud impacted by population, digital precise data consumers require, often in because of the billions of IoT devices never-ending well as to leverage data to control their environments. transformation progress, IT spend and real-time. IDC predicts that due to the infusion connected across the globe, which are IDC has deﬁned three primary locations where businesses and the user experience maturity, and many other metrics. For of data into our business workﬂows and expected to create over 90ZB of data in 2025. digitization is happening and where digital (e.g., machine-to-machine communication, Introducing the world's ﬁrst data example, China’s Datasphere is expected to personal streams of life, that nearly 30% of content is created: the core (traditional and IoT, persistent personalization proﬁling). The grow 30% on average over the next 7 years the Global Datasphere will be real-time by readiness condition (DATCON) index cloud datacenters), the edge responsibility to maintain and manage all this Not all industries are prepared for their and will be the largest Datasphere of all 2025. Enterprises looking to provide superior (enterprise-hardened infrastructure like cell consumer and business data supports the digitally transformed future. So, to help regions by 2025 (compared to EMEA, APJxC, customer experience and grow share must towers and branch oﬃces), and the endpoints growth in cloud provider datacenters. As a companies understand their level of data U.S., and Rest of World) as its connected (PCs, smart phones, and IoT devices). The result, the enterprise’s role as a data steward readiness, IDC developed a DATCON (DATa population grows and its video surveillance summation of all this data, whether it is continues to grow, and consumers are not readiness CONdition) index, designed to infrastructure proliferates. (APJxC includes created, captured, or replicated, is called the just allowing this, but expecting it. Beginning analyze various industries regarding their own Asia-Paciﬁc countries, including Japan, but Global Datasphere, and it is experiencing in 2019, more data will be stored in the Datasphere, level of data management, usage, not China.) tremendous growth. IDC predicts that the enterprise core than in all the world's leadership, and monetization capabilities. IDC Global Datasphere will grow from 33 existing endpoints. examined four industries as part of its DATCON Consumers are addicted to data, Zettabytes (ZB) in 2018 to 175 ZB by 2025. analysis: ﬁnancial services, manufacturing, and more of it in real-time healthcare, and media and entertainment. As companies increase the digitization of their To keep up with the storage demands Manufacturing’s Datasphere is by far the business and drive consistent and better stemming from all this data creation, IDC IDC predicts that largest given its maturity, investment in IoT, customer experiences, consumers are forecasts that over 22 ZB of storage capacity the Global Datasphere and 24x7 operations, and we found that embracing these personalized real-time must ship across all media types from 2018 to will grow from 2025, with nearly 59% of that capacity supplied from the HDD industry. 33 Zettabytes An enterprise renaissance is on the in 2018 to horizon 175 Zettabytes The enterprise is fast becoming the world's by 2025 data steward…again. In the recent past, IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 3

Data is at the heart of digital transformation, consumers were responsible for much of their Cloud is the new core manufacturing and ﬁnancial services are the engagements and resetting their expectations have data infrastructures that can meet this the lifeblood of this digitization process. own data, but their reliance on and trust of One of the key drivers of growth in the core is leading industries in terms of maturity, with for data delivery. As their digital world growth in real-time data. Today, companies are leveraging data to today’s cloud services, especially from the shift to the cloud from traditional media and entertainment most in need of a overlaps with their physical realities, they improve customer experiences, open new connectivity, performance, and convenience datacenters. As companies continue to pursue jump start. expect to access products and services Today, more than 5 billion consumers interact markets, make employees and processes more perspectives, continues to increase while the the cloud (both public and private) for data wherever they are, over whatever connection with data every day – by 2025, that number productive, and create new sources of need to store and manage data locally processing needs, cloud datacenters are China's Datasphere on pace to they have, and on any device. They want data will be 6 billion, or 75% of the world's competitive advantage – working toward the continues to decrease. Moreover, businesses becoming the new enterprise data repository. becoming the largest in the world in the moment, on the go, and personalized. population. In 2025, each connected person future of tomorrow. are looking to centralize data management In essence, the cloud is becoming the new core. Every geographic region has its own This places greater demand on both the edge will have at least one data interaction every and delivery (e.g., online video streaming, In 2025 IDC predicts that 49% of the world’s Datasphere size and trajectories that are and the core to be able to produce the 18 seconds. Many of these interactions are Global Datasphere expansion is data analytics, data security, and privacy) as stored data will reside in public cloud impacted by population, digital precise data consumers require, often in because of the billions of IoT devices never-ending well as to leverage data to control their environments.transformation progress, IT spend and real-time. IDC predicts that due to the infusion connected across the globe, which are IDC has deﬁned three primary locations where businesses and the user experience maturity, and many other metrics. For of data into our business workﬂows and expected to create over 90ZB of data in 2025. digitization is happening and where digital (e.g., machine-to-machine communication, Introducing the world's ﬁrst data example, China’s Datasphere is expected to personal streams of life, that nearly 30% of content is created: the core (traditional and IoT, persistent personalization proﬁling). The grow 30% on average over the next 7 years the Global Datasphere will be real-time by readiness condition (DATCON) index cloud datacenters), the edge responsibility to maintain and manage all this Not all industries are prepared for their and will be the largest Datasphere of all 2025. Enterprises looking to provide superior (enterprise-hardened infrastructure like cell consumer and business data supports the digitally transformed future. So, to help regions by 2025 (compared to EMEA, APJxC, customer experience and grow share must towers and branch oﬃces), and the endpoints growth in cloud provider datacenters. As a companies understand their level of data U.S., and Rest of World) as its connected (PCs, smart phones, and IoT devices). The result, the enterprise’s role as a data steward readiness, IDC developed a DATCON (DATa population grows and its video surveillance summation of all this data, whether it is continues to grow, and consumers are not readiness CONdition) index, designed to infrastructure proliferates. (APJxC includes created, captured, or replicated, is called the just allowing this, but expecting it. Beginning analyze various industries regarding their own Asia-Paciﬁc countries, including Japan, but Global Datasphere, and it is experiencing in 2019, more data will be stored in the Datasphere, level of data management, usage, not China.) tremendous growth. IDC predicts that the enterprise core than in all the world's leadership, and monetization capabilities. IDC Global Datasphere will grow from 33 existing endpoints.examined four industries as part of its DATCON Consumers are addicted to data, Zettabytes (ZB) in 2018 to 175 ZB by 2025.analysis: ﬁnancial services, manufacturing, and more of it in real-time healthcare, and media and entertainment. As companies increase the digitization of their To keep up with the storage demands Manufacturing’s Datasphere is by far the business and drive consistent and better stemming from all this data creation, IDC largest given its maturity, investment in IoT, customer experiences, consumers are forecasts that over 22 ZB of storage capacity and 24x7 operations, and we found that embracing these personalized real-time must ship across all media types from 2018 to 2025, with nearly 59% of that capacity supplied from the HDD industry. An enterprise renaissance is on the In 2025 of the world’s stored horizon IDC predicts %data will reside in public The enterprise is fast becoming the world's that 49 cloud environments data steward…again. In the recent past, IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 4

Data is at the heart of digital transformation, consumers were responsible for much of their Cloud is the new core manufacturing and ﬁnancial services are the engagements and resetting their expectations have data infrastructures that can meet this the lifeblood of this digitization process. own data, but their reliance on and trust of One of the key drivers of growth in the core is leading industries in terms of maturity, with for data delivery. As their digital world growth in real-time data. Today, companies are leveraging data to today’s cloud services, especially from the shift to the cloud from traditional media and entertainment most in need of a overlaps with their physical realities, they improve customer experiences, open new connectivity, performance, and convenience datacenters. As companies continue to pursue jump start. expect to access products and services Today, more than 5 billion consumers interact markets, make employees and processes more perspectives, continues to increase while the the cloud (both public and private) for data wherever they are, over whatever connection with data every day – by 2025, that number productive, and create new sources of need to store and manage data locally processing needs, cloud datacenters are China's Datasphere on pace to they have, and on any device. They want data will be 6 billion, or 75% of the world's competitive advantage – working toward the continues to decrease. Moreover, businesses becoming the new enterprise data repository. becoming the largest in the world in the moment, on the go, and personalized. population. In 2025, each connected person future of tomorrow. are looking to centralize data management In essence, the cloud is becoming the new core. Every geographic region has its own This places greater demand on both the edge will have at least one data interaction every and delivery (e.g., online video streaming, In 2025 IDC predicts that 49% of the world’s Datasphere size and trajectories that are and the core to be able to produce the 18 seconds. Many of these interactions are Global Datasphere expansion is data analytics, data security, and privacy) as stored data will reside in public cloud impacted by population, digital precise data consumers require, often in because of the billions of IoT devices never-ending well as to leverage data to control their environments.transformation progress, IT spend and real-time. IDC predicts that due to the infusion connected across the globe, which are IDC has deﬁned three primary locations where businesses and the user experience maturity, and many other metrics. For of data into our business workﬂows and expected to create over 90ZB of data in 2025. digitization is happening and where digital (e.g., machine-to-machine communication, Introducing the world's ﬁrst data example, China’s Datasphere is expected to personal streams of life, that nearly 30% of content is created: the core (traditional and IoT, persistent personalization proﬁling). The grow 30% on average over the next 7 years the Global Datasphere will be real-time by readiness condition (DATCON) index cloud datacenters), the edge responsibility to maintain and manage all this Not all industries are prepared for their and will be the largest Datasphere of all 2025. Enterprises looking to provide superior (enterprise-hardened infrastructure like cell consumer and business data supports the digitally transformed future. So, to help regions by 2025 (compared to EMEA, APJxC, customer experience and grow share must towers and branch oﬃces), and the endpoints growth in cloud provider datacenters. As a companies understand their level of data U.S., and Rest of World) as its connected (PCs, smart phones, and IoT devices). The result, the enterprise’s role as a data steward readiness, IDC developed a DATCON (DATa population grows and its video surveillance summation of all this data, whether it is continues to grow, and consumers are not readiness CONdition) index, designed to infrastructure proliferates. (APJxC includes created, captured, or replicated, is called the just allowing this, but expecting it. Beginning analyze various industries regarding their own Asia-Paciﬁc countries, including Japan, but About this study Global Datasphere, and it is experiencing in 2019, more data will be stored in the Datasphere, level of data management, usage, not China.) tremendous growth. IDC predicts that the enterprise core than in all the world's leadership, and monetization capabilities. IDC This study is based on IDC’s ongoing Global Global Datasphere will grow from 33 existing endpoints.examined four industries as part of its DATCON Consumers are addicted to data, DataSphere research and market sizing models. Zettabytes (ZB) in 2018 to 175 ZB by 2025.analysis: ﬁnancial services, manufacturing, and more of it in real-timeIndustry and speciﬁc geographic Datasphere As companies increase the digitization of their research was conducted in September 2018 by healthcare, and media and entertainment. IDC. In addition, 2,400 enterprise decision To keep up with the storage demands Manufacturing’s Datasphere is by far the business and drive consistent and better makers were surveyed, and in-depth interviews stemming from all this data creation, IDC largest given its maturity, investment in IoT, customer experiences, consumers are were conducted with senior IT executives at a forecasts that over 22 ZB of storage capacity and 24x7 operations, and we found that embracing these personalized real-time variety of industries to inform this study. The must ship across all media types from 2018 to survey was with decision makers who had 2025, with nearly 59% of that capacity responsibility for or knowledge of their supplied from the HDD industry.organization’s use, management, and storage of data leveraging advanced technologies including An enterprise renaissance is on the Internet of Things, real-time analytics, and horizonAI/machine learning. The survey spanned several countries and regions including the United The enterprise is fast becoming the world's States, China, EMEA, APJxC, and others. data steward…again. In the recent past, IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 5

Chapter 1 Characterizing the Global Datasphere Global Datasphere Expansion is Never-ending The use of data today is transforming the way we companies capture, catalog, and cash in on data live, work, and play. Businesses in industries in every step of their supply chain; enterprises around the world are using data to transform collect vast sums of customer data to provide themselves to become more agile, improve greater levels of personalization; and consumers customer experience, introduce new business integrate social media, entertainment, cloud models, and develop new sources of competitive storage, and real-time personalized services into advantage. Consumers are living in an their streams of life. increasingly digital world, depending on online and mobile channels to connect with friends and The consequence of this increasing reliance on family, access goods and services, and run nearly data will be a never-ending expansion in the size every aspect of their lives, even while asleep. of the Global Datasphere. Estimated to be 33 ZB in 2018, IDC forecasts the Global Datasphere to Much of today’s economy relies on data, and this grow to 175 ZB by 2025. (Figure 1). See Appendix reliance will only increase in the future as for methodology and data/device categories. Figure 1 – Annual Size of the Global Datasphere Annual Size of the Global Datasphere 175 ZB 180 160 es140 yt120 etab100 Z 80 60 40 20 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: Data Age 2025, sponsored by Seagate with data from IDC Global DataSphere, Nov 2018 MRI image creation is driving storage requirements signiﬁcantly. The trend is more images with thinner slices and 3D capability. We've gone from 2,000 images to over 20,000 for an MRI of a human head, and stronger magnets and higher resolution pictures means more data stored. – Senior Director in IT, Major Healthcare Provider IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 6

How big is 175ZB? One zettabyte is equivalent to a trillion gigabytes Sometimes it can be If you were able to store the entire Global Datasphere on diﬃcult to get our minds DVDs, then you would have a stack of DVDs that could around such a large number. get you to the moon 23 times or circle Earth 222 times. Here are some illustrations of If you could download the entire 2025 Global Datasphere just how large 175ZB is. at an average of 25 Mb/s, today's average connection speed across the United States, then it would take one person 1.8 billion years to do it, or if every person in the world could help and never rest, then you could get it done in 81 days. The Core is the Heart of the Datasphere In this study we isolated three primary data location categories that make up the Datasphere: 1. Core This consists of designated computing datacenters in the enterprise and cloud providers. It includes all varieties of cloud computing, including public, private, and hybrid cloud. It also includes enterprise operational datacenters, such as those running the electric grid and telephone networks. 2.Edge Edge refers to enterprise-hardened servers and appliances that are not in core datacenters. This includes server rooms, servers in the ﬁeld, cell towers, and smaller datacenters located regionally and remotely for faster response times. 3.Endpoint Endpoints include all devices on the edge of the network, including PCs, phones, industrial sensors, connected cars, and wearables. A key aspect characterizing the Datasphere today is the increasingly critical role of the endpoints and edge – which is where all the digital data about us or for us is delivered to us to help inform real-time decisions, personalized services, or other latency-sensitive actions. Data gathered from endpoints is collected at the edge, which is an important location for delivering the intelligence and analytics necessary to provide faster response and better end-user experience, as well as to accelerate and bring new levels of eﬃciency and quality to business. Use cases at the edge and core that illustrate their criticality are growing aggressively, with entire categories yet to have even crossed our minds. One increasingly critical engagement between edge and endpoint is the connected car. Driven largely by the video captured and analyzed by numerous cameras integrated into the vehicle, IDC estimates that an autonomous vehicle can create over 3TB of data per hour, and this doesn't include infotainment and GPS data. This data creation will continue to increase as vehicle-to-vehicle communication becomes commonplace, and as machine learning and AI continuously update pattern recognition integrated into vehicles’ intelligent driving algorithms. IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 7

Manufacturers have long sensed and actuated and intelligence throughout the network, on real-time data feeds within controlled powering internal and external processes, as manufacturing environments. This has led to well as intelligent and predictive engagements better quality products at signiﬁcantly lower between businesses and individuals across prices. Companies are now looking to sense and entire ecosystems (Figure 2). The net eﬀect is actuate on data collected outside the factory the continued importance and growth in walls, while products are being used. enterprise storage. Manufacturers can extend product life and Figure 2 reduce product failures by understanding Data propagation from endpoints to core and back product performance in random environments DPOIN used by customers with a multitude of behavior EN T proﬁles. This is now possible with sensors that p o l e e P are embedded and connected in the everyday s M e o l c b i DGE i h E l e e products that we use. V O h ﬃ c C n c a e r s o B m But the heart of the Datasphere is the R p T O E o C u I t core. The core plays a critical role by e Large r s providing centralized storage and Datacenters including archiving, service delivery, deeper-level C Private & Public el s l Cloud s analytics, command and control, and T T y t o a e O w w s regulatory compliance. As a result, data B e e s rs at A G ﬂows in a constant stream from endpoints and the edge to the core and back out to A R / I the edge and endpoints, with each location V P R A C d o e n t n c e playing an important part in the overall s P e r s o s ce Datasphere. This propagation of data drives data growth in the core and has ramiﬁcations for analytics Source: IDC’s Data Age 2025 study, sponsored by Seagate We’ll have more intelligence and more activity at the edge on data coming from the generators that we build and the IoT devices we have deployed…raw data will be analyzed on the edge ﬁrst, and then the results will be sent back to the core for deeper analysis. – CISO/CFO, Leading Manufacturing Firm IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 8

Data Created (Datasphere) is diﬀerent than Data Stored From a data creation perspective (solid lines in the core to be more than double the data Figure 3), endpoints are declining as a percent stored in the endpoint, completely reversing while the core and edge continue to produce the dynamic from 2015. Edge storage will also more. From a data storage perspective see signiﬁcant growth as latency-sensitive (dotted lines in Figure 3), the amount of data services and applications proliferate being stored in endpoints will plummet as the throughout our world. core becomes the repository of choice for data of all types. By 2024, we expect data stored in Figure 3 – Where data is created and stored Creating and Storing Data by Core/Edge/Endpoint 80% 70% Endpoint-Create 60% Endpoint-Store 50% 40% Edge-Create 30% Edge-Store 20% Core-Create 10% Core-Store 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: Data Age 2025, sponsored by Seagate with data from IDC Global DataSphere, Nov 2018 We are beginning to understand the value of data mining and being able to bring together disparate data and systems that create that data. We don’t understand well enough how to do this in an eﬃcient, cost-eﬀective way. Right now, each system primarily creates its own data; each system manages its own data environment. – CISO/CFO, Leading Manufacturing Firm IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 9

Cloud is the New Core…and Much of it is Additive Today, as greater numbers of devices with greater bytes will be stored in the public cloud than in levels of intelligence are connected to various consumer devices (Figure 4), and by 2021, there networks, businesses and consumers are ﬁnding will be more data stored in the public cloud than the cloud to be an increasingly attractive option in traditional datacenters (Figure 5). that enables fast, ubiquitous access to their data. Increasingly, consumers are ﬁne with lower storage capacity on endpoint devices in favor of using the cloud. By 2020, we believe that more Figure 4 – Where is the data stored? Where is the data stored? 70% 60% 50% Consumer % 40% Enterprise % 30% Public Cloud % 20% 10% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: Data Age 2025, sponsored by Seagate with data from IDC Global DataSphere, Nov 2018 There is deﬁnitely interest in an increase in utilization of public cloud for data stores as long as we’re good with governance and identify suitable candidates. It’s still not going to be customer data for the foreseeable future, but there are candidates…It’s fair to say that public cloud utilization is going to double. – VP of IT, Fortune 50 Financial Services Firm IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 10

Figure 5 – Data Stored in Public Clouds Versus Traditional Datacenters Data Stored in Public Clouds vs. Traditional Datacenters 100% 90% 80% 70% Enterprise Datacenters 60% 50% 40% 30% Public Cloud 20% 10% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: Data Age 2025, sponsored by Seagate with data from IDC Global DataSphere, Nov 2018 Business models and the location of data This is not necessarily an easy task given that management may be changing, but the technical some industries still have data in silos within the requirements and challenges remain. Data must corporate walls, as well as outside the corporate be archived and stored in ways that provide walls residing in branch oﬃces, contractor sites, appropriate levels of performance and enable or some other location where the data is not analytics and intelligence to be applied to them, generally accessible. but it must be done cost-eﬀectively and securely. There is a lot of data that has been done by third parties, and there’s a lot of data we own but it sits out with other people. A big part is trying to ﬁgure out how we might bring back that data and store it. We may not even know what we need it for, but we need it stored in one place so that others, like data scientists, can have access. – CIO and SVP of Corporate IT, Major Media Firm IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 11

The Enterprise Datasphere and Stewardship is Vital to Our Future The enterprise continues to see its share of increasingly centralized across enterprise core Datasphere stewardship grow, with consumers’ and edge infrastructure, the responsibility to share of data generated dropping from 47% in maintain and manage it is shifting to 2017 to 36% by 2025. This shift is largely driven enterprise/cloud provider datacenters. The by the increasingly always-on and “sensorized” enterprise is already the primary source and world that is capturing and analyzing our steward of data creation and storage, and the environments and creating data 24x7. In the trend continues to amplify these responsibilities past, consumers were responsible for much of (Figures 6 and 7). their own data, but as data becomes Figure 6 and 7 – The Enterprise Datasphere Continues to Expand The Enterprise vs. Consumer Datasphere Installed Base of Bytes by Owner 100% 100% 90% 90% 80% 80% 70% Enterprise 70% Enterprise 60% 60% 50% 50% 40% 40% 30% Consumer 30% Consumer 20% 20% 10% 10% 0% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: Data Age 2025, sponsored by Seagate with data from IDC Global DataSphere, Nov 2018 The installed bytes across the enterprise is expected to grow to 13.6ZB, representing over 80% of the worldwide installed bytes in 2025. We have initiatives partnering with facility management, micro payments, and car manufacturers. We currently have 25 properties, so we leverage IoT to have eﬃcient optimization around datacenter and portfolio management. All of those are big sources of data ingest. – VP of IT, Fortune 50 Financial Services Firm IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 12

Real-Time Data Demand is Driving the Edge IDC forecasts that more than 150B devices will manufacturing ﬂoor rely on real-time data for be connected across the globe by 2025, most process control and improvement. Real-time of which will be creating data in real time. For data represents 15% of the Datasphere in 2017, example, automated machines on a and nearly 30% by 2025 (Figure 8). Figure 8 - Real-Time Data How Much of Global Datasphere is Real-Time? 60 35% 50 30% es 25% yt40 etab 20% Z30 15% % of Global 20 Datasphere 10% 10 Real-Time Data 5% 0 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: Data Age 2025, sponsored by Seagate with data from IDC Global DataSphere, Nov 2018 But it's not just machines that are driving average will have a digital data engagement real-time data. IDC estimates that by 2025, over 4,900 times per day – that's about 1 digital every connected person in the world on interaction every 18 seconds (Figure 9). Figure 9 - Data Interactions per Connected Person Per Day 6,000 The Number of Interactions/Capita/Day 4,909 5,000 4,000 3,000 2,000 1,426 1,000 298 584 0 2010 2015 2020 2025 Source: Data Age 2025, sponsored by Seagate with data from IDC Global DataSphere, Nov 2018 IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 13

The Demand for Storage Remains Strong The amount of data created in the Global IDC currently calculates Data Age 2025 storage Datasphere is, of course, the target for the capacity shipments across all media types (HDD, storage industry. Even with the amount of data SSD, NVM-ﬂash/other, tape, and optical) over the created that is discarded, overwritten, or sensed, next 4 years (2018–2021) will need to exceed the but never stored longer than milliseconds, there 6.9ZB shipped across all media types over the still exists a growing demand for storage past 20 years. IDC forecasts that over 22ZB of capacity across industries, governments, storage capacity must ship across all media enterprises, and consumers. types from 2018 to 2025 to keep up with storage demands. Around 59% of the capacity will need To live in a digitized world where artiﬁcial to come from the HDD industry and 26% from intelligence drives business processes, customer ﬂash technology over that same time frame, with engagements, and autonomous infrastructure or optical storage the only medium to show signs where consumers' lives are hyper-personalized in of fatigue as consumers continue to abandon nearly every aspect of behavior – including what DVDs in favor of streaming video and audio time we'll be awakened based on the previous (Figure 10). day's activities, overnight sleep patterns, and the next day's calendar – will require creating and storing more data than ever before. Figure 10 - Worldwide Byte Shipments by Storage Media Type Worldwide Byte Shipments by Storage Media Type 5.0 4.5 HDD 4.0 es3.5 SSD yt etab3.0 NVM-NAND Z2.5 2.0 NVM-Other 1.5 Optical 1.0 Tape 0.5 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: Data Age 2025, sponsored by Seagate with data from IDC Global DataSphere, Nov 2018 IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 14

The growth in endpoint and edge storage will placed on them. By the end of 2025, over 80% favor solid state, while the core continues to of the enterprise bytes shipped into the core have a voracious appetite for the economical and edge will continue to be HDD bytes when bytes that hard disk drives and tape provide. compared to SSDs and other NVM Enterprises will use a mix of disk drives, SSDs, technologies (Figure 11). ﬂash, and tape to satisfy the performance, management, and archive demands being Figure 11 - Share Worldwide Byte Shipments into the Enterprise Core and Edge by Storage Media Type Share Worldwide Byte Shipments into the Enterprise Core and Edge by Storage Media Type 100% 90% 80% 70% HDD 60% 50% SSD 40% NVM-NAND 30% 20% 10% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: Data Age 2025, sponsored by Seagate with data from IDC Global DataSphere, Nov 2018 By the %of the enterprise bytes shipped end of 2025, into the core and edge will over 80 continue to be HDD bytes. IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 15

Chapter 2 A Regional Perspective on the Global Datasphere Regional Dataspheres have their own unique growth proﬁle Whether population driven, application driven (e.g., video surveillance), or digital transformation maturity driven, any given country or region will have a diﬀerent Datasphere growth proﬁle. Note that the calculations in regional Dataspheres are based on where the devices are located from a regional perspective, as opposed to who may actually own them. For example, if providers in the U.S. own and operate datacenters in EMEA, the data created and stored are part of the EMEA Datasphere. China China has the fastest growing Datasphere of all the regions forecast in this study. The rapid deployment of video surveillance in China has catapulted the country’s use of enterprise storage, as well as a large share of endpoint data creation. China is also one of the fastest growing regions when it comes to the deployment of cloud. EMEA Much of the growth in the EMEA Datasphere is a result of a massive population with associated endpoint devices used to create and consume massive amounts of data, an already established base of video surveillance infrastructure, and the initial impact of General Data Protection Regulation (GDPR) legislation that likely will result in a temporary increase of data until formal data management practices are implemented fully. U.S.A. While the U.S. Datasphere continues to grow, it cedes share to the other regions due to its more mature state in cloud infrastructure and highly penetrated population from an endpoint perspective. APJxC The Asia-Paciﬁc region including Japan, but excluding China, has the second strongest Datasphere growth with respect to geographies analyzed in this study. Countries like Japan are spending aggressively on smart city initiatives, which are data-creation intense. IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 16

Figure 12 looks at the absolute size of each APJxC, China, and ROW in terms of the share regional Datasphere while Figure 13 represents of bytes generated. the Datasphere share of the U.S., EMEA, Figure 12 - Size and Growth of the Global Datasphere by Region 200 Global Datasphere by Region 180 160 China es140 EMEA yt 120 APJxC etab Z100 80 US 60 ROW 40 20 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: IDC’s Data Age 2025 study, sponsored by Seagate Figure 13 – Global Datasphere Share by Region Global Datasphere Share by Region 35% 30% China 25% EMEA 20% APJxC 15% US 10% ROW 5% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: IDC’s Data Age 2025 study, sponsored by Seagate IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 17

Cloud Growth Explodes Outside the United States As the headquarters region for the leading global cloud providers, the United States has traditionally The U.S. share of public cloud had the lion’s share of cloud storage, followed by storage will drop precipitously EMEA and APJxC. And while cloud storage in the % United States will continue to grow, cloud 51 in 2017 storage in other regions will grow even faster, fueled both by the desire to reduce latency 31% in 2025 by locating data closer to the end consumer, as well as corporate and regulatory mandates requiring data to be housed locally while China’s share will more within diﬀerent regions. The U.S. share of public than double cloud storage will drop precipitously from 51% in % to % 2017 to 31% by 2025, while China’s share will more 6 13 than double from 6% to 13% (Figure 14). Figure 14 - Cloud Storage Growth and Share by Region Cloud Storage Growth and Share by Region 2015-2025 CAGR 100% % ROW – 50 90% % China – 50 China 80% 70% APJxC – 47% EMEA 60% APJxC 50% EMEA – 46% 40% US 30% ROW 20% US – 33% 10% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: IDC’s Data Age 2025 study, sponsored by Seagate IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 18

China and Asia Paciﬁc/Japan Have Edge in Data Maturity IDC’s global survey in support of this project indicates that other regions are beginning to eclipse the U.S. in certain measures of data maturity. In particular, China and APJ show better metrics in several areas. China and APJ are more likely to have corporate-driven digital transformation initiatives, to be able to quantify the value of their data, and to increase their usage of edge computing (Figure 15). This is helped in emerging markets by a lower level of investment in older legacy IT. Question Do you expect your organization's utilization of edge computing to increase in the next 2 years? Figure 15 – Increased Use of Edge Computing 100% 90% % 80% 99 % % 70% YES 91 88 % 60% 82 50% YES YES YES 40% 30% 1,426 20% 584 10% 298 0% China APJxC U.S. EMEA Source: IDC’s Data Age 2025 study, sponsored by Seagate, n=959 IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 19

Chapter 3 Industry Perspective on the Global Datasphere Digital transformation and the resulting growth in data Growth in data is happening across all industries own datacenters, sometimes very massive ones. and geographies, but not all businesses are Industries are in various states of readiness and impacted in the same way. Some rely more on the need to take action to prepare for and capitalize on cloud, while others continue to rely more on their a new era of data growth. Introducing the DATa Readiness CONdition Index To characterize diﬀerences by diﬀerent industries, IDC initiatives businesses must consider. The DATCON created the DATCON (DATa Readiness CONdition) index is a scale from 1 to 5, where 5 represents an index, the ﬁrst index of its kind to evaluate how industry that is completely optimized and where 1 prepared various industries are for managing, represents an industry in critical condition with analyzing, and storing data. It also identiﬁes gaps that respect to its readiness to manage and fully monetize need to be addressed and the most pressing the data it creates, captures, stores, and analyzes. Figure 16 illustrates the 1 to 5 DATCON index with descriptions that provide further characterization of each level. DATCON Index Figure 16 – Data Readiness Condition (DATCON) Levels Industry is Suppliers are A DX culture is A skilled workforce A strong vision 5 leading in DX synced and driven throughout is executing exists on what data Optimized healthy from the top advanced initiatives is needed, leveraged, and monetized Industry leading Vibrant Many DX initiatives Data management Good pulse on 4 in some areas of ecosystem owned and well under leveraging data Advanced digital budgeted at the control to fullest extent transformation highest level Industry on Decent Some C-level Corporate-owned Usually strong 3 par with the ecosystem with commitment visions and in one area of average similar visions rd Average initiatives in place 3 -platform technologies Industry is in Limited vision, There may be No C-level Most data never 2 catch-up mode though there some 3rd-platform commitment, monetized Needful are pockets of initiatives, but often a LOB action limited initiative Industry Disaggregated No vision for No leadership An impending disarray ecosystem rd 1 3 -platform within companies data tsunami with Critical technologies no survival plans Source: IDC’s Data Age 2025 study, sponsored by Seagate IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 20

The DATCON index is a calculated score that is through global surveys, ongoing IDC research, synthesized across six assessment vectors and expert analysis, and proprietary modeling numerous associated metrics informed techniques. These assessment vectors include: Data growth and investment C-level involvement Digital transformation Data value competency competency Leadership self-score IT structural assessment For this study, IDC focused on four industries to develop the DATCON index: Financial services Healthcare Manufacturing Media and entertainment For additional information about the DATCON index methodology and detailed ﬁndings by industry, Click here DATCON Industries Comprise Nearly Half of the Enterprise Datasphere The four DATCON industries chosen in this study (ﬁnancial services, manufacturing, % healthcare, and media and entertainment) 48 comprise 48% of the Enterprise of the Enterprise Datasphere, with manufacturing Datasphere responsible for the largest share of data, followed by ﬁnancial services and media and entertainment (Figure 17). IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 21

Figure 17 - 2018 Enterprise Datasphere by Industry 2018 Enterprise Datasphere by Industry (EB) 4,500 4,239 Financial Services 4,000 Manufacturing 3,584 3,500 Healthcare 3,000 Media and Entertainment 2,500 2,212 Retail/WH 2,074 2,000 1,555 Infrastructure1 1,500 1,218 1,296 Transportation 1,000 2 717 Resource 500 280 Other 0 1 Infrastructure includes Utilities, Telecommunications 2 Resource includes Oil and Gas (Mining), Transportation of oil & gas through pipelines or shipping, Resource industries, Petroleum and coal _manufacturing/reﬁning Source: IDC’s Data Age 2025 study, sponsored by Seagate While healthcare is the smallest of the four and other image and video-related data being industry Dataspheres in this study, it is primed captured in today’s advanced modes of to grow faster than the rest given the medical care. IDC compares growth of various advancements in healthcare analytics, industry Dataspheres to the overall Global increasing frequency and resolution of MRIs, Datasphere growth through 2025 in Figure 18. Figure 18 – Comparing Industry Datasphere Growth Rates 2018-2025 CAGR 36% % 27% 30 % 26 25% Global Datasphere Healthcare Manufacturing Financial Services Media and Entertainment Source: Data Age 2025, sponsored by Seagate, Nov 2018 IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 22

The Interplay Between Core, Edge, and Endpoint is Key in All Industries While all industries have examples of waves of then distributed back out to the endpoints, the data traversing the core, edge, and endpoints, in greatest use of edge computing in the four which data collected at the endpoints is industries in the DATCON index is found in processed at the edge, propagated at the core, manufacturing and ﬁnancial services (Figure 19). Question Does your organization utilize edge computing? Figure 19 – Use of Edge Computing 100% Don’t know Don’t know Don’t know Don’t know 90% 33% 38% % 62% 80% No No 45 No 70% No 60% % 50% 62 58% 40% YES 48% YES 30% YES % 20% 34 10% YES 0% Financial Services Manufacturing Healthcare Media and Entertainment Source: Data Age 2025, sponsored by Seagate, Nov 2018, n=1,081 IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 23

IDC came across multiple examples of this data ﬂow across the core, edge, and endpoints in its interviews for this project. Some of them include the following: Manufacturing Healthcare Manufacturers have multiple use cases such as Providers are taking advantage of greater factory automation and control, but a intelligence being built into diagnostic particularly notable one mentioned by a equipment and patient devices that can collect manufacturer had to do with IoT data from patient data, upload it to the cloud or a engines it builds and sells. It collects telemetry centralized datacenter for analysis or diagnosis, and other operating data which it then pulls and then receive instructions or back into the core to perform advanced recommendations based on the patient’s analytics to tweak manufacturing processes, speciﬁc needs. In the future, in-home robotic but which it also shares with its dealers and healthcare assistants will monitor elderly distributors, so they can be more responsive to patients and provide notiﬁcation if an individual customers’ needs. requires assistance, ensure medication is taken, and even perform simple tasks. Financial Services Firms circulate data between core, edge, and Media and Entertainment endpoint for a variety of use cases including Companies interviewed by IDC spoke of analytics and branch operations. Fraud ongoing eﬀorts to repatriate data, pulling detection on the edge is a growing use case digitized data from marketing groups, third for banks and other ﬁnancial ﬁrms given its parties, and other sources back to the core immediate impact on the balance sheet. ATM where it can be repurposed, re-used, and machines are being outﬁtted with analytics analyzed. Based on the results of that analysis engines to authenticate would-be ATM the appropriate data is then repropagated back customers looking to withdraw funds. to the end users and devices that require it. In Complex algorithms that capture various the future, entertainment content might be forms of personal biometric data and tailored in real time based on a consumer’s behavior are coalesced into a unique responses and biometric reactions. Intensity of identiﬁer that authenticates identity as eﬀects could be increased or decreased customers approach the ATM – all the while appropriately to ensure the best experience in creating data at the edge. augmented or virtual realities. For additional information on each the four industries proﬁled in the DATCON index, Click here IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 24

Chapter 4 IDC Guidance Enterprises must rise to the data Invest in the edge guardianship challenge Intelligent data is being sought to drive our As data is shifting from a consumer-centric businesses and lives in real time and on-the-go. model to an enterprise-centric model, this Many times, data has no time to travel from an increases the burden on enterprises to provide endpoint to the core and back when informing an excellent experience. Enterprises are real-time decisions. The enterprise edge helps responsible for providing correct insights and to bridge this gap. Whether taking on data excellent customer experience, even storing analytics or simply storing analyzed and customers’ digital lives. Ensure your data model intelligent data, the edge will play an increasing provides secure, ubiquitous, real-time access to role in enabling a real-time world. services and data. As consumers become more demanding of the experience in their digital lives, Ensure your organization is companies must ensure that they are providing data-ready data and services that are real-time, on the go IDC developed the DATCON index to characterize via any network, and are personalized. the readiness level of diﬀerent industries, and to Cloud migration is strategic enable individual companies to assess their level of readiness across a number of metrics. When it comes Cloud providers have emerged as a serious to improving data readiness, it is important for contender for enterprise data storage and executives to lead corporate initiatives, make certain services. The largest providers have resources, that budgets exist, and ensure that data-savvy scale, security, and performance that few workers are hired and empowered to execute. enterprises can match. Their global reach enables businesses to provide services to global Ready your IT organization for geographies, and their centralized access digital transformation enables company resources to tap into all of a Organizations born of the days when IT company's data to drive analytics today and departments dealt with back oﬃce ﬁle-and-record artiﬁcial intelligence in the future. processing are now facing a deluge of real-time, interrupt-driven bits and bytes from ﬁeld Take a global approach to your data organizations. Many IT organizations are ﬁnding It is increasingly important for companies to take themselves being given responsibility for physical a global approach to their data to provide security as well as data security, for operational low-latency, better customer experience and to data that was once sequestered on the factory address regulatory and compliance pressures ﬂoor, the grid, or the operating room, and for requiring operators to locate data in regions in integrating data repositories previously kept in which customers are located. Whether in their separate silos. Dealing with digital transformation own datacenters or via cloud providers, will require not just new technology, but also new companies need to consider which data needs to skills, political savvy, and relationships with top be located as close as possible to their customers management. and where in the network it should be located (core vs. edge, cloud vs. own datacenters). IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 25

Chapter 5 Conclusion Data is Changing the World As consumers, data is helping us build more where the Datasphere meets the physical world, and deeper connections, and to access the core remains the heart of the Datasphere products and services more quickly and easily, gathering data from the edges and endpoints, at the time and place of our choosing. We can processing and archiving it, and promulgating it now walk into a store and walk out with our back for consumption by end users, including purchases, leaving our transaction record (and machines and things – and the cloud is a vital perhaps facial image) as a digital trail, but never part of this core. having to pull out a credit card or cash. Companies looking to be relevant between now As businesses, data is helping us reach new and 2025 will need to understand the role data markets, better serve existing customers, plays in their organization and how the streamline operations, and monetize raw and Datasphere will evolve during that period. They analyzed data. If reported global intangible will need to embrace their role as data assets of companies are more than $200 trillion guardians, leverage the cloud, and take a global dollars*, what must – and will – the value of approach to their data. Diﬀerent industries have unreported data assets be? Data is an diﬀerent levels of data maturity, so companies intangible asset and underpins most other should review the IDC DATCON index reports to intangible assets like patents and goodwill. learn where they stand relative to their industry Bytes can be made more valuable by index and what they need to do to not just surrounding them with security, leveraging survive – but more importantly to thrive – in them in AI, or using them to cure diseases. their own Datasphere. Nevertheless, there is a cost associated with data: purchasing, maintaining, and protecting storage, as well as the cost of losing data or having sensitive data fall into the hands of a competitor or hacker. The real value of data is out there, and companies are just ﬁnding out Data is that data has real worth. Those businesses ﬁrst helping us reach through the gateway of digital transformation will be the ﬁrst to ﬁnd out just how valuable new markets, better their data is. serve existing customers, The Global Datasphere is large and complex, streamline operations, and with key interdependencies between core, edge, monetize raw and and endpoints. While the edge and endpoints will continue to play a critical role as the place analyzed data. * Source: IDC’s Intangible Asset Market Value Study, 2018 IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 26

Methodology The Measure of the Global Datasphere The Global Datasphere is a measure of all new data that is captured, created, and replicated in any given year across the globe. An installed base of over 70 categories of geography and industry. Content creation and content creation/capture devices, including capture and replication and consumption embedded systems in devices like calculations were applied to this installed base automobiles, gasoline pumps, vending of devices. machines, and kiosks, were sized by The aggregation of all these calculations is called our Global Datasphere. The broad category of devices includes: 1 Non-entertainment imaging e.g., medical imaging, MFPs, surveillance cameras, etc. 2 Entertainment e.g., digital TV/radio, movies, video games, etc. 3 Productivity e.g. PCs, servers, supercomputers, metadata, embedded systems 4 Voice e.g. mobile phones, VoIP, etc. IDC White Paper I Doc# US44413318 I November 2018 The Digitization of the World – From Edge to Core I 27

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