Turkey ICT Market Trends, 2017 Jyoti Lalchandani Group Vice President and Regional MD IDC Middle East, Turkey, and Africa @JyotiIDC

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IDC Continues to Expand Across META Covering 45+ markets in the Middle East, Turkey, and Africa (META) >150 analysts and events associates in the region Complete regional coverage of the 3rd Platform, innovation accelerators, and digital transformation For the ICT industry For CIOs and CXOs Strategic multi-year engagements with eight governments across META Connecting >12,000 CIOs, IT managers, and line-of-business (LoB) executives across 30+ cities in META

Technology Selection and Purchase IDC Advises IT Buyers and Tech Suppliers on the 3rd Platform and Digital Transformation Customer Engagement Data Tracking IT Buyer Analysis Technology Selection and Purchase Strategic Advice Market Analysis IT Buyers Technology Suppliers

What We Are Advising IT Buyers

What We Are Advising IT Buyers

Influencing ICT Policy and Government Strategy

ICT Transformation: The Big Picture META Market Dynamics — State of Business Transition to the 3rd Platform and Beyond — Perspectives from META Five Mega Trends Shaping the Turkish ICT Landscape

Agenda META Market Dynamics — State of Business Transition to the 3rd Platform and Beyond — Perspectives from META Five Mega Trends Shaping the Turkish ICT Landscape

Market Dynamics in META Lower oil prices and their impact across Gulf Cooperation Council (GCC) states, Nigeria, and other countries Ongoing political instability Delayed elections and currency concerns in Nigeria Currency fluctuations in South Africa and Turkey U.S. dollar shortage/restrictions in Egypt, Nigeria, and other countries Security situation weakening overall sentiment (e.g., in Turkey and other markets in Sub-Saharan Africa) Saudi Arabia’s National Transformation Program (NTP) and its short-, medium-, and long-term impacts on government, state-owned, and private-sector organizations

Growth Dynamics in Key META Markets Source: Real GDP Growth, EIU, December 2016.

META ICT Source: IDC META Blackbook Q2 2016. Note: excludes Israel. Spending in US$ constant currency 2015.

Convergence of Telecom Services and IT Source: IDC META Blackbook Q2 2016. Note: excludes Israel. Spending in US$ constant currency 2015.

META IT Spending — Top Markets Source: IDC META Blackbook Q2 2016. Note: excludes mobile phones. Spending in US$ constant currency 2015.

Market Dynamics in Turkey Source: Real GDP Growth, EIU Turkey, 2016.

Turkey’s Total ICT Spending Will Exceed $22 Billion in 2017 Source : IDC META Blackbook Q2 2016. All data in U.S.$ constant currency; base year — 2015. Data excludes mobile phones.

Turkey IT Market 2017 Forecast by Category ($M)

IT Spending by Verticals in Turkey CAGR 2015–20 — High Growth Sectors Healthcare 7.5% Utilities 6.5% Transportation 5.0% Source: IDC META Verticals Database, Q2 2016. Note: consumer and education (verticals) and mobile phones (technology) excluded. Others — resource industries, construction, and personal services.

The Next Wave of ICT Development in Turkey Doing more with less Consolidating and outsourcing legacy IT? Innovation disrupting traditional ICT mix Technology enabling business outcomes

Agenda META Market Dynamics — State of Business Transition to the 3rd Platform and Beyond — Perspectives from META Five Mega Trends Shaping the Turkish ICT Landscape

The Impact of Innovation Accelerators Explore IDC’s 3rd Platform Thought-Leadership Website: www.idc.com/3rdplatform

IDC’s Innovation Accelerator Research Internet of Things Cognitive Systems Next Gen Security Augmented and Virtual Reality Robotics 3D Printing ! “Innovation accelerators are the next wave of 3rd Platform technologies, and they are critical to business transformation!”

Innovation Accelerators The 3rd Platform’s Innovation Phase Wearables Robotics Augmented/Virtual Reality 3D Printing

By 2018, there will be 22 billion IoT devices installed, driving the development of over 200,000 new IoT applications and services. WILL BE A GAME CHANGER

IoT — Transformational Impact Beginning to Show in Turkey

The Move to Digital Transformation (DX) Explore IDC’s 3rd Platform Thought-Leadership Website: www.idc.com/3rdplatform

What’s Driving This Digital Transformation? Improve operational efficiencies Generate new revenue streams Rapidly respond to changing conditions Create new customer experiences

Digital Transformation is Moving to the Center of Corporate Strategy ! By the end of 2017, 2/3rds of the CEOs of Global 2000 enterprises will have digital transformation at the center of their corporate strategies.

Most Organizations Are Just Beginning Their DX Journeys 65% of organizations are “Digital Explorers” or “Digital Players” Source: IDC Digital Transformation Maturity Model Benchmark, 2015; n= 317 IT and LoB executives, March, 2015. Source: IDC European Digital Transformation Maturity Model Benchmark, 2015; n= 412 IT and LoB executives, May 2015.

But… What about the Skills?

Retrain/ Invest Outsource Retrain/ Cultivate Outsource How Will This Influence ICT Investments Moving Forward? Which Roles to Grow and Which to Sunset High Current Importance Retrain/ Outsource Invest Falling Future Importance Rising Future Importance Retrain/ Outsource Cultivate Low Current Importance

Agenda META Market Dynamics — State of Business Transition to the 3rd Platform and Beyond — Perspectives from META Five Mega Trends Shaping the Turkish ICT Landscape

Cloud Accelerating to a New Level of Adoption 1 Cloud Accelerating to a New Level of Adoption Increased competition among cloud providers is leading to aggressive pricing, bundling, and customer service. Cloud aggregators — telcos and local service providers — will compete to target not only large enterprises but, increasingly, also small and medium-sized businesses (SMBs). !

Cloud-First Approach to Many New Workloads Business Outcomes (Rather Than IT Outcomes) Driving Adoption

Big Data and Analytics Moving Rapidly from Descriptive to Predictive 2 Big Data and Analytics Moving Rapidly from Descriptive to Predictive

Big Data and Analytics to Power Innovation Accelerators Cognitive and Big Data Analytics IoT-Enabled Analytics Security Analytics and Machine Learning Socialytics Cloud-Based Big Data Analytics

Turkey Business Intelligence and Analytics Tools

Security Staying at the Top of IT Initiatives in Turkey 3 Security Staying at the Top of IT Initiatives in Turkey New law on the protection of personal data Ongoing digital transformation initiatives Investments into threat intelligence, including predictive behavior analysis, to top the CISO’s agenda Cost optimization and lack of skills to drive demand for security services

Security Tops List of CIO Technology Challenges in Turkey $230 Million in Projected Spending in 2017 IT surface area expanding (especially with IoT). Source: IDC Turkey CIO Summit Surveys 2016. Base: 67 organizations.

Key Security Challenges Q Key Security Challenges Q. Please rank your top challenges to enterprise security in the next 12 months Source: IDC ME Security Roadshow, 2016. Base: 104 organizations.

Digital Transformation Efforts Underway in Turkey 4 Digital Transformation Efforts Underway in Turkey Source: Turkey CIO Summit 2016. Base: 76 organizations.

Manage our digital project implementations. Lines of Business Needs More IT Help What is the single most important role your IT arm could play in your organization’s digital transformation? 32% 25% 24% Innovation Help us identify which parts of the business could be digitally transformed through the use of technology. Technology Identify emerging technologies that could accelerate our digital transformation. Project Management Manage our digital project implementations. Source: IDC Line of Business Sentiment Study, 2015, n=300 LoB executives.

Common IT Organization Barriers to Leading Digital Transformation What are the barriers blocking your IT arm from moving forward? 33% 28% 23% 9% 5% 2% People We do not have enough people with the right skills. Legacy Systems We have legacy systems to support, which consumes our efforts. Culture We do not have a innovative, risk- taking culture. Partnerships Our LoB peers do not perceive us as adding value in DX. Leadership Our leadership does not have the right vision. Incentive Systems Our current evaluation system does not incentivize us on innovation. Source: IDC IT Executive Survey, Jan 2016, n=94.

Beyond Business — Smart Cities Transforming Cities and Public Services 5 Beyond Business — Smart Cities Transforming Cities and Public Services

Permitting and Licensing: Mobile apps/forms and printing Smart City Initiatives From Fragmented Apps to Integrated and Centralized Solutions? Public Safety and Emergency Response: Connected officers, intelligent operation centers, acoustic sensors, and panic buttons Environmental Monitoring: Weather and atmospheric monitoring, waste management, and smart remote watering Permitting and Licensing: Mobile apps/forms and printing Social Services: Connected case workers, food bank inventory, and one touch emergency response Citizen Engagement: Digital signs, mobile apps, iBeacons, mobile payments, and smart trash Transportation: Fleet tracking, public transportation, smart parking, and traffic management Energy: Smart meters, Smart buildings (thermostats and elevators), and connected lighting

Consolidation and Cost Optimization Conclusion Transformation Breaking Silos Cloud Impact Partnerships Consolidation and Cost Optimization Differentiation

Thank You @JyotiIDC Jyoti Lalchandani Group Vice President and Regional MD IDC Middle East, Turkey, and Africa @JyotiIDC

You Are Invited to IDC’s Events Security Roadshow Istanbul, 9 February Ankara, 22 February Hybrid Cloud Conference Istanbul, 15 March Ankara, 22 March CIO Summit Antalya, 23–25April Advanced Analytics Summit Sapanca, May 2017 Security Summit Sapanca, September Finance Conference Istanbul, October Industry 4.0 Conference Retail Conference Istanbul, November Public CIO Summit Antalya, November