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A roundup of industry analysts’ forecasts.
Industry analyst firms Gartner, IDC, and Forrester have issued their technology and IT predictions for 2017, forecasting accelerated digital transformation, increased deployment of artificial intelligence (AI) solutions, and new applications of the Internet of Things (IoT). The three trends are intertwined, with the first about all businesses becoming digital businesses, the second about applying the most advanced computer algorithms to improve decision making, and the third about spreading machine intelligence to the edge of a global network.
In 2019, worldwide spending on digital transformation initiatives will reach $2.2 trillion, an almost 60% increase over 2016 (IDC). By 2021, 20% of all activities an individual engages in will involve at least one of the top-seven digital giants. The current top-seven digital giants by revenue and market capitalization are Google, Apple, Facebook, Amazon, Baidu, Alibaba and Tencent. As the physical, financial and healthcare world becomes more digital, many of the activities an individual engages in will be connected. This convergence means that any activity could include one of the digital giants. Mobile apps, payment, smart agents (e.g., Amazon Alexa), and digital ecosystems (e.g., Apple HomeKit, WeChat Utility and City Services) will make the digital giants part of many of the activities we do (Gartner).
By 2020, 50% of the G2000 will see the majority of their business depend on their ability to create digitally-enhanced products, services, and experiences. We will see a “deep core” transformation of what enterprises are all about and how they behave in the marketplace (IDC).
By the end of 2017, revenue growth from information-based products will be twice that of the rest of the portfolio for a third of G2000 companies (IDC). The combination of AI, Big data, and IoT technologies will enable businesses investing in them and implementing them successfully to overcome barriers to data access and to mining useful insights (Forrester).
By year end 2017, over 70% of the Global 500 will have dedicated digital transformation/innovation teams. By 2018, enterprises pursuing digital transformation strategies will expand their developer teams by 2-3X. By 2020, digital transformation teams will source 80%+ of their solution components from open source communities (IDC).
Only 40% of CIOs will lead the digital transformation of the enterprise by 2018. CIOs leading digital transformation will build organizational linkages with line of business technology teams and across IT organizational silos, and will empower changes in thinking, culture, and practices.
By 2019, 40% of IT projects will create new digital services and revenue streams that monetize data. IT will have to drive data and analytical strategies for companies.
By 2019, 5% of revenue will come through interaction with a customer’s digital assistant. Intelligent agents will create an array of conversational interaction points that need to be defined, maintained and managed. Organizations will need to develop a new set of skills in sales, marketing, and product organizations to serve a connected user.
By 2018, 45% of CIOs will shift primary focus from physical to digital and move away from BPM and optimization to deliver scale, predictability, and speed. Leveraging digital technologies, new business models, and entrepreneurial cultures will be required for success.
By the end of 2017, revenue growth from information-based products will be double that of the rest of the product/service portfolio for one third of all Fortune 500 companies. Analytics will become value-added services that will increase the revenue potential of information-based products. Organizations will need to develop new data mining skills that will be required to fully realize this potential.
By 2020, all enterprises’ performance will be measured by a demanding new set of benchmarks in leadership, customer engagement, digitization of new and traditional offerings, operational efficiency and organizational agility. At least 1/3 of leaders in every industry will fail to clear these digital transformation hurdles. New benchmarks will include 35% improvement in Net Promoter Score, 100% growth in revenues from information-based products, 20% of processes are self-healing, and 50% reduction in management layers. These performance levels will be “the new normal” for all enterprises (IDC).
By 2020, 15% of successful Chief Data Officers (CDO) will move into CEO, COO, CMO or other C-level positions (Gartner).
Across all businesses, there will be a greater than 300% increase in investment in artificial intelligence in 2017 compared with 2016 and AI will provide business users access to powerful insights never before available to them (Forrester).
By 2020, algorithms will positively alter the behavior of more than 1 billion global workers. Contextualization algorithms have advanced exponentially to include a variety of behavioral interventions such as psychology, social neuroscience and cognitive science. Human beings tend to be emotionally charged and factually drained, causing them to be irrational. Algorithms can positively alter that behavior by augmenting their intelligence with the large collective memory bank containing knowledge that has been socialized and put to the test. This will help workers "remember" anything or be informed of just-in-time knowledge that they have never even experienced, leaving them to objectively complete the task at hand but also to better appreciate life as it unveils. Use of algorithms can raise alarms of "creepiness," however, when used to effect positive outcomes, it can bring about changes to multiple industries (Gartner).
By 2019, 40% of digital transformation initiatives – and 100% of IoT initiatives – will be supported by AI capabilities. The top 3 AI use cases in terms of spending are: medical diagnostics and treatment, quality management in manufacturing, and automated service agents in retail.
By 2018, 75% of developer teams will include AI functionality in one or more applications or services. Last year this prediction was at 50% and the acceleration is due to the fact that the cloud is “democratizing adoption” of AI functionality.
By 2019, over 110 million consumer devices with embedded intelligent assistants will be installed in U.S. households. In 2017-2020 period, 7 of the Top 10 AI use cases will be industry-focused and will account for 85% of top 10 use case investment. We will see a “battle of AI platforms,” with a strong competition for developers in AI space (IDC).
Internet of Things
By 2022, IoT will save consumers and businesses $1 trillion a year in maintenance, services and consumables. The IoT holds enormous promise in reducing the cost of maintenance and consumables. The challenge lies in providing a secure, robust implementation that can deliver savings over one or two decades, without driving management costs that absorb any savings made (Gartner).
The number of digital analytics vendors offering IoT insights capabilities will double in 2017, encouraging organizations to invest in networking more devices and exploring the data they produce. The adoption of location analytics will grow to over two-thirds of businesses by the end of 2017. The resulting new insights will enable firms to optimize their customers’ experiences as they engage in the physical world with products, services and support (Forrester).
There will be a large-scale IoT security breach and Hackers will continue to use IoT devices to promulgate DDoS attacks. The areas where IoT has been rapidly adopted are the most vulnerable, e.g., fleet management in transportation, security and surveillance applications in government, inventory and warehouse management applications in retail, and industrial asset management in primary manufacturing (Forrester).
New categories will drive consumer IoT faster than replacement products. There will be two new categories of smart home tech that will reach 10% of homes in 2017: Appliances that offer access to virtual assistants (e.g., Amazon Echo with Alexa) and smart camera systems (e.g., Canary or Withings Home) (Forrester).
By 2018, the "open data platform" will emerge as the next frontier in platform discussions, causing confusion for enterprises that already invested in IoT platform solutions. Despite hype on the benefits of low power WAN, such as LoRa and Sigfox, its unlicensed spectrum and lack of QoS causes companies to focus it on non-critical applications – with 3% deploying by 2018.
By 2018, investments in operational sensing through IoT and situational awareness via analytics will deliver 30% improvements in critical process cycle times. By 2019, as IoT adoption grows in major industry, government and consumer sectors, 20% of all IoT deployments will have basic levels of blockchain services enabled. By 2019, more than 75% of IoT device manufacturers will improve their security and privacy capabilities, making them more trustworthy partners for technology buyers. In 2017, connected vehicles, insurance telematics, personal wellness, and smart buildings will be four IoT use cases in the spotlight across all worldwide regions, accounting for $96B spending.
As adoption of IoT grows, 75% of IoT adopters will turn to outside firms for help in strategy, planning, development, implementation, and/or management of these initiatives.
By 2019, at least 40% of IoT-created data will be stored, processed, analyzed, and acted upon close to, or at the edge of, the network. By 2019, 40% of local and regional governments will use IoT to turn infrastructure like roads, street lights, and traffic signals into assets instead of liabilities. By 2019, all effective IoT efforts will merge streaming analytics with machine learning trained on data lakes, marts, and content stores, accelerated by discrete or integrated processors. By 2018, companies investing in IoT-based operational sensing and cognitive-based situational awareness will see 30% improvements in the cycle times (IDC).
By 2020, 40% of employees can cut their healthcare costs by wearing a fitness tracker. Companies will increasingly appoint fitness program managers to work closely with human resource leaders to include fitness trackers in wellness programs as part of a broader employee engagement initiative. Healthcare providers can save lives and downstream costs by acting on the data from wearable fitness trackers that show health risks to the user. Wearables provide a wealth of data to be analyzed either in real-time or in retrospect with the potential for doctors and other healthcare professionals to have access to both contextual and historical information, if the patient agrees to share it (Gartner).