Data will continue to be the fuel of the digital economy and this year it underpins all our tech themes. We believe blockchain technology has only just started to revolutionise industries, IoT adoption will surge as it drives productivity and government regulation will have to move fast to catch up with past innovation. A year on from our Ten Tech Trends for 2017 - A quantum leap the digital revolution continues to displace and disrupt.
Here we highlight our ten tech themes of 2018:
1. GDPR – The Magna Carta of the digital age
The General Data Protection Regulation (GDPR) is a significant new data protection legislation that will be enforced across Europe and will supersede the UK’s existing Data Protection Act 1998. This tougher regulation, which is explained in our recent GDPR article summary, will come into force on 25th May 2018. It is imperative that all businesses that control or process personal data understand the implications and adhere to the requirements regardless of size; or face hefty fines that could cause bankruptcy. Increased digital regulation will be an ongoing trend.
2. Cyber Security - Ignorance isn’t bliss
In 2017, the evolution of ransomware has highlighted the need for collaboration between companies and security firms. Businesses must ensure they are cyber-aware in 2018 and follow the right protocol if they find evidence they have been breached; the UK Government offers guidance on how to adopt a comprehensive cyber security risk management plan.
Gartner’s Continuous adaptive risk and trust assessment (CARTA) framework emphasises the need to assess the opportunities and risks of digital business. Companies must ensure they have a Chief Digital Officer (CDO) to oversee the connection between IT and business as well as a Chief Technology Officer (CTO) to manage their IT infrastructures. Ensuring that all software including data loss prevention (DLP) is continually updated especially with the growth of the cloud and mobile device usage, whilst understanding user and entity behaviour analytics (UEBA) that will help them detect weaknesses before they cause a data breach. In 2018, we expect to see an increase in data regulation and a marked shift towards cyber security consolidation, which should eliminate the current fragmentation of stand-alone products, and tackle the growing ‘crime-as-a-service’ ecosystem.
3. Blockchain – The revolution continues
According to Gartner, Blockchain was the second top searched word on its website in February 2017. The distributed ledger technology and decentralised platform underpins all crypto assets including Bitcoin; Deloitte predicts VC funding to the blockchain sector will soon overtake other technological advancements such as cloud computing, data analysis and IoT.
Blockchain has gained substantial traction this year as it displayed its value-add in data storage, electronic voting and through smart contracts. The technology has created the foundation for future marketplaces to develop but there are still issues it must overcome to scale such as privacy, interoperability and energy consumption in the case of Proof of Work Systems (PoW).
We like the concept of Blockchain and believe its application will be disruptive. In 2018, we anticipate blockchain technology to become more widely adopted, and Web 3.0 (decentralised web) to gather more traction as it begins to replace Web 2.0 (the existing web). Blockchain’s application will transform businesses operating models, improving inefficiencies and creating additional benefits such as transparency, auditability, security and traceability.
4. Crypto Assets – ‘Bubble, bubble toil and trouble’
The decentralized nature of blockchain technology and the Ethereum network that supports ERC20 tokens have been the catalyst in the rise of crypto assets. More industries are recognising the technology’s potential and exploring building their business model on the blockchain. IOTA is an example of the first cryptocurrency with a blockchain specifically engineered for the Internet of Things (IoT). It uses the ‘Tangle’ a revolutionary new blockless distributed ledger that is flexible and scalable giving it the potential to transform the foundation of the growing IoT economy.
Speculation has led the total crypto assets (currencies) market cap to increase by 3770% in 2017, from $15.5bn to $600bn. Bitcoin holds more than 50% of the total crypto market share; its price has surged 1500% in 2017 passing the symbolic milestone of $10,000 to highs of nearly $20,000. The increased trading volume in Bitcoin and growth in ICO’s ($4.2bn raised this year) have propelled cryptocurrencies to mainstream media coverage and led to speculation that a ‘bubble’ is forming. There are already more than 1300 alternate (Alt) coins; during 2018, we will see more being issued and with this increase in supply we expect the bubble to deflate.
5. IoT-ification – ‘He ain’t heavy, he’s my Brother’
The momentum of growth of the Internet of Things (IoT) continues worldwide. IDC forecast an increase of 14.6% in IoT global spending, reaching $772.5bn in 2018. Most of these sensors and smart devices are not in your households but are powering the growth of IoT in industry (IIoT), making the physical world an information hub. Companies can monitor systems and analyse data through a ‘digital twin’ (digital replica of an asset, process or service) to measure performance and productivity, reduce downtime, and drive revenue and growth.
The ‘birth’ of the digital twin allows CIO’s to leverage IoT technologies in their digital business journey. They will play a significant role in all industries including Healthcare, by providing doctors with biometric and medical data about their patients, and ‘Smart Cities’ by delivering information about operations and maintenance to city planners. In 2018, the number of connected devices is forecast to increase by 6.4bn to 34.8bn. We anticipate companies across all industries to begin to deploy and manage sensors, as IoT becomes an integral part of more business models.
6. AI and machine learning – It’s all around you, have you noticed?
2016 was the year of AI, 2017 is the year AI reached every company’s pitch deck, and in 2018 we would like to see more EI (emotional intelligence). More companies are beginning to recognise the requirement to embrace AI, especially when augmented with ‘big data’ and machine learning. By 2020, Gartner estimates 30% of CIOs will include AI in their top 5 investment priorities as it permeates through all businesses. However, vital issues of trust and transparency will need to be addressed to ensure ‘Responsible AI’ is in place as adoption becomes more widespread.
PwC reports that AI will increase Global GDP in 2030 by 14% (equating to an additional $15.7 trillion) and could in turn boost the UK’s GDP by 10%. The UK Government is set to launch a 3-year initiative called the ‘Machine Intelligence Garage’ on 23rd January 2018 giving start-ups access to computing resources and expertise, barriers known to stunt AI and machine learning innovation.
7. Edge Computing – ‘Mind the App’
Cloud computing has created substantial new opportunities and re-shaped business strategies. We expect edge computing (or fog computing) to do the same. It moves data, applications and computing power (services) away from centralised nodes to the periphery of the network, thus enabling analytics and data to be gathered at the source of the data.
Edge computing offers several key benefits including improved application performance, lower network traffic, reduced operating and component costs, and the ability to analyse data in or near real-time. Business Insider estimates 5.6 billion IoT devices owned by enterprises and governments will utilize edge computing for data collection and processing by 2020. We expect edge computing to be deployed on a large scale throughout 2018 as autonomous vehicles, drones and other robotics produce increasing amounts of data that needs to be processed in real-time.
8. AR – ‘2018 through rose coloured spectacles’
Video is by no means a new technological concept, however 360-degree videos and Augmented Reality (AR) are both part of a growing trend in retail thanks to the use of mobile devices. John Lewis has employed a strategy to trial 360 shoppable video Facebook Ads and Apple’s October iOS11 software update included ARKit, a new framework that allows developers to create apps that blend real-world imagery with digital and augmented objects. IKEA’s ‘Place’ app allows users to preview furniture in their home before buying. These technologies will lead the way to a fundamental shift to a new immersive, invisible and interactive customer experience. In the short-term, we foresee AR becoming more widely adopted than VR, as new applications are deployed across industries and there are fewer barriers to entry for consumers.
9. VR – Seeing is believing?
A strong push in VR adoption could occur in 2018 if Facebook is able to make it more of a social experience and un-tether cumbersome headsets. Upgrades to the Oculus platform were showcased in Autumn 2017, displaying positive advancements towards making the headset a more usable product and reiterating Facebook’s goal of gaining 1bn users. Virtual real estate start-up Decentraland had its ICO in August raising £24m in 35 seconds. Its virtual world is built on the Ethereum blockchain allowing investors to purchase land using the MANA tokens. Based on a concept of limited supply, the Decentraland ecosystem could offer a ROI for landholders if the idea is adopted, as the land will become more valuable over time.
These developments highlight the potential for VR to offer a creative and immersive experience to consumers. However, VR has stalled on its way out of Gartner’s Trough of Disillusionment, as issues such as motion sickness and high barriers to entry are still restricting consumer adoption. In 2018, we anticipate adoption of VR to sustain a slow pace, enabling AR to take the lead as it is actively deployed across mobile devices making it the more accessible technology.
10. Voice-driven tech – Who do you think you are talking to?
During 2017 the ‘tech giants’ focused on virtual digital assistants (VDAs) such as Alexa, Bixby, Cortana, Google Assistant and Siri. Recent advancements in AI have pushed the concept of a voice-activated world to the forefront. eMarketer’s research suggests there are 45m voice-assisted devices being used in the US, which is expected to rise to 67m by 2019. The technology will be pivotal in changing the way consumers and brands interact; it will also challenge brands to find the best way to deliver their message.
Gartner predicts that by 2021, early adopters who redesign their websites to support visual and voice search could increase digital commerce revenue by 30%. As machine learning advances it is suggested that people will become emotionally attached to their ‘digital assistants’ as well as the voices of their favourite brands. We anticipate wider adoption of voice-driven tech to not only deliver the right message in the right place but also in the right voice.
Natasha Evans, James Harbridge and Simon Thorpe