Top 5 technology trends as we move into a new decade

It has been a while since my last blog, 2 years to be exact. Since then, we’ve seen an exponential growth in the movement of enterprise workloads to public clouds, increased awareness and interest in artificial intelligence and robotic business process automation, growth in the adoption of the internet as an alternative to established forms of networking, as well as an intensifying geopolitical landscape.

But what are the game changing trends that will shape the role that technology plays for enterprises as we move into the next decade?

1)          Realization of digital value

CEO’s have long demanded measureable return on investment from their investments in digital technologies. Digital has moved from abstraction to reality. As we move into a new decade, CEO’s must ensure that their businesses don’t get left behind. The last decade saw many companies fail to embrace digital, some of which paid the ultimate price, for example, Toys r Us.

Spanish Bank BBVA reported recently that it has achieved 37.5% of its sales digitally. Its objective in 2019 is to have mobile customers making up 50% of its base. [i]

According to McKinsey & Co, digital strategy cannot be incremental. Top companies are the ones that make big moves to reinvent themselves, committing as many resources to developing new digital businesses as they do digitizing their core. [ii] Progress has been apparent and Gartner’s 2019 CIO Agenda survey (where they interviewed 3,000 CIO’s across 89 countries) reported that 49 % of CIOs report that their enterprises have already changed their business models or are in the process of changing them.[iii]

As we move into the 2020s, there is no doubt that many companies will be left behind and there will be a plethora of new digital brands replacing long established companies.

2) Artificial Intelligence (AI) will shape the technology agenda for large enterprises

AI has long been in experimental mode however companies are now starting to deploy a range of AI technologies across the enterprise. KPMG’s 2019 report into Enterprise AI adoption (based on interviews with 30 senior leaders from some of the world’s largest companies) revealed that AI technologies have the potential to shift the competitive position of a business, particularly in the areas of product and service improvement. [iv] Robotic process automation (RPA), which is increasing exponentially, is the ability to use software, machine learning and AI to process high volume, repeatable tasks, either replacing or complementing human activity.

In September 2019, PWC surveyed 775 US business leaders, of which 84% said that they need to upscale their investments in AI and automation by 2022 in order to stay competitive. [v] I visited a hotel in Tokyo early this month which had a fully robotized check in process. [vi]

3) Multi Cloud will be the norm and its impact on networking will be transformational

At the beginning of the last decade, major Cloud providers such as Equinix, Microsoft Azure (the first release of which was Feb 2010) and AWS were investing for what they (quite rightly) predicted would be a major shift from on premises applications, to secure, off premises services. This change, along with the rapid growth of established (such as Salesforce) and new SaaS providers (such as Coupa, Box, Workday, and Servicenow), plus the belated shift of traditional ERP players to the cloud such as Oracle and SAP, has had a transformational impact on not only the way that enterprises consume applications, but in the way those applications are networked.

Over the past 20 years global Telco's built global private networks for Enterprises based on multi-protocol label switching (MPLS) to serve traditional, centralized, on premises, often regional data centers. As applications moved to the cloud, third party data centers and SaaS, demand has shifted to the internet, which is now seen as a credible alternative to traditional networking when secure and delivering the quality of service that users demand. This coupled with the exponential growth in 5G based applications will be transformational.  

Google the term ‘SD WAN’ and you’ll find no shortage of software defined products and services which run over the internet to meet the new demand of internetworking. SD WAN players range from start-ups, many of whom have been acquired such as Dell (Velocloud), Oracle (Telari), Cisco (Meraki, Viptella) and Nokia (Nuage), to companies that once specialized in optimization (e.g. Riverbed) and security players such as Fortinet, Barracuda and Palo Alto Networks. [vii]

4) Social media in its various forms will continue to gain traction in enterprise

It has been an interesting week in social media, especially with Salesforce founder and co –CEO Marc Benioff calling Facebook the “new cigarettes for our society” and calling for much tighter regulation, or break up of the social media giant. [viii]

It is hard to escape daily life that doesn’t use one of Facebook’s apps such as Facebook, Messenger, Instagram, WhatsApp, Oculus, Workplace, Portal, and Calibra. WhatsApp has launched an enterprise business app [ix], further disrupting traditional telecoms and video conferencing market (adding to revolution started by Skype and continued by the likes of Twilio, Ring Central and Zoom etc).

Also large corporations have started to deploy social based apps such as Yammer (Microsoft), Google hangouts, and increasingly Facebook workplace, which boasts adoption by 30,000 enterprises including AstraZeneca, Walmart, Campbells and Spotify. 

But the impact of social applications is not limited to media.

5) Retail banking will be disrupted by new technology players

Retail banking has always been at the forefront of the adoption of new technologies to gain competitive advantage, retain customers and deliver better experiences. Increasingly however, the traditional bank as we know it is being disrupted by technology players, some large (such as Apple) and new entrants. I've spent a lot of time on business in China recently and it has become increasingly difficult to use cash, or credit card, with businesses preferring WeChat or Alipay.

China has awoken, and beginning to shake the world (as predicted by Napoleon) [x], including that of payments. The US is still sleeping when it comes to payments, and using basic technology such as contactless cards (never mind phone apps) is rare and which only started roll out in 2019 ! [xi]

But its not just social players moving into banking. In a fascinating development this week, Singapore based taxi hailing app Grab, has teamed with SingTel, in a bid to create a full digital banking license. Southeast Asia’s digital lending market is expected to more than quadruple to US$110 billion by 2025, according to a report by Bain & Co, Google and Temasek Holdings. [xii] This represents a huge opportunity for technology companies with a bold vision to disrupt established markets, but also for existing banks which have brand equity, and established customer base, but who need to act fast and in a way that ensures compliance with privacy and data protection legislation. 

I hope you have found this blog interesting and insightful.

As always, comments welcome

Happy 2020 and beyond!

Roger

New York City, December 31st , 2019

[i] htps://ww.bbva.com/en/bbva-doubles-its-2018-digital-sales-to-date/

[ii] https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/how-top-companies-excel-with-digital-and-analytics

[iii] https://www.gartner.com/en/newsroom/press-releases/2018-10-16-gartner-survey-of-more-than-3000-cios-reveals-that-enterprises-are-entering-the-third-era-of-it

[iv] https://advisory.kpmg.us/content/dam/advisory/en/pdfs/2019/8-ai-trends-transforming-the-enterprise.pdf

[v] https://www.pwc.com/us/en/library/fit-for-growth/automation-survey.html

[vi] See https://www.hennnahotel.com/ginza/en/

[vii] Apologies to the plethora of SD wan players omitted from this section, there are simply too many to mention

[viii] https://www.marketwatch.com/story/facebook-is-the-new-cigarettes-for-our-society-marc-benioff-says-calling-for-regulation-2019-12-2

[ix] https://www.whatsapp.com/business/api

[x] https://www.goodreads.com/quotes/875112-china-is-a-sleeping-giant-let-her-sleep-for-when

[xi] https://www.ft.com/content/445a308c-02f3-11e9-9d01-cd4d49afbbe

[xii] Southeast Asia’s digital lending market is expected to more than quadruple to US$110 billion by 2025, according to a report by Bain & Co, Google and Temasek Holdings