February 2, 2016

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Technology Trends of 2016

Once again we stand today on the cusp of another new year.  This is the time to reflect on the year gone by and happily usher in the new one.  It’s time to also fathom the latest technology trends and decode which ones will likely make an increased difference to our lives in 2016. 

Technology has strange ways though – in the initial days of an idea, only a few groups will be researching and carving out algorithms, frameworks, hardware and software layers that in their opinion will light up the idea one day.  I call these the “Early Adopters”.  Much convinced, they are of their idea, and in doing so, their critical thought necessary to gauge potential success is reduced.

When the path to make products, processes, solutions, and usefulness becomes better understood, ACCOMPANIED by the clear use cases and user experience examples, then come the mass producers – I call them the “Majority”. 

At the same time, the technology industry worldwide is facing a severe slowdown.  Incredibly enough, consumers are happy with their products, and do not want to spend to upgrade.  The number of mobile phone devices in the world is estimated to be more than the world population – how many more phones do we need?  From need to curiosity to innovation – consumers have walked hand in hand with phone device manufacturers.  And now it just may be enough for not only phones, but also for a plethora of devices

This is exactly what this article is about – rummaging to discover the technologies that have matured to make the greatest impact to businesses and human life in 2016.  In my view, the following have a good chance:

  1. Internet of Things (IoT) - ready or not, the smart gadgets are getting smarter

    Miniaturization of electronics has silently worked behind the scenes and many semiconductor devices are amazing - smaller than a wrist watch, they host high-end computers; memories are about the size of a few grains of sand.  Many solutions & products in the offing owe their dramatic emergence to this. 

    The reference here is of physical (mostly electronic) networked devices that can communicate to transfer data and perform actions through received data or inbuilt intelligence.  Our homes & appliances, cars, healthcare, and so on.  Or automatic detection of a leak in an oil pipeline and shutting off the flow, or detecting the end of a drip attached to a patient in a hospital and alerting the nursing staff. The wearable industry is just the first sign of what’s ahead. 

    The key to note is that these devices rely on data collection to operate, whether through the Cloud or otherwise.  Every technological leap forward does compromise our privacy to some extent, and the same is going to happen here.

    Lack of awareness & price are inhibitors today, and the smartphone & watch /band the greatest enablers in personal life.  For businesses and homes, automation & control is easier to imagine. 

    Some progress to watch out for:

    1. Growth Rates: I expect growth rates to be in the range of 60-80% CAGR for 5-7 years, growing in the following years in line with awareness, technology and analytics.  The deployment potential of IoT devices exceeds many times over the human population.  I expect over 100b devices to be in play, and the total market size of IoT expected to be in the range of $3-5 trillion USD over the next 10-15 years. Wearables have taken a leap; media advertisements for these trending devices have already started – that’s a good sign and will go a long way in increasing awareness about IoT.
    2. Inversion of human-machine relationship.  Today devices work on our command – we activate it and a job is done.  As IoT devices become smarter and are able to take over increasingly complex operations from humans, their relationship with humans will become inverted. As Ray Kurzweil predicted many years ago, the future of technology will lead us down the path where we must move up the value chain (become “enablers” and “creators”) as the jobs we do today will perish.
    3. Explosive Need of Internet Network Bandwidth.  Without much contribution from IoT, data transfer per min on the Internet exceeds 500 TB per min, or about 10 TB per second.  IoT devices will add in the range of 2x-3x to this.  With bandwidth intensive video gaining popularity, IoT devices will be another contender or headache for the TSPs, whichever way you look at it.  There is evidence of low cost, low speed WiFi network research in the unlicensed ISM 26 MHz wide) at around 900 MHz and will carve out 26 100Kbit/s channels across which low-speed, intermittent IoT data can be parlayed.
    4. Predictive Analytics & Big Data.  One of the major silos that IoT rests on is the ability to analyze the data collected and result in usable metrics.  The best one I know is our brain.  Weighing just about 3lb or so, it manages 100 trillion human body cells or so.  That will be an acid test for predictive analytics – how much data it can analyze, in how little time. I expect research on innovative network algorithms for data collection, transmission, storage and big data analytics to intensify and see many new ideas for deployment.
    5. Data security continues to be the biggest drawback however. For instance, confidentiality of patient records in medical facilities, corporate espionage, thefts in corporate & residential facilities unattended but known to the IoT devices.  I expect work will continue this year, and probably by the end of the year, we may see results.
  2. Open-Source Infrastructure: Reliance on open-source infrastructure for developing newer products & solutions is growing, and in my view, very large numbers.  As an example, almost unbelievably, the 5G technology development forum is considering utilizing ideas and software from open-source groups to hasten development of 5G technology. 
  3. Commoditization: There are many aspects of “commoditization” at play.  I think overall this is a high growth trend for 2016.

    1. Here comes 'SOFTWAREIZATION' The two fundamental building blocks of IT are hardware and software. From the age of “appliances” where every single medical, network of other device was uniquely packaged, the value-added portion is increasingly dominated by software.  Hardware is becoming commoditized (more so in the Cloud), and loses value.  Software, on the other hand, becomes the place where competitive advantage is determined.  To be fair, it is easier to change software along with the patch release than modify a hardware appliance.  And that’s what softwareization means, and will touch more and more areas this year.

      The transition started a couple of decades ago, with HP’s Test & Measurement business, IBM’s computer hardware business, and medical electronics businesses being the early ones to embrace this change.  Make no mistake, all licensed software will go this way.  Hardware licensing is not yet fully understood, but well may become insignificant in the light of Cloud & commoditization.

    2. Anything-As-A-Service”.  As a natural conclusion of softwareization, the new (commodity hardware + highly complex, speedy software) will present increasing amounts of infrastructure, software, solutions and services “As-A-Service”.  Enabled by high-speed, reliable cloud infrastructure; CPE replaced by “I have no idea where”.  Entire services will get redefined, say PBX for voice function is placed in the broad Internet, with phone calls magically appearing on telephones within the premise.

      There will be a lot of movement on this front in 2016, as more and more elements will embrace this strategy.

  4. Subscription versus outright purchase : Also called “Software-As-A-Service”, it is coming, whether consumers like it or not.  The advantages out-weigh the negatives in a big, big way.  For the consumer,

    1. The full cost of the product as an outright purchase is recovered over 4-5 years or more.  The consumer gains by having access to the latest version all the time.  At any time the customer can opt out at any time thus saving money.  Thus the entry barrier costs for small enterprises is reduced.
    2. Every time the software is started, its license is checked against a website, thus software piracy will be reduced. 
    3. The software resellers will find their businesses continually threatened, since consumers and enterprises can interact and buy off the web.

    On the down side, the company selling the software may witness lower customer loyalty, with the customer free to move to another vendor at a moment’s notice.

    The key is that both – the software companies and consumers gain from this, though in different ways.  I expect this market to grow at 15-20% this year to reach or exceed USD $130 billion in the process.

  5. Digital Printing will become more & more mainstream and affordable :Though a small trend in comparison to other examples, digital printing is set to grow this year. 

    It is a classical technology example that has taken the whole nine yards from concept to realization.  The end result is pretty stunning though – feed in a 3D design, throw in the raw material, and the printer dumps out a stunning 3D stunning object.

    It is estimated that 200,000 printers would’ve shipped this year, the market growing to a few hundred billion dollars over the next 5-7 years.  I expect to see much cheaper but feature rich versions for home use this year though.

  6. Rural Internet Connectivity: 60% of the world population lives without access to Internet.  Over the decades, a lot of content has been developed for the Internet.  One can practically be schooled at-home today through the Internet.  Employment and healthcare opportunities are also best achieved through the Internet as well. 

    Information dispersion that Internet access will create for the beneficiaries will automatically spawn opportunities for education, employment, and all in all, a better life for all.  Facebook is already demonstrating that with its www.Internet.org program called FreeBasics.  Microsoft’s 4Afrika program is geared to helping people across Africa in a somewhat similar way.

    Thankfully, there is evidence of business opportunities for the Internet companies to realize.  This is also reflected in the names of those leading the way:

    1. Google’s Balloon technology for Internet from the air for rural connectivity. 
    2. Facebook’s five microwave relay dishes poke a bit further into the sky.
    3. Microsoft’s experiments with the first deployments of solar-powered based stations together with TV white spaces in Africa. 
  7. Mobility:  The almost three decades of cellular phones has been packed with innovation, new technologies and innovative businesses, new forms of usages patterns, a surge in Internet content, and much else.  

    From the initial days of simple phones with voice and SMS capability, packetized voice and data led the next-gen transformation.  While the operators slept first in the case of Skype, and then continued sleeping, innovation on the trot used Over-The-Top (OTT) method for bypassing the sleeping operators and offering really innovative services for a fraction of the cost that an operator would charge. 

    As I concluded in another blog “POTS is an expensive way to talk to each other. Going by standard 3G data rates, an hour long voice call from anywhere to anywhere (on say, Skype to Skype), costs a fraction of a penny. Compare that to 10¢ per min (or $6 per hour) that regular TSPs charge. So it is for videos, pictures and all else.” (please see http://www.hcltech.com/blogs/engineering-and-rd-services/social-media-here-stay-where-are-businesses).

    And given that smartphones today offer pretty much the same apps, software & experience as a laptop, the inevitable happened – there are more smartphones today as compared to desktop & laptops (2b+ smartphones compared to 1.5b desktops & laptops).  This was only to be expected, as for >50% of the world population, a smartphone is easier to own and maintain than a laptop.

    The new mobile phone sales market is saturated, and once again it is back to software and innovative apps to make a difference to human life & experience.  Apple sold $1b of apps in the holiday season.  A flash in the pan?  I don’t think so.  Expect this trend to continue this year and for many more.

    Best wishes and all the best for the New Year.