TRANSFORMATION & ORGANISATION
Top IT trends in 2018
Ettienne Reinecke, Chief Technology Officer, and Scott Gibson, Group Executive ─ Digital Practice for Dimension Data, share their thoughts on the forces that will re-shape digital business in 2018. They’ll also look back at the past 12 months and reflect on how some of the key themes that Dimension Data predicted for 2017, have played out in the market.
December 18, 2017
Trend 1: Artificial intelligence, machine learning, robotics, and virtual and augmented reality are delivering compelling and complementary outcomes
Artificial intelligence, machine learning, robotics, and virtual and augmented reality aren’t new concepts. However, until now we’ve been talking about them somewhat in isolation. Increasingly we’re seeing how bringing the power of these technologies to bear collectively has the potential to deliver disruptive outcomes.
Let’s look at some examples: Logistics giant, DHL, is successfully using machine learning, artificial intelligence, and augmented reality in its warehouse picking operations through the use of ‘smart’ glasses. The glasses place a display in front of the wearer’s eye, which provides visual displays of order picking instructions, the exact location of the goods in the warehouse, and where they should be placed on the cart. This has resulted in massive improvements in productivity of their employees and the accuracy of their deliveries.
We’re beginning to see the use cases for augmented reality going well beyond the entertainment and gaming industries – it’s now starting to move into the consumer space. Air New Zealand is currently trialling an augmented reality solution to improve how they serve their passengers. As hostesses walk down the aisle wearing augmented reality glasses, they immediately know each passenger’s details – how many miles they’ve flown, what their meal preferences are, and what their final destination is – all of which enhance their ability to provide a more personalised service. They can even tap into audio visual cues to detect a passenger’s mood!
We’re now seeing the true promise of robotics starting to manifest. In the US, San Jose’s Orchard Supply Hardware is using machine learning with robots that are connected to their inventory systems. When you enter the store, you can walk up to the robot and communicate with it in normal language. The robot knows exactly where the items you’re looking for are located and will escort you to the relevant aisle. It’s also 100% up to date with what goods the store has in stock on that particular day.
Artificial intelligence and machine learning are also impacting the world of professional sport. At this year’s Tour de France, our data analytics platform incorporated machine learning and complex algorithms that combine live and historical race data, to provide deeper levels of insight during the 23-day event. Fans were also able to understand more about environments and circumstances in which riders perform best. This in turn allowed us to include predictive algorithms to predict the outcomes of rider or groups of riders in real time during the race, further improving viewers’ experience and engagement.
Trend 2: Lack of programmability is hindering businesses’ ability to deliver on the potential of hybrid IT
Last year we predicted that 2017 would be the year that hybrid IT ‘came of age’. However, we believe that organisations haven’t made as much progress as they’d like to in optimising their hybrid IT environments. Our recent research into hybrid IT, conducted with 451 Research, revealed that 45% of organisations still find managing multiple IT environments complex.
We believe that this is partly due to limitations in organisations’ ability to leverage programmable technology. Organisations will continue to run applications and data across on-premise infrastructure, and public and private clouds. They need seamless interaction across different platforms, which means that the management of the applications and the underlying infrastructure becomes significantly more complex.
In 2018, both applications and infrastructure will continue to become more programmable, but the pace needs to pick up. Why? Because the business benefits that programmability delivers such as reducing cost and human error are too compelling to ignore. We anticipate that infrastructure vendors that haven’t made their wares sufficiently programmable are going to see their market share being significantly eroded in 2018. In addition, a lack of programmability will naturally guide organisations to platforms that are programmable, adding momentum to the adoption of cloud-based infrastructure and applications.
Automated managed services: a must-have
Last year, we predicted that automation and DevOps would become a business concern. Again, we believe businesses have made some progress, but managed services providers haven’t necessarily facilitated this transition.
To successfully operate a hybrid IT environment, you need highly automated managed services. The traditional outsource managed services model is gone. Today, organisations expect an automated service, managed from the cloud in a hybrid IT environment. Companies don’t want to have to worry about whether their technology sits on their existing on-premise equipment, on a provider’s cloud, or on a hyper-scale cloud, or all of the above ─ they just want to consume it the way they want to, in a fully automated way. Automation has to span discovery, remediation, provisioning, and operations – and the market has quite some way to go in this regard.
Lack of automation has also slowed organisations’ ability to truly embrace a DevOps culture. If your environment isn’t programmable, it’s not going to be possible to execute a deep DevOps strategy or ensure that it permeates across your entire business.
Find out how we’ve helped Hirsch’s, Woolworths, and First Choice Global to optimise their hybrid IT environments.
Trend 3: Decentralised transaction models are breathing new life into the Internet of Things (IoT) and cybersecurity
When we looked at the top digital business trends for 2017, we were spot on when we predicted that centralised transaction models would come under attack.
Blockchain, in particular, has gone from strength to strength. In the financial services sector, we saw both the US and European capital markets moving onto Blockchain platforms in a large way, with similar activity in more conservative markets like Japan. Considering how conservative and compliance-focused this sector is, that’s quite remarkable.
Many people found it quite ironic that the cybercriminals that perpetrated the recent WannaCry ransomware attack could hold a federal government to ransom and demand to be paid in Bitcoin! Bitcoin might be a crypto-currency, but as it’s based on Blockchain, it’s an interesting use case. The fact that the cybercriminals ─ who invest a lot more in cybercrime than most companies do in cyberprotection ─ are confident that Bitcoin provides a safe mechanism (i.e. its Blockchain foundation) for the payment of ransoms, should give us an idea of just how secure the distributed ledger approach is.
We believe that Blockchain has the potential to totally re-engineer cybersecurity, but that the industry has yet to come to terms with it. Over the last decade, cybersecurity has focused on defending the perimeter of a central entity through technologies such as firewalls and intrusion detection and prevention, and by correlating and isolating threats – in our view still following a very traditional approach.
With a distributed ledger, cybercriminals don’t have a central database to attack. With an encrypted ledger distributed across numerous computers, all validating one another, where’s the perimeter? Who comes under attack? It’s an inherently more secure architecture.
In recent weeks, the market has seen a major breach at one of the top three credit history providers, where an estimated 150 million client records were stolen. This is a significant event, considering the personal details that are entrusted to these authorities. This is another example of the vulnerability of the centralised approach, protected by traditional security measures – could a Blockchain foundation have avoided this?
Blockchain will deliver on the promise of IoT
In the year ahead, we believe that the potential for Blockchain to deliver on the promise of IoT will become better understood because IoT requires a peer-to-peer mechanism to be practical and executable.
In the world of IoT you’re generating millions of small transactions that are being collected from a distributed set of sensors.
It’s not feasible to operate these systems using a centralised transactional model – it’s too slow, expensive, and exclusive. To extract the true value from IoT technology you have to be able to operate in real time. Once a sensor alert is received from a control system you have to be able to react to it, meter it, and bill for it instantly – all of which negates the viability of a centralised transactional authority. The cost of the transaction has to be near-zero or free, and the cost elements of a centralised model simply don’t support the potential business model in IoT.
IoT also requires a high-performing network. While IoT-related data transmissions that provide location and status updates aren’t as bandwidth-hungry as other traffic such as video, they do require highly reliable and time-sensitive networks. IoT is often linked to highly sensitive control systems that form the foundation for critical process management. If control data is not delivered in within a limited timeframe, business functions and processes will be impacted, which will have a significant financial impact. In 2018, we foresee that this will change the way that networks are designed and deployed, in certain industries.
We also expect to see some interesting applications of Blockchain and IoT in the area of cybersecurity for IoT in the year ahead. We’ve already seen significant attacks being launched from low-cost IoT endpoints, and there’s very little incentive for manufacturers of these devices to incur the cost of a security stack, which leaves them extremely vulnerable. We believe that Blockchain can play a fundamental role in securing this environment, further increasing its relevance in IoT.
Trend 4: Surge in interest in software-defined wide area networks (WANs) … while wireless is set to boom
In 2018, we believe that organisations will start to come to terms with the fact that their wide-area networks were never designed for a hybrid IT environment and cloud.
The good news is that recently released software-defined WAN technology can help and we expect to see it gaining significant adoption in the year ahead. Some 40% of businesses across the globe will start to deploy software-defined wide area networks – up from just 2% in 2016.
The benefit of software-defined WAN technology is that it allows you to automate decisions, establish more granular sensitivity to the application and how best traffic should be handled. It can even adjust virtual architectures to match workloads or conditions, in real time. The technology also allows for more informed decision-making about how to use either broad-based Internet or your own more costly, but more robust, traditional MPLS-based networks, thereby enabling a better cost/performance balance.
In 2018, we can also look forward to a boom in new wireless technologies that will enable IoT and bring us a step closer to the dream of pervasive connectivity. Some of these advancements will include 5G and Gbps Wi-Fi, new controls, virtual beacon technology, and low power, long distance radio frequency.
Wireless is rapidly becoming pervasive in the enterprise, and even in larger spaces, such as campuses and shopping areas. More intelligent Wi-Fi that provides application hooks simplifies the collection of rich control and metadata that drive applications and analytics, and impacts business processes.
We’ll start seeing more wireless-enabled processes. This technology can truly link the user to the application, and to the business process, leading to optimisation and new business model opportunities. We also believe that wireless will become a key nodal point to initiate real-time automation or customisation. In the workplace, imagine intelligent interaction between a user’s device, via Wi-Fi, with the workspace having the ability to initiate a proximity trigger that automatically reconfigures the workspace to suit the individual.
Wireless innovation is driven by many factors, especially IoT. Sensor networks will require low-power wireless, over short and long distances. Battery life has been a costly inhibitor in the past, and we can expect significant innovation to solve these challenges.
We also believe that networks, particularly on the edge, will become more intelligent, especially where analytics becomes a stronger focus. Data analytics ─ including data normalisation, data cleaning, distributed stream processing, and even data enrichment ─ might find their way closer to the edge of the network, and increasingly embedded in the edge.
Trend 5: Only organisations with the correct architectures and data structures will achieve digital supremacy
The network isn’t the only foundational building block required to achieve digital supremacy. You also need to ensure that your basic architectures and data structures are in place.
Most organisations will need a partner to help them get these basics right. Systems integration skills are key for legacy companies hoping to compete effectively against new market entrants. A systems integrator can help you determine how to extract value from your legacy environment. In a software-defined world, where everything becomes programmable and real-time, the core skills required by systems integrators are also changing. In the next 12 months, systems integrators will need to adjust their approach, core skill sets, and methodologies.
We also expect to see organisations increasingly seeking out a new genre of consulting and advisory services. In the past, businesses would look for advice on how to improve specific technology towers – the network, data centre, security, and so on. Today the conversations are quite different. Organisations are saying ‘I want to move to digital, but how do I get there from here? What steps do I need to take? And please be very precise ─ I want to know what I should do this week, not what I should do in two years’ time. Which of all these moving parts should I look at first ─ operating profit improvements, cash flow, client experience, or my supply chain? And how do I get there as soon as possible?’
The truth is that if you haven’t yet started that investment cycle you’re at risk of being disrupted by new competitors that have the luxury of putting the right building blocks and architectures in place at the outset.
The digital fight-back
On the other hand, we believe that those established businesses that have proactively transformed into digital businesses, modernised their architectures, and embedded high levels of automation into their operations have a window of opportunity in the year ahead to claw back market share. That’s because we’re seeing increasing numbers of cloud-born start-ups themselves starting to be disrupted, in certain industries.
We predict that a number of digitally transformed incumbents will successfully start reclaiming their markets because they have more credibility, longer histories, an established customer base, and assets that can stand the test of time.
For more information, read the digital business trends analysis
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