What does Digital 2.0 hold in store for us in 2018?

Frank Palermo,
Executive Vice President

Every year, new technologies and innovations reinvent how business gets done.

Digital is passé and is increasingly losing its lustre. Yet many companies are struggling to fully embrace the digital shift. Digital 2.0 technologies — machine learning, artificial intelligence, blockchain, augmented reality, Internet of Things, cloud robotics, robotic process automation — are here to stay. Here are some of the trends that you should be prepared for in the new year.

A New Approach To Digital Transformation

The narrative around digital transformation will begin to change significantly in 2018 with companies finally taking a more holistic approach.

Digital transformation is not about executing a few random projects such as updating a website or launching a new mobile app. It requires a complete overhaul of your business — how you interact with your customers, how you drive operational excellence, and how you approach innovation. It requires cultural change, new skills, and the courage to shed legacy business models.

GE is a great example. It completely restructured its business model to adapt to the digital shift. It divested many of its financial services businesses, doubled investment in R&D, re-established itself as a technology company, and went global with a presence in 180 countries. GE essentially became a 125-year-old startup and digital company by focusing on industrial internet. It developed Predix, a cloud-based platform, to connect people and machines with big data and analytics. The result: a whopping $7 billion in new software sales in 2016.

As 2017 comes to a close, the following digital transformation stories begin to emerge.

As next-generation devices such as drones and autonomous vehicles take the online route, the demand for real-time processing will increase. It will no longer be possible to send all device data over a network to a centralized cloud. To support data volume and requirement for real-time insights, it will need to be processed at the device level (i.e., the edge). Data will be synthesized, actioned, and aggregated at the device level before being sent to a central cloud. In 2018, we can expect architectures that move intelligence to the edge.

Blockchain Gets Out Of The Lab

Over the past 10 years, blockchain has created tremendous buzz with the promise of transforming industries. However, it has struggled to find mainstream application beyond the origins of cryptocurrency. This is beginning to change with industries increasingly choosing to adopt it for various applications.

Here are some examples:

  • The State of Delaware enacted a law that lets corporations maintain shareholder lists and corporate records using blockchain technology. It is a significant move as Delaware is America’s corporate law capital, with more than two-thirds of Fortune 500 companies being incorporated here.
  • JPMorgan Chase recently announced that it will create a blockchain-based system with a couple of other financial institutions to reduce global payment transaction speeds from weeks to hours.
  • Revolut, a UK-based company, is launching a virtual bank where online banking is the norm and assets are built on blockchain. Revolut’s success has been its ability to offer all-in-one banking services with features like savings, person-to person payments, direct deposit, and limits on spending. It just hit a million customers and plans to foray into U.S. markets by 2018.

We can expect targeted blockchain applications to grow in 2018. While it’s still in its early innings, the game is on.

Almost every application and device will now be powered by artificial intelligence (AI). There will be a shift from stand-alone intelligent objects to connected ecosystem of things. Devices like Amazon Echo and Google Home are changing the ways we interact by integrating a series of things, including lighting, home security, thermostats, audio-visual devices, etc. This trend is expected to continue thereby offering us a more cohesive way of interacting with our surroundings, beyond the home environment.

In 2018, AI technologies will significantly improve the interaction model between man and machine. Emotional recognition will deeply enhance the bot-human relationship. A chatbot will be able to recognize when a person is getting frustrated and adjust its reactions accordingly. AI will bring big data analytics to the masses by streamlining the effort required to draw relevant conclusions from big data.

These advancements will undoubtedly conjure more heated debates on the ethics of AI. When AI commits a crime or something goes wrong, who is accountable? The discussion around AI governance and regulations will become paramount.

Reality Becomes Virtual

Virtual and augmented reality have long been a technology looking for a solution. Adoption has been very slow due to high cost of devices, lack of content, and the fact that many people who use such devices suffer from motion sickness. While some industries such as travel and leisure have made progress, VR is still missing its killer app.

This is all set to change in 2018, as Apple and Google emphasize the importance of pushing technology into the mainstream. Augmented reality (AR) is evolving more rapidly than VR. Apple updated iOS 11 to support AR apps, launching a wave of new apps that go beyond entertainment.

For instance:

  • Sky Guide AR allows people to overlay images to view constellations, something that’s been traditionally difficult for people to find and visualize.
  • Replacing the need for tape measure, PLNAR allows one to take rapid measurements through phone.
  • Fitness AR allows cyclists to generate 3-D models of their cycling routes to share with friends.

In 2018, an onslaught of new and creative augmented apps are likely to to hit the App Store. Market estimates suggest that AR will be worth $61 billion by 2023.

As Digital 2.0 takes root, we can expect some exciting shifts in the computing landscape in 2018.