Technological advancements are driving business development around the world, spurring the evolution of “digital transformation” from an abstract concept to a critical strategic consideration with measurable business outcomes. As a result, enterprises are dedicating unprecedented resources to their digital endeavors. International Data Corporation (IDC) recently announced that global digital transformation spending will grow by 16.8 percent per year until 2019, when it will hit $2.1 trillion.
In many instances, startups herald the technology trends that are poised to have a significant impact on the wider business landscape, introducing consumers to the emerging digital innovations of the future. Budding entrepreneurs and established business owners alike should keep an eye on startups emerging in the following sectors, as they are indicative of the tech trends that are driving digital transformation.
1. Artificial Intelligence
The research firm Gartner recently highlighted artificial intelligence and machine learning as one of the top tech trends poised to impact business strategy in 2017. One of the major factors driving this trend is the rapidly increasing volume of data available to businesses. According to estimates from IBM, the world produces 2.5 quintillion bytes of data per day, and 90 percent of the world’s massive data stores came into existence over the course of the last two years. As companies gain access to a greater volume of data regarding customer trends and operational efficiency, for example, they will rely on AI tools to help manage and interpret this information.
In 2016, a number of large companies achieved significant advancements in AI technology. These developments not only showcased the potential applications of artificial technology in areas such as analytics and cloud services, but have also made the technology available to a growing number of startups and academic institutions. As universities educate the next generation of innovators in the sector, startups are ushering in further advancements in AI technology, with new, intelligent products and supportive applications, including more advanced virtual assistance. Startups may leverage AI to provide embedded intelligence for existing software products, and the technology could also support solutions to fill the estimated 1 million cybersecurity jobs needed worldwide. As times goes on, AI systems will have a greater ability to learn and adapt.
One AI-enabled technology that is currently experiencing a noteworthy surge in popularity is the chatbot. Experts predict that in 2017, startups will create more capable, innovative, and interactive chat interfaces to help companies better engage with online customers. Their innovations will allow existing social platforms to integrate with chatbots and will lead the technology to become a larger component of backend processes. In the near future, a growing number of consumers will use chatbots to give direction not only to applications, but to intelligent objects as well.
Chatbots can help a wide range of companies, including those in the insurance and financial services sectors, to reduce costs related to customer serviceby essentially automating certain client processes and transactions. Adoption of the technology is picking up steam. A report by Gartner and TechEmergence predicts that chatbots will become the top consumer application of artificial intelligence within five years, and that by 2020, less than 15 percent of all customer interactions will involve a human being.
As digital technology becomes more firmly ingrained in both business and daily life, the matter of cybersecurity has entered the spotlight. In 2016, a number of prominent news stories, including Apple’s conflict with the FBI regarding iOS encryption and reports of corporations targeted by ransomware attacks, have encouraged business leaders to take a closer look at their cybersecurity resources.
Digital transformation affords companies endless potential benefits in the way of innovation, but it introduces just as many security concerns. As new vulnerabilities become well-known, new firms will emerge to provide solutions. In the coming years, the cybersecurity industry is likely to shift its focus from software products to managed services, with firms signing on to develop unique cybersecurity solutions for business’ distinctive digital infrastructures.Smart devices will also become vital tools in the effort to develop effective cybersecurity systems. In the near future, these interconnected technologies will feature adaptive security systems that leverage AI to learn how to defend their networks from intrusions.
4. The Cloud
Cloud technologies are a part of the “Third Platform” of digital transformation, a term coined by IDC to describe the modern era of computing that is driven by—and that continues to drive—rapid technological innovation. The Third Platform comprises mobile, social, big data, and cloud technologies, which are spurring developments in emerging product areas such as the Internet of Things, 3D printing, and robotics. In particular, cloud technologies are helping to drive digital transformation at business organizations and a shift toward more customer-focused business models. The sector is poised for continued growth in 2017.
5. AR and VR
Spurred by the popularity of augmented reality mobile games that took the world by storm in 2016, the augmented reality and virtual reality sectors are on the rise. IDC has projected that 30 percent of the Global 2000 consumer businesses will experiment with AR and VR marketing this year, and that by 2021, more than 1 billion people worldwide will regularly use AR and VR platforms to access applications, content, and data.
AR and VR enable companies to create new, engaging customer experiences, presenting enormous potential in the entertainment sector in particular. However, experts predict that startups will soon begin to harness VR to streamline internal processes and accommodate remote and gig employees.