With big data, cloud computing, AI and machine learning set to become ubiquitous by 2025, internet applications and services are likely to become more personalized and seamless across devices. Likely developments include virtual reality becoming a fixture for ecommerce and online entertainment companies, while AI and machine learning could make ad-based models more effective. The sector is likely to see continued aggressive investment across the large platform companies, particularly in the areas of AI and machine learning. However, large platform companies are also likely to face more regulatory scrutiny in the coming years.
Company specific thoughts:
Amazon (AMZN) and Alphabet Inc (GOOGL) have the big data access and compute power infrastructure needed to benefit from developments in AI and machine learning. AMZN appears to be well positioned to lead robotics innovation, while GOOGL’s investments in Waymo autonomous vehicle technology have positioned the company to lead innovation in autonomous vehicles. Where VR/AR is concerned, the acquisition of Oculus by Facebook (FB) means the company is well positioned to take advantage of future developments.
Challenges could include a widening competitive gap between eBay (EBAY) and AMZN as the latter’s investments in big data, AI and robotics lead to a more compelling user experience. Meanwhile, growing adoption of VR/AR could bring challenges for Netflix (NFLX).
Technology: Up close
The future will be determined by those who are willing to reinvest, adapt and turn future threats into opportunities.