Technology

The Robots Are Coming

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From cloud technology to AI, and from VR to autonomous vehicles, developments in technology will have wide ranging implications for the IT sector in the years ahead. While some companies are well positioned for success, others face challenges as they pursue the opportunities brought by innovation.

Drivers of Change

A variety of major developments in technology is set to transform this sector over the coming years. Cloud technology is changing the corporate IT landscape, with basic cloud services becoming more affordable. At the same time the cost of storage has decreased – and compute power has risen. By 2020, we expect there will be 1.7MB of new information created every second for every human being on the planet.

These developments have created the conditions needed for artificial intelligence (AI) to have a significant impact. The technology has begun entering real life applications – and while the focus is currently on solving relatively basic tasks, future applications will include a wide range of industries.

Internet companies have been embracing AI proactively, while machine learning techniques will likely be widely deployed across the sector by 2025. The development of AI-powered voice recognition is likely to enable more effective use of voice commands for internet apps. Virtual Reality (VR) and Augmented Reality (AR) will also become more mainstream.

Opportunities

The opportunities are considerable. Today, AI is focused on solving relatively basic tasks, such as making online purchasing recommendations or assisting doctors with diagnoses. Even this first stage of AI – known as Narrow AI – is still in its infancy.

By 2025, AI is expected to be deployed broadly across the internet sector, playing a role in everything from marketing and operations to finance and HR. This will bring opportunities for companies to personalize their offerings to a far greater extent than they do today. Meanwhile, the deployment of advanced robotics could become central for vertically integrated ecommerce companies, leading to greater operational efficiency.

Other areas of opportunity include the rise of autonomous vehicles, faster transaction speeds, the rise of mobile broadband driven by 5G and the use of blockchain to create standardized digital credentials.

Threats

The sector faces many threats and challenges as progress continues. Naturally, companies will need to embrace innovation and avoid falling on the wrong side of relevance. But there are other areas of concern. For one thing, the growing reliance on networks and connected devices and systems has opened up new security vulnerabilities. Given the frequency of cyberattacks against companies, political organizations and government officials, the importance of cybersecurity in this climate should come as no surprise.

Another issue is the erosion of consumer trust, with people becoming more concerned about the use of their data following recent data breaches. The monetization of social media has historically relied on accessing consumer data, but in the future this data may increasingly be controlled by consumers themselves – thereby driving up the costs of gaining access to this data. GDPR has given consumers greater control over their personal data – and these standards may become global practice by 2025, replacing looser standards in other markets including the U.S.

Strategic Imperatives for Success

To succeed in this environment – and meet customers’ evolving needs – companies will need to invest in growth and fully understand the potential applications of emerging technologies. A rapid pace of innovation is essential in this evolving environment. Companies with access to sufficient capital will naturally be at an advantage when it comes to achieving the necessary scale – but smaller, nimbler players will also have a role to play.

Companies that are willing to embrace opportunity are positioning themselves successfully for the years ahead. Others, however, may face challenges such as losing market share or experiencing customer churn – and companies which fall behind may find it difficult to catch up with more innovative competitors in the future.

Sector: Up Close

Leading IT companies are proactively embracing new technologies, with developments such as AI, cloud and big data expected to bring fundamental changes in the coming years.

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Information Technology

Communications Infrastructure, Telecom & Cable Services
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Information Technology

Payments, Processors & IT Services
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Information Technology

Communications Equipment & Semiconductor Capital Equipment
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Information Technology

Internet
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Information Technology

IT Hardware & Semiconductors
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Information Technology

Software
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Information Technology

High Tech
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For additional insight into the forces of change impacting the Technology Sector, read the full Imagine 2025 report.

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