Cisco's moving at the speed of digital, but what next for tech in 2016?

“The strongest weapon to shift geopolitical balances isn’t nukes or missiles, it’s technology.”
Kevin Bloch - Chief Technology Officer of Australia and New Zealand, Cisco

Kevin Bloch - Chief Technology Officer of Australia and New Zealand, Cisco

“The strongest weapon to shift geopolitical balances isn’t nukes or missiles, it’s technology,” says Kevin Bloch, Chief Technology Officer of Australia and New Zealand, Cisco.

In offering insight into the next twelve months for the local ICT market, Bloch believes that while commodity prices have plummeted, the value of digital, algorithm-based assets has escalated.

“The fourth industrial revolution is upon us and it is characterised by a knowledge or algorithm-based world fuelled by data,” Bloch says.

“This shift is underpinned predominantly by information technology.”

With IT spending expected to rise 1.5 percent to $3.6 trillion globally, over five million things are being connected per day (about 64 per second) in order to generate and collect that data.

“To do this, spending on Internet of Things (IoT) hardware will exceed $2.5 million every minute in 2016,” Bloch forecasts.

Looking ahead, Bloch offers his take on the top 10 trends for 2016:

1. Digital Transformation - Moving at the speed of digital

The fourth industrial revolution has the potential to overturn incumbents and reshape markets faster than perhaps any force in history.

The time to digital disruption in most industries is three years, yet nearly half of companies still do not view “digital disruption” as a board-level concern. It’s not too late.

Across 16 private sectors, companies captured an average of only 20 percent digital Value at Stake globally in 2015.

Industries realising highest digital value share two characteristics - they are “IT-intensive” and they display greater convergence between IT and operational technology (OT).

Data will be a priority and new businesses, models and technologies will develop around data exchange - there is no opting out for going digital, but be wary of economic dislocation.

2. Internet of Things - The instrumentation of everything

The journey has begun towards “ubiquitous computing", in which every light, every doorknob will be connected to the internet.

In 2016, 5.5 million new ‘things’ will get connected to the IoT every day.

Instrumentation and connectivity will provide data to enable, for example, safer roads, better healthcare and a cleaner planet.

This year will see a convergence of IoT standards and an increased focus on IoT platforms, apps, security, analytics and most importantly, awareness of the need to measure our world so that we can make it even better.

3. Cloud - Core of app turbulence

The cloud has become the foundation and engine room for most digital initiatives large and small.

In 2016, most new IT spending is expected to be in the cloud and is expected to reach 70 percent of investments by 2020.

Private cloud gives way to hybrid cloud and the majority of enterprise will have hybrid cloud deployments.

Disruption is occurring in the way collaboration (and video) technology is delivered and the way applications are going to be built, deployed and operated.

Today’s screen of apps is going to change dramatically towards app streaming; micro-services and containers will enable agility and scale; hyper-converged systems will become more popular.

4. Mobile - Fastest growing giant industry ever

The mobile handset is now considered by many to be their most valuable device, to be close at all times and checked on average 221 times a day.

Now a multi-trillion dollar global business, it is expected that two-thirds of global IP traffic will originate from mobile connections by 2019.

The mobile industry is expanding its focus on people to things, the Internet of Things.

Mobile provides a critical pipe for data in and out of any ‘thing’ anywhere, anytime. IoT standards will consolidate in both licenced and unlicenced spectrum around NB-IoT and LoRa.

5G is still years off but there will be interim options like 4.5G.

Page Break

5. Security - Just when you thought things couldn’t get worse

The single biggest threat to the digital or knowledge economy is trust and the security of the data that it will depend on.

As a result, security is the highest priority in spending with 82 percent of CIOs expecting to increase spending on information security in 2016. Attacks are now professional and organised.

Modern cybercrime is predominantly financially motivated spawning powerful industries in countries like Russia.

The sophistication of attack techniques will accelerate and the attack surface will expand driven in particular, by cloud, IoT and mobile.

6. Networking, Software Defined - Evolution, not revolution

In a connected world, the role and relevance of the network escalates as it connects and touches everything. It too is going through dramatic change.

The latent promise of SDN and Network Function Virtualisation (NFV) will begin to materialise (and monetise) particularly in the telco sector.

SD-WAN will become a popular use-case for SDN and advanced forms of SDN, such as Cisco’s Application Centric Infrastructure (ACI), will become mainstream in the cloud.

Wifi will continue its rapid pace, for example, with availability of 10 Gbps (Wave 3) chipsets. NBN will be challenged by wireless, the “Netflix effect” and Net-neutrality.

7. Cognitive Systems - From human-scale to machine-scale

Computers and digital technology enable us to see more than humans can and do what the brain can’t.

For an increasing number of applications, computers far exceed human capability (e.g. numeracy) taking us into new territory and possibilities.

Virtual personal assistants will augment apps that bring information to you, transforming the user interface.

Advanced systems will autonomously learn to perceive the world on their own, making machines appear ‘intelligent’ and challenge what it means to be human.

This will raise further concerns regarding the threat of intelligent machines.

8. Connected Cars - The hottest mobile computing device

The year Detroit takes on Silicon Valley. While traditional PC sales drop, connected cars are expected to grow six-fold. Users are prepared to pay more for vehicle connectivity and it is becoming a buying feature.

Authorities begin to provide incentives for ‘vehicle-to-vehicle’ and ‘vehicle-to-infrastructure’ (V2X) capabilities.

Car manufacturers announce ‘death-proof’ cars by 2020’.

The connected car industry dynamic will display all the critical attributes of the fourth industrial revolution including disruption, cognitive systems, connectivity, instrumentation, cross-industry convergence, new regulation and new business models.

9. New Tech - Top picks: Quantum, Batteries & Blockchain

The long-term growth of an advanced economy is dominated by the behaviour and speed of technical progress. While we expect innovation across a broad range of areas, we highlight three in particular.

Quantum computing has the potential to change perspectives of what is possible with traditional computing and the laws of classical physics and it will impact existing systems such as cyber security.

Battery storage will disrupt the energy sector, raising prospects for renewables.

Blockchain will find roles as a distributed ledger in the digital economy beyond bitcoin. It will challenge and be embraced by the financial services sector.

10. Innovation - Thinking beyond growth and cost reduction

Although indicators such as VC investments and the number of startups are already trending upwards, the signal is clear - it is a national priority to innovate towards an ‘algorithmic, data-rich economy’.

Industry consolidation continues and M&A increases within and across industry.