Technology Industry News & Trends, May 2017
Our industry experienced a very hot May warmed by lots of news on innovative technologies as well as those steaming into the mainstream. We’re going to cap off the month of May discussing the Bitcoin rally, the battle for the cloud, and biometrics in travel tech. So, let’s dive into these super-heated trends.
Asia/Pacific Digital Transformation Rush
The digital transformation marathon continues. The long-distance run has been going long enough for us to distinguish leaders from laggards. According to Gartner, Asia/Pacific enterprises are a bit behind their global competitors. Twenty percent of this region’s CEOs see their organizations matching digital demand, compared with 22 percent globally. At the same time, increasingly more Asia/Pacific companies see digitalization as the only way to improve their current performance. Today these companies prioritize investments into cloud, ERP systems, analytics, and CRM projects. If you’re considering a change, have a look at the digital transformation strategy that we follow at AltexSoft.
AI Turns Skills into Services
Gartner researchers claim that AI developments and robotics will be crowding out conventional workers from many businesses starting in 2022. Some jobs in law, healthcare, and even IT will be turning into “low-cost utilities.” For instance, project management in IT, claims adjustments and reconciliations in finance, and other repetitive tasks could be replaced by AI.
The core value of the shift is a significant opportunity to cut costs and reach operational scalability. As an example, you can train AI to do a lawyer’s tasks once and then distribute the system among multiple law cases simultaneously. It’s even better than cloning human lawyers.
Recently Information Management named the 6 top machine learning trends. Nearly every one of them coincides with the Gartner concepts. Voice recognition, smart chatbots – have a look at our story on best chatbot building practices – root cause analysis, etc., all these lay the groundwork for workforce reduction in one way or another. It’s creepy but we’re expecting robots to soon take charge in call centers and even some positions in sales departments.
All IoT on the Cloud Front
The growth of the smart device ecosystem will boost embedded software development. According to Gartner, the total number of connected devices will soar to 20,415.4 million units by 2020. Today, in 2017, we have about 8,380.6 million of them.
Which tools are the most widely used to create embedded software? The Electronic Design’s Embedded Revolution survey shows that leading positions are currently occupied by C, C++, and Assembler.
It’s obvious that cloud-based architecture and real-time data processing are the main technology requirements for IoT in the future. But, in fact, about 44 percent of IoT applications today are run on private clouds, which aren’t actually clouds to the full extent. So, cloud providers brutally struggle for this market. Eventually, consumers will move to the public cloud, but who’s going to grab the largest slice? AWS and Azure are at the leaders of the pack with Cisco taking third place. While Google is out of the competition on this battlefield for now, they continue to try. We’ll return to them in the next section.
The fight for the IoT cloud is a very important factor in the overall competition as it will define the landscape of IT infrastructures for years. Have a look at our April news and trends report where we discuss this facet in more detail.
What Google Does on the Cloud Battlefield
Google makes another powerful move to overtake Microsoft and Amazon in the big cloud race as the corporation launches a new IoT management service. Google Cloud IoT Core provides a useful way to govern data streams. It allows for automatic, secure, and balanced connection of all devices in the network. The coolest thing is that the gathered data integrates with Google analytics services (Google Cloud Dataflow, Google Cloud Machine Learning Engine, etc.).
Another advantage of Google Cloud IoT is a higher level of agility compared to competitors. The company provides more freedom to developers by supporting third-party solutions. For instance, Google brags that their system fits well into the logistics infrastructures by integrating with existing solutions on the market.
And that is not it for Google Cloud updates in May. The company launched a beta Cloud Spanner, Relational Database Service. The corporation promises to deliver horizontal scalability with over 99.999 percent of consistency with traditional vendors. With this value proposition, Google targets the retail and financial services industries, especially international businesses.
Fintech is Occupied by Blockchain
Bitcoin significantly enhanced its positions this year. It soared by 3,976 percent year-over-year! During the trading session on June 6, the cryptocurrency reached an all-time of $2,967, CNBC informs. The growth trend was supported by strong demand from Asia. Over half of the global Bitcoin trade volume denominated in Asian currencies.
But not only Bitcoin demonstrates excellent performance. Ethereum also shows robust growth, yet its popularity is still far from the leader. Ethereum looks pretty interesting as 28.9 percent of total turnover is covered by Bitcoin.
Generally, we see that the exchange rates are highly dependent on the trust in the given currency and willingness to accept it as means of payment. The market reaction on Japan’s Financial Services Agency permission to use Bitcoin as one of the legal means of payment confirms that. If we reach the point of mitigating regulatory constraints, the cryptocurrencies will become even stronger and will likely be incorporated into the mainstream financial ecosystem.
“[Blockchain] is a very important new technology that could have implications for the way in which transactions are handled throughout the financial system. We’re looking at it in terms of its promise in some of the technologies we use ourselves and many financial institutions are looking at it. It could make a big difference to the way in which transactions are cleared and settled in the global economy.”- Janet Yellen, US Federal Reserve Speech to Commonwealth Club of California January 18, 2017.
The cryptocurrency rush draws attention to blockchain as a technology that goes beyond financial transactions only. We covered this trend in our latest article on businesses monetizing blockchain. It’s one of the hottest areas for the fintech, though it’s expected to slow down in 2017. According to CBInsights, the total funding will reach $317 million compared with $557 million in 2016. The blockchain market has reached an inflection point. The first wave of early adoption has passed and currently the technology is preparing for more complex business cases. At the same time, a second tier of adopters hasn’t yet formed. It’s likely that insurance and asset management companies will soon strengthen the demand.
We believe that the technology is building a bridge between traditional industries, regulators, and innovative fintech. The trick is that by introducing a new approach to conducting secure transactions, blockchain doesn’t necessarily ruin the established ecosystem, but adds value on top of it.
Biometric Technology Expansion into Travel Tech
JetBlue announced the testing of a facial recognition system. Over the next 45-90 days some passengers in Boston won’t have to show their passports and flight passes to board planes. If the testing succeeds, JetBlue will expand the practice to other airports. Similar facial recognition testing is going on at Air New Zealand, British Airways, and KLM. The tests haven’t yet increased the overall boarding speed but as the technology reaches its full implementation, we should expect tangible improvements in this tiresome routine.
But biometric technology is one of several key priorities for the aviation industry in the near future. Airlines also focus on wearables, AI, and VR, according SITA.
Not only are airlines working on making the identification process better. For instance, ShoCard, a blockchain company, works on technology that will redefine the traditional understanding of ID. The company creates their own blockchain-driven base ID. The solution verifies a person through several databases and stores the verification results in a blockchain database, which is much more resistant to alteration than traditional public databases.
B2B vs B2C Reservation Business Opportunities
There is a belief that startups providing reservations for tours and attractions are likely to fail in most cases. The reasons are quite simple. The market is highly competitive and is difficult to scale. These businesses work to meet needs and requirements of thousands of inventory suppliers and millions of consumers.
B2B reservation systems are completely the opposite. In this case, you deal only with operators. The statistics say that B2B opportunities in this segment have largely improved since 2011. Nearly half of tour and attraction operators used third-party reservation systems in 2017 compared with only 14 percent in 2011, according to PhocusWright.
Adobe recently provided some insights about the nearest future of the European travel industry. It’s expected that Europe online summer travel spending will reach €19.30 billion in 2017 versus €18.33 billion last year. The travelers aren’t ready to spend as much as they did in 2016. The slowdown is 51 percent lower than 2016’s growth. What’s happening and what are the main trends?
- The UK travel industry has slowed down following Brexit;
- The US has become a more expensive tourist destination;
- International hotel booking prices remain constant, which is good;
- Online car reservation drop affected by disruptive services like Uber;
- Cruise services became more popular than in the previous year;
- The traffic and conversion rates on mobile devices demonstrated strong growth in the travel industry over 2016.
Oracle Expands Cloud Portfolio with Logistics Solution
Oracle enhanced its cloud portfolio by updating Oracle Logistics Cloud, a warehousing and transportation toolset. Some new features were added to improve delivery process and reduce order cycle times. Let’s take a look at these updates:
- improved export and import operations to simplify the declaring process in foreign trade;
- fleet management updates that aim at cost savings;
- new spreadsheet importing and exporting capabilities should simplify freight rate update process;
- 3D load configuration improvements that aim at optimizing packing capabilities – you will be able to use trailer and container space more efficiently;
- simplified workflow.
Today Oracle is one of the key players in the supply chain management (SCM) software market. And this release is likely to strengthen Oracle’s position even more.
Perhaps, May’s and the season’s main driving force is AI-based initiatives. Bold Gartner predictions about ubiquitous automation by 2022 set the tone. Among the many relevant things that happened, the most inspiring one is facial recognition testing by multiple airlines. If they succeed, it won’t take long for the rest of the leading airlines to reconsider the boarding experience to make it faster and smoother. However, this leaves many questions unanswered: how facial recognition boarding will impact international flights, how to balance security while streamlining the boarding, and whether the new approach will redefine the ways airlines set their schedules.
Another recurring signal is voice assistants, which appeared in our report last month. Basically, we are standing on a junction where the mere understanding of an interface may be changed. Will we be using mainly voice to operate future devices? Or will there be another generation of visual interfaces like AR devices that we explored recently, or even both. We must wait and see.