Source: 451 Research's Public Cloud Price Index, Global Managed Services 2018; 451 Research's Voice of the Service Provider, Infrastructure Evolution, 2018
4. A New 'Age of Automation'
Since the financial crisis of 2008 much of IT investment has been focused on the emancipation of software from the underlying hardware. Most of the investment in the coming decade will be focused on automation, building on this virtualized software layer. A large range of technologies, from robotic process automation (RPA) through to Machine Learning to will drive this and Digital Automation Platforms will be the platforms used to build applications that can adapt to change quickly. In a 451 Research custom study in December 2018, 70% of surveyed organizations said that a digital automation platform is a key requirement.
5. 'Edge' Computing Becomes More Tangible
Edge computing, in its broadest sense – everything from carrier and datacenter facilities near to where data is generated to the cars and machines generating the data – is enjoying a renaissance in this cloud-centric age. Exactly how quickly this is evolving into a tangible opportunity varies hugely across, between and even within markets, but data will increasingly need to be processed and stored close to where it is generated, or on the device itself. Determining what data goes where and how to make the best use of it will become a major challenge for IT departments. These changing requirements will have significant impacts for data, compute and networking.
Figure 4: The Rise of Edge Data Processing
Source: 451 Research's Voice of the Enterprise: Internet of Things, Workloads and Key Projects 2018
6. The Context Economy Begins to Flourish
Technology is quickly becoming the catalyst for one of the most profound changes ever to occur in the relationship between individuals and the world around them. These technological breakthroughs bring huge amounts of data to power the 'context economy.' Context will define the value of data: information without context will be worthless, while information with context will be essential for delivering personalized experiences, whether for leisure or work. Those that own the data will win; everyone else will have to pay to access it.
Figure 5: The Rise of Contextual Experience
Source: 451 Research's Voice of the Connected User Landscape: Digital Transformation Corporate Representative Survey 2H 2018
7. 'WorkOps' Emerges to Enable Intelligent Knowledge-Based Work
The term 'WorkOps' describes the evolving nature of work. It describes more responsive work execution where intelligent context, workflow automation, collaboration and reporting are integrated and embedded across the work lifecycle. As work is broken down into constituent parts, and people and technologies move between roles and tasks in an agile manner to execute work, we believe WorkOps and the technologies that enable it will be a key characteristic of enterprises' future digital competitiveness. In a 451 Research Voice of the Connected User Landscape Corporate Digital Transformation survey in the second half of 2018, 54% of technology decision-makers within organizations said it is highly important to them to use intelligent process automation to reduce the friction points in employee workflows.
8. Security Shifts to a 'Zero Trust' Model
Zero-trust networking has the potential to fundamentally change the way security is done, upending the 'old' perimeter-based security model that assumed anyone on the inside was 'trusted' and anyone on the outside wasn't. In its place, 'zero trust' networking – or what 451 Research calls unified access control (UAC) – is an entirely new security model where no one (or no 'thing') is assumed to be trusted, and in which access to resources is based more on who you are than where you are.
This implies a greater role for identity-based controls such as multifactor authentication (MFA), authorization, directory services and identity governance, and less direct reliance on network-based controls like firewalls and VPNs. All of these are among the security tools deemed most important for organizations with a security operations center according to our Voice of the Enterprise: Information Security, Organizational Dynamics 2018 study, suggesting that the time is ripe for their integration in more seamless UAC initiatives. And because it touches most segments of the IT security stack – MFA, identity as a service, firewall/VPNs, endpoint security and cloud access security brokers to name a few – zero trust will likely have a highly disruptive impact on the cybersecurity landscape in the coming years, in the form of both R&D and M&A.
Figure 6: Most Important Security Tools in the SOC
Source: 451 Research's Voice of the Enterprise: Information Security, Organizational Dynamics 2018
9. A New Silicon Gold Rush
We are currently tracking nearly 40 early-stage chip startups all focused on building new silicon designs optimized for the training of deep-learning neural network models, and for artificial intelligence inference tasks in the datacenter and at the edge. This is an unprecedented number and marks a significant shift toward the use of heterogeneous chip architectures for datacenter infrastructure. However, only a handful of these startups are likely to survive.
Figure 7: Primary Uses for GPUs and FPGAs Among Service Providers
Source: Voice of the Service Provider: Infrastructure Evolution 2018, Quarterly Advisory Report
10. M&A Dynamics Shift to Outsized Exits
The 'Softbank effect' is creating an environment in Silicon Valley of 'haves and have-nots,' as ever more VC dollars go to ever fewer startups. On the other end of the lifecycle, it's also polarizing the exit market for VC-backed startups, with record proceeds generated by a declining number of deals.
Figure 8: VC M&A Activity
