2016 was quite the year for technology. From the inside, it feels like we’ve collectively figured out how to get the boiler going, and for the past year have been fueling the fire and raising the pressure—picking up steam along the way. So much so, this IT locomotive is starting to set record speed goals for delivering unprecedented amounts of innovation and progress. We are headed toward the golden age of software.
The reasons are broad and many-factored on how we got to this tipping point. Perhaps an oversimplification, but an undeniable reason here is that open source has leveled the playing field. People have learned that working together, we can do more. Infinitely more, in fact.
As open source has taken hold, many tools have stabilized and matured, often with public standards supporting them. The Open Container Initiative launched RunC to stabilize the container wars that were brewing. The Cloud Foundry Foundation emerged as a titan this year, with Microsoft and Google volunteering major support for their clouds—Google even became a full member last month! In perhaps the most symbolic of moves that we are all now on the same page, Microsoft retracted statements that open source is like cancer with major contributions and even joined the Linux Foundation.
So as vendors sort themselves out openly, we find that the substrate we use to build software now has actual substance—and developers are reaping the benefits of a proliferation of services baked into scalable platforms and services. As industrialized open source frees developers and operators from the undifferentiated lifting of building application infrastructure, our eyes can turn to the real value here: the shower of exceptional user experiences that are pouring out of the cloud.
With barriers to start scalable application development reduced to minutes, we are entering into a renaissance period where user design and value is paramount, and we are actively reshaping the landscape of the businesses that provide it.
Let’s take a look at some of the most transformative innovations leading this new era, and how they are taking off.
RIP Auto Industry—Long Live The Mobility Industry
It’s probably fitting to start with the automotive industry as Uber was one of the first unicorns to buck an established industry in 2010. Now every industry is shaking in their boots, fearing they could get “ubered” if they don’t lead disruption and evolution themselves. The effect on the auto industry is hard to ignore. Their disruption is so advanced that Sheryl Connelly, Ford’s global trend and futuring manager, released her Christmas message, and declared that Ford is no longer an auto company, it’s a mobility company.
This isn’t radically new, but it symbolic of a powerful mindshift, and underscores some real leadership in navigating their industry’s transformation. This clears their focus to be a company that spends less time building cars, and more time making people’s lives better in a world that uses a lot of cars. Self-driving cars are here already, with Google’s fleet exiting their larval stage and becoming a full-fledged Alphabet company last week called Waymo. They already have a mini-van, the Chrysler Pacifica that they are adding to their fleet. Uber’s self driving semi truck spinout, Otto delivered its first 50,000 beers in October, clearing the way for long haul trucking to be safer and cheaper. Not to be outdone, the same month Tesla announced that every car they build from now on will have self-driving hardware.
Credit: The Verge
The auto industry isn’t stopping at self-driving either. They’re plugging into the environment. Audi just rolled out cars that talk to traffic lights, inserting a “time to green” countdown into the driver navigation. Eventually, this level of communication could help improve your route, stop and start the vehicle to save on fuel, and recommend a speed that maximizes the number of green lights one can make in sequence. Maybe it can even tell the light to turn green when you are approaching on barren roads.
Apps Get A Voice—Virtual Assistants, Virtually Everywhere
We are on the brink of making the switch from typing to talking. This makes sense, as humans can talk at about 150 words per minute, yet on average type only 40 words. Talking is supposed to be our ideal user interface. It’s almost comical that we think it is a switch to go back to it.
The tech here has been kicking around for a few years, with Google introducing voice search in 2009, and Apple debuting Siri in 2011. But, as Mary Meeker, a general partner at Kleiner Perkins Caufield & Byers, argued in her annual presentation on the state technology, in order to be successful, voice recognition software needs to have 99% accuracy rate. She then tells us we are getting close, as Google, Baidu, and startup Hound are already achieving around 90% accuracy.
With the rising accuracy rates, we are now seeing an enormous appetite for devices that act like an interface to your home, allowing you to change the channel, turn down the temperature, order a pizza or even an Uber. The demand has spiked so much that Oppenheimer analyst Andrew Uerkwitz estimates the Amazon Echo and Google Home will sell 10-12 million units this holiday season. To put this in perspective, Apple sold just north of 12 million iPhones in its first two years.
The demand for virtual assistants is permeating through most app experiences, and giving rise to chatbots as in-app assistants. Facebook is starting to roll out the beta version of their assistant, M. Microsoft has Cortana, which powers the chatbot Zo. Then there are the company specific chatbots like KAI from Mastercard or Erica from Bank of America.
The great thing is that each of these platforms are borrowing from open source and gravitating toward the openness, allowing developers to contribute to openly expandable services. They are gaining traction as Alexa, which powers the Echo, already sports 3,000 “skills”, up from 1,000 this past June. Facebook claims to have 33,000 chatbot services on their messenger platform. This also means more people are using these services. Microsoft reports 67,000 developers are working on chatbot services. Facebook reports 34,000.
Harry Shum says that Microsoft’s Zo chatbot had a 9 hour, 53 minute long conversation with a user on Kik. O_O
— Blair Hanley Frank (@belril) December 13, 2016
With the way this market is growing, it’s no wonder that Gartner is predicting that by 2020, the average person will have more conversations with bots than with their spouse.
The Thing Economy Is About To Break Open
The industry has been buzzing about the possibilities of the Internet of Things (IoT), where devices are all connected and talk to each other or bots that manage their performance, maintenance and learn from their surroundings as well as their users.
Gartner says today we have about 6 billion devices connected, and projections have that number heading north of 20 billion–as high as 50 billion–by 2020. As a society, we have gotten used to our wearables and smart thermostats. We’ve proven our appetite for them. As a result, digitally savvy companies have become better at building them, and identifying opportunities for new experiences.
With a CAGR of 41% for IoT, be certain that there will be no industry left behind. And with the goals being to be more energy efficient, time sensitive and healthier, we all stand to gain. Take a look at some of the near term possibilities:
- Smart traffic lights could be optimized in smart cities to improve traffic flow, reducing carbon footprint, and decreasing wear on roads—all while speeding up your morning commute. Initial tests by Carnegie Mellon in Pittsburgh showed travel times across the city were reduced by 26%.
- Medical devices for specific types of patients are starting to populate hospitals. Devices like Urosense that automatically measures urine output and core body temperature (CBT) for catheterized patients. By monitoring these vital signs, medical professionals can detect and start care earlier for critical conditions like heart failure, infectious disease, and sepsis. Phillips makes a medication dispenser for elderly patients who forget to take pills, or forgot they’ve taken them.
- Retail has already taken advantage of IoT for product tracking. You probably notice when they are able to give you a 10 minute delivery time window, but retailers are appreciating their ability to increase inventory accounting accuracy, dramatically reduce out-of-stocks and reduce product loss, all of which can result in margin growth. Coming up, we will start to see those products talk to your phone as you walk by, tailoring offers and informing your digital assistant on how to describe product benefits.
- Insurance is changing to not just protect you financially, but to actually protect you. Take the new British company Neos, who provides home insurance that comes with smart home technology which they use to detect problems before they become disasters. This is a world where your grandmother’s heirlooms just got safer because you picked the right insurance.
- Fin-ternet of things is changing where banks add value. Banks will look to track driving habits so they can offer you insurance discounts, they’ll use biometric data to confirm your identity at the ATM, and they just might remotely disable your car if your payments are late or it gets slated for repossession. Regardless, financial services companies are hot on ushering in an era where they can seamlessly collect, share and analyze real-time data for sales or risk protection.