AOL founder Steve Case says we’re entering a third wave of the internet, where the primary aim shifts from providing knowledge to making our lives easier. This is being driven by emerging technologies – including artificial intelligence (AI), machine learning (ML) and blockchain – which are integrating the internet into everything we use and do.
It’s difficult to overstate the potential of these technologies. PwC estimates artificial intelligence could add as much as $15.7 trillion to the global economy by 2030 – a number which rivals the combined output of China and India. Gartner says blockchain could generate business value of $176 billion by 2025. These are big numbers.
But the true value of these emerging technologies isn’t monetary. They will fundamentally change the way we live, work and play, making processes more efficient and accurate.
The adoption and maturity of these technologies will grow at pace, but it will require investment if they are to live up to their potential. The future is closer than you think. If you want to lead in this third wave of the internet, the time to start is now.
Artificial intelligence (AI) is the most important general-purpose technology of this era. Machine learning is a subset of artificial intelligence. There’s incredible potential in a machine’s ability to keep improving performance.
AI and machine learning are already being used but applications are limited. A recent MIT-Boston Consulting Group survey found 85 per cent of executives believe AI will change business, but only 20 per cent of companies are using it and just five per cent use it extensively.
This gap between expectation and reality looms large. PwC’s Digital IQ study found the percentage of technology spending outside of the CIO’s budget has climbed to 68 per cent, from 35 per cent just a few years earlier. Unlike previous generations of technology, the adoption of AI and ML will not be driven primarily by one person.
Skills within businesses is another challenge. IT teams need to learn to implement and configure these technologies, but the required skillsets are often scarce. In many companies, analytics and data experts are spread across different business units. These teams also vary greatly in size, capability and skill level.
But the key reason for the lack of adoption is the challenge of keeping pace with emerging technologies. Making use of these technologies means accelerating digital transformation – it’s impossible to progress without getting the digital basics right. Most companies are still too busy optimising infrastructure to invest in the technologies which will define the digital age.
Blockchain improves processes by making multi-party transactions quick, transparent and secure, reducing reliance on third-party intermediaries. It has potential in managing digital copyrights, enabling financial transactions without banks, tracking supply chain information and recording healthcare history.
But Blockchain is currently hampered by a lack of understanding – particularly due to buzz around bitcoin, a cryptocurrency that relies on blockchain. For Blockchain adoption to grow, it needs the support of senior leadership teams who are still trying to understand how it can improve their business.
There are also challenges around acceptance. Regulatory bodies will need to manage a standard for implementing this entirely new system for it to be in place for standard use. Equally, it requires a new acceptance around decentralised data systems. This is a foreign concept in our current, centralised web services system.
Why cloud is key
Although these technologies are already in use, more widespread adoption requires an upgrade to the underlying infrastructure.
Cloud is an integral building block that lays the foundation for these emerging technologies. They need fast processors, lots of memory and access to storage but not all the time. Machine learning and AI workloads tend to be short but intense so it’s crucial to build an environment adapted for this type of flexibility.
For many organisations, it makes little sense to build the high-end infrastructure needed to support emerging technologies. There’s also little need, thanks to cloud technology, which provides access to high-end environments as and when needed. Cloud integration also provides a consistent level of security and regular upgrades.
The potential upside of first-mover advantage with these technologies is huge. Examples include:
- Increased productivity – Machine learning and AI can be programmed to automate routine administrative functions, freeing up staff to spend more time on tasks requiring greater skill. Although some jobs will disappear, many more will be redefined and new ones will emerge. Automation also removes the risk of human error, making processes faster and more accurate. Blockchain improves productivity by allowing transactions to occur quickly and transparently without third-party verification. We’ll see the rise of smart contracts, which automatically trigger actions based on criteria to further streamline processes.
- Cost reduction – Increasing productivity has a positive impact on business costs. With blockchain, for example, removing the need for an intermediary and allowing contracts to be processed automatically removes much of the transaction cost.
- Customer experience – A chatbot or other instances of machine learning allows your business to handle routine customer requests without needing a service representative on call. It means customer service can be maintained around the clock, improving customer relationships. Blockchain improves digital experiences too. The security and transparency features of Blockchain put everybody in direct control of their information and transaction history.
The business gains will be even more powerful as these technologies are interconnected. The internet of things (IoT) is driving huge amounts of interest for its potential to produce a treasure trove of data – but this is meaningless without effective analytics. AI will help draw meaningful insight from huge datasets with automated processes that push people further up the value chain. Machine Learning will augment human decision making in unprecedented ways, allowing businesses to speed up and deepen the process of continuous improvement.
These benefits are available now for companies prepared to lead the charge. Business leaders who wait to see how things pan out will be left playing catch-up in the third wave of the internet.
Ashok Munirathinam is Senior Director, SAP Cloud Platform, SAP Asia Pacific & Japan