Top tech trends that will echo into 2016

Technology, today, is the leading source of productivity gains and sustained competitive advantage for every company and organization in every single industry globally. It also has the potential to level the playing field across educational and socioeconomic disparity.

Through cross-pollination, technology can and is being used to solve long-standing problems in a fundamentally different way. Asking which sectors technology will disrupt is like asking which sectors plastics would disrupt back in the 1950s – the answer is all of them.

Therefore, this technology year in review covers the trends and the deals that not only most impacted tech, but also that permeated the global business, political and social landscape in 2015.

Data is the phenomenon of our time. It is the world’s new natural resource …Cybercrime, by definition, is the greatest threat to every profession, every industry, every company in the world – Ginni Rometty, CEO IBM

In fact, it was data-related cybersecurity issues that dominated the news this year, with some of the biggest data breaches on record, as well as an increase in state-sponsored cyberattacks. The research firm Gartner estimates worldwide security spending reached $75.4 billion 2015, increasingly driven by the need to protect and manage digital business, “particularly cloud, mobile computing, and … the Internet of Things.”

This year, people also realized that 100% security is a myth and more nuanced risk assessment and mitigation strategies started to come into play. Security will start moving away from perimeter defense to more security aware application design, dynamic and static application security testing, and runtime application self-protection.

The general theme of “data”, and what to do with it permeated the rest of the sector, as well. The rapidly accelerating ways technology can be used to store, manage, analyze and act on data was the underlying catalyst for disruption in every single field, not just cybersecurity.

As such, my view of the other top tech trends of 2015 are also based on this theme, one which will likely dominate tech headlines again in 2016:

1. Clouds and computing everywhere: “Mobile,” including smart-phones, wearables and the Internet of Things, finally became the computing paradigms of focus and their use cases continued to evolve. Flexible cloud infrastructures that centrally coordinated applications and devices scaled even more rapidly and flexibly. Eventually, this will lead to computing everywhere, connecting everything we care about to the Internet and causing an even more rapid creation of data.
2. Advanced and pervasive analytics: The focus of “big data” in 2015 really moved from managing and storing the data to understanding how to use the increasing amount, volume and variety of data to learn something we did not know before. We moved beyond asking a question and getting a slightly better answer to learning, through advanced analytics, what questions should even be asked in the first place. In the future, every application will have embedded analytics and will need to deliver insights and recommendations, not just processing data faster.
3. Artificial intelligence and smart machines: Analytics and context started to pave the way for smart machines that can learn for themselves and act accordingly. The pace of advancement in AI actually sped up in 2015 and machine “helpers” started to simplify and automate many processes and to really “open their eyes”. Thanks to embedded intelligence and analytics, these systems will become more alert and responsive to their surroundings and will become more anticipatory as opposed to merely reactive.
4. 3D Printing: 3D printing started to hit more affordable price points this year that will enable scale and growth in industrial uses as well as penetrate consumer use cases. Quality will continue to improve over the next few years with expansion likely be biggest in industrial and biomedical applications, helping companies reduce prototyping and building costs, as well as enabling new types of design and speed to development.

2015: deals of the year

“Bigger, private tech companies” was the key theme when it came to deals this year. 2015 saw the largest technology M&A deal of all time and the largest leveraged buyout / “take-private” (a practice which is seldom seen in technology) ever in any industry. In October, Dell (which itself was taken private in 2013 in a deal valued over $24 billion) announced an agreement to acquire publicly traded EMC and, with it, control of another public company VMware, in a deal valued in total at $67 billion.

Also dominating tech deal news, was the rise and apparent decline of so-called tech “unicorns,” private tech companies valued at $1 billion or more. Today, there are 144 unicorns valued at $505 billion between them, about five times as many as three years ago. Most are unprofitable. Venture capitalists funded a significant portion of this, but a huge amount of the capital is coming from non-traditional investors in private tech companies like mutual funds and hedge funds who normally invest in public markets but are desperately searching for growth.

The chart below shows the dramatic acceleration of the number of these companies in 2015:

Source: CB Insights

There are signs of a pricing slowdown including the inability to maintain public valuations after an IPO as well as mutual fund write-offs on unicorn investments. A mild correction might actually be good for the technology ecosystem – except of course, from those who invested at sky-high valuations in the past 18 months.

Author: Sandhya Venkatachalam is a Founding Partner of Centerview Capital Technology, and a World Economic Forum Young Global Leader.

Image: Humanoid communication robot Kirobo moves during its unveiling in Tokyo. Kirobo, a knee-high talking robot, is to test how machines can help astronauts with their work. REUTERS/Toru Hanai