“iCar” concept art.
Every year pundits, analysts, bloviators, and anyone with a voice make outlandish predictions for the coming year. Most do not come true, but it is nice to be the guy that got it right, even if it was a small prediction. In keeping with this tradition, I submit my 2018 predictions for the Internet of Things (IoT), Autonomous Vehicles (AV), and the systems and software that support each. Additionally, I will attempt to cut through the hype and identify a few companies to watch in the coming year.
- The IoT industry will fall short in their attempt to push IoT Proof of Concepts (PoC) to production deployments. It’s true; most IoT projects have a difficult time moving beyond testing cycles to production, especially distributed projects and those that are at scale. For many years, traction in this industry has been largely around Industrial IoT (IIoT), especially in industries like energy/Oil & Gas, manufacturing, and transportation. Consumer-centric industries like smart cities, healthcare, and retail show tremendous potential, but they lag those industries that have been integrating operational technologies (OT) for many years, from companies like Siemens, ABB, National Instruments, and others. Don’t get me wrong, IoT represents a significant phase shift in efficiency and automation. However, there are many regulatory, infrastructure, and privacy issues, as well as a talent gap that needs to be solved, before we see the growth many of the bloviating heads are predicting in 2018.
Hype: While many predict 2018 to be the year of production IoT, I believe that over 60% of the projects in the PoC phase will fall short from a deployment and expectations perspective—especially when considering security, privacy, infrastructure, and risk management challenges. No CEO wants to show up on the cover of the WSJ as the latest casualty of an attack from the edge, and that fear is enough to significantly slow production deployments.
- Tim Cook will retire from Apple and go into politics, while Apple Inc. will acquire Tesla. Elon Musk will take the reins, spearheading the production-ready Level 5 (full autonomy) “iCar” by 2020. Even though I am having a bit of fun, this prediction is not preposterous. Apple has been riding the personal device wave for many years, and Tesla has proven themselves to be the vanguard of innovation when it comes to automation. If you have ever been in a Tesla, it is almost like driving a magical iPad on wheels. Both companies are laser-focused on user experience (UX), innovation, and maintaining/growing their respective fan-bases. Furthermore, the combination of the two companies would create a competitive barrier in AV that would be difficult for their competition to overcome. As for Elon Musk, he brings the charisma, vision, and drive (not to mention quirkiness) that was partially lost when Steve Jobs passed away. Not that Apple needs a shot in the arm, but there is not another CEO in the industry that can get away with driving an electronic semi truck onto the stage.
Hype: This prediction is largely conjecture. However, I do believe we will someday have a choice between an iOS or Android operating system in our cars. The AV industry is moving very quickly to get to level 3-4 production vehicles (meaning mostly autonomous). There are still many hurdles to overcome in the AV space—specifically ethics, regulation, Moore’s Law, storage, compute, and last-mile infrastructure—before it becomes a true reality. Every chip manufacturer and OEM in the world wants to profit from these mobile data centers. The AV industry is ripe for consolidation and to the victor will go the spoils. Sadly, I also predicted Bitcoin would not survive past 2016.
- Open Source and Software Defined “everything” will continue to grow as a viable option for many enterprises. It was not too long ago that Open Source software was simply considered free software, developed by hackers and crackers to avoid paying licensing fees. Over the past several years, Open Source on Linux has emerged as the preferred method for most developers entering the workforce. Additionally, an increasing number of enterprises and DevOps organizations—especially those that leverage agile development environments—have adopted Open Source and Linux as their preferred development environment and operating system (OS). With the convenience and efficiencies Open Source provides, communication service providers, telecoms, and many enterprises will continue to turn away from expensive closed proprietary dinosaur systems of the past—especially when it comes to networking, WAN, and data center infrastructure. Software Defined (SDx) means decoupling the operating system from the hardware, thereby allowing users to have the same functionality or network functions provided by proprietary systems (like network switches, routers, firewalls, and load balancers, but run on commodity hardware). Once you separate the OS from the hardware, organizations can deliver their services and software much faster, less expensively, and more efficiently.
Hype: Not much hype around Open Source. At one point it was a competitive advantage for companies to leverage Open Source to develop and deploy applications faster and at a lower cost. As the industry has continued to evolve, Open Source has become competitive parity and those organizations who ignore it do so at their own peril.
As for SDx, not everything is a good candidate for “Software Defined.” Recently, I was briefed by a company that claimed to be the first Software Defined software company in the world—the conversation did not go well. That said, there are tremendous efficiencies and cost benefits to SDx, especially as the number of IoT or edge devices grow. However, the SDx market has been slow to address many of the security issues at the edge. In addition, I believe the SD-WAN marketplace will not see much growth in 2018, and will die an unceremonious death over the next several years.
In many respects, I believe 2018 will be more of the same for the technology industry—which is why I expect several big acquisitions. Additionally, I expect 2018 will be the year of hype, especially with Artificial Intelligence (AI) and containers. Regarding AI, many companies will continue to mistake AI with Machine Learning (ML), and ML with data analytics. Moreover, I believe containers (especially process and application) will continue to thrive in development and DevOps environments as a way to deploy code more efficiently. However, the massive hyperbole from celebrity CEOs breathlessly pushing forward machine containers and a marginal Kubernetes (K8s) narrative will likely fall short—though Rancher Labs K8s distribution on Ubuntu and Red Hat’s OpenShift do show promise, if they can monetize, execute, and get past the hype.
Disclaimer: Moor Insights & Strategy, like all research and analyst firms, provides or has provided research, analysis, advising and/or consulting to many high-tech companies in the industry mentioned in this article, including Apple Inc., DellEMC, Hewlett Packard Enterprise, Intel, Microsoft, NVIDIA, Qualcomm, Red Hat. The author does not have any investment positions in any of the companies named in this article.