Artificial Intelligence (AI), Virtual Reality (VR) and Augmented Reality (AR), and Quantum Computing are some of the current trends in the Information Technology (IT) industry. Insights surrounding these trends as well as the impact of COVID-19 on the IT industry have been provided below.
Trend #1: Artificial Intelligence (AI)
- AI is already known for its dominance or greatness in navigation apps, ride-sharing apps, and image and speech recognition among many other functions. While it has been receiving a lot of attention over the recent years, it still holds significant potential for businesses and its full potential is yet to be seen.
- According to Linchpin, several new mediums of AI have been introduced and more industries are looking for ways in which they can cultivate the resources and implement them in the work they do. As a result, AI is only starting to witness “implementation on a larger scale, which is only set to grow more over the coming years.”
- A recent survey by Deloitte found that the people who have adopted AI believe it to be quite important in the success of their companies and that the “percentage of executives rating AI as ‘critically important’ is expected to surge globally over the next two years.” This must be one of the major reasons why the global spending on cognitive and AI systems is predicted to reach over $57 billion in 2021, while the AI market is expected to reach $190.61 billion by 2025 at a CAGR of 36.62%.
- Since the impact AI has on how people live, work, and play is only in the early stages, it continues to be one of the top trends in the information industry.
- When asked about AI, Satya Nadella said; “Advanced machine learning, also known as artificial intelligence or just AI, holds far greater promise than unsettling headlines about computers beating humans at games like Jeopardy!, chess, checkers, and Go. Now is the time for greater coordination and collaboration on AI”
Trend #2: Virtual Reality (VR) and Augmented Reality (AR)
- VR is normally used to immerse a user in an environment while AR enhances the environment. According to the Computing Technology Industry Association (CompTIA), when people hear about AR and VR, their minds often drift to possibilities in gaming. However, it holds real potential for businesses and solution providers.
- While VR and AR have mostly been used in gaming so far, it has “also been used for training, as with VirtualShip, a simulation software used to train U.S. Navy, Army and Coast Guard ship captains.” CompTIA also reported that businesses can take advantage of the technology to visualize their products and services, as well as enhance their offerings and inform effective decision-making. For instance, IKEA and Wayfair are letting shoppers virtually “try-out” different products from home before making a purchase, Nike has an AR feature to its app to help consumers find the right size sneakers, and Lego and Adidas are using AR to engage with customers.
- Because VR and AR have great potential in entertainment, education, training, marketing, and even rehabilitation after an injury, it is predicted that they will further be integrated into people’s lives in 2021. As such, the global VR and AR market is expected to reach $209.2 billion in 2022 compared to the estimated $27 billion in 2018.
Trend #3: Quantum Computing
- According to Simplilearn, quantum computing is a form of “computing that takes advantage of quantum phenomena like superposition and quantum entanglement,” and is one of the next big trends in the IT industry.
- The technology provides opportunities for predictive analysis that go beyond the capacity of standard computing. Its ability to “easily query, monitor, analyze and act on data” made experts use it in preventing and developing potential COVID-19 vaccines. Businesses can also use quantum computing for predictive analytics and big data analysis.
- Although it is not widely used yet, CompTIA reported that quantum computing will be used to come up with viable solutions as we encounter new problems in the future. Its global market is expected to reach $2.5 billion by 2029 from $90 million in 2019.
- Majed Saadi of Quantum Computing Inc. said, “The investment by government and commercial enterprises in quantum computing has steadily increased over the last few years, as leaders recognize that this technology now has a place in their IT strategy. QCI has brought us into the future, making today the best time to begin to leverage the power of quantum technologies. Organizations looking for differentiated applications that set them ahead of the competition cannot afford to wait until these technologies become mainstream.”
COVID-19 Impact on the Information Technology Industry
- KPMG reported that during the first quarter of 2020, technology firms witnessed a rapid decline in non-essential corporate spending because businesses were closing and focusing on crisis management. According to Gartner, because CIOs chose to prioritize spending on technology and services that are only considered critical, the global IT spending is expected to reach $3.4 trillion in 2020, a decrease of 8% when compared to 2019.
- John-David Lovelock of Gartner said, “IT spending recovery will be slow through 2020, with the hardest-hit industries, such as entertainment, air transport, and heavy industry, taking over three years to come back to 2019 IT spending levels.”
- Computer Economics also reported that IT budgets across ten industries are expected to decline by 5% to 11%.
- The disruption of supply chains also negatively affected the IT industry. A report by GlobeNewswire reported that the decline in China’s manufacturing capacity caused a huge disruption in the industry, especially since it is the major manufacturing location for companies such as IBM, Intel, and Apple. This disruption caused serious revenue implications throughout the year.
- As a result of the lockdowns put in place to prevent the spread of the virus, numerous events in the IT industry such as the Game Developers Conference 2020, Mobile World Conference 2020, and MTN GlobalConnect among others got canceled, postponed, or shifted online. Based on a report by Market Data Forecast, the cancellation or interference of these events cost the industry approximately $1 billion.
- However, the pandemic also brought about some positive impacts on the industry as it caused “years of change in the way companies in all sectors and regions do business.” A good example is how the shift to remote working is expected to cause IT spending on public cloud services to go up by 19%. According to Forbes, cloud-based telephony and messaging and cloud-based conferencing are also expected to go up by 8.9% and 24.3% respectively.
- Many consumers also shifted online because of the COVID-19 pandemic causing companies to “accelerate the digitization of their customer and supply chain interactions and of their internal operations by three to four years, and the share of digital or digitally enabled products in their portfolios has accelerated by a shocking seven years.” Most of these changes are working in favor of the IT industry.
- Moreover, a survey by McKinsey found out that most of these changes that took place because of the pandemic are expected to remain in place even after it is over.