Tech Predictions for 2017

Many of the world’s largest businesses are now tech companies (think Google, Amazon, Apple, Facebook and Microsoft) and many traditional businesses are fast becoming tech or data businesses. By 2021 it is predicted that a third of CEOs and COOs of Global 2000 companies will have spent at least 5 years in a tech leadership role (according to IDC). So it seems tech is increasingly influential. The tech events and pace of change in 2016 were dramatic, and 2017 looks set to be equally exhilarating. Here’s a taste of what might happen…

1. Autonomous cars will start to appear on the roads

Elon Musk has promised us a Tesla by the end of 2017 that can drive from LA to New York without the need for a human driver. As road accident statistics now suggest, many drivers would prefer to spend time in their car doing something other than driving, typically using their smartphones. There is of course a way to go before we see fully autonomous vehicles (level 4 or 5), but whether you view autonomous vehicles as evolutionary or revolutionary, progress is happening fast. Mainstream manufacturers, including Mercedes Benz, JLR and Volvo, increasingly have semi-autonomous features, such as lane-assist, automatic parking and auto-pilot functions. Recently, Uber acquired self-driving hardware developer Otto. VW invested $300m in Gett, Google is running trials with its cars in Mountain View, and we are waiting with anticipation to hear of Apple’s plans.

As for the UK, it is a hotbed of development and testing activity for automated vehicles and pleasingly the UK government is committed. Our government was one of the first to conduct a review of national laws. The findings in its 2015 ‘Pathway to Driverless Cars’ Summary Report clarified that the testing of automated cars and other technologies is possible in the UK today, without being confined to test tracks, without the need for special permits and without the need for a surety bond (provided that adequate insurance exists). This gives the UK a useful head start over other European countries. Bristol and Greenwich are already conducting testing activity for automated vehicles. In 2017, Coventry and Milton Keynes will host tests involving Lutz podcars and Volvo has announced it will be testing driverless cars in London.

From a legal perspective, the government has stated that it intends to take a ‘pragmatic and proportionate approach, with a rolling programme of regulatory reform’. The only immediate change to primary legislation is to the UK’s insurance framework to ensure that product liability covers automated vehicles. In 2017, the government will also review the allocation of civil liability between driver and manufacturer, consider the standard of driving required for automated vehicles and consider changes to MOTs. Watch this space! Meanwhile, we should also expect to see the rapid growth of lift sharing and car sharing facilitated via apps such as Bla Bla Car.

2. Cyber-attacks will increase and become more creative

While 2016 was the year when hacking went mainstream (remember the attacks on the Ukraine power grid, fake news infecting Facebook, the DoS attack on Dyn, ADP’s data breach and the attack on the Central Bank of Bangladesh), 2017 is likely to see increasingly creative or sophisticated hacks. In the past, cyber security was considered the exclusive realm of IT departments. This is no longer true and board rooms should take note.

Malware and ransom ware attacks will continue, largely as attacks are cheap to operate and organisations often do not engage appropriate tools and strategies to prevent or mitigate attacks, sometimes due to complacency and/or cost.

User devices are increasingly becoming internet-enabled and the security measures in place often lag behind. Apart from the obvious risks for attacks on consumer IoT devices, there is likely to be a threat against industrial (and perhaps governmental) IoT as well. This will inevitably lead to the theft of intellectual property, trade secrets and (sooner or later) some disruption to critical utility infrastructure.

The regulators seemed to anticipate some of this as the forthcoming GDPR (which is due to come into force on 25 May 2018) includes a clear focus on the steps that both controllers, and processors, will need to take in ensuring security.

3. Cloud usage will reach loftier heights

Whether you think about AWS, Azure, WhatsApp, Facebook, Office365 or Dropbox, cloud computing is increasingly becoming the nerve centre of IT infrastructure and not using a form of cloud is fast becoming the exception to the norm. According to IDG’s recent Enterprise Cloud Computing Survey, it is predicted that 2017 will see businesses spending 28% of their IT budgets on cloud computing, of which 45% will be spent on SaaS and 30% on IaaS. Data analytics, data storage and data management will continue to be a key reason why businesses go into the cloud. The hybrid use of public and private clouds will remain relevant for many businesses largely due to the mixed type (including sensitivity) of applications and data being used and processed.

Typical customer concerns about migration to the cloud include vendor lock-in, server location, security and weak contractual remedies. As the cloud market becomes more crowded, many vendors will continue to offer solutions designed to address these issues, although (with an increasingly regulated data privacy environment, including the threat of heavier fines) more balanced contractual terms are unlikely simply to be volunteered by vendors.

Vendors, and sub-vendors, in the cloud supply chain will have to grapple hard with how to satisfy the new regulatory requirements imposed on them as a result of GDPR, both directly and indirectly via their customers, without a substantial erosion of profit margins. Compliance is likely to involve a delicate balance between absorbing, and passing on, the additional cost. For those interested in the detail, have a careful look (in particular) at the changes and cost needed to comply with the new requirements relating to a) ‘data portability’, b) consent required to engage sub-processors, c) security (including availability, integrity, resilience and data restoration) and d) data transfers outside the EEA (articles 20(2), 28(2), 32(1)(a)-(c) and 46 GDPR).

4. Clever algorithms and machine learning will increasingly be used for decision-making

Algorithms are increasingly replacing human decisions. Many algorithmic decisions are good ones, but some are poor and the process is often not transparent. AI is, for example, being used by employers to assess suitability for jobs, banks to assess suitability for loans, insurers to assess cover and premiums, social networking sites in the form of bots and self-driving cars to assess driving decisions.

While there are of course many benefits, the use of AI can lead to bias or incorrect decisions so businesses should expect to have a suitable degree of human intervention on hand. In this regard, existing UK data protection law (s12 DPA 1998) gives data subjects certain rights to object to automated decision-taking. Watch out as the GDPR further expands on this right of objection (article 22 GDPR). These rights may be seen as another obstacle but, as some consumers prefer a more human approach to decision-making, there may be a marketing angle here for some businesses.

5. Developments in adtech and martech

Customer acquisition and personalisation remain core areas of focus for marketers. In this fast moving sector, here’s what we might see in 2017:

• A move away from cookie based, scattergun advertising approaches to precision pull-based marketing, including the use of ‘just in time’, content-rich, discovery and social based marketing
• Programmatic will grow in all its guises
• Brands who understand digital tech will increasingly undertake more ad innovation and give greater direction to their agencies
• An increased use of AI, especially in relation to ‘cross device’ modelling
• Mobile data will remain key and, within that, location data, sensor data and other forms of data will become more sophisticated
• We say ‘farewell’ to opaque inventory as attribution, reporting and measurement techniques improve
• An accelerated deployment of header bidder technology across publishers, allowing publishers to see the true value of each impression. See our previous article on Bidders from the perspective of Publishers for further information

There are a few interesting things to note here: a UK data subject already has the right to object at any time to direct marketing (i.e. they can withdraw consent). Second, the GDPR will give data subjects a right (subject to exceptions) to object to the processing of data concerning him or her (where the controller is relying on the ‘legitimate interest’ exception), including profiling based on those decisions (article 21 GDPR). Also, the GDPR has a slightly broader definition of ‘personal data’. These GDPR changes will create additional challenges for those involved in advertising and marketing to ensure that marketing can be conducted in a successful yet compliant manner

6. More use of AI in retail

In the offline and online world, retailers are already using AI to shake up the status quo. AI helps to provide a more interactive customer experience, encourage repeat business and help stock availability and speed to market. We can expect to see a lot more of it in 2017, but measuring the ROI is not always easy.

By way of example:

• Smart mirrors allow customers to try on clothes without the need to undress. Intel’s “MemoryMirror” allows a customer to review what they have previously tried on via their smart phone.
• Stock management systems are less sexy than in-store gadgets, but fundamental to getting the right stock into the right store, or delivered to the customer, at the right time.
• Data analytic tools that predict customer behaviour can assist retailers by better anticipating the needs and behaviour of their customers. This in turn leads to more accurate inventory ordering, stock management and carrier scheduling. IBM’s Watson is the AI behind 1-800-Flowers.com launch of a gift concierge system that acts as a personal shopper. It asks the shopper a series of questions to identify the perfect gift – the more you use it, the smarter it gets. North Face is providing customers with more accurate product recommendations by using a search tool that is also powered by IBM’s Watson. The technology focuses on natural language use to produce more accurate results. See more in our previous article on Getting the best out of AI in Retail.

Closing thoughts

2017 will almost certainly reveal many exciting tech developments. Much of this development will continue to be fuelled by our seemingly insatiable appetite to capture, analyse and use financial, personal and other valuable data. However, what is changing is the need for tech teams, business stakeholders and boardrooms to plan ahead, take action and ensure that their organisations’ objectives, processes and systems that involve tech and personal data (both existing and new) are designed, built (or adapted) and implemented in a manner that can meet the needs of an increasingly burdensome data privacy environment.