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Environmental sustainability boosted by IoT
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AI continues to make headlines
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Multiprotocol IoT connectivity
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AI hardware in 2023
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Enriching data streams in manufacturing
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Operationalizing AI
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eUICC technology growth
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Cloud and intelligent edge
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Market adoption of AI is accelerating
Across Informa Tech's Applied Intelligence Group, Analysts and Editors from Omdia and AI Business have come together to give their insights and predictions on the tech trends that will shape the digital landscape in 2023, and beyond.
+ Intro by Jenalea Howell, Vice President, Applied Intelligence Group
Applied Intelligence Group
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The quantum advantage
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Stay connected in 2023
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About Informa Tech's Applied Intelligence Group
Transformation Trends
2023
+ Intro by Josh Builta, Senior Director, Omdia
TOP DIGITAL
The first half of 2023 has seen continued development and excitement around transformative technologies. In fact, you would be hard pressed to find a topic that has garnered more discussion in the media or around the dinner table so far this year than Generative AI (GAI). This is perhaps best exemplified by ChatGPT, a GAI interface that has gone from a virtual unknown to reportedly surpassing 100 million users within its first two months of becoming publicly available.
While Generative AI has captured an incredible share of attention there have been significant developments in other technologies too. The development of 5G RedCap, a cellular protocol purpose built for Internet of Thing (IoT) devices, is continuing and its release is quickly approaching. This technology aims to reduce the complexity and cost associated with IoT and could serve as a key accelerator in connecting billions of endpoints throughout the world. As the same time, Quantum Computing continues to make key strides. In June 2023, IBM Quantum announced results showing that quantum error mitigation techniques used with the company’s 127-qubit Eagle-class processor outperformed a classical supercomputer in solving a problem of commercial and scientific interest. This suggests quantum computers will demonstrate commercial value in the near-term, prior to the development of large scale, completely fault tolerant quantum computers. These and other developments are clear signals that technological innovation is inevitable. We expect the advancements occurring in individual technologies will be accompanied by more instances of technological convergence. This means these technologies will not exist in silo but instead see their ecosystems and solutions come together. We believe this confluence, for instance the merging of IoT and AI, will turn simple solutions into more impactful offerings that will alter how we live and work for years to come. Its also becoming increasingly clear that enterprise adoption of these technologies will grow. Adverse economic conditions or even a global pandemic have not stopped this. In fact, such conditions have for the most part acted as a catalyst for digital transformation across business and society and moved emerging tech to the next phase of development and adoption. Multiple surveys done by Omdia, our technology research brand, indicate that enterprise adoption and investment in IoT, AI, and Quantum Computing are all on the rise. This is not a trend that we expect to stop or reverse anytime soon. Finally and perhaps most importantly, as these technologies become more powerful and enterprise adoption increases, serious discussions around ethical considerations and ensuring that these technologies are used in a responsible manner are coming to the forefront. Most prominent in 2023 is the growing focus on the responsible use of AI. Government bodies and international organizations are taking action to release regulations to ensure safeguards are in place. In June 2023, the European Parliament approved a draft of the EU Artificial Intelligence Act which will impose a set of obligations on both providers and deployers of AI systems. As AI and other technologies continue to evolve, it is imperative that there is a focus on not just improving the capabilities of these technologies but also in creating the frameworks needed to govern their proper use. The world of technology is changing everyday and has the potential to quickly transform industries around the world. It is a challenge to keep up to date with the rapidly evolving products, their potential use cases, and the readiness of enterprises to adopt them. This report from the Applied Intelligence Pillar at Informa Tech pulls together views from Omdia analysts and editors from AI Business on these topics. Read on to learn more.
Senior Director Research, Applied Intelligence, Omdia
Josh Builta
> TREND #1
HOME
The impact of global warming and the damage of more severe weather occurrences have already been felt in many regions of the world. This has led to global initiatives, most notably the 2015 Paris Climate Agreement in which 196 nations committed to efforts to limit global warming. There is also an increased focus on environmental sustainability at a corporate level, with a growing number of companies being challenged legally for perceived delays, deceptive marketing, or insufficient efforts in addressing their environmental impact. Other factors including government regulation, investor pressure, employee demand, and concerns around consumer perception have also compelled more enterprises to prioritize sustainability efforts. As a result, Omdia estimates that 60% of Fortune 500 companies now report on sustainability, with numerous sustainability indices tracking their performance. It is clear that IoT will play a role in allowing enterprises meet these sustainability targets. The ability for IoT solutions to help measure (and eventually reduce) energy and resource consumption is proven. Smart factories, fleet management, cold chain monitoring and smart buildings are just some of the examples where IoT is being used by enterprises around the world to be more sustainable. It is, therefore, no surprise that in an Omdia survey, 84% of enterprise respondents said IoT was playing a role in contributing to their sustainability efforts.
For enterprises and environmental sustainability, there is a clear cost to doing nothing – this can impact stakeholders; from investors to customers to employee retention, and even the threat of litigation. Given these risks, creating a more sustainable business is a must, and IoT will clearly need to be part of those solutions.”
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of respondents rated in the formative phases for technology-operations
73%
of respondents rated in the advanced phases for organization
55%
Josh Builta, Senior Director, Research, Applied Intelligence, Omdia
Environmental sustainability will be boosted by IoT
Next Trend
Home
> TREND #2
Seven key developments to monitor in 2023:
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of respondents rated in the advanced phases for strategy
68%
Deborah Yao, Editor, AI Business
AI Business’ Editor Deborah Yao shares an overview of the top AI trends recognized by the editorial team, based on the daily coverage of global AI news and insights -- encompassing breaking news, interviews with leading AI experts, commentaries on AI use cases and analysts’ reports on applied intelligence. 1.Generative AI will continue to make headlines but some hard questions are going to be asked around IP protection, privacy, misuse of the technology and monetization. In 2022, the runaway headlines revolved around generative AI, specifically ChatGPT, Stable Diffusion and DALL-E. Nine of the top 10 stories of 2022 were about generative AI. 2. The race for AI supercomputers will continue, particularly in the U.S., Europe and Asia. In 2022, a Silicon Valley company called Cerebras built an AI supercomputer with 13.5 million cores capable of calculating at 1 exaflop per second. Meanwhile, Nvidia and Microsoft are collaborating to build one of the most powerful supercomputers in the world. We expect to see more announcements in 2023 about AI supercomputers being built. 3. Ukraine will continue to leverage AI and tap the global tech community for help in its fight against Russia’s invasion. But there will be increased emphasis on using tech to help Ukraine rebuild after the war. 4. The global chip shortage will abate somewhat due to a slowing economy. Meanwhile, building of semiconductor plants continue. In 2022, the U.S., Germany, the EU, Japan and South Korea were among the nations offering financial incentives to build chip plants as they seek to diversify the global production of chips away from East Asia. 5. The use of AI will expand across the board in enterprises as more non-technical employees will learn to use it to derive better business insights. There will be more emphasis on applying AI intelligence and measuring the outcomes. 6. Regulations will start to come together in Europe, the U.S., and elsewhere to safeguard society against the evils of AI when it comes to privacy, copyright infringement, bias and other illegal outcomes. 7. AI will continue to disrupt health care, from radiology to drug discovery, to offer more accurate and faster diagnoses of diseases.
AI will continue to make headlines
Previous Trend
> TREND #3
Connectivity is no longer as simple or straightforward as it once was, with various protocols each with different advantages. Rather than choosing a single connectivity type for a device, multiple connectivity options will be included on a single chip, with options extending far beyond the typical Wi-Fi/Bluetooth combinations. As an example, a typical connectivity chip might include Wi-Fi, Bluetooth Low Energy (BLE), Thread, and even an additional standard such as Ultra Wideband (UWB) or LoRa.
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By the end of 2023 the idea of a single connectivity chip will be for very specific applications - in general multiples will be the way forward.”
Edward Wilford, Analyst, Omdia
Chips would then benefit from on-chip connectivity management, with the chip then optimizing data transfer by selecting the most appropriate protocol. For example, a chip may use BLE for commissioning, Thread or Zigbee for local low-latency functions (such as a doorbell ring or turning power on or off), Wi-Fi for local transmission of larger amounts of data (for example, queries extended to the Cloud, or transfer of video from a video camera to a monitor. UWB can be added for security, or LoRa for fault reporting or perimeter fencing. The combination of connections thus could ultimately minimize both total power and bandwidth by allowing the use of the most efficient protocol for a given application.
Multiprotocol IoT connectivity becomes standard
> TREND #4
The key motivations for the second compute transition – from the GPU to whatever comes next - are alive and well in 2023. AI adoption and innovation continue, but they continue down the same path on an ever bigger scale. This creates a structural demand for computing power and new microarchitectures. However, the industry faces the transition from a low-interest rate, chip shortage environment into one of oversupply and greater capital discipline. In Nassim Nicholas Taleb’s words, "A glut is rarely followed by a shortage, but a shortage is always followed by a glut." As such, the vintage of AI hardware startups funded so lavishly in 2018-2019 will face a stress test in 2023. The technology, too, is moving on. Industry majors are increasingly focused on multi-chip and composable systems, enabled by new developments in interconnects. Many of the new AI chip players have pursued the same vision – the whole model on-chip – and may now be left behind by continuing model growth.
We expect in 2023 to see the first kilowatt chip. As a result, there is a need for a new direction, but the biggest challenge is convincing enterprises - especially software developers - they have to change.”
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Key motivations for the second compute transition are alive and well in 2023
Alexander Harrowell, Prinicpal Analyst, Omdia
AI Hardware in 2023
> TREND #5
Digital transformation and automation is driving manufacturing
Alexander Bourgeois, Senior Analyst, Omdia
Digitalization initiatives and AI adoption are expected to grow rapidly in industrial sectors as inflationary pressures and ongoing supply chain and energy disruptions continue to subside. According to Omdia’s software market for Robotic Process Automation & Intelligent Automation, manufacturing is exhibiting the highest growth rate, forecasted at 39% CAGR 2020-27. Instead of relying on manual labor and mostly deterministic operation models, practitioners in the manufacturing space are beginning to leverage more powerful AI models through the integration of more complex data streams. Introducing more powerful models will give operators access to additional tools and support as a means of improving performance, throughput, logistics and even regulatory and safety compliance. Looking forward, the industrial market should expect a surge in data federation and integration, where the focus will be cleaning and utilizing operational data. An application which will benefit immensely from more complex data models is in the area of supply chains, where an increase of data quality would optimize the predictive performance of the analytics tool. This would include, perhaps, integrating newer emerging large language models, such as ChatGPT, for customer support applications.
Enriching Data Streams in Manufacturing
In 2023 manufacturers will focus on AI adoption by converging OT-IT where improvements in the ability to predict, forecast and make real-time decisions will be levered to unlock new insights.”
> TREND #6
In 2023, use of AI in enterprise will explode, and proper governance frameworks, such as AI risk management and KPIs, will become critical.”
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Four key areas of impact in 2023
Mark Beccue, Prinicipal Analyst, Omdia
1. Market adoption of AI is accelerating rapidly The market moved beyond early adopters in 2022 and into critical mass/early majority phase. AI deployments, new projects, and entrants will explode in 2023. 2. Employment challenges will fuel AI investments, regardless of inflation, recession Broad market pressure in terms of finding and retaining workers means the efficiencies gained with AI are even more appealing to enterprises across nearly every enterprise sector. 3. Enterprises begin to formalize AI risk management AI risk is such a potential threat that no organization should move beyond the pilot stage with AI without putting in place at minimum some rudimentary form of AI risk management. 4. AI KPIs will rapidly grow as foundational elements of enterprise AI The number of organizations with AI KPIs will grow rapidly because the barriers to building AI KPIs today are largely temporary and are not long-term, systemic challenges.
Mark Beccue, Principal Analyst, AI and NLP , Omdia
> TREND #7
One of the trends that will keep us busy in 2023 is the growth of eSIM and eUICC ( which is the software component that allows the remote eSIM provisioning of multiple network profiles). We expect that automotive and healthcare will be among the main IoT verticals that will notice the highest adoption, and thus see the benefits at this early stage of the market. For instance, the introduction of eUICC in healthcare devices, such as CPAP machines, will reduce friction from roaming if a patient is traveling. It should be noted that as standards for the eSIM, for M2M, are established other more constrained devices will adopt these solutions in industrial and energy and utility verticals. Although the massive adoption from other verticals will happen gradually over the coming years, at Omdia we expect that 2025 will be the inflection point. Key Recommendations : For CSPs : CSPs, especially those that target the automotive industry, should embrace eUICC and build a strategy that includes a certification process ( for eUICCs). CSPs can define strategies to bundle content in the automotive market and win highly valuable automotive infotainment connections. For module vendors : Vendors must be familiar with different types of SIMs technology, including eSIMs, eUICCs, and iSIMs, as smarter SIMs become an important hardware. For enterprises : Enterprises should watch or participate with the GSMA in establishing standards for the eSIMs for M2M.
There is no doubt that eSIM is changing technology, and provides greater carrier flexibility along with enhanced security.”
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Eleftheria Kouri, Senior Analyst, Omdia
eUICC technology is showing the first wave of growth
eUICC technology is showing first wave of growth
> TREND #8
Millions of GBs of data are being generated by connected devices processed in the cloud, on-premises or sometimes within the device itself. The insight from these sources is ultimately used to make business decisions that are sometimes critical. The need for real-time processing and taking quick action based on insights generated is leading to the growth of edge intelligence in IoT. We estimate that in 2023 majority of IoT deployments will have intelligence at the edge for faster processing. Edge computing brings the computing power of the cloud to IoT devices (closer to where the data resides). By moving workloads to the edge, devices spend less time communicating with the cloud, which reduces latency. They can even operate reliably in extended offline periods. With this in mind, we recommend IoT vendors to not only focus on cloud-based solutions, but also to enable edge processing. About 80% of enterprises, are currently using, or planning for processing at the edge, which will better enable services, such as real-time analytics and the incorporation of AI/ML in their digital transformation journey.
The need for real-time processing and taking quick actions based on insights generated is leading the growth of edge intelligence in IoT. We estimate that in 2023 the majority of IoT deployments will have intelligence at the edge for faster processing.”
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Edge intelligence and cloud will be at the center of IoT deployments in 2023 and beyond
Shobhit Srivastava, Senior Principal Analyst, Omdia
Cloud and intelligent edge to drive IoT deployment
> TREND #9
While large language models like ChatGPT continue to capture the headlines by fully automating tasks such as generative images and text, a much more "organic" trend is taking shape in the form of 'human in the loop' AI. Instead of relying on AI to fully automate processes like data tagging and model creation, enterprise AI practitioners will begin to inject human-driven oversight into AI processes as a means of improving the performance, accuracy, and even regulatory compliance of AI systems...perhaps even systems such as ChatGPT.
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Brad Shimmin, Chief Analyst, AI & Data Analytics, Omdia
Human in the loop AI
'Human in the loop' AI
> TREND #10
Achieving a “quantum advantage” over classical computers is a key goal for the quantum computing industry, and a nearer-term goal than achieving large-scale, fully fault-tolerant quantum computing. “Advantage” here means some measurable improvement in terms of either speed, cost, efficiency, or quality for a problem of commercial interest. A few vendors have publicly stated their expectations to achieve quantum advantage by 2024, and most estimates range between 2024 and 2027, or even longer. However, Omdia has heard that advantage may be announced in 2023, though the likelihood of this happening is small. Quantum advantage will mark an important inflection point in the industry and draw increased interest and activity in quantum computing from the wider society and economy. Omdia expects the global quantum computing market to cross the billion dollar mark in 2025, and to pass five billion dollars globally in 2030.
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Could the quantum advantage be announced in 2023?
Sam Lucero, Chief Analyst, Quantum Computing, Omdia
The Quantum Advantage
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