2016 Predictions: Mobile, Internet of APIs Economy, AI, IoT and Hybrid Cloud

With another year coming to a close, it's time to dust off the crystal ball for our annual predictions. However, before we forecast any new insights, I want to look back at our 2015 predictions, which could be best summarized as a maturing of technology innovations introduced in prior years. Now that the fundamentals are in place, there's potential for significant shifts in both software and vendor shakeups in 2016. The emerging battleground of innovation continues to heat up between companies that make technology versus those that use it. Success will be determined by a company's ability to leverage and monetize its data and API assets, drive contextual interactions with customers, along with its organizational agility to react to competitive forces. Here is Part One of our 2016 predictions.

1. Mobile democratizes technology.
Most of us can still remember the famous Steve Jobs slogan used to introduce the first iPod in 2001: "1,000 songs in your pocket." Apple transformed and disrupted the music industry by riding the wave while others came kicking and screaming into the digital age. Of course, the requisite Apple ease of use and cool form factor mattered, but it was the legal and low-cost access to a massive online iTunes music store that made the difference against competitors.

What's the iPod/iTunes of 2016? Mobile technology. Mobile is even more disruptive because it cuts across all industries. Everyone now has access to "a pocket supercomputer" as the number of unconnected people in the world continues to shrink. Ericsson's latest Mobility Report predicts that by 2021, global smartphone subscriptions will more than double to 6.4 billion. Mobile is the universal democratizer for technology.

New generations are particularly impacted by the democratization of technology due to their preferences for social and messaging apps over email and telephone calls. Companies need to pay attention to the ‘lifestyle network effect' as social effects like crowd intelligence and the sharing economy continue to multiply.

The product-centric experience of the past that was defined by the hardware, the operating system, the applications, and the Internet is now extended based on a unique digital ID to support contextual behaviors and preferences to shape the new customer-centric experience. This creates massive potential for the transformation of business models along with opportunities to capture new revenue streams.

2. Artificial Intelligence (AI) and Virtual Reality (VR) in the customer age.
According to the Ericsson ConsumerLabs report, 1 in 2 people believe the smartphone screen will be replaced by AI in 5 years. But, let's face it, Siri, Cortona, Google Now and Facebook's new virtual assistant M are a long way from becoming virtual assistants that do not need data provided by humans. In 2016, computer and smartphone architectures will evolve to support more natural and intelligent speech interactions that will make virtual personal assistants more useful.

Visual information will continue to grow outside of traditional screens as we become more immersed in the physical world around us. In 2016, VR will become better understood by more people with more experimentation of potential VR use cases across different industries like gaming, entertainment, medicine, sports and events. Half of the smartphone users surveyed in the ConsumerLabs report want a 3D selfie that can be used as an avatar to try on clothes online.

The way in which customers interact with online brands will increasingly be shaped by the blurring of artificial and human assisted services.

3. Openness drives Internet of APIs economy.
What's the best way to nurture innovation (both organic and non-organic), drive growth and disrupt the status quo? The answer is open APIs in mobile and social apps and e-commerce. APIs must be rethought of as a new asset for a company to harness. An API strategy brings with it a new dialogue that includes how a customer would like to use your service, how you win over internal and external app developers, and how you continually improve and evolve a service to meet future needs.

By providing robust, well-documented APIs in an open environment, developers can create game-changing apps that fundamentally transform a company's approach for unleashing new value from core assets and data. APIs have evolved beyond consumer apps to the point where enterprises can share data backed by well-defined IT policies to collaborate internally and externally. Meanwhile, the connection between IoT, mobile and APIs becomes apparent; every sensor has the potential to create a new service and accelerate the new generation of analytics, applications and more APIs. May the best application win.

4. Non-proprietary open software platforms.
The number of applications for iOS, Windows and Android devices has exploded over the years with close to 2 million apps available for iOS and Android devices alone. The creation of applications for specific devices served its purpose well. However, in 2016 most people own multiple devices with different OSs, while only using a handful of applications on a regular basis. Now with IoT, billions of devices from different companies on different networks around the globe need to interact. In the new customer-centric age, the key to success is delivering both critical services and apps with a consistent quality of experience based on a unique digital ID irrespective of device, app or network.

The community has spoken and it has a strong preference for open source tools and platforms. Even a company like Apple that historically pushed developers to its own development tools, cannot risk alienating third-party developers that it counts on to drive app innovation. Apple's new Swift language is the successor to Objective C as the primary language for developing iOS apps and is a recognition that Apple needs to open up to support cross-platform applications and make developers happier.

5. From connected devices to horizontal IoT marketplaces.
With increasing levels of mobile connectedness, machine-to-machine communication, cloud computing and vast networks of data-gathering sensors, IoT has the potential to make everything in our lives smarter. We see new smart devices emerging every day for our homes and cars. Cities are adopting new technologies from smart streetlights to smart airports. According to a Mckinsey report on IoT, its economic impact will reach $11 trillion a year by 2025 across various industries.

We can expect to see 1.6 billion connected IoT devices deployed in smart cities across the globe in 2016, with Gartner predicting an increase of 39 percent over 2015.

As software and sensors running on everything from industrial machinery to household appliances to common city services continue to advance, we're entering an era where agents (services) can control the actions of interconnected intelligent things. A household appliance and a homeowner can provide a utility control of that appliance through software APIs that can grant permission to the utility. As a result, the relationships between devices, device manufacturers and their owners, and service providers will become increasingly more complex. Physical access and one-off contracts will be replaced by software that can support the frequent negotiations for access to things and the data they generate. Not only that, but it will happen in an agile and scalable way where all parties involved in the transaction are appropriately compensated.

Stay tuned for part two of the 2016 predictions. Interested in learning more? Join us for our upcoming Twitter chat on January 19th about this topic. Add to your Outlook calendar now.