Published on 19 September 2016
Embrace Digital Disruption
Imagine, for a moment, life without personal computers. We have become so accustomed to instant access to news and information, that the loss of it would completely transform our way of life. In today’s technology-driven society, that is a difficult thing to picture. But a world without personal computers is exactly what the former leader of a major mainframe computer manufacturer predicted in 1977. Ken Olsen, founder of Digital Equipment Corporation (DEC), once argued against the PC, stating: ‘There is no reason anyone would want a computer in their home.’ Today in hindsight, this prediction seems almost comical. What is it about change that is often so apparent and accepted by some, but unseen or considered threatening to others? Fear of the unknown, laser focus on the present, and lack of foresight can all cause aversion to change. But, just as computer giant DEC faced disruption in the 1970s, we too face another crossroads - with a technological disruption that will reshape our industry unlike anything else before.
Of all the technology trends that are taking place right now, perhaps the biggest one is the Internet of Things (IoT). Simply put, IoT connects devices such as everyday consumer objects and industrial equipment to the network or internet, enabling information gathering and management of these devices via software. It is the one trend that is going to give us the most disruption, as well as the most opportunity over the next decade. 50 billion things will be connected to the internet by 2020, and that number jumps to 1 trillion connected devices by 2025. That same year, McKinsey Global Institute also predicts that IoT will generate up to USD 11.1 trillion a year in economic value. In short, it will become the largest technology market ever. According to Goldman Sachs, there are five key verticals of IoT adoption: connected wearable devices, connected cars, connected homes, connected cities and industrial internet. All of these verticals present a tremendous opportunity for engineering consultancies, who will soon, if not already, be expected to leverage these new technologies into client projects.
A number of significant technology changes and enablers have come together to give rise to this trend. A first change is the global cloud computing market. This market is expected to skyrocket over the next four years, from USD 40.7 billion in 2011 to USD 241 billion in 2020. This Cloud movement, according to Kleiner Perkins Caufield Byers, is being fueled by rapidly falling processing costs and increasing cloud accessibility. A second change is declining technology costs. The cost of sensors, which are used to identify, locate, and evaluate items, went from USD 1.30 to just USD 0.60 over the past 10 years. What is more, the cost of bandwidth is down by a factor of 40 times over the past 10 years. Another technology change is the usage of smartphones. In 2009, less than 1 % of global internet traffic came from mobile devices. As of August 2016, mobile internet traffic soared to an impressive 46 % of total internet traffic worldwide. That is an increase of over 5000 %. A last important technology change is the Expanding Wireless Coverage. The development of faster, higher bandwidth and more intelligent networks is leading to an explosion in mobile technology adaption. By 2020, nearly 60 % of mobile devices and connections will have 4G capability in North America, according to Cisco. Western Europe is just behind North America, with an estimated ratio of 53 % of 4G connections by 2020.
With billions of new mobile devices and connections being introduced each year, we are already seeing an influx in both personal and business data. Imagine this: 5 billion gigabytes (GB) of data were created from the beginning of time to 2003. That sounds like a lot of data, right? Well, that same amount of data was created every 2 days in 2011. And by 2013, it took only 10 minutes. This phenomenon, commonly known as Big Data, presents a challenge to traditional data processing applications, that will likely have difficulty processing data so large and complex. In order to sustain the amount of data a firm may produce, processing applications and technologies will need to be reevaluated, or new ones created. And with the proliferation of devices connected to the internet comes security vulnerabilities. More connected devices mean more attack vectors and possibilities for hackers to target infrastructure and our personal information. Firms will need to evaluate their current security protocols to insure they are shielded from such cyber attacks.
It is clear to see - a new digital economy is upon us and ready to disrupt the engineering industry as we know it today. This hotbed of opportunity will invite new competitors from outside the traditional architecture and engineering industry to enter our world, bringing unparalleled competence in the Cloud, Big Data, Security, and IoT. Imagine powerhouses like Google, IBM, Microsoft, Cisco, or Apple marrying their technological expertise with the infrastructure prowess of traditional engineering consultancies to reshape our cities and infrastructure. There is a bold future ahead of us, and the impact of these changes will be far-reaching and profound. Ask yourself: what can you do to begin preparing for this transformative digital economy? What technology skill sets can you leverage, acquire, or partner with to position your consultancy for an IoT economy? It is time to seize the opportunity!