Cyber security one of safe bets for tech sector growth in 2017
THERE were a few notable growth points in tech last year. Wearable technology grew – though not as significantly as forecast at the start of the year. FitBit, Garmin and Samsung have continued to expand but there were some casualties, including Pebble, who ended up with its software assets being acquired by FitBit but for a fairly low value of $40million at the end of 2016. I expect further consolidation in 2017 in this area as significant growth cannot continue with the current number of players.
With respect to 2017, here are some thoughts on what we're likely to see hit the headlines in the tech world in the 12 months ahead:
• Streaming services will continue to grow and displace terrestrial TV channels. The leaders in the market - Netflix, Amazon, Sky and iTunes - will continue to dominate. Netflix has surged to a record high recently with a market cap of $62bn. For smaller media production companies, it will become increasingly easier to access this huge channel to market.
• Public Cloud revenues will continue on the same growth track as that of 2016 with Amazon AWS continuing to dominate. It is forecast to have revenues of $16bn in 2017 and some analysts are suggesting that it will have a valuation of $160bn - yes 10 times its revenues. That is an astonishing growth path and all competitors are mere minnows by comparison.
• 2016 was a phenomenal growth year for Virtual Reality (VR) as it started to move into the mainstream. Businesses in numerous sectors are now starting to see practical uses for this continually improving technology. The health sector has embraced VR. On a more local level we are witnessing Northern Ireland manufacturing companies using VR in an amazingly inventive way. CDE Group based in Cookstown is now enabling customers to complete “real life” inspections of equipment before manufacturing has been completed.
• Smart home technology will start to become common place and Amazon Echo will play a big role in the modern smart home. According to recode.net “Echo and its siblings are expected to see a great deal of competition in 2017, the device's overall capabilities, in conjunction with the open-ended Skills platform that Amazon created for it, are proving a winning combination. Echo will become the key gateway device in the home, allowing it to essentially “translate” between devices that might not otherwise be able to easily work together.” This will prove an exciting growth area for other companies to tap into the food chain of home automation.
• Smart cars and major improvements around in-car software will start to impact in 2017. Expect a lot of announcements and activity around the development of self-driving vehicles but don't expect any domination on the forecourt until at least 2021. In the meantime, software like Apple's CarPlay or Google's Android Auto and other data-connected systems will add intelligence to any car. Additionally, there are some interesting new smart automotive systems like Navdy which adds a heads-up display (HUD) to nearly any vehicle, displaying navigation information, notifications and more. In 2017 we'll see more car owners make investments to smarten up their existing vehicle's technology experience.
• Cyber-security will continue to dominate the headlines and a plethora of new technologies and companies will blossom in an attempt to keep the hackers at bay. These hackers are learning to use artificial intelligence to automate their attacks, making it even faster for them to break into user accounts. This is big business and we should all expect more and more complex attacks to happen on a more regular basis.
For Northern Ireland companies, there will continue to be opportunities to participate in these growing markets or to simply use the technologies to improve their business. We know that cyber-security is a particular focus for Northern Ireland Plc – and with the global cyber security market estimated to grow to $170 billion annually by 2020, so it should be. Indeed one of the industry's largest international conferences is set to come to Belfast in May of this year. Northern Ireland already tops rankings for US foreign direct investment in cyber, and the strength of the cyber cluster that is developing here has started to be recognised in the wider industry. Watch this space in 2017 and beyond.
:: Patrick McAliskey is managing director Novosco, an indigenous managed cloud company with offices in Belfast, Dublin, Cheshire and Cork. It employs 140 people and works for leading organisations across the UK and Ireland, including many of Northern Ireland's top companies, UK health trusts, councils and other organisations.