The digital transformation that many companies underwent in 2020 continued in 2021 at a rapid pace as the pandemic continued to impact the world. While many of my digital Top transformation trends predictions from a year ago were proven correct, others didn’t quite come to fruition and were displaced for more urgent and strategic needs as the pandemic persisted. What does this mean for 2022? Will we continue to see headlines about customer experience and data or will other technologies come to the forefront of the conversation? Only time will tell, but here are my top 10 digital transformation predictions for 2022.
Last year I predicted that 5G would finally go mainstream in 2021. While 5G deployments in the sub-6GHz bands have remained on track globally, more complex 5G millimeter wave deployments have significant growth potential. Early deployments of 5G had some carriers putting prioritization on low band 5G frequencies, which are about twice as fast as LTE, but often feel only marginally faster than LTE networks, and this has led to some observers and consumers feeling less than satisfied with the impressive 5G speeds we had been promised.
This trend is already changing, and we will see it happen even faster in 2022. I anticipate an acceleration of 5G millimeter wave deployments in urban and densely populated environments, alongside continued roll outs of low-band 5G expansions into rural markets. As an example, currently AT&T 5G mmWave network is only available in 38 cities. Other carriers like T-Mobile and Verizon have been more aggressive expanding their mmWave coverage. What I can say is that the superior experience will drive consumers to adopt networks and devices that support it. Carriers around the world are also following suit deploying mmWave, especially throughout large parts of Asia. The Beijing Winter Olympics will be a massive test for 5G mmWave this winter with many supported devices and networks being stood up just to make sure the best connectivity is available. However, some companies, even notably innovative ones are being slow to completely buy in to mmWave. Apple, for instance, adopted it in the U.S. for its iPhones but made a decision to not support mmWave for iPhone 13 devices outside of the U.S. I believe this was a foolish bet, whereas most other big device makers like Samsung are putting mmWave in all of their flagship devices.
From a 5G innovation and development standpoint, companies like Qualcomm, Ericsson, Samsung and Nokia are a few of the leaders pushing the development of 5G and 5G mmWave forward with network infrastructure developments and chips that will enable the next generation 5G mmWave devices. Why does the difference in network frequency matter? In short, mmWave greatly increases network efficiency and capacity, while delivering faster speeds and low latency, and therefore I firmly believe that mmWave will be the future of 5G.
Semiconductors Eat the World
In 2020, the pandemic fueled a boom that saw a tech explosion driving growth to cloud, SaaS, collaboration, devices, and basically any technology that enabled commerce, communication, and productivity. This trend created unprecedented demand and therefore 2021 became the year of the chip shortage. This shortage has caused sizable delays in production times of everything from cars to cell phones. But semiconductors are responding with large investments to ensure this problem never happens again. Intel, GLOBALFOUNDRIES, Samsung, and TSMC have all announced multi-billion-dollar investments to build new fabrication plants around the global to improve production times. We likely won’t feel the direct impact of those investments until the end of next year or even 2023, but it’s critical to note the size of these investments and the role they will play in our developing infrastructure for decades to come.
In the short term, I believe the issues will continue to impact the supply chain, with lagging processes being the hardest hit, but the advancements in silicon will take computing, analytics, devices, and auto technology—among other market segments—to new heights in terms of applications, experiences, and designs. For instance, in just the last month alone, OEMs in partnership with semiconductor companies like Qualcomm, Intel, and NVIDIA have announced major advancements in automotive chip technology that will continue to push the software-defined vehicle forward. I’ll dive more into that trend and the impact it will have on other areas a little later, but the main takeaway here is chips don’t operate in a silo. They impact every aspect of our lives whether we realize it or not and I don’t see that changing in 2022.
In a recent op-ed that I published on MarketWatch I closely examined the growth trajectory of the semiconductor space and based upon the unparalleled demand, growing revenues, and improved cash flows, the next year looks like a big year for large chipmakers like NVIDIA, AMD, Intel, and Qualcomm, as well as your small to midsize chipmakers and rising stars such as Marvell Technologies and Lattice Semiconductor. I’m also keeping an eye on growing specialty chipmaking from hyperscalers like AWS, and expect to hear more from their counterparts at Azure, and Google to step up homegrown chipmaking efforts. Lastly, I think some of the startups focusing on AI Acceleration like Groq and GraphCore will start to be heard from more as AI’s momentum will be unshakable in the coming year.
Post Pandemic Future of Work Mega Shift
I predicted last year that remote work would continue beyond the pandemic and that is absolutely happening. We’ve seen headlines all summer of major companies in nearly every industry offering permanent flexible working arrangements. But these arrangements aren’t without their own set of challenges. With some employees working from the office and others still working from home, organizations are going to need technologies that seamlessly enable collaboration regardless of location. According to a recent report, only 8% of conference rooms around the globe are equipped to handle video conferencing. The good news? Collaboration companies are taking note.
September was a huge month of announcements from Zoom, Poly, Cisco, Microsoft, Google, and Salesforce. We can expect to see software and hardware tools that will improve meeting equity and enable a level of unmatched collaboration. Intelligent cameras and collaboration systems equipped with AI will make it easier to identify which speaker is talking. Companion modes will offer a unified device experience for all participants.
Hybrid work advancements will happen outside of the conference room too with cloud PC offerings, improved VDI experiences and more tools that will make it easier to work from anywhere.
The work shift is also leading to a change in how we interact and function with our software to enable us to be more productive. This is leading the tech industry to build new operating systems for work where instead of living in our inbox, ERP, CRM or productivity tools, we are employing platforms enterprise wide where the epicenter is collaboration. Salesforce made this clear in its Slack acquisition with Marc Benioff affectionately calling the platform a “Digital Headquarters.” Microsoft Teams has built an extensible full-stack that engages its entire software and infrastructure ecosystem to bring work into a single pane of glass in most instances. For smaller businesses, Zoho has built its operating system for work on its Zoho One platform. I expect more and more for ubiquitous software stacks to drive how we work and these examples are evidence of this trend.
Environmental Social Governance Will Make More Headlines
From climate issues to social good, organizations in every industry prioritized environmental social governance (ESG) throughout 2021 and it will likely amp up over the next decade. We’ve already seen investments and pledges in areas like climate, diversity and equity, and sustainable product development. And I believe material role that many organizations play in the widespread adoption and investment in sustainability and other initiatives will continue to grow.
Over the past year, we have seen growing leadership from the tech community to step up and prioritize climate change and efforts to achieve carbon neutrality. Amazon’s climate pledge, for instance, has been a major success as the company’s collaboration with leading companies from around the world has led to hundreds of companies pledging to achieve carbon neutrality by 2030—ten years ahead of the goal set by the Paris Accord. Several other leading tech companies have made notable efforts to improve their impact on the planet. A few that come to mind include Dell, HPE, Honeywell, and Salesforce. All have made material changes to their businesses to be able to better account for materials sourcing and usage, carbon footprint, and establishing an exemplary market facing narrative about their investments to be greener. Of course, there are dozens of other great initiatives across tech to do more for climate change and I expect even more in the coming year.
It has also been encouraging to see more and more software vendors building out solutions to support enterprise clients to better understand their carbon footprint and sustainability efforts. Salesforce, SAP, and ServiceNow, are three enterprise software companies that have developed and brought to market solutions for companies to manage their ESG efforts. I expect to see more of this from software leaders and new entrants in 2022.
While opinions may vary on the impetus for many of these initiatives, including suggestions of posturing and greenwashing by the tech community, I see the tech industry’s influence as significant and its leadership as paramount. Being profitable while doing good is the best kind of business, and it’s hard to deny the impact that the efforts of these companies have had on our world already.
Smart Cars and Cities in Hyperdrive
Smart cars and infrastructure development in smart cities are in hyperdrive and while some may feel like Tesla is leading the charge, there are a plethora of players making this happen and it’s going to be good for sustainability and for the future of automotive. Companies like Plus, Mobileye, NVIDIA, Luminar, and Qualcomm (including Arriver) have spent the last year (or more) furthering the software-defined vehicle, but the thing that I really see improving in the coming year is advanced driver assistance systems (ADAS). Currently we’ve seen a lot of success with Level 2+ ADAS testing and demos. That’s when the vehicle controls steering and acceleration, but all tasks are still monitored by a human and a human can take over at any time. IAA 2021 was full of organizations with announcements in this area, but all trends still point to eyes being on breakthroughs for Level 4 ADAS or fully autonomous operation where a human does not need to intervene. Who doesn’t want to break out the laptop and enjoy a cup of coffee while our vehicle takes us to wherever we are trying to go?
Last month at the IAA Moibilty event in Munich, I participated in a demonstration of Luminar’s L4 technology that showed a car being able to “see” a child in the road and stop in time before an accident occurs. This wasn’t the only promising test of L4 technology that happened this year. Plus (formerly Plus.AI) successfully demonstrated a truck operating with its L4 technology on a highway in China earlier this summer. I also had the chance to experience the innovation engine of automotive through a series of demonstrations held offsite near IAA at Capgemini’s Future Forum Automotive in Munich. Capgemini is one of a few global consultancies that aligns deeply and strategically with Automotive OEMs, Tier Ones, and component manufacturers to steer vehicle innovation in the right direction. After these promising examples, I anticipate that we will see more tests happening in controlled environments to test out a myriad of conditions so we can be assured of their safety.
But it’s more than just smart cars in development, cities around the global are improving their infrastructure to support smart cars and the connected networks of IoT sensors that are improving our daily lives. More charging stations, better public connectivity, and other technologies will continue to emerge over the next year—and in more areas than just heavily populated metropolitan cities.
Continued Focus on the Power of AI and Automation
Every day we create roughly 2.5 quintillion bytes of data, and that number is growing an exponential pace. But that data is only as good as the AI systems we use to manage, regulate, and mine it for insights. The work that many organizations continued in 2021 with new use cases for AI will continue to expand as organizations realize the power that AI can hold for solving problems better, faster, and at scale.
With this in mind, I expect AI to become more ubiquitous in the everyday lives of workers and consumers and it will also continue to be more useful as we turn the corner from applied analytics and natural language processing to multi-turn conversational AI and deep inference that turns our interactions with applications and devices into more robust and human-like with each and every software update—this will also see a pick up in automotive with advancements in ADAS as I mentioned earlier in this piece.
Just a few weeks ago, we saw Amazon launch its Astro in-home robot that uses powerful processing and inference to deliver ambient intelligence and continue to push the envelop of how AI and Automation can be part of our personal lives. We have become familiarized with this in our everyday interactions with Alexa or Siri or Google. This will continue to become more useful in 2022. NVIDIA has been pushing the boundaries of conversational AI with Jarvis, and this has further democratized conversational AI for app developers around the world. We will see more of this in the coming year.
The enterprise applications for AI will be even more robust and this will be powered by extraordinary data growth and more powerful chips for workload acceleration, along with more robust software and frameworks that allow data scientists to move faster to deploy and test algorithms and apply data to solve big complex enterprise problems. The rise of companies like Tom Siebel’s C3 AI are a good example of how enterprise AI, and its applications are being developed and streamlined to scale how enterprises in an array of industries can more efficiently deploy AI to leverage data and solve complex business challenges. Last year, in my predictions piece I touted the work being done by Spunk, which the company referred to its Data to Everything approach. I most appreciated the company’s focus on how all data has the potential to add value to how an enterprise functions be it operations, customer experience, marketing, or security. The ability to put the mass of data to use in a both meaningful and timely manner will be dependent on the advancements in GPU technology, specialty accelerators, and more capable, easy to deploy software that enables businesses to put AI to work.
Lastly, Automation shouldn’t be left out of the discussion. For many entities, the ability to efficiently streamline the deployment of a process can be massive on the top and bottom line. Intelligent Automation has been a focal point of companies like Microsoft, with its Power Platform and Red Hat’s Ansible, both serving as examples of software solutions that have been built to enable the deployment of automation to streamline business processes from small simple tasks being built by citizen developers to robust financial services automation for large banks.
Big Tech Stays in the Regulatory Spotlight
Big Tech companies better get used to the intense scrutiny from regulators and governments around the globe. From court rulings to antitrust legislation, Amazon, Apple, Google, and Facebook will be under the microscope for years to come. It’s fairly obvious that these companies overtly use monopolistic practices in shopping preferences, search results, and even their app stores, but so far, they’ve all been able to skirt being called a monopoly. Which makes me think it will be unlikely that we see major antitrust reform or any of the legislation that’s currently in front of congress passing any time soon. But if history is any indication, antitrust suits and focus rarely disappear.
The recent Facebook Whistleblower followed by the extraordinary Facebook outage exemplifies how quickly big tech can go from being in the crosshairs to back out to back in again. Summer of 2021 saw a whirlwind of new bills put in front of lawmakers to vote on much tougher restrictions on big tech companies. While I personally felt these laws gave too much power to policy makers, the need to rethink how we regulate big tech continues to be a concern as society becomes more deeply entrenched in these platforms and concurrently these platforms collect more data and have more control over our lives and access to information, services, and goods/services that we need.
Apple’s somewhat negative ruling in the Epic case was another indicator that some big tech platforms may in fact be susceptible to antitrust rulings that at the very least require material changes to platforms and behaviors. While Apple’s U.S. market dominance clearly led to a court ruling that will at the very least force the company to change how users are able to download apps. It wasn’t a big loss for Apple by any means, but it at least showed that change is possible and if a company is seen as taking advantage of its position of power over consumers that rulings against their practices are possible.
I believe that this is a category that will remain on this list for the next decade. With big tech and its platforms being so important to many people’s lives, legacy antitrust laws and definitions of monopolies require a new perspective. Especially since consumer harm and competition don’t always go hand and hand. For instance, people may not have another way to download an app on iOS, but how much do they care? Meanwhile, the app developers are being put in a difficult situation that limits their ability to compete. It’s a paradox where consumers are happy, but competition may in fact be limited in some situations.
This never-ending cycle of alleged abuses, lawsuits, appeals, and rulings will continue this year, and will certainly be a regular headline for the industry. However, I believe that tech giants will also likely continue to be steadfast in defending their success and importance to consumers. What we likely need are incremental changes that spur competition and protect consumers. For instance, more focus on protecting consumer data and offering greater levels of privacy for those that seek it. A nice Segway…
Privacy Rules, Rule
The conversation on antitrust and anticompetitive behavior can’t happen without also looking at the level of privacy that users have with applications and the changes that organizations making to protect the end user, not the business. Apple has been incredibly vocal in its advertising about its all-in approach to user privacy. Their ad campaign from earlier this year emphasized the fact that they view themselves—or would like customers to view them—as a privacy company, the secure alternative that cares about who has access to your data. But that’s not where the conversation ends.
With the massive volume of data that we volunteer to apps, e-commerce, and other social media sites, we have created a world where tech companies have to balance best of breed experiences with more robust and thoughtful data management practices. To give the best experiences, data is required. However, are we being thoughtful about all of the data that we need to collect and how often we collect it? What we monitor, and why?
The next wave of big tech regulation that I mentioned above, will almost certainly have a significant privacy bend. The confluence of the data big tech companies have and algorithms that are used to serve our experiences has the opportunity to provide us a world class experience tailored to our every need, or to drive us down a rabbit hole of emotionally charged content that can drive us into the bowels of humanity. AI, layered with almost unfettered data growth, access, and collection will need a closer to look to balance how we opt-in and opt-out. How companies are managed if data breaches occur, and how to help businesses and consumers protect themselves from the misuse of data that may have been accessed from an app or infrastructure product that we trust to protect our data.
In 2022, organizations that relied on data collected through apps and other third-parties will need to augment their data collection policies. I expect CDP’s from a laundry list of top software vendors like Twilio, Microsoft Dynamics 365 Customer Insights, Adobe Experience Platform, Salesforce, Treasure Data, and Oracle to lead this category with each taking a slightly different approach to making the customer view more extensible. Customers are used to amazing customer experiences that require data to happen. Orgs will need to find new sources of data and determine how to collect and manage all of it in an open and honest manner that will enable the same level of customer experience. It won’t be an easy undertaking, but it will be critical for success.
All Eyes on the (Hybrid + Multi) Cloud
The cloud is not a new trend by any means, but in 2022 hybrid cloud will take center stage, as vendors compete for the for the perfect mix of public and private clouds as companies take on challenges around computing including security and data access.
Over the past few years, we have watched the big public cloud players all make their offerings much more extensible to solve for the clear enterprise narrative that will be leveraging both on-prem and public cloud.
This has led to offerings like AWS Outposts, Google Anthos, Azure Stack, as well as a continued rise for the likes of VMware, IBM Red Hat, Oracle, and HPE, all of which have launched significant new hybrid cloud services to address the needs of enterprise users embracing the power of hybrid cloud.
As enterprise IT architectures continue to become more ubiquitous, the battle for hybrid leadership will continue to be a focal point of cloud and legacy IT providers alike. Open-source solutions and popular modalities for hybrid architectures like Kubernetes will see greater adoption as any workload to any destination remains a need for supporting the complex requirements of business.
2022 will drive this trend forward with an acceleration in the shift from hybrid to multi-cloud. Companies using more than one public cloud to solve their biggest technology and business challenges will become more and more normal, and necessary. Furthermore, with data being created exponentially faster at the edge than in the datacenter, accounting for the edge will only further accelerate the migration to hybrid cloud. I expect to see more investment from all the competing companies in this space to simplify the process of orchestrating workloads and making data accessible and secure for apps across the IT environment.
We have all witnessed the impact that the public cloud and SaaS has had on all technology procurement. One-time capital expenditures for software and infrastructure have been increasingly traded for subscription and OpEx based technologies that can be procured on a consumption basis.
This has led to a shift away from traditional buying cycles, and if we learned anything from the pandemic, enterprise technology consumers (and all tech consumers) want what they want, when they want it. As a result, in 2022 we’ll reach peak Everything-as-a-Service with pay as you go models becoming increasingly popular for everything from data software to desktop virtualization.
This, of course, will bode well for Enterprise SaaS companies like Salesforce, Zoom, Microsoft, Oracle, and Snowflake. The public cloud leaders like AWS, Google, Oracle, and Azure will also benefit of course.
The other big beneficiaries are going to be the companies that have been able to migrate from legacy licensing and CapEx models to more desirable consumption models. HPE, for instance, kicked this movement off when CEO Antonio Neri announced the companies plan to move all of its offerings to as-a-service by 2022 within its GreenLake portfolio. Since then, we have seen Lenovo, Cisco, and Dell all begin migrating much of their infrastructure portfolio to more OpEx friendly consumption models. Other traditional enterprise companies that licensed their software like Splunk and Citrix have recently announced big pivots to cloud ARR models. These moves aren’t only paramount for these companies but should give them a more advantageous motion to acquire new revenue and create stickier relationships with their customers.
Business operates at a breakneck pace today and companies can’t be caught running out of capacity or resources for anything. That could spell disaster from both a monetary and reputation standpoint. But I think that this shift is for the best as it has enabled faster digital transformation and increased tech adoption. The concern will be containing the app sprawl this might lead to in the workplace, but that should be manageable (likely by an app) and will be a small price to pay for the convenience that as-a-service model will deliver.
Honorable Mention: The Metaverse and New Money
2020 was the year where the Metaverse came out of the shadows and entered the mainstream lexicon. While I am not predicting that we will all be living our lives in the way predicted by the movie ‘Ready Player One’ any time soon, we see the future start to play out, whether that is in gaming, art, or how money will work in the future.
2021 saw Facebook double down on the Metaverse as a strategic long-term north star for the company. While details are not forthcoming from Zuckerberg (are they ever?), we can be confident that Facebook will be looking to monetize its investment in Oculus and further embed its social networks into the fabric of our lives. In 2022 I predict we will see other social networks and global technology leaders such as Microsoft and Amazon start to position themselves for the metaverse future that will undoubtedly play out over the next decade.
Another key trend is the reimagining of art and how it is bought, sold, and owned. 2021 saw the rise of Non-Fungible Tokens (NFT) with some breakthrough moments that captured the mainstream media’s attention, not least of which was the sale of an NFT for $69 million by the digital artist Beeple through the auction house Christie’s. Another development in this space during 2021 was selling NBA highlights clips as NFT’s via a collaboration between the NBA and Dapper Labs. While the sales of jpeg’s as NFT and highlight clips of LeBron dunking for the Cavs are interesting, they don’t represent the whole extent of the value derived from the concept of NFT’s underlying blockchain technology. I predict we will see NFT technology extend into business use cases where proof of ownership needs to be verified.
Another megatrend I envision taking further hold in 2022 is the transformation of money. At the time of writing, Bitcoin is a trillion dollar asset, and to put that in context, that means the 12-year old cryptocurrency is worth twice the market capitalization of JP Morgan. In the summer of this year, We saw the first nation-state adopt Bitcoin as legal tender. El Salvador made this decision to quell rampant inflation and move its population to the point where they have increased access to financial services. I predict in 2022 we will see more emerging and third world nations in South America and Africa consider or make the move to adopt Bitcoin as legal tender. I also predict further advances in the Decentralized Finance (DeFi) space as the whole legacy monetary system is refactored using blockchain and distributed ledger technology. What Strike announced in collaboration with Twitter is an early example of where I see this trend going in 2022 and beyond.
So, what did I miss? While Bitcoin will undoubtedly be a massive topic keeping its share of headlines, will blockchain and its diverse use cases resurface in 2022 with even bigger headlines? What about confidential computing or cybersecurity? With so much focus on data, privacy, AI, and applications, the overarching need to keep the data secure will surely be top of mind. Maybe even Quantum Computing, which has picked up a bit of steam in the past year. Regardless, I’m sure 2022 will be a big year of more tech advancements and I can’t wait to see what plays out.