Top Strategic Predictions for 2016 and

Beyond: The Future Is a Digital Thing

Published: 02 October 2015

ID: G00291252

(mailto:%20?
subject=Top%20Strategic%20Predictions%20for%202016%20an
strategic
predictions
future
digital%3Fdocdisp%3Dshare%26srcId%3D1
4398736771%0D%0DAny%20views%20or%20opinions%20expre
Share
mail%20are%20those%20of%20the%20sender%20and%20do%2

Analyst(s):DarylC.Plummer
(http://www.gartner.com/analyst/7521)|VanL.Baker
(http://www.gartner.com/analyst/1008)|TomAustin
(http://www.gartner.com/analyst/6540)|Charles
Smulders(http://www.gartner.com/analyst/8089)|Jim
Tully(http://www.gartner.com/analyst/8101)|Ray
Valdes(http://www.gartner.com/analyst/9994)|Adam
Sarner(http://www.gartner.com/analyst/11821)|Kristin
R.Moyer(http://www.gartner.com/analyst/15859)|
FrancesKaramouzis
(http://www.gartner.com/analyst/16395)|WhitAndrews
(http://www.gartner.com/analyst/16534)|JayHeiser
(http://www.gartner.com/analyst/24523)|SylvainFabre
(http://www.gartner.com/analyst/26971)|Angela
McIntyre(http://www.gartner.com/analyst/34134)|Don
Scheibenreif(http://www.gartner.com/analyst/38539)|
KarenA.Hobert
(http://www.gartner.com/analyst/38630)|JennySussin
(http://www.gartner.com/analyst/40383)|Richard
Marshall(http://www.gartner.com/analyst/44130)|Rob
Smith(http://www.gartner.com/analyst/46739)|Martin
Kihn(http://www.gartner.com/analyst/46805)|Magnus
Revang(http://www.gartner.com/analyst/47624)|
AdrianLeow(http://www.gartner.com/analyst/48089)|
JasonWong(http://www.gartner.com/analyst/48330)|
DianeMorello(http://www.gartner.com/analyst/274)|
DavidFurlonger
(http://www.gartner.com/analyst/14043)|KennethF.
Brant(http://www.gartner.com/analyst/14913)|Helen
Poitevin(http://www.gartner.com/analyst/48901)

Summary
Thedramaticriseofsmartmachinesandautonomous
devicesisdrivingradicalshiftsinbusinesspracticesand
individualbehaviors.Enterprisesandindividualsfacethe
urgentneedtodefineanddevelopharmonious
relationshipsbetweenpeopleandmachines.

Overview
Key Findings
Therelationshipsbetweenmachinesandpeoplearebecomingincreasinglycompetitive,assmart
machinesacquirethecapabilitiestoperformmoreandmoredailyactivities.
"Smartness"isnoweverywhereintheworkenvironment,withconsequencesthataredifficultfor
enterprisedecisionmakerstoforesee.
TheNexusofForcesisevolvingandexpandingintoanentirelynewsetofscenarios.

Recommendations
UseGartner'spredictionsasplanningassumptionsonwhichtobaseyourstrategicplans.
Evaluatetheneartermflagsthatindicatewhetherapredictionistrendingtowardtruthorawayfromit.
Positionpredictionswithlongertimehorizonsashavingalowerprobabilityofcomingtruethanthose
withshortertimehorizons.

TableofContents
Analysis
WhatYouNeedtoKnow

StrategicPlanningAssumptions
GartnerRecommendedReading

Strategic Planning Assumptions

By2018,20%ofallbusinesscontentwillbeauthoredbymachines.
By2018,6billionconnectedthingswillberequestingsupport.
By2020,autonomoussoftwareagentsoutsideofhumancontrolwillparticipatein5%ofalleconomic
transactions.
By2018,morethan3millionworkersgloballywillbesupervisedbya"roboboss."
ByYE18,20%ofsmartbuildingswillhavesufferedfromdigitalvandalism.
By2018,50%ofthefastestgrowingcompanieswillhavefeweremployeesthaninstancesofsmart
machines.
ByYE18,customerdigitalassistantswillrecognizeindividualsbyfaceandvoiceacrosschannelsand
partners.
By2018,2millionemployeeswillberequiredtowearhealthandfitnesstrackingdevicesasaconditionof
employment.
By2020,smartagentswillfacilitate40%ofmobileinteractions,andthepostapperawillbegintodominate.
Through2020,95%ofcloudsecurityfailureswillbethecustomer'sfault.

Analysis
What You Need to Know
Gartner'stoppredictionsfor2016andbeyondcontinuetoofferalookintothedigitalfuture,aworlddriven
byalgorithmsandsmartmachines,wherepeopleandmachineswillneedtodefineanddevelopharmonious
relationships.Thesepredictionshelpourclientsunderstandtheradicalchangestheyfaceinthedigital
world.
Thosechangesarecomingfast.Wepredict,forexample,thatin2016spendingonnewInternetofthings
(IoT)hardwarewillexceed$2.5millionaminute.And,asmindbogglingasthatnumberis,itpalesin
comparisonwiththecorrespondingpredictionthat,by2021,1millionIoTdeviceswillbepurchasedand
installedeverysinglehour.Thatlevelofdensityofdeploymentandusewillpresentdramaticchallengesto
enterprisesandITorganizationsthatneedtomanageandtrackIoTactivities.
ThechangesthatarecomingextendfarbeyondtheIoT.Theincreasinglysmart,autonomousnatureof
machinesmeansthatwe'reseeingthebeginningof"robos"risingtheworldwidespreadofautonomous
hardwareandsoftwaremachinestoassisthumanworkersinpracticalscenarios.
Robowritersarenowcreatingbusinesscontent.Roboagentsareconductingevermorecriticaleconomic
transactions.Androbobossesareemergingthatwilleventuallysupervisesignificantportionsofthe
workforce.Theriseofrobotsisaseriouschallenge,butit'salsoanopportunitytoincreasetheuseofsmart
machinestodevelopmoreeffectiveworkstrategies.
The"robotrend,"theincreasingpracticalityofartificialintelligence,andthefactthatenterprisesand
consumersalikearenowembracingtheadvancementofthesetechnologies,isalsodrivingthedevelopment
ofriskyscenarios.Therisktohumanjobswhenroboworkersentertheworkforceinvolumeisobvious,but
it'sbalancedbytheneedfortalentcapableofdevelopingsmartsystemsandautonomousprocesses.
CompanieslikeGE,GMandIBMseeSiliconValleytalentasaninducementtomovemoreoftheir
operationstothoselocations.Thefuturewillbelongtothecompaniesthatcancreatethemosteffective
autonomousandsmartsoftwaresolutions.Sointhenearfuture,atleast,jobsaremorelikelytobecreated
thantobeeliminatedonamassivescale.
Therealrisksarelessobvious.Asdigitalcapabilitiesareincludedinmoreandmoresystems,theabilityof
unscrupulousindividualsincludingsoftwarebasedthievesgrows.Digitalsmartbuildingsarebeing
attackedasmoreaccesstosoftwaresystemsmeansmorecontrolsurfaceswillbecomevulnerable.Digital
signageheating,ventilationandairconditioningsystemsandevenlightingandenvironmentcontrolsare
subjecttoattack,especiallyinindustrieswherefewpoliciesfordetectingandpreventinghacksonthese
kindsofsystemsareinplace.Thesavvydigitalofficermustnowcontendwithrisksthatfalloutsidethe
normalassumptionsofriskrelatedtocomputingtechnologies.
Thisyear's10seeminglydisparatetoppredictionsaremorecloselyrelatedthantheymightseematfirst
glance.
Amongthehighleveltrendsthatemergefromthesepredictionsare:
Therelationshipsbetweenmachinesandpeoplearemovingfromthecooperativetotheco
dependenttothecompetitive:
Inlastyear'spredictions,westatedthattheworldwasrapidlymovingtoafutureinwhichmachinesand
humanswouldbecoworkers,andpossiblyevencodependentsandthisisnowareality.We're
seeinganincreaseintheuseofautonomousandsmartmachines,andintheabilityofthosemachines
todependonhumanpartners.Fortysevenpercentofdeviceswillsoonhavethenecessaryintelligence
torequestsupport.Thingseverywhere,fromconnectedenginestoconnectedprostheses,willbe
requestingsupportfromhumansandhumanmanagedbusinesses.Vendingmachines,vacuum
cleaners,printers,airfresheners,securitycameras,parkingmeters,soapdispensersandaircraftare
justafewexamplesofthingsthatwillbeaskingforrepair.Thenextfrontierisaworldwheremachines
competewithpeopletoperformmoreandmoredailyactivities.
"Smartness"isbeingappliedacrosstheentirefabricoftheworkenvironment:

Weneedtobeaskingourselves,"Howsmartissmartenough?"whenitcomestosoftwaresystemsand
devices.Whendevicesbecomesmartenoughtogobeyondsimpleautonomousbehavior,tobehavior
thatislesspredictive,weopenthedoortounexpectedandpotentiallyunwantedresults.The
prevalenceofmetacoinplatformsdrivenbysoftwarealgorithms,forexample,allowstheemergenceofa
fullyprogrammableeconomyoperatingbeyondthecontrolofcentralizedinstitutionsoreven
governments.Willthisleadtosoftwareagentsactingasrobothieves,makingunauthorizedeconomic
transactions?Willtheriseofsmartmachineinstancesintheworkforcedriveapsychologicalwedge
betweenbusinessesandtheiremployees,makingthemfeelincreasinglylikepartsofanall
encompassingbusinessmachine?Thesearequestionsthat,whilenotyetfullyansweredand
perhapsnotfullyanswerable,areexaminedimplicitlyaspartofourpredictionsonthefutureofsmart
machines.
TheNexusofForcesisevolvingandexpandingintoanentirelynewsetofscenarios:
Securityresponsibility,personalidentificationandtheevolutionofthepostapperaarethreeareas
whereweseetheconvergingfactorsthatGartnerhasidentifiedastheNexusofForcessocial
networking,cloudcomputing,mobilecommunicationsandinformationcontinuingtoevolve.As
securityconcernstakecenterstagefordigitalcustomers,itisbecomingclearthatsecurityiseveryone's
problem.Wepredictthatcloudsecuritywillevolvetobecomemoreofacustomermaturityissuethana
providerissue.Wealludetothefactthatpasswordidentificationwillnolongerbeenough,andmuchof
ourpersonal"image"willbecomeourdigitalsignature.Wealsostatecategoricallythatmobileappsare
notthefinalwordwhenitcomestothewayindividualsinteractwithbusinesses.Thesethreeissues
exposeustothenotionthatthematurityofcloudandmobile,andtheneedformoreeffective
approachestosecurity,arenowbecomingcorevaluepropositionsforbusiness.
Gartner'stopstrategicpredictionscontinuetoofferaprovocativelookatwhatmighthappeninsomeofthe
mostcriticalareasoftechnologyevolution.Evenmoreimportant,theyhelpustomovebeyondthinking
aboutmerenotionsoftechnologyadoption,drawingusmoredeeplyintoissuessurroundingwhatitmeans
tobehumaninthedigitalworld.Whetheroneisacustomer,abusinessoraninvestor,thesepredictionswill
beusefulforcapturingtheinterestofstrategicthinkersandfuelingtheexcitementoftacticaldecision
makers.

Strategic Planning Assumptions

By2018,20%ofallbusinesscontentwillbeauthoredbymachines.
Analysisby:KarenA.HobertandMartinKihn
KeyFindings:
Technologieswiththeabilitytoproactivelyassembleanddeliverinformationthroughautomated
compositionenginesarefosteringamovementfromhumangeneratedtomachinegeneratedbusiness
content.Informationbasedondataandanalyticscanbeturnedintonaturallanguagewritingusingthese
emergingtools.Businesscontenttypessuchasshareholderreports,legaldocuments,market
reports,pressreleases,articlesandwhitepapersareallcandidatesforautomatedwritingtools.
Consumercentricparadigmsarelikewisedrivingtheapplicationofintelligentsystemstothecreation
anddistributionofpersonalizedmarketingcontentthatisusedtoattractandretainconsumers(see
"MarketGuide:DigitalPersonalizationEngines"(/doc/code/262995?ref=ddisp)).
Oneoftheearliestandmostcompellingusecasesformachinegeneratedcontentisoccurringalready
inmarketingandadvertising.Thereisampleevidencethatgreatermessageandimagepersonalization
leadstobetterresults(forexample,40%higherengagementratesonawebsiteand2.3timesbetter
responsetodigitaladvertising,accordingtorecentbenchmarks).Theproblemisoneofscale:Ifa
marketerhasthousands(ormillions)ofprospectsandcustomers,itisnotpossibleforhumansto
generatethousands(ormillions)ofdifferentmessages.
Today,weareseeingmachinegeneratedcontentinafewlimitedapplications:
Articleanddocumentarycopy,layoutandpublicationbasedondatafeeds(ofteninrealtime)and
analysis.
Recommendationsforproductsonecommercesitesandemail,wheremachinesgeneratebasic
headlinecopyandlayout,includingoffers.
Layoutandimagearrangementsonwebsitesthroughpredictivecontentalgorithms.
Machineswritingbasicpaidsearchadcopy.
Dynamiccreativeoptimizationonsitesandads,wheremachinescreateandtestversionsbasedon
knownparametersandtemplates(whicharecreatedbypeople).
Improvementsinmachinelearning,dataintegrationandpredictiveanalyticsappsforallareasof
businesscontentarecombiningtoinspireanewclassofsolutionssuchasAutomatedInsightsand
Persadothatprovidemachinewrittenverbaltreatmentsandmachinederivedimageryfor
personalizedmessagingatveryhighvolumes.Forexample,AutomatedInsightshasalreadybeen
employedtorobowritethousandsofreportsforfantasyfootballnewslettersbasedonfairlyrigid
templates,andanintrepidreporterinSouthernCaliforniahasconfiguredasystemtoautomatethe
writingofbasicnearrealtimeearthquakedispatchesbasedonseismicandotherdata.Theseexamples
representanearly,primitivestageofarapidlydevelopingsetofsolutions.
Automatedcompositiontechnologiesofferabroadrangeofbenefits,including:
Contextualizedcontent(automaticandcontextualizedcontentcreationbasedonthereader's
location,activitiesanddevice,todelivertherightcontenttotherightpersonattherighttime).

Authorshipvelocity(justintimedocumentgenerationandauthoringthroughrealtimeanalyticsand
monitoringofinformationfeeds,whichcanbefasterthanhumanauthorship).
Contentqualityandconsistency(improvedquality,consistencyandformatofbusinesscontent,
throughautomatededitorsthatprovidenaturallanguageandtranslationservicesbasedon
templatesandrules).
MarketImplications:
Contentmanagementvendorsareaddingbettercontentcompositionandanalyticcapabilitiestotheir
systems.Improvedcapacitytosupportdifferentdevicetypes,diversityofinformationformats,andrealtime
monitoringandanalysisofcontentsourcesareofferingcustomersmoreefficientwaystoassemble
informationintonewcontent.
Solutionsthatcombinetheabilitytofind,analyzeandassembledataintoformatsthatcanbereadinnatural
languagewillimproveboththespeedandthequalityofbusinesscontentdelivery.Personalassistantssuch
asApple'sSiriandMicrosoft'sCortanaaswellasIBMWatson,withitscognitivetechnologyprovide
richerandmoreinteractivecontent.Drones,sensors,wearablesandcameraswillcreatehugevolumesof
datathatneedstobeaccessedandassimilatedintounderstandablecontent.
Today,theapplicationsaretextbased,butdynamiccreativeadvertisingsolutionsfordisplayandvideo
(includingMirriad,SundaySkyandAlliant)pointtoarapidlyevolvingspaceinwhichimageandvideo
personalizationispoisedforgrowth.
NearTermFlags:
ByYE16,morethan10significantvendorswillhavecommerciallyavailablemanagedservicesofferings
thatusesmartmachinestocreatewrittencontentandbasicdesignelementsforenterprisecontent,
websites,email,andsomemobileapplications.
ByYE16,twomajoradvertisingholdingcompanieswillhaveplacedahiringfreezeoncopywritersand
makesignificantinvestmentsinrobowritingsolutions.
Recommendations:
Evaluateemergingvendorstoidentifyautomatedcontentgenerationservices(forexample,article
writingorWebcontentgeneration)thatyourenterprisemightwanttousetoday.
Reviewcontentmanagementvendorroadmapstodeterminetheirabilitytoofferautomatedcontent
generationorintegrationintosystemsthatgeneratenaturallanguagecontent.
Considercontentmanagementvendors'analyticscapabilities,currentorplanned,andidentifywaysthey
mightbeusefulforautomatedcontentgeneration.
Evolveyourmarketingsegmentationandtargetingdisciplinestohandlemanymoremicrosegments.
ImproveyourA/Bandmultivariatetestingdisciplinetobetterdefinesuccessfordifferentprospect
groups.
Reviewcurrententerpriseplansfornewdevices,wearables,scannersandattendantsthatmight
producenewdataformatsandmetadata,anddeterminewhethertheinformationtheyproducecouldor
shouldbeleveragedforautogeneratedbusinesscontent.
Conductanexplorationofjobs(orroles)thatcouldbeaugmentedwithautomaticcontentgeneration
capabilities,andespeciallywhereitcanprovidemorevaluetocustomers.
Cultivateamindandprocessshiftamongcreativeteammembersandagenciestowardmoremodular
andtemplatebasedcreativity(thatcanbemanipulatedbymachinesascreative"elements")ratherthan
finishedproducts.
RelatedResearch:
"HypeCycleforContentManagement,2014"(/doc/code/274692?ref=ddisp)
"HypeCycleforDigitalMarketing,2015"(/doc/code/277369?ref=ddisp)
"Top10StrategicTechnologiesTheRiseofSmartMachines"(/doc/code/260830?ref=ddisp)
"MarketGuide:DigitalPersonalizationEngines"(/doc/code/262995?ref=ddisp)
By2018,6billionconnectedthingswillberequestingsupport.
Analysisby:JennySussin,JimTully,KristinMoyerandDonScheibenreif
KeyFindings:
Customerserviceorganizationsarealreadycapableoftakingsupportrequestsfromconnectedthings
(forexample,securitysystemsthatalertasecuritycompanythatanalarmhasbeentripped).
Thenumberofconnectedthingsissettogrowexponentially.InGartner'sIoTforecast,weestimatethat,
by2020,morethan35billionthingswillbeconnectedtotheInternet(see"Forecast:InternetofThings,
EndpointsandAssociatedServices,Worldwide,2014"(/doc/code/270264?ref=ddisp)).
Wealsoestimatethat47%ofdeviceswillhavethenecessaryintelligencetorequestsupport.Things
everywhere,fromconnectedvehicleenginestoconnectedprostheses,willberequestingsupportfrom
humansandhumanmanagedbusinesses.Vendingmachines,vacuumcleaners,printers,air
fresheners,securitycameras,parkingmeters,soapdispensersandaircraftareafewexamplesofthings
thatwillbeaskingforrepair,refillandproactivemaintenanceineveryindustrywhetherbusinessto
business(B2B)orbusinesstoconsumer(B2C)andeverygeography.Manyoftheserequestswillbe
forverysimpleactions,suchastheneedtoreplaceorrechargeabattery,andmostwillrequirehuman
intervention.

AsthecomputationalintelligenceofInternetconnectedthingsincreases,sowilltheirabilitytorequest
supportandtoreceiveitautomatically.Examplesweseetodayincludemedicaldevicesfrom
Biotronikthatallowdoctorstomonitorpatienthealthforremoteevaluation,andTeslaelectricvehicles
thatcallthecompanytorequestcorrectivesoftwaredownloads,independentoftheirhumanowners.
MarketImplications:
Intheeraofdigitalbusiness,whenphysicalanddigitallinesareincreasinglyblurred,enterpriseswillneedto
beginviewingthingsascustomersofservicesandtotreatthemaccordingly.Theywillneedtodevelop
mechanismsforrespondingtosignificantlylargernumbersofsupportrequestscommunicateddirectlyby
things.Theywillalsoneedtodevelopstrategiesforrespondingtothemthataredistinctlydifferentfrom
traditionalhumancustomercommunicationandproblemsolving.
Respondingtoservicerequestsfromthingswillspawnentireserviceindustries,andinnovativesolutionswill
emergetoimprovetheefficiencyofmanytypesofenterprise.
Thingswillbecomemoreautonomousastechnologiesevolve,andaswelearntotrustthem.Inanumberof
scenarios,things(ascustomers)willhavetheabilitytochoosebetweenalternativeserviceprovidersandto
negotiatepricesandotherterms.
Customerservicecapabilitiesformanagingsupportissuesthatarelargelyalgorithmicandobjectivelydriven
willallowforlesshumanagentbasedsupport,andmoreM2Mbasedsupport.Thiswillmakemoreefficient
customersupportpossible,butwillalsonegativelyimpacttheabilityofenterprisestodifferentiateonthe
basisofcustomerexperience.Customerexperiencerequiressubjectivityperceptionsandfeelings
whilethingsdealpurelyintheobjective.
NearTermFlags:
ByYE16,connectedcarsubsystemswillexceed600millionunits.
ByYE17,thenumberofconnectedhealthandfitnessdeviceswillexceed580millionunits.
Recommendations:
Initiatecollaborationwiththechiefdigitalofficer,chiefstrategyofficerandotherkeystakeholdersto
explorethestrategicimplicationsofthingsascustomersrequestingservice.
Developscenarios,suchasbusinessmoments,thatenvisionhowthingsthatyoudeploytocustomers
orthatarepresentinyourcustomers'locationscouldimpacthowyouapproachcustomerservice.
Examineyourcustomerjourneymapsanddeterminehowathingmightinterveneoractonbehalfof
yourhumancustomers.
Thinkspecificallyabouthowyourcustomerservicefunctionsmightbeimpactedinthesescenarios
Buildintelligentdevicesintoyourtechnologyinnovationpipeline.
Begintoexplorepartnershipswithcompaniesthatarebuildingintelligenceintothings.
Learnhowthetechnologyworks,considerthesystemsthatareneededforcoordinationand
orchestration,andthinkabouthowyourenterprisewillfitinthatecosystem,especiallywithregardto
customerservice.
Challengeyourcurrentcustomerservicetechnologypartnerstounderstandhowtheywillhelpyouadapt
tothisfuture.
RelatedResearch:
"Maverick*Research:WhenThingsBecomePeople"(/doc/code/278110?ref=ddisp)
"InternetofThingsScenario:WhenThingsNegotiate"(/doc/code/219512?ref=ddisp)
"InternetofThingsScenario:WhenThingsBecomeCustomers"(/doc/code/274247?ref=ddisp)
"MassAdoptionoftheInternetofThingsWillCreateNewOpportunitiesandChallengesforEnterprises"
(/doc/code/274959?ref=ddisp)
"TheInternetofThingsandRelatedDefinitions"(/doc/code/269832?ref=ddisp)
"DigitalBusinessesWillCompeteandSeekOpportunityintheSpanofaMoment"(/doc/code/262735?
ref=ddisp)
By2020,autonomoussoftwareagentsoutsideofhumancontrolwillparticipatein5%ofall
economictransactions.
Analysisby:MagnusRevang,RayValdesandDavidFurlonger
KeyFindings:
Algorithmicallydrivenagentsarealreadyparticipatinginoureconomy.However,whiletheseagentsare
automated,theyarenotfullyautonomous,becausetheyaredirectlytetheredtoarobustcollectionof
mechanismscontrolledbyhumansinthedomainsofourcorporate,legal,economicandfiduciary
systems.
Theuseofblockchains,ofwhichbitcoinisbutoneimplementation,hasthepotentialtodeliverdisruptive
change,ascryptocurrencybasedtechnologiesbecomemorewidelyadoptedandevolvetopowerful
decentralizedplatformssupportingdiversescenariosforvalueexchange.
Metacoinplatformsusingthetrustlessblockchainmechanismforadistributedgloballedgerof
transactionswillevolvetoincludefullyembeddedprogrammabilityofobjects.

Algorithmicallydrivenentitiesonnextgenerationmetacoinplatformswillbeabletohold,accumulate
andspendmoney.Theywillalsobeabletoenterintocontractsinvolvingconditionalpayments.
Entitiesonthesegloballydistributedplatformscanadapt,replicate,evolveandspawnnewautonomous
agents.
Theresultoftheprevalenceofmetacoinplatformswillbetheemergenceofafullyprogrammable
economyoperatingbeyondthecontrolofanysinglecentralizedinstitutionorgovernment.Itisthe
metacoinplatformthatenablesautomaticenforcementofconditionsinafullydistributedanduntrusted
environment.
Autonomoussoftwareagentswillholdvaluethemselves,andfunctionasthefundamentalunderpinning
ofaneweconomicparadigmthatGartnercallsthe"programmableeconomy."
Bydesign,humanscannotcontroltheseentities,oncethefullydistributedautonomoussoftwareagents
are"setfree"runningliveontheblockchainledger.
Theprogrammableeconomyhaspotentialforgreatdisruptiontotheexistingfinancialservicesindustry.
Wewillseealgorithms,oftendevelopedinatransparent,opensourcefashionandsetfreeonthe
blockchain,capableofbanking,insurance,markets,exchanges,crowdfundingandvirtuallyallother
typesoffinancialinstruments.
MarketImplications:
Afullyevolvedprogrammableeconomyisatectonicchangedisruptingtheseeminglyunassailable
institutionsofbothgovernmentandtheglobalfinancialindustry.Theimplicationsoftheblockchainfor
theeconomyarecomparabletothoseoftheInternetforinformation.
Autonomoussoftwareagentswillcompetewithcommonofferingsfromfinancialinstitutionslikebank
accounts,exchanges,marketsandinsurancewhilebeingvastlymoretransparent.Theywilllikely
forcefinancialinstitutionstoadoptnewrevenuestreamsasoldstreamsaredisplaced.
Becausetheseautonomousagentsliveinafullydistributedenvironment,theyareeffectively
ungovernable,creatingchallengesforgovernmentsandplacingthefundamentalmechanismsof
ownershipandtaxesunderpressure.
NearTermFlags:
ByYE16,80%oftheworld'slargestbankswillhaveinitiatedblockchainbasedprojects(byYE18,80%
oftheseprojectswillhavebeenterminated,duetotheimmaturityoffirstgenerationtechnology).
ByYE16,atleastthreenationalgovernmentswillhaveannouncedthattheywilluseblockchain
technologyasanauthoritativerecordforsignificanttransactions,suchaslandownership.
ByYE17,atleastonemajorfinancialinstitutionwillannouncethatitisredesigningitsbusinessmodel
andcoresystemsaroundtheuseofablockchain.
ByYE18,abitcoinalternativeorderivative,capableofrunningTuringcompletesoftwarecode,willhave
surpassedbitcoinintotalvalue.
ByYE19,5%ofthevalueofeconomictransactionsintheworldwillinvolveblockchaintechnologies.
Recommendation:
CIOsinthefinancialindustryshouldimmediatelyformteamstobuildblockchaincompetencies,
monitoringandanalyzingtheimplicationsofthesetechnologiesonthebusiness.Blockchaintechnology
isdifficulttograspfullybecauseitinvolveselementsofcryptography,peertopeercommunications,
gametheoryandadvancedeconomictheoryanditthereforerequiresamultitalentedteam.
RecommendedResearch:
"Maverick*Research:InaPostBitcoinWorld,MetacoinPlatformsEnabletheProgrammableEconomy"
(/doc/code/270509?ref=ddisp)
"HypeCyclefortheProgrammableEconomy,2015"(/doc/code/278135?ref=ddisp)
"TheFutureofMoneyIstheProgrammableEconomy,NotJustBitcoin"(/doc/code/270192?ref=ddisp)
"CoolVendorsinWebComputing,2015"(/doc/code/275812?ref=ddisp)
By2018,morethan3millionworkersgloballywillbesupervisedbya"roboboss."
Analysisby:WhitAndrews,FrancesKaramouzis,KenBrant,HelenPoitevin,TomAustinandDianeMorello
KeyFindings:
Supervisorydutiesareincreasinglyshiftingintomonitoringworkeraccomplishmentsthrough
measurementsofperformancethataredirectlytiedtooutputandcustomerevaluation.Such
measurementscanbeconsumedmoreeffectivelyandswiftlybysmartmachinemanagerstunedto
learnbasedonstaffingdecisionsandmanagementincentives.
The"gigeconomy"whereworkerscompeteforshorttermcontractsratherthanworkingforasalary
ismakingalargeamountoftalentavailabletoenterprisesinstructured,taskgranularformats.Talent
canbesourced,selectedandengagedinanautomatedfashion.
Robobosseswilldependondatadirectlyderivedfromworkerperformanceandontheirownabilityto
deriveinsightsfromthatdatathatahumanmightnotreach,ormightreachlessquickly.

Smartmachinetechnologiesandservicesareavailabletodayinthecommercialmarket.Smart
machinesdemonstratecertainkeyattributes:
Theydealwithhighlevelsofcomplexityanduncertaintytoformhypothesesbasedonwhatthey
havelearned.
Theytestthosehypothesestorefineprobabilisticconclusions.
Theyhavedevelopedabetterunderstandingoftaskspecificcontextsthanmanyindustryobservers
hadpredicted.
MarketImplications:
Robobosseswillincreasinglymakedecisionsthatpreviouslycouldonlyhavebeenmadebyhuman
managers.Forexample,theywillrouteworkandevaluateperformancewithnuanceandflexibility(theywill
not,however,manageoutofworkflowexceptions,suchastheneedforcompassionateleave,inthe
foreseeablefuture).
Businessprocessoutsourcersthatfocusonperformanceappraisals,incentivesandpaywilldevelopsmart
machine"contractmanagers"designedtohandlemeasurementandsupervisionofparticularworker
classes.
Measurementofworkerperformancewillbecomeevenmoregranularassmartmachinesbecomethe
primarymeansofanalyzingperformance.Activitiesandeventsthatwouldbefartoominusculeforhuman
managerstotrackforexample,theangleatwhichaplateispresentedtoadiner,thespeedatwhicha
driverturnsacorner,orthepercentageofcompletenessthatasmilereachesinfrontofaVIPcustomer
willbefodderformachinescapableofuniquelypowerfulandgranularmicromanagement.
Reactionstosuchmeasurementswillbecomeequallydeftandindividual.Smartmachinemanagerswill
presentserverstodinersbasedonoptimizedpersonalityandinteractionprofiles.Technicianswillbe
assignedtotasksatwhichtheyuniquely,butalmostinvisibly,excel.Gigeconomyfreelancerswillparticipate
inefficientworkchainsdrivenbyminutelymeasuredprocesses.
NearTermFlags:
Amajorsoftwarevendororbusinessprocessoutsourcerwillreleasea"workermanagement"smart
machineduring2016.
Anothermajorservicessubindustrywillfaceasuccessfulsharingeconomydisruption(likeUber)in
2017.
Morethan30%offreelanceprofessionalswillbeselectedforworkthroughsharingmarketplacesin
majorlabormarketsin2017.
Recommendations:
Trainmanagerstofocuson"human"issues,suchascreativeleadership,workerrelations,andstrategic
planning.Trainingmustfocuslessonsimplymeasurableworkerbehaviorsandtheircorrelation.Human
managersshouldbegivenclearinstructiononwhattheycanaccomplishthatmachinescannot.The
managersthemselvesshouldbemeasuredonworkersatisfactionwiththecompany,andbalancingof
performancemetricsagainstthenecessitiesofliving.Humanmanagersmaybepartneredwithsmart
machinemanagersinawaythatallowsthemtoinfluencetheskillsandstrengthsofthemachines.
Establishfinegrainedmeasurementstoallowforthediscoveryofbenchmarksandflagsthatwouldnot
havebeendetectablepreviously.
Correlateseveralmeasurementsinsteadofdependingonindividualmeasurements.Individualmetrics
(overallsatisfactionwithatransaction,forexample)mustbecombinedwithothermetricstodevelopa
moremeaningfulpicture(thismightincludeanincreaseordecreaseofsatisfactionforagiven
transactionthatismeasuredbycomparingitwiththeprevioustransaction,orothertransactionsmadeat
thesametime).Individualmeasurementsthatarebasedonfulfillmentofparticularprocessstepsmust
becombinedwithothersuchsteps,andwithoutcomes,tofueleffectiverelationshipdiscovery.
Ensurethatsmartmachinedevelopmentformanagementpurposescombinesthemachines'propensity
toidentify,documentandemploynewpatterns.Smartmachinemanagerswilllookatdatainnewways
becauseoftheirabilitytodispassionatelydiscoverpreviouslyundetectedrelationshipsandcorrelations,
testtheirhypotheses,andthenelevatethemtoproductionstatus.
RelatedResearch:
"HiretheRightStafftoBestEmploySmartMachines"(/doc/code/277156?ref=ddisp)
"TheCIOSurvivalGuide:YourRoleinaWorldofIncreasinglySmartMachines"(/doc/code/275974?
ref=ddisp)
"SmarterMachinesWillChallengetheHumanDesireforControl"(/doc/code/274813?ref=ddisp)
"MandateInvestigationofSmartMachineEnabledServicestoAccelerateBusinessOutcomes"
(/doc/code/269974?ref=ddisp)
ByYE18,20%ofsmartbuildingswillhavesufferedfromdigitalvandalism.
Analysisby:RichardMarshallandRobSmith
KeyFindings:
Inadequateperimetersecuritywillincreasinglyresultinsmartbuildingsbeingvulnerabletoonline
attacks.
Mostoftheseattacksunlikeconventionalcriminalhackingintendedtorecoverpersonal,financialor
governmentalinformationwillbeofpurelynuisancevalue.Theseexploitswilllikelyhappensimply
becausetheyarepossible,asisthecasewithphysicalgraffitiandbrokenwindows.

Withexploitsrangingfromdefacingdigitalsignagetoplungingwholebuildingsintoprolongeddarkness,
digitalvandalismisanuisance,ratherthanathreat.Thereare,nonetheless,economic,healthand
safety,andsecurityconsequences.Theseverityoftheseconsequencesdependonthetarget.
Unlockingallthesecuredoorsinabuildingviaanunprotectedcontrolsystemmaynotbeimportantfor
anoffice,forexample,butwouldbeasevereproblemforaprison.
Thedigitalvandalsperpetratingtheseattacksarelikelytobeexploring,tryingtoseewhattheycando,
andareprobablyunawareoftheconsequencesoftheiracts.Theremay,infact,benomaliciousintent,
withanattackstartingsimplyasaprank.
Theflexibilityandpowerofsmartdigitalbuildingscomeswithrisks,duetothecomplex,loosely
integratedsystemsthatformtypicalcontrolnetworks.In2015,wehaveseencontrolhackerstake
controlofcarsviatheirentertainmentsystems,andthepotentialriskismoreseriousforbuildings.Cars
aresystematicallydesigned,integratedandbuiltbyasingleorganization,andarerarelyrefreshed.
Buildings,bycontrast,evolveorganicallyoverextendedperiods,withregularrenovations,makingthem
morevulnerable.
Existingsystemsinbuildingsarefrequentlyrippedoutandnewonesputinastechnologyevolves.
Differentaspectsofthebuildingevolveatdifferentspeeds,accordingtotheirnature,availablebudgets
andlevelsofwearandtear.Permanentsignagemaybereplacedwithdigitaldisplaysoftenlowcost
tabletsatadifferenttimefromthebuildingmanagementsystem.Smartlightingisfittedaccordingto
thelampageschedule,andtheWiFiandBluetoothbeaconsareaddedtothebuildingbydifferent
contractors,buttheyareallinterconnected.Ifjustonecontractorleavesanaccesspointonthedefault
password,theentirenetworkmaycompromised.
Anewlyconstructedbuildingmaybecreatedasasinglesystem,butassoonasasinglelamphasbeen
replaced,thesystemhaschanged,andifthatlampincludesunprotectedsmartcontrols,itmayoffer
attacksurfaces.
NearTermFlags:
ByYE16,severalmajorofficeswillhavebeendisruptedasdigitalsignagehashadtobeturnedoffdue
toobscenitiesorotherinappropriatemessagespostedonmeetingroomdoors.
ByYE17,amajorshoppingmallwillbeevacuatedbecausehackershaveturneditscoolingsystemto
heatingduringthesummer,andraisedtheinternaltemperatureofthebuildinguntilitisunsafefor
occupation,resultinginrevenuelossfortheretailersandpossiblefatalitiesofelderlyorinfirmshoppers.
ByYE17,aschoolemergencylockdownwillbetriggeredbystudentsbreakingintotheschool's
managementsystem.
ByYE18,anationallegislativeassemblywillbeshutdownforseveralhoursbecausehackershave
turnedoffthelightsinthedebatingchamber.
MarketImplications:
Smartbuildingcomponentscannotbeconsideredindependently,butmustbeviewedaspartofthelarger
organizationalsecurityprocess.Productsmustbebuilttoofferacceptablelevelsofprotectionandhooksfor
integrationintosecuritymonitoringandmanagementsystems.Certificationprogramsthatallow
organizationstoensurethecorrectlevelofsecurityfortheirneedsduringprocurementwillberequired.
Recommendations:
Ensurethatsmartbuildingsystemscomeundertheauthorityofthechiefsecurityofficer.
Auditallbuildingsystemstocheckforpotentialsecurityweaknesses.
Maintainuptodatearchitectureandnetworkdiagramsthatincludeallconnectedbuildingcomponents.
Includedigitalvandalisminyouremergencyandcontingencyplanning.
RelatedResearch:
"PreparefortheSecurityImplicationsoftheDigitalWorkplace"(/doc/code/263954?ref=ddisp)
"MarketGuideforSecurityConsultingServices,Worldwide"(/doc/code/271917?ref=ddisp)
"CoolVendorsinMobileSecurityandIoTSecurity,2015"(/doc/code/275653?ref=ddisp)
By2018,50%ofthefastestgrowingcompanieswillhavefeweremployeesthaninstancesofsmart
machines.
Analysisby:FrancesKaramouzisandMagnusRevang
KeyFindings:
Gartnerestimatedthevalueofthesmartmachine"technology"marketat$6billionasofYE14.
Manyofthefastestgrowingprivatecompaniesareusingsomeformofsmartmachinetechnology,with
limitednumbersofemployeesgeneratingsignificantrevenue.
Startupsandothernewerbusinessesarebestpositionedtoleveragethecostsavings,efficienciesand
scalabilityofsmarttechnologies.
MarketImplications:
Thecapabilitiesofsmartmachinesarerapidlyevolvingandconverging,andtheywilldriveprofound
advancesintheabilitytoperformcomplextasks.Theycansupportbothenterprisesandindividualsintwo
importantways:

Byfullyautomatingtasksandremovinghumancontrol(forexample,viaalgorithmictradingor"lights
out"factorieswithnoonsiteemployees).
Byaugmentingthecognitiveandphysicalperformanceofindividualsinamannerthatfeelslikean
extensionoftheirownabilities(forexample,viadecisionsupportorwearabletechnology).
Onesmartmachinetechnologyvendor,forexample,reportsthatitsrobowritertechnologycreated1billion
storiesin2014,manyofthemwithouthumanintervention.Theinverseintheformofautomatedessay
gradingisalsobecomingcommonplace.ThenonprofitonlineeducationplatformedXhas,forexample,
introducedacomputersystemthatgradesstudentessaysandshortanswersonexams.
Gartnerbelievestheinitialgroupofcompaniesthatwillusesmartmachinetechnologiesmostrapidlyand
effectivelywillbestartupsandothernewercompanies.Thespeed,costsavings,productivityimprovements
andabilitytoscaleofsmarttechnologyforspecifictasksofferdramaticadvantagesovertherecruiting,
hiring,trainingandgrowthdemandsofhumanlabor.Somepossibleexamplesareafullyautomated
supermarket,orasecurityfirmofferingdroneonlysurveillanceservices.The"oldguard"(existing)
companies,withlargeamountsoflegacytechnologiesandprocesses,willnotnecessarilybethefirst
movers,butthesavviercompaniesamongthemwillbefastfollowers,astheywillrecognizetheneedfor
competitiveparityforeitherspeedorcost.Additionally,thereareinterestingexamplesofsmallnumbersof
employeedrivingextensivevalue.Andthesecompanieswillthengothrougharenaissancewherenew
businessandoperatingmodelsforgrowthareseenasthekeytocompetitiveadvantage.
Manycompaniesareclearlyrecognizingtheseadvantages.Gartnerrecentlyinterviewedrepresentativesof
threeofthefastestgrowingprivatecompaniesintheworld.Eachofthemwasusingorpilotingsomeformof
smartmachinetechnology,andeachhadfewerthan150employeesgenerating$85to$160millionin
annualrevenue.Facebook'sOctober2014purchaseofthemessagingplatformWhatsApp$22billion
dollarsforacompanywithonly55employeesisaparticularlydramaticexampleofthistrend,andofa
newpatterninvaluations.
Smartmachinecoststructuresforbothenterprisesandvendorswillchangeradicallyovertime,
leadingtodifferentmarginstructures.Entireindustrieswillbedisruptedbynewdeliveryoptions.Therewill
beabifurcation,withanenterprisesviewedasbeingpotentiallyinoneoftwocategories:havingitscore
businessmodelsignificantlydisruptedorbeingthedisrupteror"categorykiller."
Thiswillbemostimpactfulandinterestingforsmallormidsizebusinesses(SMBs).Inthepast,largeR&D
budgetsorexpensiveefforts(involvinglargecapitalexpendituresforequipmentandscientists)wereneeded
tocreatevalueandgeneratepatentsandotherintellectualproperty.Nowthesourceofvaluewillbe
algorithmicbusinessmodels,andthevalueoftheintellectualpropertygenerated.Therefore,SMBswillnow
haveopportunitiesthatneverexistedbefore.
Therewillbemajorshiftsinthevendorlandscape,drivenbyaconvergenceofproductvendorsand
managedserviceprovidersthatwilloffersometypeof"businessprocessasaservice"usingsmart
machines.
NearTermFlags:
ByYE16,smartmachinetechnologyrevenueswillsurpass$10billion.
ByYE16,oneinfiveglobalenterpriseswillhavesomeexperience(eitherlicensedorengagedinaproof
ofconcept)withsmartmachineofferings.
ByYE16,wewillseeafourfoldincreaseinsourcingdealsthatinvolveahybridecosystemconsistingof
employeesandsmartmachines.
Recommendations:
Includesomeanalysisofuseofsmartmachinesineverynewbusinessmodelbeingconsideredor
evaluatedasastrategicimperative.
Ensurethatgovernanceandmanagementofahybridecosystemconsistingofemployeesandsmart
machinesisanewmandatedcompetency.
RecommendedResearch:
"MandateInvestigationofSmartMachineEnabledServicestoAccelerateBusinessOutcomes"
(/doc/code/269974?ref=ddisp)
"SourcingSmartMachineEnabledServicesDrivesCompetitiveAdvantageandFuturePatentRevenue"
(/doc/code/272722?ref=ddisp)
"DigitalBusinessInnovationWithSmartMachines"(/doc/code/265758?ref=ddisp)
"Toolkit:AccelerateDigitalBusinessWithaProductCreativeThinkingWorkshopforYourExecutives"
(/doc/code/262520?ref=ddisp)
ByYE18,customerdigitalassistantswillrecognizeindividualsbyfaceandvoiceacrosschannels
andpartners.
Analysisby:AdamSarner
KeyFindings:
PromisingmobiledigitalassistanttechnologiessuchasCortana,GoogleNow,Siri,andAmazonEcho
arealreadytappingintopreferencesandexplicitcontextthroughspokenquestionsandcommands,
connectingpiecesofthebuyingprocess,suchasneed/wantassessment,informationgatheringand
evaluation.
Whilenothavingtoreachtheleveloftrueartificialintelligence,toptechnologiesforcustomerdigital
assistantswillincludefacialrecognition,voiceidentification,emotiondetection,naturallanguage
processing,andaudienceprofiledata.
Assistantswillbetrainableandcapableoflearningfromeachcustomerinteraction.

InvestmentsinthesetechnologiesfromhighprofiletechnologyproviderssuchasAdobe,Apple,Google,
IBMandMicrosoftareincreasing,andsometechnologiesarealreadyinuse.
NearTermFlag:
ByYE16,mobiledevices(includingsomewearables)thatarealreadyequippedwithfrontfacing
camerasandmicrophoneswillbethemostaccessibleandadopteddevicesforcustomerdigital
assistantsthatcanidentifyindividualcustomersbyfaceandvoice.
MarketImplications:
Onepossiblescenarioiswhereyounavigatetoanclothingwebsite,andthefrontfacingcameraofyour
smartphoneactivatesmomentarily,andthecustomerdigitalassistantnotonlysignsyouinandgreetsyou
byname,butputpicksupwhereyoulastleftoff,regardlessofwhatchannelyouwereusingpreviously.Or
youmightwalkintoastoreandtryonsomeclothesinthedressingroom.Invokethecustomerassistant
embeddedinthemirrorbyaskingittorecommendanensemblewithyourpreferences,inyoursize,thatis
instockandonsale.
Microsensorsonthetags,orwovenintotheclothing,informyourassistantwhatyouhavechosen.Tellitto
billyoufromyourmobilesothatyoucanskipthecheckoutline.Multiplelevelsofauthenticationhaveyou
covered.
Thelastmileformultichannelandexceptionalcustomerexperienceswillbethisseamlesstwoway
engagementwithcustomers.Itwillmimichumanconversations,withbothlisteningandspeaking,havea
senseofhistory,useinthemomentcontext,timingandtone,andhavetheabilitytorespond,addtoand
continuewithathoughtorpurposeatmultipleoccasionsandplacesovertime.
Afterdecadesofimprovementsinvoicerecognitionanddetectiontechnologyaswellasimprovingface
recognitiontechnologyfromlarge,highprofileorganizationslikeAdobe,Apple,Google,IBMandMicrosoft
andothersthetechnologyisnowalreadyhere,andreadyforprimetime.
ConsiderMicrosoft'sXboxOneandSony'sPS4,twoleadinggamingconsolesthatbothhavetheability
(throughKinectandthePlayStationCamera,respectively)torecognizeandsigninplayersbyface
recognitionwhentheyenteraroom.Bothsystemsrespondtovoicecommandsandallofthesecapabilities
areusedingame.Facialrecognitiontechnologiesexistinmultiplephotostorageandeditingapplications.
BarclaysWealthandInvestmentManagement'spassivevoicesecurityservicecutsauthenticationtimeinits
callcenterbyabout20seconds,resultinginincreasedcustomerexperiencescoresforspeed,easeofuse
andsecurity.Othercallcentersareusingemotiondetectioncapabilitytodiscernintentandrealtime
contextualtreatment.Althoughthesetechnologieshavebeenlargelydisparateacrossmultiplechannels,we
seethatcustomersarewillingtoadoptthesetechnologiesandtechniquesthathelpthemsiftthrough
increasinglargeamountsofinformation,choiceandpurchasingdecisions.Thissignalsanemerging
demandforenterprisestodeploycustomerdigitalassistantstoorchestratethesetechniquesandtohelp
"glue"continualcompanyandcustomerconversations.
Recommendations:
Ifyourindustryisretail,financialservices,travel,hospitalityoranotherthathashighinvestmentsin
multichannelmarketing,exploitfirstmoveradvantage.Over90%ofcompaniesintheseindustries
cannotseamlesslyconnectmorethanthreechannelstogetheraroundabuyingjourney,andacustomer
digitalassistantcanstarttobridgethesedisparatechannels.
Considercustomerdigitalassistantsasanopportunityforbusinessestoestablishcustomerledrulesof
engagementthatwillstartorimproverelationshipsbetweencompanyandcustomer.Digitalassistants
havetheopportunityforanoptin"pullapproach,"exchangingrelevantinformationforthepurpose,
ratherthaninterruptiveengagementoraonesideddatagatheringexercisethatcanbeperceivedasa
privacythreat.
Begintopilotandbetatestkeytechnologies(naturallanguageprocessing,voicerecognition,facial
recognitionandvoiceidentification)onmobiledeviceswheretheintegratedhardwareexists.
Developastepbystepoptinstrategytoestablishtrustforeachcapability,demonstratingconvenient,
highvalueusecases.
RelatedResearch:
"MultichannelMarketingSurveyResults2015:MarketersDoubleDownonRealTimeStrategies"
(/doc/code/277437?ref=ddisp)
"HowDigitalMarketersWillTakeAdvantageoftheInternetofThings"(/doc/code/270454?ref=ddisp)
"Predicts2015:DigitalMarketersWillMonetizeDisruptiveForces"(/doc/code/265814?ref=ddisp)
By2018,2millionemployeeswillberequiredtowearhealthandfitnesstrackingdevicesasa
conditionofemployment.
Analysisby:AngelaMcIntyre,SylvainFabreandAdrianLeow
KeyFindings:
Corporatewellnessprogramsareincreasinglyprovidingfitnesstrackersasawaytomotivateworkersto
becomemorephysicallyactive.IntheU.S.,100millionworkershaveaccesstoawellnessprogram.
Providers,includingstartupssuchasLimeadeandJiff,enablefitnesstrackerstobeanintegralpartof
goalsettingandincentives.
Asheartratetrackinggainsadoption,especiallyduringexercise,peoplearelikelytobecomemore
acceptingofsharingdatawithwellnessprogramproviders,withappslikeEndomondoandwithonline
communitiessuchasNikeFuel.
SeventeenpercentofonlineadultsintheU.S.undertheageof75currentlyuseafitness
wristband/tracker,asdo10%ofpeopleintheU.K.(source:GartnerConsumerSurveydata).An
increasingnumberofwearablesareabletotrackheartrate,includingsmartwatches,suchasApple

WatchandSamsungGear2Neo,andwristbands,suchastheJawboneUP4andFitbitChargeHR.
Similarly,sportswatcheswithheartratetracking,suchasthePolarM400andGarminForerunner225,
areusedby6.3%ofadultsintheU.S.and8.8%inGermany.
Atleast10,000eliteathletesacross35countrieswearafitnesstrackingdeviceaspartoftheirtraining.
CatapultSportsprovideswearabletrackermodulestoprofessionalsportsteamssothatcoachescan
moreeffectivelymanagethetrainingofindividualathletes.Likewise,theAdidasmiCoacheliteteam
systemcapturesdataonanathlete'sspeed,distanceandaccelerationduringplay,andheartrate.The
Germanteamthatwonthe2014WorldCuptrainedusingAdidasmiCoachwearabledevices.
Analysisofdatafromwearablehealthtrackerscoulddeterminewhetheraworkerislikelytofallasleep
andsendanalert.Fatigueisestimatedtobeanassociatedfactorin13%ofalltruckcrashesand28%
ofsinglevehicletruckcrashesannually.
Forfirefighters,thesinglelargestcauseofinjury,resultingin45%ofalldeaths,isstressand
overexertion.Futurephysiologicalstatusmonitoringcouldmakeuseofwearables,suchassmartshirts,
todetectwhetherthebodyisundertoomuchstress,ascharacterizedbyelevatedheartrate,prolonged
exposuretohighambienttemperatures,dehydration,abnormalrespirationorchangesinbloodoxygen
levels.Thewearablestargetedatconsumersarenotintendedtobeusedastosavealife,orasmedical
monitoringdevices,andthosethataremustreceiveregulatoryapproval.
MarketImplications:
Thehealthandfitnessofpeopleemployedinjobsthatcanbedangerousorphysicallydemandingwill
increasinglybetrackedbyemployersviawearabledevices.Emergencyresponderssuchaspolice
officers,firefightersandparamedicswillcomprisethelargestgroupofemployeesrequiredtomonitor
theirhealthorfitnesswithwearables.Theprimaryreasonforwearingthemisfortheirownsafety.Their
heartratesandrespiration,andpotentiallytheirstresslevels,couldberemotelymonitoredandhelpsent
immediatelyifneeded.Inadditiontoemergencyresponders,aportionofemployeesinothercriticalroles
willberequiredtowearhealthandfitnessmonitors.Suchoccupationsincludeprofessionalathletes,political
leaders,airlinepilots,industrialworkersandremotefieldworkers.
Newservicesandproviderswillarisetotrackthephysiologicalstatusofworkerswhoareofteninhazardous
orisolatedenvironments.Mobilepersonalsafetyservicesforfieldworkersandinspectorswillusedatafrom
sensorstosendalertsincaseofissueswithhealthandsafety.
Smartcitieswillintegratedatafromwearablesthattrackthelocationandhealthofpoliceofficers,
emergencymedicaltechniciansandfirefighters.Theappropriatehelpcouldbesenttoassistthemassoon
aspossibleincaseofaninjuryorahealthcrisis.
ProvidersofprotectivegearforemergencyresponderslikeTaserandGlobeManufacturingwillinclude
sensorsingarmentsandhelmetstomonitorheartrate,detectfalls,tracklocationandidentifyothersignsof
physicaldistress.
NearTermFlags:
In2016,80%ofprofessionalteamsinNorthAmericaandWesternEuropeplayingAmericanfootball,
Australianfootball,football(soccer),basketballandrugbywillrequiretheirathletestowearfitnessand
healthtrackingdevicesduringtraining.
In2016,200,000policeofficersintheU.S.willbeissuedwearabledeviceswithactivityorhealth
trackingcapability.
In2017,atleastoneexecutiveatatoprankingglobalenterprisewillhavetowearahealthandfitness
monitoraspartofhisorhercontract.
Recommendations:
Provideawellnessprogramthatincludeswearablesasawaytoencourageemployeestoleadhealthier
lifestyles,improvejobsatisfaction,andincreaseworkereffectiveness.
Investigatewhetherdatafromfitnesstrackerscanconfirmwhetheremployeeswithrequiredphysical
exerciseorrestperiodsarecomplyingwithpolicy.
Followcountryspecificregulationsregardingdataprivacyandsecurity.
Considerremotelymonitoringthehealthofemployeesinhazardoussituationsorinisolatedlocations
wheretheycouldnototherwisegethelpinatimelyfashionincaseofanaccidentorhealthcrisis.
Respecttheprivacyofemployeeswearingfitnesstrackersbyonlycollecting,storingorviewing
informationessentialtoverifyinggoalsormetricstheemployeehasagreedtopriortodatacollection.
Considerhavingathirdpartymanagethedataandanalysis,sothattheemployerdoesnothaveaccess
tosensitiveemployeehealthdata.
RelatedResearch:
"InvestImplications:'Wearables:NewInteractionsandNewOpportunities'"(/doc/code/290038?ref=ddisp)
"HowtoBeginIntegratingWearableDevicesIntoSmartCityGovernments"(/doc/code/277270?ref=ddisp)
"Forecast:WearableElectronicDevicesforFitness,Worldwide,2014"(/doc/code/262820?ref=ddisp)
By2020,smartagentswillfacilitate40%ofmobileinteractions,andthepostapperawillbeginto
dominate.
Analysisby:RichardMarshall,VanBaker,AdrianLeow,CharlesSmulders,RayValdesandJasonWong
KeyFindings:

Appsgivesmartphoneownersaccesstomillionsoffocusedcapabilities,buttheirusagefallswithina
narrowsetoftheappinventoryoneachuser'sphone.
Smartagenttechnologiesareemergingthatoffernewinteractioncapabilitiesbeyondthesimpleuseof
appsondevices.
Commonearlyexamplesarevirtualpersonalassistants(VPAs)suchasCortana,GoogleNowandSiri,
butthesewillbroadentoincludededicatedagentsspecifictobusinesstasks,suchasOpenstreamEVA,
VivandApi.ai.
MarketImplications:
Passionsrunstrongintheappcommunityastowhatappsshouldandshouldnotbe.Oneofthemost
fundamentalbeliefsisthatanappshouldbefocusedonasimpletaskthatcanbecompletedquicklythrough
aneasytouseuserinterface.Forsimpletasks,thisworksverywell,butmosttasksarenotstandalone,but
areconnectedtoothers.Asimpletaskwillgetyoutheanswertoaspecificquestion,butitdoesnotlink
actions.Manyactivitieswouldbenefitfromtheintegrationofsimpleappfocusedtaskstocreatean
automatedprocess,butfewmobileappdevelopershaveattemptedtoaddthiscapability.Todosowould
violatethefundamentalbeliefthatanappshouldfocusonasimpletask.Forauser,swappingbetween
appsmeansthatasimpleuserexperiencehassuddenlybecomecomplex.
Smartagenttechnologies,intheformofVPAsandotheragents,willmonitorusercontentandbehaviorin
conjunctionwithcloudhostedneuralnetworkstobuildandmaintaindatamodelsfromwhichthetechnology
willdrawinferencesaboutpeople,contentandcontexts.Basedontheseinformationgatheringandmodel
buildingeffortsVPAscanpredictuserneeds,buildtrust,andultimatelyactautonomouslyontheuser's
behalf.
VPAsandotheragenttechnologieshavethepotentialtotransformthewayworkisdoneandhow
individualsinteractwithtechnologyinthedigitalworkplace.Agenttechnologieswillbeusedtoautomate
complexbusinessprocessesthatcanbeinitiatedviaasimpleconversationalinterface.Additionally,VPAs
willincreaseemployeeproductivityasincreasingnumbersofroutineworkflowsarecompletedwithout
requiringuserintervention,allowingemployeestofocusonmorevaluabletasks.
NearTermFlag:
Lookforgrowingexperimentationwithsmartagentsbyconsumersandyouremployees.
Recommendations:
Begintoincorporatetheimplicationsofthepostappera,withcloudhostedsmartagentsboth
respondingtorequests,andactingindependentlyoftheuser,inyourscenarioplanning.
EvaluatethecapabilitiesofVPAsandothersmartagenttechnologiestoassesshowtheycanbeusedto
increaseworkforceproductivityandenhancecustomerengagement.
Assesssecurityandprivacyconcernsfromboththeperspectiveoftheemployees,andtheperspective
ofthebusiness,regardingpotentialdataleakage.
Begindevelopmentofcloudhostedservices,inareassuchasbusinessprocessmanagement,business
intelligence,andcustomerrelationshipmanagementdata,thatcanintegratewithVPAsandotheragent
agentstodeliverneededinformationandautomateroutinebusinessprocesses.
RelatedResearch:
"ITStrategistsMustPreparefortheRiseofVirtualPersonalAssistantsintheWorkplace"
(/doc/code/279840?ref=ddisp)
"TheFutureofMobileAppsandTheirDevelopment"(/doc/code/266385?ref=ddisp)
"SixMobileAppConceptstoTransformYourBusiness"(/doc/code/272118?ref=ddisp)
"Top10MistakesinWebandUserExperienceDesignProjects"(/doc/code/171161?ref=ddisp)
"ThreeUnderutilizedWaystoImprovetheImpactofMobileAppsinYourOrganization"(/doc/code/270999?
ref=ddisp)
Through2020,95%ofcloudsecurityfailureswillbethecustomer'sfault.
Analysisby:JayHeiser
KeyFindings:
Thehighlevelsofconcernaboutcloudserviceprovidersecuritypostureshavebecome
counterproductive.Theyaredistractingattentionfromtheneedtoestablishtheorganizational,security
andgovernanceprocessesrequiredtopreventcloudsecurityandcompliancemistakes.
Manyenterprisesarepayinganopportunitycostbyallowingunwarrantedsecurityfearstoinhibittheir
useofpubliccloudservicesthatwouldbemoresecure,andmoreagile,thanprocessestheyimplement
withintheirowndatacenters.
ThenaivebeliefthatSaaSprovidersareresponsiblefortheircustomers'securitydiscourages
enterprisesfromaddressingtherealityofhowtheiremployeesuseexternalapplications.Thisleadstoa
misguidedleveragingofthepowerofcloudservices,encouragingemployeestoinappropriatelyshare
hugeamountsofdatawithotheremployees,externalparties,andsometimestheentireInternet.
Thefailuretotakeastrategicapproachtocloudcompetencytoputpeopleandprocessesinplaceto
consistentlyleveragethesecurityadvantagesofcloudcomputingcaneasilycreateworkloadsthat
arelesssecurethanthosecreatedbytraditionalcomputingpractices,resultinginunnecessary
complianceincidentsanddatalosses.
MarketImplications:

Securityconcernsremainthemostcommonreasonforavoidingtheuseofpubliccloudservices.The
variouspubliccloudmarketscontinuetogrowatabriskpace,butenterprisesthathavecometotermswith
cloudsecurityareabletomakedecisionsaboutwhichcloudservicestousemorequickly,andwithless
internalconflict,thanthosethatarestillstrugglingtounderstandcloudrisks.
Thediffuseandcomplexnatureofcloudcomputingwillcontinuetoensuresignificantandgrowing
opportunitiesformultipleformsofcloudcontrolplanes.IDasaservice,cloudapplicationsecuritybrokers,
cloudmanagementplatforms,andothercategoriesofcloudcontrolprovideconvenientsingleconsolesand
managementpoints.Thesemakeitpossibletoensurecommonconfigurationsandpolicies,andmonitorand
governuseractivities,acrossanincreasinglycomplexvirtualenterpriseofapplicationsbasedin
infrastructureasaservice(IaaS),platformasaservice(PaaS)andsoftwareasaservice(SaaS)clouds.
Thirdpartysecuritystandards,suchasISO27001andSOC2,willbecomevirtuallymandatoryproduct
featuresforanyenterpriseundertakingstrategicallysignificantuseofacloudbasedservice.
recenthistoryhasshownthatvirtuallyallpubliccloudservicesarehighlyresistanttoattackand,inthe
majorityofcircumstances,representamoresecurestartingpointthantraditionalinhouseimplementations.
Nosignificantevidenceexiststoindicatethatcommercialcloudserviceprovidershaveperformedless
securelythanenduserorganizationsthemselves.Infact,mostavailableevidencepointstotheopposite.
Onlyaverysmallpercentageofthesecurityincidentsimpactingenterprisesusingthecloudhavebeendue
tovulnerabilitiesthatweretheprovider'sfault.
Duringthenextseveralyears,thenewsmediawillcontinuetoreportagrowingnumberofstoriesabout
securityfailures,butonlyafewincidentsayearwillbeattributabletopoorprovidertechnologyorpractices
onthepartofacloudserviceprovider.Mostwillinvolvesmallprovidersandimpactrelativelyfewcustomers.
Thecloudbusinessmodelprovideshugemarketincentivesforcloudserviceproviderstoplaceahigher
priorityonsecuritythanistypicalforenduserorganizations.Cloudserviceproviderscanaffordtohire
experiencedsystemandvulnerabilitymanagers,andtheireconomiesofscalemakeitpracticaltoprovide
aroundtheclocksecuritymonitoringandresponse.Thebrandnamecloudservicesusecustomplatforms,
whichenablesthemtoavoidthesecurityvulnerabilitiesthataretypicalofinhouseimplementations.
Thisdoesnotmeanthatorganizationsshouldassumethatusingacloudservicemeansthatwhateverthey
dowithinthatcloudwillnecessarilybesecure.Thecharacteristicsofthepartsofthecloudstackunder
customercontrolcanmakecloudcomputingahighlyefficientwayfornaiveuserstousepoorpractices,
whichcaneasilyresultinwidespreadsecurityorcompliancefailures.
Mostoftheenterprisesthathaveimplementedcloudapplicationdiscoverycapabilitiestypicallyprovided
byacloudaccesssecuritybrokerhavediscoveredthatSaaSisbeingusedinwaysthatexposesensitive
datainternallyandexternally.
"Openshares"thatcanbeaccessedbyanyoneontheInternetareatypicalcustomersecurityvulnerability.
Themisuseofpubliccloudservices,whichinevitablyhappensifanenterprisedoesnotattempttoexert
somecontroloverclouduse,representsasignificantincreaseintheexposureofsensitivedatatopeople
insideandoutsidetheenterprise.Thesecureandregulatorycompliantuseofpubliccloudsrequiresthat
enterprisesimplementneworganizationalpolicies,developnewskillsandundertakenewprocesses.
Thegrowingrecognitionoftheenterprise'sresponsibilityfortheappropriateuseofthepubliccloudis
reflectedinthegrowingmarketforcloudcontroltools.By2018,50%ofenterpriseswithmorethan1,000
userswilluseproductsprovidedbycloudaccesssecuritybrokerstomonitorandmanagetheiruseofSaaS
andotherformsofpubliccloud,reflectingthegrowingrecognitionthat,althoughcloudsareusuallysecure,
thesecureuseofpubliccloudsrequiresexpliciteffortonthepartofthecustomer.
NearTermFlags:
ByYE16,40%ofenterpriseswithmorethan1,000employees,and80%oforganizationswithover
10,000employees,willhavepoliciesandpracticesinplacetoapproveandtracktheuseofSaaS.
Thenumberofenterpriseswithpoliciesagainstplacinganysensitivedatainthepubliccloudwilldropto
5%by2017.
ByYE17,95%ofcloudserviceproviderswithannualrevenueover$500millionwillhaveatleastone
formalsecurityevaluation.
ThroughYE18,thenumberofpublicdisclosuresofinhousesecurityfailureswillgroweveryyear,but
onlyoneortwoincidentsayearwillbeattributedtopoorcloudserviceprovidertechnologiesor
practices.
50%ofenterpriseswithmorethan5,000userswilldeployproductsfromcloudaccesssecuritybrokers
tocontroltheiruseofcloudservicesbytheendof2018.
Recommendations
Developandfollowanenterprisepubliccloudstrategy.Aneffectivestrategyincludessecurityguidance
andregulatorycomplianceguidanceconcerningacceptableandunacceptableusesofpubliccloud
services.
Implementandenforcepoliciesoncloudownershipandcloudriskacceptanceprocesses.
Followalifecyclegovernanceapproachtotheuseofallcloudservicesandtheprocessesperformed
withinthem.Whileexistingoperationalpracticesareusuallyextendedtoenterpriseapplications
provisionedwithinIaaS,mostenterprisescurrentlyfailtofocusthesamelevelofattentiononthe
ongoingoperationalcontrolofSaaSapplications.
Developexpertiseinthesecurityandcontrolofeachofthecloudmodelsyouwillbeusing.Theuseof
IaaSrequiresknowledgeofvirtualizationsecurity,andnewtechniquesfornetworksecurity.SaaS
requiresknowledgeofprovidercharacteristicsandtheuseofcloudaccesssecuritybrokertools.All
formsofpubliccloudrequirecarefulcontroloveridentityandaccess.

Implementtechnologycontrolplanestoaddressthecomplexityofclouddiffusion.Enterprisesecurity,
identity,compliance,continuity,sourcing,andotherITroleswillincreasinglyusesingleconsolesthat
enablethemtomonitorandmanagetheuseofawiderangeofexternallyprovisionedservices.
RelatedResearch:
"DevelopingYourSaaSGovernanceFramework"(/doc/code/274895?ref=ddisp)
"APublicCloudRiskModel:AcceptingCloudRiskIsOK,IgnoringCloudRiskIsTragic"(/doc/code/261246?
ref=ddisp)
"BestPracticesforSecuringWorkloadsinAmazonWebServices"(/doc/code/275221?ref=ddisp)
"EverythingYouKnowAboutSaaSSecurityIsWrong"(/doc/code/260951?ref=ddisp)
"HypeCycleforCloudSecurity,2015"(/doc/code/27321?ref=ddisp)

Gartner Recommended Reading

SomedocumentsmaynotbeavailableaspartofyourcurrentGartnersubscription.
"HypeCycleforContentManagement,2014"(/doc/code/274692?ref=ddisp)
"Maverick*Research:WhenThingsBecomePeople"(/doc/code/278110?ref=ddisp)
"Maverick*Research:InaPostBitcoinWorld,MetacoinPlatformsEnabletheProgrammableEconomy"
(/doc/code/270509?ref=ddisp)
"HiretheRightStafftoBestEmploySmartMachines"(/doc/code/277156?ref=ddisp)
"MandateInvestigationofSmartMachineEnabledServicestoAccelerateBusinessOutcomes"
(/doc/code/269974?ref=ddisp)
"MultichannelMarketingSurveyResults2015:MarketersDoubleDownonRealTimeStrategies"
(/doc/code/277437?ref=ddisp)
"InvestImplications:'Wearables:NewInteractionsandNewOpportunities'"(/doc/code/290038?ref=ddisp)
"ITStrategistsMustPreparefortheRiseofVirtualPersonalAssistantsintheWorkplace"
(/doc/code/279840?ref=ddisp)
"DevelopingYourSaaSGovernanceFramework"(/doc/code/274895?ref=ddisp)

2015Gartner,Inc.and/oritsAffiliates.AllRightsReserved.Reproductionanddistributionofthispublicationinany
formwithoutpriorwrittenpermissionisforbidden.Theinformationcontainedhereinhasbeenobtainedfromsources
believedtobereliable.Gartnerdisclaimsallwarrantiesastotheaccuracy,completenessoradequacyofsuch
information.AlthoughGartnersresearchmaydiscusslegalissuesrelatedtotheinformationtechnologybusiness,
Gartnerdoesnotprovidelegaladviceorservicesanditsresearchshouldnotbeconstruedorusedassuch.Gartner
shallhavenoliabilityforerrors,omissionsorinadequaciesintheinformationcontainedhereinorforinterpretations
thereof.Theopinionsexpressedhereinaresubjecttochangewithoutnotice.