How businesses plan to accelerate growth in 2020

Further adoption of cloud computing and artificial intelligence will be on the agenda. But another factor may be edge computing, in which data is processed locally, says Deloitte analyst Paul Sallomi.

With 2020 just around the corner, businesses are contemplating their strategies to facilitate growth in the new year. What tools and technologies will companies pursue and adopt to ensure that they’re moving forward?

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Familiar areas such as cloud computing and artificial intelligence (AI) will certainly dominate. But 2020 could also be the year for “edge computing,” according to Paul Sallomi, global technology, media, and telecommunications analyst for Deloitte.

SEE: From cloud to edge: The next IT transformation (ZDNet special report) | Download the report as a PDF (TechRepublic)

“We expect to see more and more portable and fixed networks with local high-capacity, low-latency (real-time) processing capabilities that embed analytics and AI to transform the customer experience,” Sallomi says. “The benefits of edge computing can extend to factories, distribution facilities, autonomous vehicles—essentially any situation where data must be processed locally versus sending it to the cloud or a data center.”

In Deloitte’s 2020 Technology Industry Outlook, Sallomi says that cloud adoption will continue to grow next year but in a flexible way as companies look at both hybrid and multicloud environments.

A hybrid cloud approach, which encompasses both private and public clouds, is favored by many businesses as a stepping stone toward wider public cloud adoption. This is due to a range of factors, including a continued reliance on legacy systems and compliance with corporate regulations. But many businesses still have concerns about depending solely on public cloud providers, especially for mission-critical data.

Organizations will also increasingly turn toward a multicloud environment in which they use cloud services from multiple providers. Such an approach gives companies the opportunity to assess different providers before committing to specific ones for the longer haul, according to Sallomi. A multicloud strategy also helps organizations control costs and avoid being locked into any one vendor.

Many technology firms are shifting toward an everything-as-a-service (XaaS) approach, which incorporates such strategies as platform-as-a-service (PaaS), infrastructure-as-a-service (IaaS), and software-as-a-service (SaaS), Sallomi says.

With PaaS, database and application platform services are the largest segments, with blockchain, digital experience, serverless, and AI/machine learning platforms among the more recent offerings. IaaS offers such benefits as improved disaster recovery, ease of deployment, and platform scalability. And SaaS vendors can provide more customizable end-to end solutions, increased agility, and better ROI measurement.

Artificial intelligence will be another focus area for 2020 as many companies see it as essential to their innovation and growth. According to Deloitte’s 2018 “Global State of AI in the Enterprise, 2nd Edition” survey, 80% of the respondents said their AI investments had already led to ROIs of 10% or more. Those surveyed pointed to “enhancing products and services” and “optimizing internal business operations” as the primary benefits of AI.

Looking toward the new year, organizations are expected to expand their AI efforts in such areas as managing customer interactions, developing and testing products, personalizing products and services, delivering connected equipment, and enabling deeper involvement of personal assistants in the daily activities of consumers.

But one area that could see significant growth in 2020 is edge computing. With this approach, businesses collect and analyze data at the same locations where it’s generated (e.g., the edge of a network), rather than sending it to an offsite or cloud-based data center. Edge computing can prove effective at factories, distribution facilities, autonomous vehicles, and other environments where data must be processed locally. As such, it can offer such benefits as reduced latency and lower bandwidth costs.

Edge computing will see greater traction next year due in part to the growth of Internet of Things (IoT) devices and the increased portability of computing power and AI-driven tools, according to Sallomi.

An IDC report forecasts that in three years, 45% of IoT-generated data will be stored, processed, analyzed, and acted upon close to or at the edge of networks. This growth will be triggered by IoT applications in a range of industries, including manufacturing, retail, health care, energy, financial services, logistics, and agriculture.