Enterprise to assume bigger role in technology adoption: Deloitte

After a decade of consumers being the trendsetters in the adoption of emerging technology, the enterprise sector will take on a bigger role in 2015 as leaders in the use of cutting-edge IT products, according to a new report from Deloitte Touche Tohmatsu Ltd. The annual report predicting the coming year’s technology trends from Deloitte’s Canadian office, released Tuesday, said from the 1950s until about 10 years ago “new technologies and advanced versions of technologies were usually adopted by the enterprise first: the mass-market consumers would then take years or even decades to catch up.” Computers, Touch-Tone phones and electronic calculators are some of the examples cited. The report added that, over the last decade, consumers have been the first to adopt products including large-screen smartphones, tablets and fibre-to-the-home Internet service. The pendulum will swing back to enterprises this year, Deloitte said. For example, the adoption of wearables such as smart glasses has been slower than expected in the consumer market, though such products are generating interest from industry sectors such as security, health, warehousing and materials handling. Among the 10 predictions Deloitte made for the coming year, two others concerning the Internet of Things (IoT) and 3D printing support the idea of enterprises again becoming the main early users of technology. The report said that “the powerful customization and data analysis that is possible through IoT is not of interest to most consumers.” It said IoT applications, such as automated appliances or home utilities, tend to be expensive and don’t offer the degree of savings for consumers that can be realized from the larger-scale operations such as power plants. Deloitte said the global market this year for IoT devices will be about $10 billion US and $70 billion US for associated services. Deloitte predicted that one billion IoT devices will be shipped in 2015, and 60 per cent of that will be destined for enterprise customers. The enterprise sector will also account for more than 90 per cent of IoT services revenue, it said. The report said global revenue for IoT devices and connections is growing 10 to 20 per cent a year, while related services, apps and analytics are expanding by 40 to 50 per cent annually. Deloitte said there would be $1.6 billion US worth of 3D printers sold this year, up 80 per cent from 2014. It said consumers would buy about 70 per cent of these units though enterprises would account for almost 90 per cent of the revenue for such devices. The report said most consumer-oriented 3D printers are “small units with relatively limited capabilities for producing functional parts.” It said the devices sought by businesses are “industrial machines are capable of producing finer details, are faster and can print larger objects; but the largest units can cost almost a million dollars, and even smaller machines cost on average hundreds of thousands of dollars each.” Drones were cited as another form of technology growing in popularity, though Deloitte said their usefulness is more apparent in commercial operations, such as agricultural surveying, than for consumer purposes. Past enterprise-led technological trends, including the use of computers and calculators, were eventually picked up by the masses in the consumer sector. Duncan Stewart, Deloitte’s director of research for technology, media and telecommunications in Canada, said this could happen with products such as IoT and wearables, though probably not any time soon with 3D printers or drones. “Do I want something that will zoom up in the sky and follow my dog as he’s off on his walk on his own? No,’ ” Stewart said in a phone interview. “My dog doesn’t walk on his own; he’d get hit by cars. The fact that I can remotely monitor my dog is irrelevant. I don’t want my dog wandering around on his own.” As for wearables, Stewart said: “I can see enterprise piloting that and people going, ‘Hey, I use this at work; it would kind of be fun to have this at home.’ It’s almost exactly the same way the desktop calculator worked — ‘Hey, why am I working out long division on this piece of paper when there’s a $30 machine that does this now?’” Among the other predictions made by Deloitte was that use of mobile phones for in-store payments will grow. It said five per cent of the 600 million to 650 million smartphones in the world equipped with near-field communications (NFC) will preform this function at least once a month in 2015 compared to less than 0.5 per cent of the 450 million to 500 million capable phones at the midway point of 2014. “We expect the largest card issuers in the majority of the largest developed countries to have activated NFC smartphone payments by end 2015, although adoption patterns are likely to vary by region, due to differing economics and technical (e.g. payments processing) models.” Deloitte’s report said. Stewart said wireless carriers could be beneficiaries of increased usage of smartphones as payment tools. “There are lots of people — not just in Canada but worldwide — who still have feature phones without data plans,” Stewart said. “Or they have smartphones and they don’t have data plans: they use them only as phones and play the odd game with them on WiFi. The idea that you can buy a data plan and you can now , that’s a huge win because it’s the tipping point between zero and $50 a month; it’s not the tipping point between a $50-a-month plan and now I need a $70-a-month plan.” Deloitte also said that about 1.4 billion smartphones will be sold worldwide, and a record one billion of those sales will be upgrades as people seek faster Internet speeds, higher-quality cameras or to simply keep up with their peers, among other things. International Data Corp. forecast in December that smartphone shipments would amount to 1.3 billion for 2014 and rise to 1.4 billion this year. “This year, a common complaint among smartphone users will be that their device ‘feels slow,’ ” Deloitte said in its report. “This will be fact as well as perception: smartphones used frequently for data applications tend to last about four years before becoming too slow to operate.” Stewart said this prediction contrasts with the view of many pundits that the upgrade market for smartphones was dead. “If we’re at a period where there hasn’t been a new phone in a while, people go, ‘Oh, I guess it’s all over.’ And then of course three months later when the new whatever-it-is comes out, and there’s lineups around the block, everybody goes, ‘Whoops, I guess we were wrong. I guess people are still interested.’ ” The report also predicted the gap between the fastest and slowest Internet speeds will grow. It said average speeds of broadband service in most markets will increase by 15 to 25 per cent this year, though this “obscures significant differences between households,” noting that in many areas the top 10 per cent of households have 10 times the Internet speeds as the bottom 10 per cent. Stewart said such a growing discrepancy might prompt discussion among regulators and service provides about what qualifies as “broadband” or “high speed” Internet. The CRTC’s stated goal is for most of the country to have access to “broadband” Internet download speeds of at least 5 Mbps by the end of this year. However, Stewart noted that with the growth of fibre-to-the-home connections, it’s not uncommon for households to have 100 Mbps or more. “By narrowing the range to, say, 25 and up, it makes the term probably more useful,” he said. Rounding out its predictions for this year, Deloitte said: print will remain the dominant format for books despite the popularity of e-readers; millennials will spend $7 billion in Canada on media consumption including traditional formats such as TV and newspapers; “click and collect” retail where people order products online and pick them up in person will thrive in Europe though it’s unclear how this will play out in Canada; and short online videos of 20 minutes or less will not, as some suggest, emerge as significant competition to traditional TV programming. — With reporting by Derek Abma at dabma@thewirereport.ca and editing by Peter Henderson at phenderson@thewirereport.ca

Enterprise to assume bigger role in technology adoption: Deloitte

News | January 12, 2015

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Enterprise to assume bigger role in technology adoption: Deloitte

News | January 12, 2015

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

Bell seeks CRTC clarity amid class action alleging unreasonable prison call rates

Bell, Northwestel tell CRTC to leave billing dispute with Iristel in hands of the court

Bell, Northwestel, reach agreements with Iristel to suspend disconnection notices

CRTC greenlights Northwestel Connecting Families packages

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us