The Chinese horoscope for 2018 predicts that this year of the Brown Earth Dog will be a good year in all respects, but it will also be an exhausting year with many trials and challenges.
Since I published my 10 IT trends for 2018 last month, I have received a lot of good feedback which I would like to incorporate in a summary of these trends to kick off 2018. Here they are.
#1: IT will adopt IoT platforms to facilitate the application of IoT solutions. IoT solutions deliver valuable insight to support digital transformation and are rapidly becoming a strategic imperative in almost every industry and market sector. Cloud, analytics and IoT will greatly enhance not only OT dominated industries but also IT organizations. Data centers may be the first phase of IoT implementation where automation directors, analytic advisors, Splunk, and ServiceNow ingest data from ‘sort of smart’ devices to increase the operational efficiency of data centers, improve the processes / best practices that govern resource deployment and enable autonomous data centers.
The data center is a familiar environment to IT, however, most IT organization have very little knowledge or experience with OT systems like (SCADA) Supervisory, control and data acquisition systems which were designed to provide high-level process supervisory management of other peripheral devices such as programmable logic controllers and discrete PID controllers that interface to the process plant or machinery. Conversely OT systems have very little knowledge or practice with IT methodologies like cloud, containers, micro services, security, distributed storage and analytics. Building IoT solutions that provide real value can be difficult without the right underlying architecture and a deep understanding of OT technologies and business to properly simulate and digitalize operational entities and processes. Hitachi Vantara’s Chief Product & Strategy Officer Brad Surak weighs in with his predictions for IOT in 2018 and points out some of the complexity in integrating new technologies into existing IT and OT environments, managing the vast number of protocols in IIoT (Industrial IoT) that involve radio frequencies and low energy options, connecting devices from the edge with authentication, encryption, maintenance updates, and ability to communicate their presence and activity, and the lack of best practices in the evolving area of IoT.
This is where the choice of an IoT platform and the choice of an experienced services provider is important. Enterprises should look for an IoT platform that offers an open, flexible architecture that simplifies integration with complimentary technologies and provides an extensible “foundry” on which to build a variety of industry applications that companies need to design, build, test, and deploy quickly and with minimal hassle.
#2: Containers enable movement to the next level of virtualisation. Container-based virtualization is the latest virtualization technology that will gain wider acceptance in 2018. While virtual machines (VMs), abstract an entire device including the operating system (OS), containers are a new level of virtualisation which consists only of the application and all the dependencies that the application needs.
Containers are lightweight, in that they do not need a dedicated OS for each container, which helps to reduce costs. Their open configuration also means that they can run on numerous platforms and they allow applications to run isolated from one another, resulting in greater security. Monolithic applications can be written as micro services and run in containers, for greater agility, scale, and reliability. Enterprises are migrating and developing new applications with containers in order to be competitive in today’s market that is defined by agility and efficiency. As an organization, we have built our IoT platform, Lumada, on containers and micro services and are fully embracing the benefit that they bring by moving our management software for Pentaho worker nodes, Hitachi Content Intelligence and Hitachi Infrastructure Director to containers as well.
According to Gartner, the biggest inhibitor to the use of containers is the lack of persistent storage. Our Virtual Storage Platform (VSP)/Storage Virtualization Operating System (SVOS) storage has a plugin to provision persistent VSP storage in containers – a trend we expect many storage vendors to follow next year in IoT and other application platforms.
#3: Analytics and artificial intelligence. 2018 will see a growth in analytics and artificial intelligence (AI) across the board as companies see real returns on their investments. According to IDC, revenue growth from information-based products will double the rest of the product and services portfolio for a third of Fortune 500 companies by the end of 2018.
AI is becoming mainstream with consumer products like Amazon Alexa and Apple Siri, and Hitachi believes that it is the collaboration of AI and humans that will bring real benefits to society. Through tools like Pentaho Data Integration, our aim is to democratize the data engineering and data science process to make Machine Intelligence – a combination of Machine Learning and AI – more accessible to a wider variety of developers and engineers.
Tools like the Pentaho with R and Python connectivity, are steps in that direction. Lumada, Hitachi’s IoT platform, enables scalable IoT machine learning with flexible input and outputs, standardizes connections that can automatically configure and manage resources, and is compatible with Python, R and Java for machine learning.
#4: Data governance 2.0. 2018 will see new challenges in data governance which will require organizations to implement new frameworks. The biggest challenge will come from the General Data Protection Regulation (GDPR), which will give EU residents more control over their personal data. This regulation will drive up costs and increase the risks involved in collecting and storing personal data. Violations of the GDPR could result in fines totaling up to $21.75 million, or 4% of an organization’s total annual worldwide turnover of the preceding financial year.
Previous data governance was based on the processing of data and metadata. New data governance must now consider data context. If a user invokes their right to be forgotten, a company must be able to locate that individual’s data, eradicate it and provide proof that this has been done, subject to overriding legal holds. GDPR’s mandatory breach notification of within 72 hours also means organizations face a very short window to respond. The ability to do this is impossible if the data is scattered in different application silos and cannot cover data stored on mobile devices or in the cloud. In 2018, data governance frameworks will need to be updated to include content intelligence tools.
#5: Object storage gets smart. Many enterprises started their digital transformation last year but the first problem that they ran into was the ability to access their data. Data is often locked in isolated islands that make it costly to extract and use. These islands were built for purpose and not necessarily for sharing with other applications, and many contain data that is duplicated, obsolete or no longer used because of changes in business process or ownership.
Data scientists tell us that 80% of the work involved in gaining analytical insight from data is the tedious work of acquiring and preparing the data. The concept of a data lake is alluring, but you can’t just pour your data into one system, unless that data is properly cleansed, formatted and indexed or tagged with metadata so that the data lake is content aware. Otherwise you end up with a data swamp.
While object storage can store massive amounts of unstructured data and provide metadata management and search capability, the ability to be context-aware is missing. Object storage now has the ability to be “smart” with software that can search for and read content in multiple structured and unstructured data silos and analyze it for cleansing, formatting and indexing.
Products like Hitachi Content Intelligence can extract data from the silos and pump it into workflows to process it in various ways. Users of Content Intelligence can be authorized so that sensitive content is only viewed by relevant people and document security controls are not breached. Content Intelligence can create a standard and consistent enterprise search process across the entire IT environment. It can connect to and aggregate multi-structured data across heterogeneous data silos and different locations and provides automated extraction, classification, enrichment and categorization of all of an organization's data.
#6: Wider adoption of video analytics. Video content analytics will be a “third eye” for greater insight, productivity, and efficiency in a number of domains, beyond public safety. The algorithms to automatically detect and determine temporal, spatial, and relational can apply to a wide range of businesses like retail, healthcare, automotive, manufacturing, education and entertainment. Video, when combined with other IoT information like cell phone GPS and social media feeds can provide behavior analysis and other forms of situational awareness. Hitachi has used video analytics at Daicel, a manufacturer of automotive airbag injectors, in its quality management system to increase product quality, reduce cost of rework and root cause eradication. Retailers are using video to analyze customer navigation patterns and dwell time to position products and sales assistance to maximize sales. Video analytics relies on good video input so it requires video enhancement technologies like denoising, image stabilization, masking, and super resolution. Video analytics may be the sleeper in terms of analytics for ease of use, ROI, and generating actionable analytics.
#7: Blockchain projects will begin to impact IT. Blockchain will be in the news in 2018 for two reasons: First is the use of blockchain in cryptocurrencies, which saw growing acceptance in 2017. The value of the most popular cryptocurrency, Bitcoin, sky rocketed from$1,000 USD at the beginning of 2017 to nearly $19,000 USD by year end. While the value of Bitcoin fluctuates wildly it is viewed as a stable currency in countries that were plagued by hyperinflation. Japan and Singapore are also indicating that they will create flat-denominated cryptocurrencies in 2018 that will be run by banks and managed by regulators. Consumers will use this for P2P payments, ecommerce and funds transfers. This will lead many banks to turn to blockchain to help them build the capacity and processes needed to manage accounts in cryptocurrencies.
Second is the growing use of private blockchains in the financial sector for routine processes like internal regulatory functions, customer documentation and regulatory filings. Interbank fund transfers via blockchain ledgers are also expected to expand in 2018, and other sectors will begin to see prototypes with smart contracts and identity services for health care, governments, food safety and counterfeit goods.
The biggest challenge for blockchain users will be the processes and governance required to work within a blockchain consortium, agreeing to contract changes and considering its impact on other systems internal and external to an organization’s business. In the volatile world of crypto currencies, how do you calculate net present value when the value of bitcoin fluctuates $1000s of USD in one day?
#8: The time is right for biometric authentication. Every application we use requires authentication. The increasing numbers of passwords required to be maintained by consumers will drive a shift towards biometric authentication in 2018.
In reality, many of us use the same password for the accounts that we don’t think are very important. Unfortunately, hackers also know this, so once they discover a password, they will use it to successfully hack your other accounts. Businesses are coming to the realization that proxies that represent our identity - like passwords, ATM cards, and pin numbers - even with two-factor authentication, are hackable.
Smart phone vendors and financial companies are moving to solve this problem by using biometrics which represent the real user. But choosing the right biometric is important. If a biometric like a fingerprint is hacked, there is no way to reset it in the same way you would a pin number or password. Since we leave our fingerprint on everything we touch, it is conceivable that someone could lift our prints and reuse them. Hitachi recommends the use of finger vein, which can only be seen when infrared light is passed through a live finger to capture the vein pattern and is the most resistant to forgery.
#9: The extension of agile methodologies across the enterprise. Digital transformation is all about efficiency and working together to drive faster and more relevant business outcomes. This is why more information technology organizations are adopting agile methodology.
IT organizations have a legacy of siloed operations with server, network, storage, database, virtualization, and now cloud administrators passing change notices back and forth to deliver a business outcome. In fact, many would argue that IT was more focused on IT outcomes and not business outcomes.
Even when data centers use technology to create shared data repositories to break down the data silos, the different functions were still focused on their own objectives and not on the overall business objectives. Now with cross functional teams using iterative agile sprints of two to four weeks, IT can focus on relevant business out comes and deliver it more efficiently.
Under the leadership of Chief Information Officer Renee McKaskle, Hitachi Vantara has been using agile methodologies over the past two years to drive digital transformation, and the results have been highly impactful.
Agile provides us with a nimble approach, where small cross functional teams, with a clear direction and strategic milestones, can iterate through short sprints to ensure alignment across the board, communicate effectively, and focus on problem solving and achieving our common business goals. 2018 will see more enterprises move to agile and DevOps in software development, with agile methodologies being used across the enterprise.
#10: The Co-creation of value. Traditional business thinking starts with the premise that the producer autonomously determines value through its choice of products and services. Consumers have typically been consulted through market research but are passively involved in the process of creating solutions and value. In 2018, we will witness a shift in value creation, away from producer-centric, solution-value creation to a co-creation paradigm of value creation.
Producers and consumers can no longer survive in the digital world with this traditional approach to value creation. In the digital world, the pace of change is relentless and problems span across multiple domains, with a blurring of industry domains and boundaries. Producers cannot take years to develop a solution and consumers cannot plan their business on multi-year roadmaps that may not deliver what they need. If consumers and producers are to innovate, they must be active participants in the value creation process as co-creators
Hitachi sees co-creation as the process of collaborating with customers and ecosystem players in order to innovate and create new value for business stakeholders, customers and society at large. The company has been co-creating with a number of customers, including Daicel and Curtin University, and has developed a co-creation methodology that we expect will see further uptake in 2018.
Best Wishes for a successful 2018. This will be an exhausting year with many new challenges but in the end I believe it will be a good year.