Algorithms In A Post-App World

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Gartner analysts shared their vision for the future of technology this week in Orlando at the research firm's Symposium/ITxpo. They described a world where information gets pushed to consumers, rather than pulling in information through searches or actions, and cloud services become more in demand. 

Calling it the post-app era, Gartner estimates that by 2020 smart connected devices in the form of virtual personal assistants will facilitate 40% of mobile interactions. "The technology will draw inferences about people, content and contexts. Based on these information-gathering and model-building efforts, VPAs can predict users' needs, build trust and ultimately act autonomously on the user's behalf," per Gartner.

I've been writing about it for years. It's more of a CIO geeky tech thing, but search marketers -- in fact, marketers in general -- need to lift their heads and take note. It's the stuff running advertising and marketing in the future.

Worldwide IT spending is virtually flat at $3.6 trillion in 2016, up just 1.5% from 2015, according to Gartner. The IT industry is being driven by a digitally connected world, which means CIOs continue to lose budgets to whom, marketing departments? Gartner predicts spending on Internet of Things (IoT) hardware will exceed $2.5 million every minute in 2016.

In five years, 1 million new devices will come online every hour. The interconnected devices create billions of new relationships driven by data and algorithms. In this world one report suggests 39 million terabytes of storage is deployed globally, but by 2019 that figure will more than double to 89 million terabytes.

Data is inherently dumb unless algorithms tell it what to do, explains Peter Sondergaard, SVP and global head of research at Gartner.

This new world requires IT and marketing departments to work more closely together. Gartner released data late last year suggesting that digital marketing budgets would rise 8% in 2015. The larger the company, the higher the marketing budget would rise as a percentage of revenue. The percentage varied, but those companies with revenue of $5 billion or more reported 11% increase, compared with 9.2% for those with revenue between $500 million and $1 billion.

In the world of algorithms, Wall Street analysts factor in a company's algorithmic worth when evaluating their stock price. Sondergaard says organizations will become valued, not just on their big data, but the algorithms that turn that data into actions, that ultimately impact customers.

The increase of algorithms will force companies to rethink risk factors. Gartner predicts that by 2017, the average IT organization will spend up to 30% of its budget on risk, security and compliance, and will allocate 10% of their people to these security function --  tripling 2011 levels.