How GE Sees Industrial Internet Trends Developing in the Coming Year

by Chris Preimesberger

Innovation and value creation in the realm of next-gen platforms, and applications will continue to disrupt legacy IT architectures. Investment specifically geared toward extending the capabilities of cloud, social, mobile and big data will accelerate and account for 30 percent of total IT spending and nearly all of the industry’s growth during 2015.

At the outset of 2015, global IT spending is expected to grow in the range of 3.5 percent to 4 percent. However, there will be a significant underlying divergence by geography as well as technology. Aggregated IT spending in mature economies is expected to grow no more than 2 percent globally (2.7 percent in the United States) while spending growth in emerging economies will be closer to 7 percent. Similarly, investment in next-gen technologies and services will rise approximately 13 percent, according to researcher IDC.

The transition of the IT delivery model toward cloud service providers (software applications as well as hardware infrastructure) will accelerate. Growth in data center spending will continue to be dominated by large cloud service providers, while IT vendor business models delivering software and infrastructure functionality via cloud services will significantly outgrow traditional on-site infrastructure/perpetual software licensing models.

With the massive scale of investment and commodity pricing posing as significant barriers to entry, there will be few new entrants and more likely consolidation in the infrastructure-as-a-service market. Conversely, with few barriers to entry, developers of new applications will continue to proliferate while benefitting from historically low cost economics enabled by next-gen development and delivery platforms.

Security threat detection and mitigation will remain a spending priority and will receive the least amount of scrutiny within corporate IT budgets. The unrelenting adoption of cloud, mobile and social media have significantly increased the complexity of how corporations and individuals interact with and try to protect their devices, systems, data, personal information and money.

Next-gen platforms and applications will enable new security innovations that protect the mobile edge of the network as well as data stored at the core. These innovations include payment platforms that are biometrically enabled, specific threat intelligence enabled by big data analytics and ubiquitous use of encryption for regulated data stored in the cloud.

The higher growth rate is attributed to increased interest in mobile advertising, versus the traditional online search and display ad market as well as increased use of programmatic advertising buying. Internet ad growth (excluding mobile) will remain a bright spot in an industry that expects to endure a 1 to 2 percent growth rate in 2015.

The mobile ad market was projected to top $12 billion in 2014, an increase of more than 65 percent year-over-year. This trend is forcing advertisers to rethink their advertising strategies and adapt them for tablets, smartphones and other mobile devices.

This will continue to gain incremental traction as cable and satellite companies look to combat the enormous growth of over-the-top (OTT) services. Traditional distributors are entering new, long-term and comprehensive contracts with content producers to expand digital rights.

Big data analytics and the IoT will continue to be major destinations for investment and innovation. According to IDC, the worldwide market for software, services and analytics related to big data will reach $125 billion in 2015. The edge of the network will continue to extend into the physical world with more “smart” cars, commercial buildings, homes, industrial equipment and wearables connecting to the Internet.