What to Expect in the Tech Sector in 2020 | ITEK & SKYY
The technology sector will be playing a
more important role than ever in 2020. Like the advent of the motor industry in
the early 20th century, it is already starting to change the lives
of nearly everybody on the planet.
Underneath the growth of technology stocks
generally, however, there are also exciting investment stories that are
enjoying massive expansion, both here in the United States and further afield.
Cloud technology is a priority area for
Amazon and Google
Three of the world’s four largest companies
are in the Cloud sector, namely Amazon, Google and Microsoft. Amazon now
derives nearly 60%  of
its profits from Cloud Services, not from delivering books. Amazon is in the
business of helping small and medium companies with their secure data storage
The secure storage of data on servers that
could be miles away from your office, maybe in another country, is just the beginning
for Cloud services.
An ancillary to that is the Internet of
Things (IoT), the connectivity of ordinary devices like kitchen appliances and
cars, to the Internet. This technology will make machines smarter as it will
allow manufacturers to monitor the performance of devices and recommend changes
Companies like Tesla have been leading the
way in the development of IoT technology, using it to help them change the way
their cars consume fuel, for example. But they are the early adopters – soon we
will be taking IoT for granted.
The telecoms sector will be driven by 5G
You will also be reading a lot about 5G in
2020: the roll out of 5G mobile networks is already underway in much of the
developed world, including in the UK. Many large telecoms companies are
involved in this, among them AT&T, Ericsson and Huawei. 5G is about more
than just getting better coverage on your phone – it will enable a much higher
level of interactivity between the individual and his or her environment – paving
the way for the creation of smart cities, for example.
Data, and the way we manage is going to be
another prominent theme in 2020: artificial intelligence and machine learning
is changing the way companies deal with data, introducing more speed, scale and
convenience into the corporate world.
AI is one of the most transformative tech
evolutions of our times. Most large companies are exploring how they can use AI
to improve customer experience and streamline their business operations. For
now, many AI applications will continue to be provided via as-a-service
platforms. This allows smaller
businesses to simply feed in their own data and pay for the algorithms they
With more data comes Big Data – if you’ve
not come across this before, think in terms of the new oil. Data is becoming a
very serious competitive edge for larger companies. It helps brands to improve
the way in which they process information and isolate the inefficiencies in
their operations. But while we see the use of data expanding, we are also
seeing enormous consolidation in the corner of the IT sector that focuses on
data management. For example, in 2019 we saw Salesforce acquire Tableau in
order to enhance its own Big Data offering.
Advertising companies are changing the
way they work
Technology is also changing the way the
advertising world functions: most Americans under 30 spend more time on their
mobile phones than they do watching television .
One of the advantages of mobile devices is that they can also provide
advertisers with a lot more information on the habits of their owners than a
Digital advertising is now dominating
advertising spend. Political campaigns are focusing more on social media than
on television advertising as it helps them to target the constituencies which
could swing an election more specifically, drilling down into the electorate
using granular demographic data. If politicians see the digital opportunity, so
do big companies – I expect to see digital advertising agencies grabbing a
bigger piece of market share in 2020 from television advertising.
Health technology and cyber security –
the unsung heroes
2020 will also see further breakthroughs in
the field of health medicine. We don’t see many banner headlines from companies
in this sector, but technologies like DNA editing and CRISPR our building the
platform for some truly revolutionary breakthroughs in the future. Smart
devices and wearable technology are delivering new insights on patients to the
medical profession. Artificial intelligence is being used to help to sift this
data and there are obvious additional benefits from the enhanced screening
procedures technology can provide.
Another significant area of development is
cyber security. We hear a lot about data breaches when they happen to a large
company, but we see little of the battle going on behind the scenes between the
security specialists and the bad actors, which these days include some
governments. Cyber security is in a boom phase as both governments and
corporates turn to the professionals for help.
In 2019 we saw plenty of M&A activity
in the cyber security arena: according to Momentum Cyber there were more than
150 deals totalling more than $23 billion, including deals as large as $4
This is evidence of the size and scale of some of the companies already
dedicating themselves to cyber security.
It is still a young industry, estimated at
about $131 billion in size, according to Fortune Business Insights. They
estimate this sector will grow to $289 billion by 2026 .
This growth is being driven by a mixture of existing and growing threats, and
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Article Date: 6th February 2020.