Commentary

Algorithms In A Post-App World

Gartner analysts shared their vision for the future of technology in Orlando at the research firm's Symposium/ITxpo in October. They described a world where information gets pushed to consumers, rather than pulled in through searches or actions, and cloud services are increasingly 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 take note. It's the stuff that will be 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 that spending on Internet of Things (IoT) hardware will exceed $2.5 million every minute in 2016.

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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.

This column was previously published in Data and Targeting Insider on October 7, 2015.

1 comment about "Algorithms In A Post-App World".
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  1. Jennifer Jarratt from Leading Futurists, LLC, November 3, 2015 at 4:25 p.m.

    I agree with you that intelligent agents are the future of apps. Like you I've been saying that for years. All of us need curation services, help with our online journeys, advocates for us in shopping and services.

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