Findings
Interest in emerging technologies is peaking. Enterprise curiosity around Edge and AI is strengthening, while blockchain is yet to gain mainstream popularity
Omdia’s London Tech Week and TechXLR8 survey 2020 revealed that interest in Edge services and AI is gaining traction as increasing number of enterprises look at ways to adopt emerging technologies to maintain competitiveness and growth. As 5G becomes a reality across regions, enterprises are looking at ways to leverage Edge services to process data faster by transferring storage and compute powers to the end points and devices where data is generated. Enterprises believe that adopting Edge will improve operational agility and deliver better customer engagement. Blockchain technology, on the other hand, is expected to help develop new business models and value chains, improve transparency and security across the supply chain, while AI is expected to enhance existing products and services, improve decision making and aid in the creation of new products and services (see Figure 1).
Figure 1: Top 3 business drivers of emerging technology adoption
Edge
Adoption of new technologies (50.97%)
Improved operational agility (41.29%)
Improved customer experience (38.71%)
Blockchain
Create new business models and valuer chain (44.76%)
Greater transparency (39.86%)
Greater security and lower risk (34.97%)
AI
Product and service enhancememt (53.57%)
Creation of new services and products (46.43%)
Making better strategic decisions (40.71%)
Source: Omdia TechXLR8 Survey 2020; n=155
While 90% of the respondents consider AI as critical or very important to their business strategy, 70% believe that Edge services will play a crucial role in their business’ future (see Figure 2). However, enterprise interest in blockchain has not moved beyond isolated implementations and pilots and there have not been enough large-scale, enterprise-wide implementations to fuel wider, mainstream adoption.
Figure 2: Interest in emerging technologies is growing in the enterprise
Source: Omdia TechXLR8 Survey 2020; n=155
Q: How do you view the relevance of these emerging technologies to your organization or project in the coming 12 to 24 months?
Only 35% of survey respondents consider blockchain to be critical or very important to their strategy. We have also seen decreasing investment in mainstream blockchain solutions from the service provider community as enterprise interest and adoption continues to focus on specialized use cases rather than enterprise-wide application of the distributed ledger technology.
Living on the Edge appeals to enterprises
Edge services is a growing area that enables devices to collect, store and compute at local and edge locations before connecting and sending information over to the cloud. As we see exponential growth in the number of connected devices the amount of data these will generate is also growing equally, if not faster. It is not feasible to transmit this volume of data to the cloud to be processed, and not sensible in some cases such as connected cars that require really fast response times in emergencies. Being able to process data at source and selecting which information needs to be shared to the cloud has the ability to deliver real real-time data and insights as well as adding a layer of security to the data being collected (see Figure 3).
Figure 3: Edge has many potential applications in the enterprise
Source: Omdia TechXLR8 Survey 2020; n=155
Q: Which of these initiatives or applications is your organization planning to apply edge computing to? (Select up to 3)
However, actual adoption of Edge remains limited with nearly 72% of survey respondents still evaluating the pros and cons of the technology or planning deployment. Of the remaining respondents, only 2% are planning to significantly expand deployment. Currently, about 38% of survey process 10% or more of their data at the edge and this is expected to nearly double to 70% in the next 24 months as 5G becomes a reality for a larger section of enterprises globally (See Figure 4).
Figure 4: Enterprise adoption of Edge services has quite a long journey ahead
Q: % of data processed at the edge
Q: Where is your enterprise on its edge journey currently?
Q: Most Important factors for deploying Edge (Select up to 2)
Q: Top barriers or inhibitors to adoption of edge services (Select up to 3)
Source: Omdia TechXLR8 Survey 2020; n=155
Business leaders believe that Edge services will help in improving the security, agility and resilience of their operations, while also providing faster access to insights for driving decision making. Though Edge services have lot of benefits to offer to businesses adoption is hindered mainly due to lack of knowledge about its benefits to the organization, concerns about the lack of focused development of edge solutions, the potential cost of building and managing the infrastructure needed to support it, and lack of standards that leads to fragmentation in the technology space.
The blockchain party has not hit high gear
Omdia’s research shows that enterprise interest and investment in blockchain - the distributed ledger technology behind cryptocurrency – is waning. Despite blockchain use cases promising to revolutionize everything from the grocery supply chain to healthcare providing lot of fodder for thought and experimentation, the technology has yet to see widespread adoption. Current initiatives around blockchain in the enterprise include applications around data validation, secure payments, and controlling data access apart from the digital currency aspect (see Figure 5).
Figure 5: Enterprise investment in blockchain use cases is limited
Q: Block chain use cases your organization working on (Select all that apply)
Q: What are advantages of blockchain for your specific industry? (Select up to 3)
Q: Metrics used in measuring blockchain case results (Select up to 3)
Source: Omdia TechXLR8 Survey 2020; n=143
The top applications of blockchain in the enterprise revolve around data and digital payments, and enterprises anticipate these to provide benefits such as ability to create greater transparency, better security, and fraud reduction. However, more than a 36% of respondents are unaware of the metrics used to measure performance of these initiatives and only 6% of the survey respondents stated they have already realized benefits. Around 20% of respondents stated it will take between one to two years, another 21% stated three to five years and 15% stating that it would take over five years for them to see results. A large majority - 38% - stated that they either do not plan to ever invest in blockchain or have given up on ever seeing returns on their investments (see Figure 6). This has been a major hurdle in the wider adoption of blockchain.
Other hurdles in the growth of the blockchain technology include trouble integrating it with legacy systems (34%), lack of skills in-house (33%) and the fact that it has not been identified as a priority for the business (29%).
Figure 6: Major barriers to adoption of blockchain remain
Q: Expected time frame to make a measurable, verifiable return on your blockchain investment?
Q: Barriers that prevent the adoption and scale of blockchain technology in your business (Select up to 3)
Source: Omdia TechXLR8 Survey 2020; n=143
There is insufficient understanding of how the technology would function in the existing IT environments of businesses as well as an inability to explain how blockchain is different and better than other means of safeguarding data transactions such as cryptography. The apparent cost of adoption and delays in realizing tangible returns on investment are holding back enterprises from making larger investment in this area. However, the distributed ledger technology cannot be completely written off as it has applicability in certain use cases. It is highly likely that future technological advances in computing could likely revive interest in the space, making it easier to implement and faster to derive results from applications of blockchain, but for now it is clear that enterprises are not going to be pouring millions into this space.
The uses of AI are far from driving an intelligent enterprise
Enterprises access to data and technology has become nearly universal, with businesses of all sizes looking for ways to leverage this data for driving growth. AI technologies have the potential to offer enterprises many opportunities to level the playing field by enabling greater efficiencies, more accurately predicting variabilities in operations, and reducing time, labor and costs associated with repeatable tasks. As deployment of AI in the enterprise accelerates, the major areas of application currently are AI augmented workforce. Nearly half of the survey respondents are using AI for predictive analytics of business and operational data, IT automation (35%) and enhancing customer service (29%) round off the top three use cases for AI in the enterprise (see Figure 7).
Figure 7: Enterprise adoption of AI spans multiple use cases
Q: Top AI use your organization working on (Select all that apply)
Source: Omdia TechXLR8 Survey 2020; n=140
AI has the ability to strengthen the core of the intelligent enterprise as it has the ability to parse through complex data and recognize patterns that are not readily visible to the human observer. However, current adoptions of AI are focused more on the operational side – automating tasks, predictive maintenance, virtual assistants – with only 20% of respondents using it for forecasting business and market changes, which is what offers the ability to be more competitive.
The ability of an enterprise to successfully leverage AI for improving competitiveness depends heavily on how accurately it is able to articulate the problem and its business impact, and define a value associated with it. It is due to this reason that 27% of survey respondents stated that AI has only given them a slight edge over the competition, with only 7% stating that it helped them leapfrog ahead of competition (see Figure 8).
Figure 8: Not every enterprise is seeing similar results from AI adoption
Q: Would you say that the adoption of AI has allowed your organization to...
Source: Omdia TechXLR8 Survey 2020; n=140
Given the constant evolution that the AI space is currently undergoing, it is difficult to grasp what defines competitiveness for an enterprise and what AI-driven growth looks like. AI is not a singular solution but a term that encompasses a variety of technologies and solutions that is multi-layered and increases in complexity at the higher levels. For instance, a chat-bot is one of the basic AI solutions in the market while a virtual assistant able to process complex interactions using a multitude of tools including natural language processing (NLP).
Enterprises need to have a better understanding of the scenarios where AI can offer significant advantages and view it as one of the enablers of competitiveness rather than the magic bullet that will solve major problems at the get go. There are also other challenges that need to be addressed such as lack of skills, implementation challenges, addressing data and privacy issues, cost, and finding ways to measure success (see Figure 9).
Figure 8: Not every enterprise is seeing similar results from AI adoption
Q: Top challenges for AI intiatives in your organization? (Select up to 3)
Source: Omdia TechXLR8 Survey 2020; n=140
Appendix
Methodology
This report leverages data from the TechXLR8 Survey London 2020, a survey of 150+ enterprises as a precursor to its (now postponed) TechXLR8 2020 event to understand enterprise buying trends in the UK around emerging technologies like artificial intelligence (AI), blockchain, and Edge services.
Further reading
Digital Entropy is Rapidly Emerging as a Major Side Effect of Digital Transformation, ENS002-000125 (April 2020) Cognizant's road to recovery is a bumpy one, ENS002-000119 (February 2020) Service Provider Snapshot: Infosys SAP Services, ENS002-000114 (January 2020) Transformation Fatigue and How To Survive It, ENS002-000115 (January 2020)
Author
Hansa Iyengar, Senior Analyst, Digital Enterprise Services askananalyst@omdia.com
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