Trends in (Computer and Communications) Technology

CharlesRobins2013

Written by: Charles Robbins, Managing Director, Fairmount Partners

I’m a bit nostalgic writing this article. Over 35 years ago, I gave a talk almost annually on “Trends in Technology”.  In those days qualifiers to “technology” weren’t needed, since commercial computing was barely past mainframes, and other technology fields such as communications, nanotech, biotech, etc., were yet to emerge into anything visible to the average person.  Those original talks introduced things that now seem mundane but then were mysterious and difficult to explain:  software and the idea of data communications – note that those were the days not only prior to the internet, mobile phone, laptop computer and GPS, but also before fax machines were prevalent.

Comparatively, today we live in a world of deep technological sophistication. I am fortunate to have been able to see this evolve, and foster my lifelong passion for technologies that can change the world. At Fairmount Partners, we focus on recognizing emerging technology industries and helping position technology businesses to optimize their businesses and value.  In the work we do we interact with literally hundreds of technology-based companies world-wide annually, attend key conferences and speak with major investors on a regular basis.  Based on that background, following are some key trends that we believe are at the heart of driving the next generation of technology innovation.

At the highest level, everything is becoming digital. By everything, I mean ultimately anything, from the person (through their handset), to refrigerators, to sneakers, to anything physical and tangible.  And everything digital is becoming tracked and able to communicate.  The cost of tracking, whether through GPS or radio-frequency identification, and further computing and communicating, is already low enough to spur innovation, and is dropping rapidly, enabling new innovations that can take advantage of huge prior and ongoing investment in infrastructure.  In addition, new connected objects that include innovative sensors, or include control mechanisms, are emerging, not to mention mobile objects such as drones.  Together this leads to the emergence of the Internet of Things (“IoT”) that, ultimately, is projected to lead to literally trillions of connected objects reporting, and ultimately interacting, in real time. This has profound implications.  Everything can report its status, location and movement.  This generates enormous volumes of data.

In addition, there are huge data stores that exist prior to and outside IoT, ranging from genomics and patient records, to financial market information to marketing data about individual habits. Together, this has generated huge focus on what is termed Big Data, the storage and analysis of huge data sets.

IoT and Big Data sound like full solutions, but they are only the first step. Systems that can effectively store and manage orders of magnitude greater volume of data efficiently are certainly important.  It gets interesting when we drop down one level and look at the next level of implied needs and opportunities for innovation.

First, there is the opportunity to wring incredible value from all of this data. There are static applications, wherever large stores of information are captured over time, to determine patterns and derive remarkable predictive and personalized insights.  For example, examining large stores of patient conditions, records, tests and genomics to determine patterns can drive breakthroughs in early detection and treatment of disease at the individual level, financial data can be used to predict markets, consumer data can be used to determine marketing strategies, and individual data such as driving telematics can be integrated with large historical data stores to determine auto insurance rates.  So, we are seeing newer companies with breakthroughs in pattern and predictive analytics to address these needs, both generally and in vertical industries.

Second, there is the opportunity to completely reengineer business processes based on real-time, dynamic, “closed-loop feedback systems”. Objects in motion, and situations requiring real-time response, not only require analysis of large historical databases, but require even more information related to an individual or situation integrated in real-time.  Additionally, two-way communications enable closed loop feedback systems that can adjust dynamically to situation, space and time.  This level of real-time dynamism requires very rapid computation on incredible amounts of information (we have seen up to 1,000,000,000,000,000,000 – a million x million x million – data points in certain cases requiring one-second response) and the integration of actionable information within systems.  This added complexity requires complete reexamination of the nature of how algorithms actually work.  We are seeing some exciting innovations beginning to emerge in these areas.

Virtually every aspect of computing and communications must be reexamined in the face of almost incomprehensible volumes of information, mobile computing and real-time self-adjusting personalized systems. This includes security, process control, version control, as individuals, objects and traditional computer systems evolve into a single, dynamic, temporally-spatially aware, geographically diverse and personalized system.  We see major opportunities, and emerging companies, across vertical industries, in each of these areas, often in unique and unanticipated forms, that we believe can truly change the world in the future as much as it has changed over the past forty years.  It’s truly a great era to witness!


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