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Tech predictions 2016: 4 business trends to watch

ZDNet editors Larry Dignan, Steve Ranger, Chris Duckett, and Jason Hiner map out four important technology trends to watch, from AI to Apple issues to Chinese vendors to corporate VR.
Written by Jason Hiner, Editor in Chief; Chris Duckett, Contributor; Larry Dignan, Contributor and  Steve Ranger, Global News Director
2016 tech
Image: iStockphoto/graphicnol

The relentless innovation machine never stops turning in the tech industry, but that sucker also throws out a lot of noise. A big part of our job is helping you filter out the noise. As you look into 2016 and think about your tech strategy, here are the four big themes to watch.

ALSO SEE: The 5 trends that rocked business tech in 2015

1. AI: The race is on [Larry Dignan]

Artificial intelligence was a key thread through 2015 and will become an even bigger one in 2016. Meanwhile, tech vendors are racing to open source machine learning technologies and other tools. On the enterprise front, IBM is beginning to scale its Watson cognitive computing system by breaking it down to services and engines that can connect to the cloud via APIs. On the consumer front, everyone from Facebook to Google to Microsoft to Amazon and Apple have some kind of artificial intelligence play.

Simply put, digital assistants are just the beginning. IT and business decision makers need to ponder how they will deploy their digital workforce--an army of algorithms and machine learning systems that will automate many tasks--and find a role for humans. For companies, digital automation, machine learning and artificial intelligence are natural transitions to make.

For your career, the race will be on to find a role for humans. Let's face it: Artificial intelligence may destroy as many jobs as it creates. AI and how it affects the employment landscape was a focus of one of our special reports this year. Next year, artificial intelligence's impact on humanity will go from theoretical to more of a policy debate. Meanwhile, the industry will keep developing. Here are some items to ponder as 2016 unfolds for the AI community:

2. Apple's rally will stall [Steve Ranger]

With the Apple Watch slow to gain momentum and the iPhone possibly seeing its first-ever drop in sales, 2016 is going to be a year of consolidation rather than high excitement for Apple.

Morgan Stanley has predicted that iPhone sales may drop by as much as 5.7 percent next year, thanks to higher costs in international markets and a smartphone market that is increasingly saturated.

Smartphones are a mature, well-understood technology now, which makes it hard to wow consumers. Sure the iPhone 7 (or whatever else it is called) will have some neat new features: perhaps wireless charging or waterproofing will put in an appearance, but there's just not much more to add to the iPhone (or any other handset) to make it exciting.

So where does that excitement come from next ? It's still very early days for Apple's next big thing, the Apple Watch. While few would dare to bet against Apple, the smartwatch doesn't seem to be generating the same levels of adoration some expected. It may be that the next generation Apple Watch due in 2016 will be more desirable, but for many it seems to be a gadget still lacking a clear role--like all smartwatches.

As for Apple's other big bets, if the rumours about Apple's electric car are true that's still not likely to arrive for a few years--perhaps three to five.

Still, Apple has plenty of areas to make steady progress: it is still advancing into the enterprise with the iPad Pro and into mobile payments with Apple Pay--solid, if not glamourous.

3. Next storage giant is Chinese [Chris Duckett]

While the headlines in storage this year dealt with market consolidation -- thanks to Western Digital's purchase of Sandisk for $19 billion, and Dell and EMC set to join forces--the sleeper pick for the year has been what Tsinghua University has been cobbling together in China.

In case you missed it in May, Tsinghua's subsidary, Unisplendour teamed up with HP to form a new business called H3C to sell HP's China-based server and storage products, as well as its technology services.

Under the terms of the agreement, Unisplendour acquired a 51 percent share of H3C for $2.3 billion, with HP bringing its H3C Technologies subsidiary and HP China businesses to the table.

Not content to have majority ownership of HP's Chinese assets, Unisplendour turned around in October to purchase a 15 percent stake in Western Digital for $3.8 billion.

"We believe this long-term investment will serve as a constructive collaboration model for Chinese and US companies to work together for success," Weiguo Zhao, chairman of Tsinghua Unigroup and Unisplendour Corporation said at the time.

A month later, Western Digital and Unisplendour were at it again, with a joint venture formed to sell Western Digital data centre storage arrays in China. Once again, Unisplendour has a 51 percent stake in the unnamed company.

In between these deals with Unisplendour, Western Digital acquired Sandisk for $19 billion to form a company with close to $20 billion in yearly revenue--a company that Unisplendour will have a 15 percent stake in.

So, at the time of writing, it seems that regulatory approval is all that stands in the way of Unisplendour becoming a major storage player, and when you consider that counted among the alumni of Tsinghua University are current Chinese President Xi Jinping, and his predecessor Hu Jintao, the company will not be lacking political influence in the Middle Kingdom.

Even if overseas regulators limit Unisplendour to focusing on the Chinese market, it will still be a massive storage vendor. However, if it is able to expand overseas like it desires, and perhaps even add companies like Micron Technologies to its stable, then we are seeing the creation of a true storage and semiconductor behemoth.

4. VR will become a business force [Jason Hiner]

With highly-anticipated 2016 launches of three VR products--Oculus Rift CV1, HTC Vive, and Sony Playstation VR--the next year is shaping up to be a major turning for the long-anticipated technology. Plus, we've got Microsoft's augmented reality HoloLens headset launching its devkit in Q1. And, we'll certainly see more custom Google Cardboard promotions likes the ones from The New York York Times and Star Wars: The Force Awakens.

If VR felt like it was popping up everywhere in the second half of 2015, then it's likely to get oppressively ubiquitous in 2016. There will be VR news stories, VR ads and commercials, and of course, VR entertainment of all kinds.

But, the VR advances that will fly under the radar are the ones that will be the most useful and valuable. We're going to see businesses put VR to use in creative ways that will provide a glimpse of the next generation of business computing. A few examples will include immersive training for difficult jobs, three dimensional data visualizations, full multimedia product demos, medical rehabilitations, defense and military planning, and virtually limitless possibilities in education.

So when you see the splashy ads, billboards, and commercials spouting the new VR headsets and their new forms of entertainment in 2016, think instead of the ways the technology is going to be used for far more useful things in the years ahead.

ZDNet's Monday Morning Opener is our opening salvo for the week in tech. As a global site, this editorial publishes on Monday at 8am AEST in Sydney, Australia, which is 6pm Eastern Time on Sunday in the US. It is written by a member of ZDNet's global editorial board, which is comprised of our lead editors across Asia, Australia, Europe, and the US.

Previously on the Monday Morning Opener:

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