Why AI Champions Gain Lasting Strategic Advantages

Courageous leadership is most valuable when others fail to act, due to fear and uncertainty. As an example, when a pandemic disrupts the Global Networked Economy, there's still an opportunity for bold and brave executives to lead an investment in platforms that enable sustainable digital growth.

Global spending on artificial intelligence (AI) is forecast to double over the next four years, growing from $50.1 billion in 2020 to more than $110 billion in 2024. Investments in AI systems will accelerate as more organizations deploy new platforms for digital transformation projects, according to the latest worldwide market study by International Data Corporation (IDC).

The compound annual growth rate (CAGR) for AI technologies and associated platforms will reach 20.1 percent during the 2019-2024 forecast period.

Artificial Intelligence Market Development

"Companies will adopt AI -- not just because they can, but because they must," said Ritu Jyoti, vice president at IDC. "AI is the technology that will help businesses to be agile, innovate, and scale."

The companies that become 'AI powered' will focus on proven use cases. They'll use AI to convert data into information and then into knowledge; use AI to understand relationships between knowledge and apply the learning to business problems; plus use AI to support business decisions and increase business process automation.

Two of the leading drivers for AI adoption are delivering a better customer experience and helping employees to improve their performance. The leading use cases for AI include automated customer service agents, sales process recommendation and automation, automated security threat intelligence and prevention, plus IT operations automation.

Combined, these four use cases will represent nearly a third of all AI platform investments this year. Some of the fastest growing use cases are automated human resources (HR), enterprise IT applications automation, and pharmaceutical research and discovery.

The two industries that will invest the most in AI solutions throughout the forecast period are Retail and Banking. The Retail industry will largely focus its AI investments on improving the customer experience via chatbots and recommendation engines, while Banking will include spending on fraud analysis and investigation and program advisors and recommendation systems.

Discrete Manufacturing, Process Manufacturing, and Healthcare will round out the top 5 industries for AI spending in 2020. The industries that will see the fastest growth in AI investment over the 2020-2024 forecast are Media, Federal or Central Government, and Professional Services.

That said, according to the IDC assessment, the COVID-19 pandemic has caused a slowdown in AI investments across the Transportation industry, as well as the Personal and Consumer Services industry, which includes leisure and hospitality businesses.

IDC analysts believe that these industries will be cautious with their AI investments in 2020 as their focus will be on cost containment and revenue generation rather than innovation or digital experiences.

In the short term, the global pandemic caused supply chain disruptions and retail store closures with continued impact expected to linger into 2021 and beyond. For the most impacted industries, this has caused some delays in AI deployments.

Elsewhere, leaders capitalized on the opportunity to become more resilient and agile. For those forward-looking executives, AI will be a key technology in the road to their recovery. Adopting AI platforms will enable them to rebuild or enhance future revenue streams and commercial operations.

Software and services will each account for a little more than one third of all AI spending this year with hardware delivering the remainder. The largest share of software investment will go to AI applications ($14.1 billion) while the largest category of services spending will be IT services ($14.5 billion). 

Computer Servers ($11.2 billion) will dominate AI hardware investment. AI Software will see the fastest growth in spending over the forecast period with a five-year CAGR of 22.5 percent.

Outlook for AI Platform Investment Growth

On a geographic basis, the United States will deliver more than half of all AI spending throughout the forecast, led by the Retail and Banking industries. Western Europe will be the second-largest geographic region, led by Banking, Retail, and Discrete Manufacturing.

China will be the third-largest region for AI investment with State or Local Government, Banking, and Professional Services as the leading industries. The strongest spending growth over the five-year forecast will be in Japan (32.1 percent CAGR) and Latin America (25.1 percent CAGR).

I believe that there are unprecedented opportunities to execute progressive digital transformation projects in some sectors of the economy -- such as international travel and hospitality -- because many of the competitors are somewhat incapacitated and unable to deliver their planned innovations.

The 'Remote Work' Trend Drives Networking Investment

The Work from Home (WFH) phenomena has fueled the need for more devices, better internet access, and secure networking technologies. Plus, the COVID-19 pandemic is now driving demand for Wi-Fi customer premise equipment (CPE) as millions of people work and learn from their homes.

According to the latest global market study by ABI Research, the closely related worldwide Wi-Fi CPE market will see vendors ship more than 223 million units in 2020 -- that's a surge of 10 million units from 2019 reported growth.

"Stay-at-home orders imposed in the first quarter of 2020 forced millions of consumers to work from home and students to do home-based learning, creating the need for ultra-reliable broadband and Wi-Fi connectivity in households worldwide," said Khin Sandi Lynn, an analyst at ABI Research.

Wi-Fi CPE Market Development

There has been a sudden spike in the adoption of Wi-Fi routers and wireless network extenders as consumers seek a reliable Wi-Fi connection that can simultaneously support multiple users and devices.

That growth in the use of applications -- such as video conferencing, live TV streaming, and online gaming at home -- resulted in consumers adopting Wi-Fi CPE for better coverage and higher capacity. 

Although some governments are reopening the economy, the demand for higher efficiency Wi-Fi solutions will continue beyond the current pandemic. The adoption of entertainment platforms and IoT devices in broadband households are driving increasing shipments of Wi-Fi mesh systems and CPE with new Wi-Fi standards.

Wireless networking CPE with 802.11ac standard represents ~80 percent of total CPE units shipped at present. However, early demand for Wi-Fi 6 (802.11 ax) devices is set to grow across the globe.

Telecom network operators such as Com Hem and Telefonica have introduced CPE supporting Wi-Fi 6 to their customers. Availability through both the telecom service provider and retail markets is expected to significantly drive adoption in the years to come.

"Not surprisingly the COVID-19 pandemic caused delays in enterprise Wi-Fi deployments in 1Q 2020," Lynn points out. "As businesses evaluate their investment priorities based on economic conditions, the adoption in the enterprise segment is likely to remain limited in the short term."

In addition, telecom carrier Wi-Fi deployments have been slowing down as LTE wireless network coverage expands across most global regions. This trend will further slow Wi-Fi CPE unit shipments to the enterprise market segment.

Nonetheless, the migration to Wi-Fi infrastructure with CPE supporting higher performance Wi-Fi standards -- such as Wi-Fi 6 (802.11ax) -- creates an opportunity for the enterprise CPE market in the long term.

Furthermore, the increasing use of live video streaming during online corporate events and in the healthcare and education markets is expected to further drive more Wi-Fi 6 technology adoption.

Outlook for Wi-Fi Technology Innovation and Growth

It's forecast that Wi-Fi 6 will become the dominating Wi-Fi standard by 2023 in both the consumer and enterprise Wi-Fi market, while the networking industry prepares for the next generation Wi-Fi standard, Wi-Fi 6E.

Semiconductor vendors have announced chipsets supporting Wi-Fi 6E, and the first Wi-Fi CPE is likely to arrive in 2021. In addition to supporting the latest Wi-Fi standard, the integration of IoT connectivity and cloud-based Wi-Fi network management features will enable CPE makers to differentiate among competitors in both consumer and enterprise Wi-Fi segments.

According to the ABI Research market assessment, consumer and enterprise Wi-Fi CPE shipment will reach 259 million and 15 million units respectively in 2025. Moreover, I believe that due to the increase in distributed workforce use cases and cloud service adoption, more enterprise CIOs and CTOs will re-assess their application delivery platforms and related secure networking requirements.

The Quintessential Chief Information Security Officer

Given the strategic significance of digital transformation, IT security leadership is a really important role. And yet, only 12 percent of Chief Information Security Officers (CISOs) excel in all four categories of the 'CISO Effectiveness Index', according to the latest worldwide market study by Gartner.

Gartner analysts presented their global survey findings and discussed the key traits of top-performing CISOs during their recent 'Security & Risk Management Summit'.

"Today’s CISOs must demonstrate a higher level of effectiveness than ever before," said Sam Olyaei, research director at Gartner. "As the push to digital deepens, CISOs are responsible for supporting a rapidly evolving set of information risk decisions, while also facing greater oversight from regulators, executive teams and boards of directors."

IT Security Market Development

These significant enterprise challenges are further compounded by the pressure that the COVID-19 pandemic has put on the information technology (IT) security function to be more agile and flexible.

Gartner’s measure of CISO effectiveness is determined by a CISO’s ability to execute against a set of outcomes in four categories:

1. Functional leadership
2. Information security service delivery
3. Scaled governance
4. Enterprise responsiveness

The survey respondent’s score in each category was combined together to calculate their overall effectiveness score. Gartner defines 'effective CISOs' as those who scored in the top one-third of the CISO effectiveness measure.

Of the factors that impact CISO effectiveness, Gartner revealed five behaviors that significantly differentiate top-performing CISOs from bottom performers. On average, each of these behaviors is twice as prevalent in top performers than in bottom performers.

"A clear trend among top-performing CISOs is demonstrating a high level of proactiveness, whether that’s staying abreast of evolving threats, communicating emerging risks with stakeholders or having a formal succession plan," said Mr. Olyaei. "CISOs should prioritize these kinds of proactive activities to boost their effectiveness."

The survey also found that top-performing CISOs regularly meet with three times as many non-IT stakeholders (such as Line of Business leaders) as they do IT stakeholders.

Two-thirds of these top performers meet at least once per month with business unit leaders, while 43 percent meet with the CEO, 45 percent meet with the head of marketing and 30 percent meet with the head of sales.

According to the Gartner assessment, CISOs have historically built fruitful relationships with IT executives, but digital transformation has further democratized information security decision making.

Effective CISOs keep a close eye on how risks are evolving across the enterprise and develop strong relationships with the owners of that risk – senior business leaders outside of IT.

The survey also found that highly effective CISOs better manage workplace stressors. Just 27 percent of top-performing CISOs feel overloaded with security alerts, compared with 62 percent of bottom performers.

Furthermore, less than a third of top performers feel that they face unrealistic expectations from stakeholders, compared with half of the bottom performing CISOs.

Outlook for Enterprise CISO Leadership and Influence

"As the CISO role becomes increasingly demanding, the most effective security leaders are those who can manage the stressors that they face daily," said Mr. Olyaei.

Actions such as keeping a clear distinction between work and non-work, setting explicit expectations with stakeholders, and delegating or automating tasks are essential for enabling CISOs to function at a high level.

That said, I believe that IT security spans both the data and networking realm, due to the growing demand for hybrid IT solutions that incorporate a combination of on-premise data centers and public cloud computing infrastructure. Moreover, the inherent security benefits of SD-WAN solutions make them an essential tool for forward-thinking CISOs.

COVID-19 is Accelerating Retailer Digital Transformation

The application of new technology is an opportunity for traditional retailers to enhance customer engagement via digital transformation. Many of these established retailers are confronted by disruptive competition from eCommerce.

Savvy retailers are evolving their business model into an omnichannel offering, where they combine the best of their offline experience and supplement it with an online shopping experience. Therefore, retailers that intend to maintain a physical in-store presence must operate more effectively.

There are several technologies being combined to enhance the way retail store operations function -- including self-checkout apps, beacons, RFID tags, robotics, and artificial intelligence (AI). That said, the current global economic environment requires retailers to become more agile and decisive.

Retailer Technology Market Development

According to the latest worldwide market study by Juniper Research, the value of transactions processed by smart checkout technologies, where the fixed checkout process is replaced by a frictionless model, will reach $387 billion in 2025 -- that's up from just $2 billion in 2020.

Smart checkout technologies provide much simpler user experiences by removing traditional checkouts; embracing a 'just walk out' approach. The rapid growth will be driven by retailers seeking sustainable business models in the wake of the COVID-19 pandemic.

However, the pandemic’s impact has accelerated the ongoing decline of more traditional retail models. And, it's enabled some retailer executive teams to make swift and bold moves while their peers stumble.

Juniper analysts found that while the growth in adoption is dramatic, innovation will likely be limited to the convenience segment, where product lines are simpler and implementation costs are lower. These deployments will also be enacted by financially stable retail chains that can still make a significant investment.

The new research discovered that the use of AI, including smart checkout systems and chatbots, will be critical in ensuring that retailers can deliver a compelling omnichannel experience to consumers.

The drive for supply chain and operational efficiency will lead to new technology investments of over $23 billion by retailers in AI-related solutions by 2025 -- that's up from just over $5 billion in 2020.

"To compete with eCommerce disruptors who heavily rely on AI, traditional retailers must adopt AI rapidly to boost efficiency. If they fail to do so, they will face a highly commoditized retail market with an outmoded, uncompetitive business model," said Nick Maynard, lead analyst at Juniper Research.

Outlook for Retail Technology Application Growth

The research found that the use of RFID for tracking is essential to enabling analytics used within the retail supply chain. As retailers need ever greater efficiency, analytics is crucial, but it is only as good as the data it is based on.

According to the Juniper assessment, this need for standardized data for analysis will propel RFID’s deployment; driving RFID shipments for retail to over 32 billion in 2025, from 9 billion in 2020.

Furthermore, I believe that traditional retailers will re-evaluate their current telecommunication network Opex spend and seek ways to extract savings by applying SD-WAN and other technologies that are proven to lower costs and improve network performance or enhance security at their stores.

Public Cloud Services Revenue Reached $233.4 Billion

The COVID-19 pandemic has accelerated the Digital Transformation trends. Savvy CIOs and CTOs that were an early adopter of public cloud computing technologies now have a significant strategic market lead over their competitors. Moreover, a few dominant IT platform providers continue to benefit from this trend.

The worldwide public cloud services market -- including Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS) -- grew by 26 percent year-over-year in 2019 with revenues totaling $233.4 billion, according to the latest market study by International Data Corporation (IDC).

Spending continued to consolidate with the combined revenue of the top five global public cloud service providers -- Amazon Web Services, Microsoft, Salesforce.com, Google, and Oracle -- capturing more than one third of the worldwide total and growing at 35 percent year-over-year.

Public Cloud Services Market Development

"Cloud is expanding far beyond niche e-commerce and online ad-sponsored searches. It underpins all the digital activities that individuals and enterprises depend upon as we navigate and move beyond the pandemic," said Rick Villars, group vice president at IDC. "Enterprises talked about cloud journeys of up to ten years. Now they are looking to complete the shift in less than half that time."

The public cloud services market has more than doubled since 2016. During this same period, the combined spending on IaaS and PaaS has nearly tripled. This highlights the increasing reliance on cloud infrastructure and platforms for application deployment, for enterprise IT internal applications, as well as SaaS and web application delivery networks.

IDC expects spending on IaaS and PaaS to continue growing at a higher rate than the overall cloud market over the next several years as resilience, flexibility, and agility guide IT platform decisions.

According to the IDC assessment, economic uncertainty draws fresh attention to the core benefits of IaaS -- such as low financial commitment, flexibility to support business agility, and operational resilience.

Cost optimization and business resilience have emerged as top drivers of IT investment decisions and IaaS offerings are designed to enable both. The COVID-19 disruption has accelerated cloud adoption with both traditional enterprise IT organizations and digital service providers increasing use of IaaS for their technology platforms.

IDC believes that digitizing processes are being prioritized by enterprises in every industry segment and that is accelerating the demand for new applications as well as repurposing existing IT applications. 

Modern IT application platforms powered by containers and the serverless approach are providing the necessary tools for software developers in meeting these needs. The growth in PaaS revenue reflects the need by enterprises for tools to accelerate and automate the development lifecycle.

That said, SaaS applications remain the largest segment of public cloud spending with revenues of more than $122 billion in 2019. Although growth has slowed somewhat in recent years, the current economic crisis serves as an accelerator for SaaS adoption across primary and functional markets -- to address the exponential growth of remote workers within a globally distributed workforce.

Outlook for Public Cloud Services Growth

Looking at the segment results, a combined view of IaaS and PaaS spending is relevant because it represents how end customers consume these services when deploying applications on the public cloud. 

IDC has been tracking and publishing this view of the market since 2019. In the combined IaaS and PaaS market, Amazon Web Services and Microsoft captured more than half of global revenues. But there continues to be a healthy 'long tail' of service providers, representing over a third of the market.

These are typically companies with targeted use case-specific PaaS offerings. The long tail is even more pronounced in SaaS, where nearly three-quarters of the spending is captured outside the top 5 service providers.

I believe that while there will continue to be new opportunities for niche cloud service offerings, the hyperscale provider dominance will make it increasingly difficult for undifferentiated 'me-too' cloud services. Niche providers must clearly articulate their unique attributes, and enable their clients to create a compelling business case for an investment that is sure to be scrutinized by enterprise CFOs.

Next-Gen Smart IoT Gateways will Transform Security

A multitude of new devices have been connected to the Internet already this year, and many more will connect in the coming weeks and months. That said, the Internet of Things (IoT) gateway has become an important link in the IoT security and device authentication value chain.

They've emerged as a crucial conduit for intelligent network operations across the entire IoT ecosystem, and will very likely increase the demand for more edge computing infrastructure investment.

Now the new wave of next-generation smart IoT gateways has arrived at an opportune time, enabling a breadth of novel security, intelligence, and authentication operations at the edge, causing IoT vendors to revisit their deployment and IT management strategies.

IoT Gateway Market Development

According to the latest worldwide market study by ABI Research, there will be 21.4 million next-gen smart IoT gateways shipped in 2025.

"Smart IoT gateways are currently caught amid a greater transformative evolution, further enhancing capabilities for gateways, shifting focus toward the edge, and reversing the cloud-centric investment priorities of the past decade," said Dimitrios Pavlakis, an analyst at ABI Research.

The primary characteristics of next-gen IoT gateways include enhanced cybersecurity options, extended connectivity support, edge processing and filtering, authentication and management, cloud services, analytics, and intelligence operations.

These highly demanding technological characteristics have been steadily reaching the core of the implementation lists of IoT implementers, shifting the dynamics of IoT security and pulling focus ever closer to the edge.

"This is not to say that edge-focused IoT gateways will completely replace data servers and cloud computing – far from it. Rather they are set to create a more symbiotic relationship between them while increasing the amount of responsibility towards edge computing and intelligence-gathering operations," Pavlakis explains.

The current market demands brought forth by the intense increase of IoT technologies allow gateway vendors to turn challenges into well-honed value propositions.

This can include tackling the secure transition of legacy equipment into larger IoT fleets, enable increased visibility, monitoring, and management of IoT devices, aid in the clash between Information Technologies (IT) and Operational Technologies (OT) in industrial and healthcare systems, and streamline digital security and device management.

Outlook for IoT Gateway Applications Growth

ABI Research expects that the surge of IoT gateways shipments will create a variable penetration rate across different IoT end markets led by innovative gateway vendors such as Advantech, Cisco, Kerlink, MultiTech, and Sierra Wireless.

"The data suggest that video surveillance, heavy transport vehicles and equipment, intelligent transportation, and fleet management depict the highest penetration rate for the next-level security and intelligence components for smart IoT gateways, with a clear focus revolving around automotive verticals and data-heavy applications," concludes Pavlakis.

I believe that we'll see more vendors address cybersecurity, device management, edge processing, and other key IoT gateway evolutionary traits over time. Moreover, edge networking applications for IoT gateways are looking stronger than ever, shaping the future market and expectations from IoT solution providers.

Talent Development Strategy for Today's Flexible Work

Are you still unable to fully launch that Digital Transformation project that your CEO approved months ago? The savvy CIOs and CTOs know that business model innovation progress is achieved by better people, process, and technology advancements -- specifically in that order. Are you ready now?

If your current 'team' of employees are unprepared, well you're not alone. Furthermore, many organizations are struggling to hire 'quality talent' as only 16 percent of new hires possess the needed skills for both their current role and the future, according to the latest worldwide market study by Gartner. Moreover, what's the likelihood that this 'cream of the crop' wants to work at your company?

Ongoing Quest for Aptly Skilled Talent

To hire quality talent, recruiting leaders must shift their strategies from replacing the workforce to instead 'shaping the workforce' by defining needs based on skills, sourcing talent more broadly and creating responsive employment value propositions (EVPs).

Historically, the value of the HR recruiting function has been to acquire quality talent with critical skills to meet the organization’s short- and long-term objectives.

Accomplishing this objective centered around 'replacing the workforce' through a similar set of candidate profiles from known talent pool sources that were attracted to existing EVP attributes.

"Traditional recruiting methods are unable to compete with the large-scale shifts to the workplace and the labor market," said Lauren Smith, vice president at Gartner.

Gartner data shows that existing roles may require up to ten new skills by 2021. Today’s current environment of economic instability due to COVID-19 has made traditional talent pools less viable for sourcing talent, as high-quality candidates are unlikely to leave their current positions.

The COVID-19 pandemic has forced employers to rethink how to best get work done and what skills their employees will need to adapt in this new context. Candidates are scrutinizing organizations’ responses to the pandemic, looking to see how companies have treated employees during this time.

Leading organizations are already shaping the workforce through strategies based on the realities of the new recruiting landscape. Shaping the workforce means acquiring new skillsets from a diverse skills market that influences an organization’s EVP.

According to Gartner's assessment, recruiters must make 3 key shifts:

• Define talent needs by prioritizing skills instead of hiring profiles
• Uncover the total skills market instead of targeting known talent pools
• Create responsive EVPs, not just responsive candidates

"The best recruiting functions that excel in these workforce-shaping behaviors see a 24 percent increase in quality of hire," added Ms. Smith. "High-quality talent can have a significant impact on business outcomes, including individuals who successfully perform in their roles 20 percent faster and teams that get a 19 percent boost in their ability to meet future challenges."

Hiring managers often focus on candidate profiles, recycling the last job description and adding new desired skills to the list, which creates an impossible task for recruiters to find these elusive 'unicorn' candidates.

Leading organizations are shifting the focus of needs-definition conversations towards defining the essential skills required to get the job done. To be effective in this new approach, recruiters need to understand skill needs in the larger context of the organization-wide strategy.

To equip recruiters with this knowledge, the best organizations leverage HR partnerships to map future skill needs. Recruiters can then consult the line of business leaders on how to best align job strategy with organization-wide objectives.

Recruiters have long sourced skills from known talent pools based on credentials and background. This strategy misses out on highly skilled candidates, as Gartner research shows that 43 percent of candidates today are self-taught in one or more of their role's requirements.

In addition, organizations are increasingly developing high-value skill sets in employees through accelerated training programs. However, this approach is often problematic, due to corporate cultural constraints.

HR leaders should also consider where their search criteria can be broadened. For instance, can the organization look at candidate potential over candidate credentials -- or hire based on where the talent is located, not where the business is located? Key point: a distributed workforce offers a sizable talent pool, not a mere talent puddle.

HR leaders should also audit their entire hiring process for exclusionary practices that advantage one talent segment over another.

Outlook for Progressive Talent Recruitment Leadership

Gartner research finds that 65 percent of candidates have cut short the hiring process because they found certain aspects of the employer's job (e.g. work-life balance, development opportunities, company culture) to be unattractive. Do you survey why the best high-caliber candidates decline your employment offers?

"To deliver on changing candidate expectations, the best organizations are leveraging labor market insights – direct candidate feedback, competitor EVP offerings, employee needs – to inform and adapt their EVP to today’s environment," Ms. Smith said. "Progressive organizations use these insights to inform job design and new employee experience initiatives."

Frankly, there's a much greater problem holding-back meaningful progress at traditional employers. HR performance appraisal processes are not applied in such a way that they lead to the desired business outcome (better talent). Instead, too many large enterprise managers reward people for being 'nice' -- and for not challenging the status quo. Bold and brave talent is seen as a threat, not an asset.

The quintessential passive-aggressive middle manager has typically mastered the art of ensuring that all their direct reports are appropriately 'compliant' and 'non-threatening' to the accepted corporate culture. Given that backdrop, how do you really attract high-quality candidates that willingly want to be a part of that dismal existence? Yes, it's a rhetorical question. Of course, we all know the answer.

B2B Payments Processed by Fintech will Reach 53 Billion

How businesses pay each other is an essential process for all organizations. They have suppliers, and therefore all need access to effective payment systems. That said, the lack of meaningful digital transformation within the business-to-business (B2B) payments sector has challenged the established systems.

In this context, the digital disruption of the traditional B2B payments ecosystem is now more important, to enable companies to perform financial transactions as efficiently as possible. Fortunately, there's a multitude of forces developing in this market, with more new vendors attempting to drive innovation.

B2B Payments Market Development

According to the latest worldwide market study by Juniper Research, the volume of B2B payments facilitated by non-banks will exceed 53 billion in 2022 -- that's up from a COVID-related low of 38 billion in 2020; representing 42 percent growth.

These new vendors will account for 12.6 percent of B2B payments by volume in 2022. Despite the slow recovery elsewhere in the economy due to the COVID-19 pandemic, non-bank B2B payments will exceed 2019 volumes in 2021 -- showing how the migration from offline to online, and the need for greater efficiency, is helping non-traditional vendors.

As businesses recover from the pandemic, they are fundamentally reassessing their operations to maximize efficiency. As such, banks and traditional money transfer operators face a reckoning, pressed by newer, more innovative fintech players that offer more cost-effective solutions.

The new study analyzed twenty leading challenger B2B payment providers, examining their B2B payment offerings and related digital innovation. The top 3 non-bank vendors identified by Juniper Research were: TransferWise, Veem, Currencycloud.

These leading fintech vendors offer digital capabilities that are unmatched in terms of efficiency, cost, and value -- allowing them to rapidly gain market share and threaten established market structures.

"Fintech vendors have risen to prominence by offering both greater efficiency and ease of use, calling into question the fundamental approach that banks take," said Nick Maynard, lead analyst at Juniper Research. "Banks must turn to APIs for greater automation, as well as more competitive pricing, to retain some influence in this highly lucrative market."

The analyst's research found that automation will be crucial in solving the many challenges faced by businesses in their existing payment processes.

According to the Juniper assessment, this process automation must be enabled using open APIs, which can radically simplify sharing data between different financial systems and associated organizations.

Outlook for B2B Payment Applications Growth

However, this automation will require a collaborative ecosystem to emerge, whereby B2B payments vendors integrate their systems with ERP and accounting packages. Otherwise, payment processes will remain highly manual and time-consuming for CFOs and their staff.

I anticipate that more enterprise CIOs and CTOs will review the security measures when they consider the deployment of open APIs, or connect with another organization's API services. The application of security policies is one area where companies can mitigate cyber threats and reduce risks from open APIs.

Worldwide IT Security Spend will Reach $174.7 Billion

A distributed workforce, and ongoing work-from-home mandates, have evolved the charter of corporate information technology (IT) organizations. CIOs are now tasked to support flexible working arrangements that require them to reconsider prior assumptions about securing the combined infrastructure that enables an employee to perform work remotely.

Enterprise spending on IT security products and services has experienced new growth in 2020, as many organizations invest in solutions to meet the needs of a much larger remote workforce, and a wide range of online security threats that create additional requirements.

According to the latest global market study by International Data Corporation (IDC), worldwide spending on security-related hardware, software, and services will be $125.2 billion in 2020 -- that's an increase of 6 percent over 2019.

IT Security Market Development

As the global economy recovers from the impact of COVID-19, IDC expects worldwide security spending to reach $174.7 billion in 2024 with a compound annual growth rate (CAGR) of 8.1 percent over the 2020-2024 forecast period.

While IT spending is contracting somewhat across most industries in the wake of the global pandemic, IT security demand remains robust, particularly in sectors including State or Local Governments, Telecommunications, and Federal or Central Governments that have become essential service providers.

Indeed, these three industries will exhibit double-digit growth in IT security spending through 2024. Meanwhile, Banking, Manufacturing, and Professional Services continue to have the largest share of IT security spending. There's even some growth still in IT security for industries that are currently struggling, such as Retail and Transportation.

The three industries with the largest IT security investments (Banking, Discrete Manufacturing, and Federal or Central Governments) will account for roughly 30 percent of overall spending in 2020 and throughout the forecast period.

The industries that are seeing the greatest increase in IT security spending in 2020 are Federal or Central Government (10 percent), State or Local Government (8.9 percent), and Telecommunications (8.5 percent). These three industries will also deliver the only double-digit CAGRs over the five-year forecast period, led by State or Local Government with an 11.1 percent CAGR.

IT security services will be the largest and fastest growing segment of the global IT security market accounting for roughly half of all spending throughout the forecast and a 10.5 percent five-year CAGR.

Managed security services – single-tenant solutions operated by third-party providers and residing on customers' premises (customer premises equipment) – is the largest category of IT security services spending, followed by integration services and consulting services. Managed security services will also be the fastest growing segment with a five-year CAGR of 13.6 percent.

"Complexity abounds with security technology deployment and sprawl requiring assessment and design services," said Christina Richmond, vice president at IDC. "While COVID-19 has had a negative impact on many ICT technologies, security services have witnessed increased engagements, especially in outsourcing services such as managed security services (MSS) and managed detection and response (MDR)."

According to the IDC assessment, software will be the second largest segment of the IT security market, led by endpoint security and security analytics, intelligence, response, and orchestration software.

Hardware spending will be dominated by network security needs -- including firewalls, intrusion detection and prevention, unified threat management, and virtual private networks. Both product segments are expected to recover in 2021 with year-over-year growth rates of 9.6 percent for hardware and 4.4 percent for software.

Large and very large enterprises will be responsible for two-thirds of all IT security-related spending in 2020 and throughout the forecast period. These two segments will also see the strongest spending growth with five-year CAGRs of 9.3 percent for large businesses and 8.6 percent for very large businesses. Medium and small businesses will spend more than $30 billion combined on IT security solutions this year.

Outlook for Global IT Security Investment Growth

From a geographic perspective, IDC analysts forecast that the United States will be the single largest market for IT security solutions with spending forecast to reach $56.4 billion in 2020. Four industries -- discrete manufacturing, the federal government, banking, and professional services -- will account for more than $20 billion of the U.S. market total.

China and the United Kingdom are the next largest country markets with IT security spending expected to reach $7.9 billion and $7.6 billion this year. Telecommunications and state or local government will be the industries with the largest IT security spending in China while banking and discrete manufacturing will be the leading industries in the UK market.

Due partly to global economic uncertainty, I anticipate that corporate IT budgets will be realigned to accommodate shifting priorities in the coming months. That said, IT technology investments that facilitate strategic digital transformation projects will remain a high priority for many organizations. IT security will be a key component of these ongoing projects.

IoT Machine Learning and AI Services Gain Momentum

As more devices are connected to the public internet, mass quantities of data are being produced. Capitalizing on those data assets, expansion in the advanced analytics market has been enabled by new technology, products, and related services. 

The inherent value of data is increasing, and that value is stimulating the Internet of Things (IoT) advanced analytics market, with the emergence of accessible out-of-the-box and off-the-shelf machine learning (ML) and artificial intelligence (AI) solutions.

Vendors are now easing access to ML and AI toolsets by expanding availability through deployment options that include edge computing, on-premises infrastructure, private cloud, Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS).

 IoT ML and AI Market Development

According to the latest worldwide market study by ABI Research, the IoT ML and AI market will reach $1.09 billion in 2020 and grow to reach $10.6 billion by 2026.

Edge ML/AI is more prevalent in manufacturing and industrial segments, where there is an immediate need to assess, transform and augment data as it is being generated through functions of quick pattern recognition, labeling, and protocol optimization.

"The IoT Edge Advanced Analytics Market is essentially operationalized ML and AI products and services targeted at Operational Technology (OT) teams to understand and extract insights," said Kateryna Dubrova, research analyst at ABI Research.

According to the ABI assessment, ML and AI frameworks are also enabling advanced analytics in the public cloud, where algorithmic models (predictive, prescriptive, correlations, etc.) are deployed on pre-processed and organized datasets.

Amazon Web Services (AWS), Microsoft Azure, Google Cloud, SAS, and C3.ai, are dominating the scene for their end-to-end IoT portfolios and combined native and third-party ML/AI toolkits -- all predominantly delivered as public cloud offerings.

At the same time, Seeq, DataRobot, Noodle.ai, and Dataiku will soon enable greater democratization of IoT ML technologies, with more powerful AI engines and low-code or no-code software solutions.

Finally, there is steady and robust development among edge-centric SaaS and PaaS vendors -- such as Crosser, Swim.ai, and FogHorn, advocating edge-first solutions.

While the vendors have clear positions on deployment choice, edge and cloud are merging into a singular edge-cloud paradigm. However, the increasing value of edge AI/ML solutions within the IoT has unveiled a gap in the accessibility of these solutions.

ABI research concludes that the scalability and productization of an edge solution are fundamentally dependent on cloud vendors expanding their marketplace portfolios toward the edge. The IoT edge marketplace will take off within a couple of years and become an integral part of the IoT ecosystem. 

Outlook for IoT Intelligence Applications Growth

But not all suppliers in the IoT value chain will find greater accessibility to off-the-shelf AI/ML solutions favorable to their business model. These solutions will lessen the need for and duration of analytics professional services.

"Fortunately, IoT is a growing market so custom analytics engagements will still see demand. The real upside is that more people can apply advanced analytics to their IoT data expanding its usefulness to a broader cross-section of the enterprise," Dubrova concludes.

I believe that IoT big data, and associated analytics software applications, will continue to blossom across the globe as more organizations seek to extract actionable insights from raw data repositories.