Constellation Research: AI and Internet of Things Will Drive Digital Transformation Through 2020

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AI investment to increase significantly in 2018.

Businesses are investing heavily in the Internet of Things (IoT) while remaining cautious about investments in artificial intelligence (AI), reveals a digital transformation study conducted by Constellation Research. However, Constellation expects AI to emerge in 2018 as the predominant area of technological experimentation due to the increasing availability of AI development kits and frameworks.

Nearly half of respondents of the Constellation 2017 Digital Transformation Survey said their organization either had an established IoT strategy with applications in production (19 percent) or have pilot projects underway (28 percent). In contrast, just 25 percent of executives said they were investing in AI.

Digital Transformation in the Era of AI

Growing demand for the Internet of Things (IoT) and artificial intelligence (AI) is expected to drive large investment in SaaS/cloud and big data technology. Seventy-five percent of respondents said their organization was increasing investment in big data technologies. A full 77 percent of respondents said their organizations would increase investment in SaaS/cloud over the next 12 months, with 45 percent of that total saying the investment would be significantly greater.

Digital business models that hinge on AI and IoT such as “as-a-service” and “mass personalization at scale” require large amounts of data and computing power to execute. In addition, the connections for IoT are in the cloud and AI processing will increasingly rely on cloud-based services. These trends will continue to drive investment in SaaS/cloud and big data technologies.

About the Survey

The Constellation 2017 Digital Transformation Survey asked C-level executives about the priorities of their digital strategy, recent investments in emerging technologies, near- and medium-term goals, and hurdles to initiatives.

Constellation sought to understand organizations’ investment in emerging technologies that are integral to realizing the potential of digital business. Constellation polled respondents on their organizations’ awareness and adoption of the internet of things (IoT), artificial intelligence (AI), synchronous ledger technology (blockchain), big data, and cloud technology.

Constellation received 105 responses to an online survey from respondents with a diverse range of job roles. About 18 percent of respondents self-identified as CEOs, followed by line of business managers (20 percent) and IT managers (16 percent). Responses were collected on Constellation’s website and Responses were also collected from Constellation’s subscriber base.

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About Constellation Research

Constellation Research is an award-winning, Silicon Valley-based research and advisory firm that helps organizations navigate the challenges of digital disruption through business models transformation and the judicious application of disruptive technologies. Unlike the legacy analyst firms, Constellation Research is disrupting how research is accessed, what topics are covered and how clients can partner with a research firm to achieve success. Over 350 clients have joined from an ecosystem of buyers, partners, solution providers, C-suite, boards of directors and vendor clients. Our mission is to identify, validate and share insights with our clients.
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Aubrey Coggins
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Constellation Research, Inc.

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