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When Computing Becomes Human: Automation, Innovation, and The Human Industry Computing Human Becomes Productivity Human Chris Morris Human IDC Asia Pacific September 4 Innovation Why AI? And Why Now? 2 The Era of Digital Transformation: Where We Are Now Business Primary Value Consumer models impact propositions experiences Real-time value Intelligent Simplification + Preemptive + chains + information- assistance + pertinent cognitive ease + based product and "getting the job outcomes life-integrated services + outcome- done" based monetization Getting Down to Business: AI in a Services-Based Economy ▪ The services sector represents over 70% of Australia's GDP and employs four out of every five Australians. ▪ Increased competition from free trade also encourages local service providers to become more innovative and efficient ▪ Economic growth is increasingly tied to a human workforce ▪ Efficient service sectors are major drivers of economic growth © IDC 4 Expected AI Impact on the Workforce Efficiency vs Effectiveness: Productivity and Innovation Q. What impact do you believe Artificial Intelligence will have on your organization’s workforce? Source: IDC’s Cloud and AI Adoption Survey, January 2018, N=400 © IDC 5 Why AI? How? 6 AI Adoption Nascent But Critical to Meeting Business Goals 70% AI Assist AI will dislocate jobs for the typical worker AI will be an important assist for the typical worker Source: IDC’s Cloud and AI Adoption Survey, January 2018, N=400 © IDC 7 AI Use Is Still Immature: RPA and Conversational AI Are the Focus Topics At what stage of deployment are the following cognitive/AI technologies in your organization? (12–24 months to use) 24% 21% 21% 19% Chatbot or automated Robotic process Non-conversational Applications with conversational interface automation cognitive learning cognitive embedded cloud Source: IDC Cognitive/AI Adoption Survey Asia/Pacific Excluding Japan, 2017 8 8 Challenges for AI in the IT Organization Bridging the Technology Skills Gaps Source: IDC’s Cloud and AI Adoption Survey, January 2018, N=400 © IDC 9 AI Shows a Significant Short-term Technology Expertise Gap Longer-Term Gaps Impede Emerging Technology Success Elsewhere Q29. Rate the level of investment in the following services over the next 24 months to meet your customers' requirements. Q30. How would you describe your organization's skills gaps in the following areas of digital expertise over the next 24 months to meet your customers' requirements? (Choose one for each.) n = 500 Source: Service Provider Pulse 1Q18, May 2018, IDC © IDC© IDC 10 Cloud 2.0 Delivers Digital Services Cloud buying centres are changing – from IT to non-IT IP owners Cloud consumption is changing - from infrastructure to platform, to application By 2020 ▪ over 90% of Enterprises Will Use Multiple Cloud Services and Platforms — a Transition Supported by Investments to Manage Resources Across Platforms By 2021 ▪ 20% of Analytics, Cognitive/AI, and Information Management Deployments Will Be Based on Heterogeneous Compute Infrastructure, Whereby Servers with Different Processors Take on Specific Tasks Rather Than General- Purpose Processors Taking on All Tasks Why AI? Where? 12 The Expanding AI Market Size in APeJ 5 year CAGR72.9% © IDC Visit us at IDC.com and follow us on 13 Twitter: @IDC Using AI: AI-assisted Vision for Pest Eradication ▪ The crown-of-thorns starfish eats coral in mass outbreaks, causing widespread destruction on the Great Barrier Reef ▪ Queensland researchers have developed world- first robots to administer a lethal injection to the starfish ▪ RangerBot is equipped with a vision system that allows it to "see" underwater and used real-time vision to navigate and identify starfish ▪ Usually everybody uses acoustics to do that, that is very expensive way of navigating under water ▪ The robot has been developed as a result of a collaboration between QUT, Google and the Great Barrier Reef Foundation. ▪ The drone can also monitor and gather huge amounts of data about coral bleaching, water "We've developed a really nice piece of software quality and pollution that is designed specifically to only find starfish and it is based on artificial intelligence" Using AI: Gaming By 2021, 75% of new intelligent systems Libratus won the no-limit Texas Hold ’em will have an embedded decision poker tournament by 14.7 big blinds per architecture that automatically detects game, drawing in $1,776,250 in prize money: and evaluates conditions and makes ▪ Mastered an imperfect information decisions about how to respond game. ▪ Unlike chess or Go where players can see all the board pieces at all times, poker players have to come up with a strategy based more on probabilities since they do not know their opponent’s cards. © IDC Gaming AI Implications Domain-independent AI can be used for developing strategic decisions in all industries: Finance ▪ Instant approvals of microloans in China ($200-$300) ▪ Insurance risk analysis and underwriting in USA Information Security ▪ Defend against hackers exploiting zero- day vulnerabilities, where software bugs are not known Source: Pokernews.com © IDC 16 Transforming Trading AI Outperformed Human Fund Managers An AI managed hedge fund index of Eurekahedge has monitored performance of 23 hedge funds and outperformed generalized hedge funds as well as traditional quant funds since 2010. ▪ AI managed funds netted annual returns of 8.44% for the past 6 years. ▪ Other indices that Eurekahedge uses, including the CTA/Managed Futures index, Up 16% had around 2.62% returns for the same Since Oct 2017 period. Uncovering New Insights New Crop Recipe Historically, farmers have relied on: ▪ their own instinct/expertise ▪ oral histories to come up with specific growing conditions and nutrients for the right “recipe”. There is no perfect recipe when the variables keep changing, and that means each year and every crop are a gamble (e.g., weather, soil) Food Computers generate roughly 3 million points of data, per plant, per growth cycle ▪ Found a known tradeoff between weight and flavor ▪ A surprising new result that perpetual light help plants produce more flavor. The large dots are suggestions, and the darker dots are the most recent ones. They suggest OpenAg’s Food Computer utilizing long photoperiods and UV periods, the success of which was confirmed in growth experiments Applying AI Fraud Management PayPal acquired Simility, a specialist AI-based fraud and risk management software and service provider, for $120M in June 2018 ▪ All types of fraud (e.g., Internal) ▪ Adaptive actions - a changing approach and protection strategy based on what the threat of the moment might be ▪ Ingestion of all data ▪ Combines ML & manual rules © IDC 19 20 What Do All These Have in Common? Heterogeneous Compute Infrastructure By 2021, 20% of analytics, cognitive/AI, and information management deployments will be based on heterogeneous compute infrastructure, whereby servers with different processors take on specific tasks rather than general-purpose processors taking on all tasks ▪ Libratus burned through approximately 19 million core hours of computing throughout the tournament ▪ Who can afford that? ▪ Access to AI-optimized compute platforms is being democratized via cloud services © IDC Applying AI: IT Infrastructure Source: Anders S.G., Oct 05, 2017 In 2016 US datacenters consumed 70 billion kilowatt hours ▪ That’s 8 big nuclear reactors, and approximately $7B in costs By 2021, the expanded use of power-hungry accelerated computing technologies will have forced most major data center operators to adopt a managed, modular approach to deploying power/cooling assets in their facilities. Something has to change…. © IDC 21 AI Automation: Delivering ROI and Business Value Power Usage Effectiveness 12-> 30% Source: Google © IDC 22 AI Automation: DCIM Democratizing AI/ML Using a Platform Nlyte Energy Optimizer (NEO) relies on IBM’s Predictive Maintenance and Optimization solution for machine learning capabilities ▪ Collect ▪ Analyze ▪ Action Source: IBM Source: Nlyte © IDC 23 AI and Cloud: None can do it all Bringing a New Engagement With Vendor Ecosystems CLOUD PROVIDERS PARTNERS CUSTOMERS ISVs MSPs Hosters Cloud Specialists Colos Sell Enterprise Customer With Telcos Outsourcers / SI Cloud Brokers Distributors Resellers / VARs © IDC 24 Educate: • Work with the right partners and experts • Learn and understand how your business units can use AI – choose the right projects • Consider where embedded AI can IDC Guidance contribute to your enterprise offerings – Cast a wide net / open mind Transform: “AI doesn’t just cut • Develop a data strategy for your AI enabled applications costs, it Expands • Incorporate AI and ML capabilities into your overall business and digital Business transformation strategy • Future-proof by examining develop Brainpower“- Forbes once & deploy anywhere approach (e.g., Containers) Accelerate: • Use pre-existing AI/ML platforms to accelerate your initiatives • Leverage technical expertise and focusing on providing domain expertise © IDC 25 Thank You Chris Morris [email protected] www.idc.com Twitter https://twitter.com/@IDC LinkedIn https://www.linkedin.com/company/idc.
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