10 Trends That Will Shape the Tech Industry in 2023
This article originally appeared on AIM Consulting on January 31, 2023.
Technology is a rapidly and continuously evolving industry, and the start of each year provides us with the opportunity to look to the future and predict what lies ahead.
We recently spoke with three members of AIM’s leadership team to learn their key projections for 2023. Read on to learn what changes to expect in the technology sector this year and what your organization should know to adapt accordingly.
Meet our experts:
- Kyle Mizell – Senior Vice President of Consulting Services
- Patrick Taylor – National Technology Evangelist
- Jeff Rubingh – National Director, Digital Experience
10 Tech Trends to Expect in 2023:
- Growth of Cloud Native
- Recession and Team Resizing
- Growth of Generative AI and ChatGPT
- Cloud Solutions Moving Up the Stack
- The Startup Boom
- DevOps Automation at the Enterprise Level
- Augmented Reality and Virtual Reality
- Zero-Trust Architecture
- Synthetic Test Data
- Data Repatriation
Growth of Cloud Native
In 2021 and 2022, we started to see the long tail of service providers offer fully serverless applications.
Before, providers like Linode, Cloudflare, or DigitalOcean could only offer you a virtual machine; however, they now offer fully serverless and containerized compute opportunities. This shift is going to reveal itself in a couple of interesting ways.
The first way will be, across the board, a greater adoption of serverless, and a greater understanding of application architecture that is designed for a fully serverless solution.
The second one, Taylor shared, will be second- and third-tier players increasing in popularity and adoption. “I see no situation in which AWS, Azure, or GCP or going to shrink, but their overall market share is inevitably going to shrink because there are more players in the space. Players like Linode and Cloudflare are going to allow people to do more interesting things.”
The transition to second- and third-tier providers will be driven by price. Taylor expects that second- and third-tier provider options will compete on price by offering less robust services than AWS, Azure, and Google Cloud Platform. Organizations that don’t need that robustness will be able to enjoy the advantage of lower cloud costs.
Recession and Team Resizing
Downsizing, resizing, and recession response show no signs of slowing down in 2023. Taylor said it will reveal itself in the way teams operate in two ways.
For one, the highest performing teams are going to benefit, “because very high performing teams will be driven to focus on essential business value. It is of long-term net positive for them to drill into real business problems and deliver critical features rather than experiments.”
On the flip side, average and low-performing teams are going to struggle with the impacts of team resizing. “There is going to be a real human cost incurred not only by the people who are put out on the street looking for work, but by the people who remain because they are left with greater responsibilities.” As a result, burnout is going to be a significant problem within these teams.
Growth of Generative AI and ChatGPT
OpenAI, an AI research and deployment company, recently launched a chat interface called ChatGPT. The tool is based on GPT, a language model that can generate a large body of text in a natural language style, similar to the writing level of a high school or college student.
“The introduction of ChatGPT is just a hint of what’s going on under the surface because they’ve probably had this technology for one or two years. The tool is based on GPT-3.5 and GPT-4 is almost ready to be released, which would theoretically make its performance even more disruptive,” explained Rubingh.
Rubingh continued, “OpenAI did not expect the chat interface to explode, but its introduction has been heralded by many as an ‘iPhone moment’ – meaning that it’s as important of an event as 2007 when Steve Jobs introduced the first iPhone.”
ChatGPT represents a breakthrough in artificial intelligence, marking a shift in the general public’s mindset towards, and understanding of, generative AI that Rubingh said will continue to reveal itself in 2023.
“[ChatGPT’s] introduction has been heralded by many as an ‘iPhone moment’ – meaning that it’s as important of an event as 2007 when Steve Jobs introduced the first iPhone.”Jeff Rubingh, National Director of Digital Experience at AIM Consulting Group
Cloud Solutions Moving Up the Stack
“A clear trend we saw at AWS Re:Invent is cloud solutions moving further up the stack,” said Taylor. “Many of the big new offerings at AWS this year were more focused on industries and specific solutions than they have ever been before.”
These offerings addressed business problems specific to healthcare, advertising, and other highly focused verticals rather than offering flexible technology.
Taylor added, “it’s been a slow-moving trend for a long time, but it’s recently gained significant attention from Amazon which will drive it further.”
The Startup Boom
The tech industry saw a significant increase in layoffs in late 2022, and the unfortunate trend shows no signs of slowing down. In fact, approximately 2,500 tech workers have been laid off every day of 2023 so far, for a total of more than 75,000 employees in January alone.
With this challenge, however, comes the potential for remarkable innovation. Rubingh noted that when tech layoffs occur, some ex-employees decide they would rather form their own startup than return to work at a large enterprise. “A lot of great startups come out of a declining economy,” he said.
DevOps Automation at the Enterprise Level
In the past, build-and-deploy automation and service automation was expected by everyone in the mid-market to startup space. But at the enterprise level, DevOps remains a slow-moving department that you have to “cut a ticket for.”
Taylor predicts a growing push towards true DevOps automation no longer being the exception in Fortune 500 and Fortune 200 companies, but rather the rule.
“We’re likely going to see these major enterprises enjoy more agility and better cost management by fully embracing DevOps and speeding the delivery of feedback. But again, the other side of that is businesses do it wrong and their costs go out of control,” warns Taylor.
Augmented Reality and Virtual Reality
“Apple will be introducing their new Apple Glasses, which will be one of the biggest things to happen in 2023,” said Rubingh.
Although he noted the price point will likely be too high to see significant adoption and impact, Rubingh expects that the introduction will generate buzz about the glasses’ features and drive competition from other companies.
“There are a lot of challenges with virtual reality. About 15% of people get nauseous after they’ve worn these goggles for 30 minutes. If you think back to when they first introduced the television, if 15% of your family got sick after watching a half-hour show, it probably wouldn’t have taken off. People are optimistic they can overcome that, but it’s still a challenge,” he explained.
The percentage of companies with a defined Zero Trust initiative doubled between 2021 and 2022. Although it’s not a new concept, Mizell predicts an increasing emphasis on zero trust in 2023 among organizations that deal with large amounts of private customer data, from ecommerce to retail to travel loyalty programs.
“Security previously meant that you use network security to keep out intruders, using protected zones and subnets. You assumed that everything within the local network was secure and safe, and if something on your subnet was trying to access your data, you trusted it because of its local origination,” explained Mizell.
But now, the next step is internal communications. Most threat management and security problems today stem from someone accessing a weak spot within your internal network and using that to communicate with other parts of your network and steal data.
Zero trust does away with that and ensures everybody must be authenticated. Organizations that are intent on protecting their sensitive internal data will benefit from implementing a zero-trust architecture that offers protection against internal and external threats.
“Security previously meant [assuming] that everything within the local network was secure and safe, and if something on your subnet was trying to access your data, you trusted it because of its local origination.”Kyle Mizell, Senior Vice President of Consulting Services at AIM Consulting
Synthetic Test Data
Historically, companies have been busted for having sensitive data in their pre-production environments, which are usually less secure environments from a network and security firewall perspective.
If hackers gain access and you have live data in a pre-production environment, Mizell says, it’s just as bad as if they got access to production. In this way, some companies have even been responsible for their own data leaks.
“The next evolution in software testing, security, and privacy concerns is using synthetic test data that’s built by AI. AI builds data and stores it in a database for pre-production environments to be able to do testing, and organizations are increasingly adopting this as a strategy,” said Mizell.
Synthetic data functions as a more accurate and scalable replacement for real-world data. It enables organizations to simulate the patterns and characteristics of their real data and run necessary tests while ensuring privacy, confidentiality, and security.
Mizell predicts that in 2023, the use of synthetic test data will become increasingly popular across all industries that deal with highly sensitive data, including healthcare, ecommerce, and finance.
Cloud costs are hard to manage and hard to understand, and in some cases, it is possible to save money by storing data in your own data center instead of in the cloud. This is driving rumblings of “data repatriation”: people pulling back out of the cloud and moving data into their organization’s data centers.
“I think this year there’s going to be a lot of chatter around repatriation. Some are going to try it, and few are going to succeed,” said Taylor. He noted that the organizations that are looking into data repatriation are those that have very large-scale data sets.
Storage costs for data of that scale are high in any architecture, and some organizations want to trade out cloud costs by taking on storage responsibilities and risks.
But in most cases, the cloud is still the best place to run compute loads. “There are some compute loads that are highly specialized that are going to potentially benefit. But for the vast majority of organizations with very large data loads and compute loads, the cloud remains the most cost-effective in the long-term, primarily due to its flexibility because it’s very easy to overprovision in the data center.”
This interest in data repatriation is, to some degree, driven by backlash on cost control problems in the cloud. If what you’re observing appears to be out-of-control cloud costs, as you consider data repatriation, you should also strongly consider a more focused cloud cost management solution.
“There are some compute loads that are highly specialized that are going to potentially benefit [from data repatriation]. But for the vast majority of organizations with very large data loads and compute loads, the cloud remains the most cost-effective in the long-term.”Patrick Taylor, National Technology Evangelist at AIM Consulting
Impactful Change in 2023 and Beyond
When your organization looks to achieve your most ambitious initiatives across data, digital, and cloud this year, AIM Consulting can help. Our value is anchored in deep expertise in technology and a passion for empowering our clients’ growth and success.
Whether you’re looking to tighten security, increase the efficiency of your teams, or manage your cloud computing costs in 2023, our team is ready to partner with you and accomplish your goals.