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Thursday, 21 January 2016 16:32

Women way behind in IT jobs and wages, young millennials pro-PC: Deloitte Featured

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Global audit, economics, financial advisory, human capital, tax and technology services giant Deloitte has released its 2016 Technology, Media and Telecommunications (TMT) predictions. Some of the findings are quite surprising.

It has been doing so for the past 15 years and its predictions, with the benefit of 20-20 hindsight are usually right.

The full report is here and iTWire is pleased to present an overview of its ‘crystal ball.”

The report covers three sections – Technology, Media and Telecommunications and is compiled from extensive research and client consultation – it’s the kind of report you should read and keep handy for reference during the year.

Here is a quick overview of Deloitte’s top predictions:

  • Touch commerce: The mobile online checkout gets an express lane: Touch commerce is set to boom according to Deloitte, with the number of individuals using touch-based payment services on their mobile device increasing 150%.
  • Cognitive Tech and AI meet consumer needs: Consumers will benefit from enterprise software companies scaling up in 2016 to meet the need for better customer experience.
  • Mobile games and virtual reality powering up: This year, mobile (smartphone and tablet), is likely to become the leading games platform by software revenue, generating US$35 billion globally - up 20% from 2015. And the global expectation for virtual reality is that it hits a major milestone in 2016 and becomes a billion-dollar market.
  • Consumers driving need for speed: Consumer’s needs for data capacity and faster internet connections driven by both the number of devices in the home and their use.
  • Rise of the data exclusive: 26% of smartphone users in developed markets will not make any traditional phone calls in a given week in 2016.
  • TV: erosion not implosion: Traditional television remains resilient, even in the US where it is approaching a plateau, not a fall – an important indicator for the Australian market.
  • The Post-PC Generation is actually the Pro-PC Generation: The generation most expected to give up the PC will do just the opposite and be the most pro-PC of all age groups.
  • Women in IT: By end-2016 fewer than 25% of information technology jobs in developed countries will be held by women.
  • Photo sharing: Trillions and rising: 2.5 trillion photos will be shared or stored online, a 15% increase on 2015.
  • eSports another niche market: People love to play computer games, but there is also a small but growing audience, expected to reach 150 million globally in 2016, that love to watch others play.

More detail on some points follows.

TECHNOLOGY

Women in IT jobs it is about education, but it is also about more than just education

Gender imbalance in IT has been recognized as an issue since at least 2005. One might have expected some improvement since then, and perhaps even faster change since 2010, when there was a surge in articles about women in IT. At present women occupy fewer than 20% of IT jobs and gender wage parity is still a long way off.

In part it still comes down to a lack of gender diversity in the STEM (science, technology, engineering and mathematics) education pipeline. The report highlights that only 5% of IT job applicants were women and IT advertisements still target men. The pay gap appears to be between 10-20% less in the US but up to 45% in India.

But even if real progress is made immediately in improving gender parity in STEM at levels of the educational pipeline, it may take time (possibly decades, in the case of improvements to primary education) for those improvements to translate into IT job parity.

Trailing millennials are the pro-PC, not the post-PC generation

Trailing millennials (18-24 years old) are the smartphone generation but are also the most pro-PC of all age groups. They are very unlikely to abandon personal computers (any operating system) and are actively interested in acquiring new laptop models.

Purchase intent may be lower than for smartphones but laptops are still the second-most desired device in every country surveyed. About a third of 18-24 year-olds in developed countries surveyed planned to buy a new smartphone in the next 12 months, and a quarter intended to buy a new laptop.

What this means is having an omni-channel marketing strategy is necessary in 2016. A mobile-first strategy is almost certainly a good idea but not a mobile-only strategy. Depending on the content or use case, millennials still use their PCs, and sometimes even prefer the PC to mobile.

Touch commerce: the mobile online checkout gets an express line

Deloitte predicts that in 2016, the number of individuals who use a third party touch-based

payment service to make a purchase on their mobile devices (smartphones and tablets) should increase by 150 percent, to reach 50 million regular users. Critically, touch commerce reduces significantly the time taken from browsing to transaction on a mobile phone, and on an app or website to mere seconds from tens of seconds or even minutes.

Consumers are constantly connected to their smartphones, from the early hours in the morning to late at night, when at work, while spending time with family and friends or while commuting. These provide opportunities for converting browsing into purchases with a simplified payment process.

Retailers should educate the market on the existence of touch commerce and encourage first-time usage, perhaps by offering small discounts for doing so. Marketing campaigns should show how fast touch payments are, but also explain how they are also as secure, and possibly more so, than conventional check out processes.

Touch commerce is likely to tap into consumers’ appetite for impulse purchasing. But more mobile commerce and impulse purchases may mean that they will need to be even more responsive and able to cope with unpredicted spikes in demand that may happen at various times of the day and night. The potential impact on sales created by social media influencers should also be considered.

A simplified checkout process is not the only prerequisite for mobile commerce. A user-friendly and appealing mobile website or app is also essential.

 Cognitive technologies enhance enterprise software

Cognitive technologies that will be the most important in the enterprise software marketin 2016 will be: machine learning, natural language processing and speech recognition.

Vendors of enterprise software applications should consider how cognitive technologies can enhance their products. Start-ups may offer models of how to employ these technologies to make products easier to use, automate functions intelligently, and generate greater insight from data.

Corporate IT groups may want to build awareness of and skills in cognitive technologies such as machine learning and natural language processing. They could also begin to assess how to employ cognitive technologies to enhance existing corporate applications to provide greater usability and more valuable insights to users.

Buyers of enterprise software may find it worthwhile to ask their vendors to explain how they plan to take advantage of cognitive technologies to enhance their products’ performance and utility.

Software companies should also consider applying cognitive technologies to their internal business operations, such as recruitment. One company integrated predictive analytics to forecast which job applicants were likely to have a good cultural fit and be high performing. The same technology could also predict when a target candidate might start seeking out a new job, and make recruiters aware of this.

All in all, very good for Cortana and other digital assistants.

MEDIA

Virtual reality: a billion-dollar niche

Virtual reality (VR) will have its first billion-dollar year with about $700 million in hardware sales, and the remainder from content. It estimates sales of about 2.5 million VR headsets and 10 million game copies sold.

VR is likely to have multiple applications, both consumer and enterprise, in the longer term, but the vast majority of commercial activity will focus on video games. The majority of spending on VR will be by core rather than casual gamers.

Apart from games VR is still very much over-hyped and commercial take up is required to make this truly successful. For example, travel companies wanting to create VR brochures should assess how much filming and playback in VR may cost relative to current marketing approaches. They should also assess the cost associated with acquiring the hardware needed to display these materials.

Recent breakthrough technologies that required consumers to wear something on their face havenot proven to be mass market successes. While VR headsets may sell better than smart glasses or

3D TV glasses, also consider that using the technology may require a set of behavioural changes (the most apparent of which is wearing a large headset) that the majority of people do not want to make.

For some people the immersion that VR causes may overwhelm rather than liberate. And wearing a padded headset for a prolonged period of time may cause the user’s face to get hot and/or sweaty.

As for enterprise adoption of VR, 2016 will be a year of experimentation, with a range of companies dabbling with using VR for sales and marketing purpose.

Mobile games: leading, but less lucrative

App stores will offer more than 800,000 mobile games compared to 17,000 titles available for all games consoles and PCs. Every day a further 500 mobile games titles are launched on a single platform.

The immense number of mobile game titles renders many new titles invisible without substantial marketing spending.

Mobile apps are for ‘short’ games and people are only prepared to play and pay less. Console games are for long games and people will pay more.

The mobile games sector now has the same core challenges as most mainstream media: creating compelling content and making people aware of it.

US [pay] TV: erosion, not implosion

Despite many forecasts of the imminent collapse of the traditional advertising and subscription funded TV model, it is likely to erode at a slow, steady and predictable rate.

The US traditional pay television market is the world’s largest at about $170 billion. It will see erosion on a number of fronts:

  • the number of pay TV subscribers
  • pay TV penetration as a percent of total population
  • average pay TV monthly bill
  • consumers switching to antennas for watching TV
  • and live and time shifted viewing by the overall population, and especially by trailing millennials (18-24 years old)

With the rise of over the top (OTT) services offered from non-traditional providers like Netflix, download services like iTunes application program, clips from services like YouTube, and the continued usage of pirate sites (streamed or downloaded), talk of the imminent collapse of traditional TV is understandable. But while the US TV market is not growing, it is not collapsing either. The best way of describing the outlook is gradual erosion: an apocalypse is not around the corner.

eSports: bigger and smaller than you think

eSports will generate global revenues of $500 million in 2016, up 25 percent from about $400 million in 2015, and will likely have an audience of regular and occasional viewers of close to 150 million people.

The very idea that people may be willing to watch other people play competitive video games for big money prizes may surprise some. These people often underestimate the global annual market size at millions of dollars only. Conversely, eSports advocates overestimate the current market size, believing annual revenues are already in the billions, and comparable to major league sports.

There is nothing wrong with educating or entertaining tens of millions of gamers (usually for free, except for the ads), but this may not directly lead to tens of millions wanting to either subscribe or pay to attend an eSports tournament.

TELECOMMUNCIATIONS

The dawn of the Gigabit Internet age: every bit counts (Gigabit is not generally available in Australia)

The number of Gigabit per second (Gbps) Internet connections will surge to 10 million - a tenfold increase, of which about 70 percent will be residential connections. Rising demand is likely to be fuelled by falling prices and increasing availability. The 10 million subscribers will likely, however, represent a small proportion of the 250 million customers on networks capable of Gbps (or 1,000 Mbit/s) connections as of end 2016.

This is all about the need for speed and the Federal Governments desire to provide NBN broadband speed (<100Mbps) to most Australians. This is a big step up from the 2-15Mbps speeds offered by ADLS and up to 100MBps offered by cable.

The speed is not only for video streaming and OTT but the rapid digitisation of almost every service and the coming IoT demands.

A Gbps Internet connection might appear frivolous, but a decade ago some commentators may havequestioned the need for a touchscreen based device capable of transmitting data at 150 Mbit/s, with storage for tens of thousands of HD photos, video quality sufficient for broadcast, a pixel densitysuperior to most TV sets, a secure fingerprint reader, and billions of transistors within a 64-bit eight core processor. Yet modern smartphones with this specification are likely to sell in the hundreds ofmillions of units this year.

Photo sharing: trillions and rising

2.5 trillion photos will be shared or stored online, a 15 percent increase on the prior year. About three-quarters of this total will likely be shares, and the remainder online back-ups. We estimate that over 90 percent of these photos will have been taken over a smartphone; digital SLRs, compact cameras, tablets and laptops will collectively contribute the remainder. This estimate does not include the trillions of photos that remain on devices’ memory.

Smartphone vendors have long differentiated their models on photographic capability. They shouldmake sure to focus on innovations that are perceptible and appreciated by users, and not be lured into a specification race. Customers are likely to respond to technology that flatters their ability. Smartphones should lessen user error when taking photos. Software that automatically compensates for photographic mistakes (such as shooting into direct sunlight) can make the owner feel more talented.

Will it get it right? Tune in next year.

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Ray Shaw

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Ray Shaw ray@im.com.au  has a passion for IT ever since building his first computer in 1980. He is a qualified journalist, hosted a consumer IT based radio program on ABC radio for 10 years, has developed world leading software for the events industry and is smart enough to no longer own a retail computer store!

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