The Bullhound report lists: The next generation of Artificial Intelligence, Cordless Content, E-Sports, the dawn of AR and VR, driverless cars – up to a point, changes in Fintech, transformation in social media, the continued rise of SaaS (software as a service), a rise in tech IPOs, and predicts a new European Decacorn.
Drilling down, it says that 2017 will be the year when AI breaks into the mainstream. In the past AI, has not always lived up to its hype, but Bullhound points to a number of factors that are transforming the technology. For one thing, computers are more powerful – so that’s the march of Moore’s Law. For another, we have seen a vast increase in the amount of data available. Add to this, advances in machine learning algorithms. But also at play is that big investors are showing more interest. It says that 2016 saw 591 deals worth $4.2 billion involving AI technology. The big techs are leading the way and Bullhound says that “outside the tech giants, adoption of AI technology has been sluggish.” But it concludes that “2017 will see consumers and businesses begin to adopt cutting edge Artificial Intelligence for real-world applications.”
Looking at some of the other technologies on the Bullhound list, it sees the millennials leading a continuation of a move away from cable type content, to the growing popularity of networks, as the likes of Netflix, Amazon Prime, HBO challenge the traditional players.
It also sees the rise of video games as a kind of spectator sport, and maybe linked to that it expects virtual and augmented reality to take-off in 2017 – well no surprise there. It says: “In 2015, there were 112 major e-sports events around the world, generating over $21 million in ticket sales and $61 million in total prize money.”
Looking at driverless cars, it says that ‘unprecedented levels of investment’ are expected in this sector in 2017.
Fintech, it says, may see a fightback from the old guard, in an attempt to grapple with the threat from what it calls banks 2.0.
Intriguingly, it expects social media to see more offerings from Asian companies, as they acquire western technology companies and expand into the west. It says that companies such as Chinese firm WeChat, by targeting its domestic market, have been able to monetise their platforms quickly, but have neglected investment into technology.
Software as a service is expected to see consolidation as tech giants and non-traditional companies alike continue to acquire SaaS companies.
Looking at IPOs, it says that tech IPOs in north America, Europe and Asia fell by 36 per cent in Q3 of 2016, but that 2017 will see a strong pick-up with China and the US leading the way. It refers to the planned IPO of SnapChat but says that Dropbox, Spotify and Pinterest may also follow next year, but that China is expected to see the most active IPO market in 2017.
And finally, we get that elusive beast the Unicorn, and the even more elusive Decacorn – that’s a company valued at over $10 billion. Bullhound says that in Europe Unicorns boast a much higher EBITDA to valuation than their US equivalents, enjoying higher levels of profitability – with European unicorns valued at 18 times turnover, versus 46 for US unicorns. This means that European entrepreneurs are more focused on sustainable growth than the generation of capital. But it predicts that 2017 will see the emergence of another European Decacorn, Spotify being its favourite.