Key Trends in 2019 – Redefining Your Digital Business

29 January 2019 | Matt Gutierrez, Senior Managing Director, Asia Pacific

The true Digital Business is the only enterprise that will have a competitive advantage in 2019. But what are the business and technology trends businesses in Asia Pacific need to look out for? Find out why enterprises need to take note of critical developments in artificial intelligence (AI), Internet of Things (IoT), smart cities, and more. 

2019 will be the year for Digital Businesses. As the region’s economy evolves and digital transformation continues to gain momentum, there will be more opportunities for enterprises that know how to leverage the power of their data to focus on their solutions, services and improve the customer experience.

To start 2019 on the right foot, it’s time to identify some key business and technological trends that will shape the digital future. 

#1. Economic integration in Asia Pacific will offer more opportunities for businesses

Asia Pacific will continue to offer growing opportunities for businesses. At the recent ASEAN Summit, the key Southeast Asian countries talked about bringing the Regional Comprehensive Economic Partnership (RCEP) forward. The agreement is estimated to have a huge impact on the world economy, making up 25 percent of the global GDP, 30 percent of global income, and 30 percent of world trade. The integration will also bring 45 percent of the world’s total population closer, creating a bigger market for enterprises. 
In Southeast Asia alone, the internet has generated a value surpassing the GDP of more than 100 countries in the world in just three years. 

Furthermore, the internet economy in the region is also expanding fast, creating a more vibrant playing environment for Digital Businesses. In 2018, the region’s internet economy was projected to have hit S$72 billion, doubling since 2015. In Southeast Asia alone, the internet has generated a value surpassing the gross domestic product (GDP) of more than 100 countries in the world in just three years. In the same period, over 3 million Southeast Asians have gone online for the first time every month – a size bigger than Chicago’s or Madrid’s population. This growth will continue well into 2025, with the e-commerce market value reaching S$102 billion.

For Digital Businesses dealing in e-commerce, prospects in Southeast Asia look bright. In 2018, the e-commerce market value doubled from the previous year – with the top three e-commerce businesses being Lazada, Shopee, and Tokopedia.

This continuously growing market gives enterprises more reasons to move to Asia Pacific and motivation to accelerate their digital transformation journey. This also means that IT agility will be critical to help enterprises meet diverse customer needs rapidly. 

#2. Smart systems and infrastructures will shape customer experiences

The number of smart cities will only increase. This year, the ASEAN member states launched the ASEAN Smart Cities Network, and have developed plans to drive 26 pilot cities. The initiative aims to create innovative urban solutions that will raise the quality of people’s lives. Smart city technologies such as data-driven urban planning, e-payments, and automated vehicles will increase the speed of digital transformation across various countries and cities. 
Consequently, digital will play an increasing role in how consumers – and customers – interact with organizations and enterprises. Digital capabilities will become an important aspect of delivering better customer experiences. To do so effectively, enterprises must put data at the heart of their business strategy. Discovering actionable insights rapidly will be key to acting on market trends and customer preferences faster and gain a lead in today’s competitive market. 

#3. IoT will play an even more central role in business

Following the accelerating developments in smart cities, Digital Businesses, and evolving digital economies, IoT will see an accelerated rise in adoption. Connected devices and IoT networks will be a powerful influence on daily life and business operations. 
By 2020, analysts indicate that there will be 8.6 billion connected devices in the region.
By 2020, analysts indicate that there will be 8.6 billion connected devices in the region, excluding Japan. In the top five countries with IoT penetration are South Korea, Australia, New Zealand, Singapore, and Taiwan. IDC also indicates that IoT will heavily impact sectors such as government, utilities, discrete manufacturing, healthcare and retail and this trend will only increase.

#4. The Adaptive Network will become a competitive differentiator

Data and IoT capabilities will require the power of a network foundation that is robust and flexible. Network demands will only become heavier as enterprises grow their customer bases, power their digitization initiatives, and expansion to other countries. Furthermore, the region is also becoming a fast-growing hotspot for “data capitals”. According to a report, Asia Pacific will be home to 40 percent of the world’s data centers.

This shift is driven by surge in data generated from various digital products and businesses migrating their data storage to cloud services such as Google, Amazon, Microsoft and Alibaba. With more data storage and transfers being performed by enterprises and other organizations in the region, building reliable, secure connectivity will be more challenging. Meanwhile, the introduction of edge computing will also drive demand for the next-generation network. This distributed, open IT architecture features decentralized processing power, crunching data on the local machine instead of a data center and enabling the next level of mobile computing and IoT capabilities. 

To transform, enterprises need to look at building cloud-like flexibility, automation, and flexible management into their networks. 

#5. “Software-defined everything”

One of the important components of an adaptive network is software-defined technologies. Hence, software defined networking (SDN) – especially software-defined wide area networks (SD-WAN) – will see increasing adoption to design and support an Adaptive Network. 
Thanks to the pervasiveness of cloud computing and IoT, SDN will become a popular way of delivering better virtualized systems, balance network workloads, and to support IoT initiatives like Smart Manufacturing, Smart Asset Management and Smart Networking. On top of that, SDN gives enterprises more control over network management and better end-to-end visibility. In fact, SD-WAN has the potential to improve provisioning times by up to 80 percent and triple capacity scaling in real time. And with the emerging technologies like 5G, SD-WAN will only increase in popularity. 

#6. The emerging risks of cryptojacking, insider threats, and botnets

IoT attacks will remain one of the more prominent types of attacks to look out for. CenturyLink Threat Labs saw high bot traffic in hotspots like China, South Korea, and Taiwan. Therefore, botnets that target IoT devices, which are becoming popular, will be one of the top cyber threats businesses to look out for. 

However, we are also seeing two new types of attacks becoming more popular. They are crypto jacking and insider threats. Crypto jacking is now more prevalent than ransomware, which was 2017’s most popular cyberattack method. Hackers install cryptocurrency mining software on a target system. The software consumes processor cycles and their requisite electricity to process cryptocurrency transactions, helping attackers earn their commissions.

Crypto jacking is now more prevalent than ransomware, which was 2017’s most popular cyberattack method. 

Insider threats are another risk to remain vigilant against. Sources of internal threats include cybercriminals working from within companies, third-party contractors and negligent employees. In Asia Pacific, insider-related incidents caused enterprises to lose approximately US$5.88 million in a space of 12 months.

To deal with these threats, enterprises need a proactive cybersecurity approach. A Connected Security framework that uses the network as a threat sensor will allow enterprises to anticipate and deal with attacks. The support of a global intelligence network will enable enterprises to have complete visibility of threats within and without to better protect against them. 

#7. AI will become more important in powering networks and cybersecurity  

As networks expand and workloads become more complex, managing them can become too overwhelming for security and network operations teams. The advent of adaptive networks amid evolving threats will drive enterprises to rely on AI for operations.

AI can be used to analyze data traffic and security data, identifying trends and behaviors for a more predictive approach to management and security. For instance, AI can help e-commerce retailers identify peak seasons and geographies in network traffic during events like Singles Day or festive periods. They can provision network bandwidth to ensure the right markets have it to prevent downtime. AI can also automate basic processes like security log monitoring and identify threat trends from data fed in from a massive intelligence network. Consequently, security teams will then be able to perform more value-added tasks such as devising security strategies and consulting with customers.

#8. Private-public partnerships to bridge the skills divide

Asia Pacific will have to cope with its labor shortage in the face of a growing digital economy. By 2020, the region will experience a deficit of 12.3 million workers, with the possibility of rising to 47 million by 2030. For cybersecurity in particular, the shortfall is about 2.14 million by current estimates. What is worse is that these shortages will lead to an annual opportunity cost of US$4.238 trillion for the region. 
Fortunately, collaboration can be a solution to this problem. Private and public organizations are coming together, combining their competencies and maximizing their resources, and this is especially on the matter of evolving threats. It is nearly impossible for any organization to keep up with the pace of cybercrime on their own; Partnering up will open up access to resources that would otherwise be unavailable to a particular business or government body. 
In Thailand, a private company and Thailand’s Ministry of Education signed a MoU to facilitate technology skills transfer among students to help support the Bangkok-Nong Khai high-speed training project. Singapore’s government is also working with private companies—as well as other countries—to boost up the region’s cybersecurity capabilities with the ASEAN-Singapore Cybersecurity Centre of Excellence.

#9. New privacy laws are looming 

In 2019, the global compliance landscape will also become more complex. The GDPR made headlines in 2018 but another upcoming EU privacy law might change the way enterprises operate and innovate.

This new policy is called the ePrivacy Regulation and it addresses essential issues of data privacy as well as introduces important shifts in regulatory compliance. The new law will apply to companies outside of Europe, including heavy fines for infringers.

It is slated to replace an old directive that will control the treatment of traffic and location data by telecommunications companies and internet service providers. In addition, it might restrict direct marketing by email and other channels, and limits the use of online tracking devices, such as cookies.

The year 2019 will be the year for Digital Business. To flourish, enterprises must accelerate their digital business journey with a trusted IT partner that has capabilities across the Adaptive Network, IT Agility, and Connected Security. But technology is only half the story. Enterprises should also seek to work with companies that have a focus on customer experience, those that display a deep understanding of their needs and the ability to chart out a digital business roadmap that is right for them. 

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