Renewing Business Intelligently

It has started to sound conventional nowadays to say that artificial intelligence, or AI, is going to change the world as we know it, as well as the way we do business. But when we try to get into the scale of this probable and very likely change, we are in a trouble. I have to confess that we at Cisco have been always wrong when we have tried to forecast the growth of the Internet over the past 15 years. Although we were completely right when we predicted huge growth, we underestimated it every year by 15–30%, on the low side. Just imagine: In 2012, 10 American families uploaded to the Internet an equivalent amount of data to the entire world’s Internet traffic in 2009. In 2020, one American family will account for the same amount of traffic as that of the entire globe in 2009. And the main reason for that is not because people will be just sitting and watching videos; it is because medicine, education, production, and many other things are going to change because of the Internet. I daresay industrial Internet of Things, or IoT, driven by artificial intelligence, is going to emulate this rising trend.

So, if we are simply going to collect terabytes of data from traffic lights, from beds that are completely digitized in a hospital, from parking systems, and from the people around, then 95–98% of that data will be useless, because there is nothing new in there. Thus, the first thing we will see in the future where industrial Internet is concerned is more computing at the edge instead of sending all the data collected back into the cloud. Each of those cameras, retail systems, or parking systems will have to have some policies, some rules that say, “When this violates that protocol, then send it back.” It may sound boring, as it is basically monitoring, however, this is a point that is worth mentioning before proceeding on to the consequences of the technology to have a full-fledged presence in our environment.

This AI and IoT technology advent has already shifted how things happen in many areas. Cancer research, for example, has completely changed. And, in the next five years, the cancer industry will also completely change because of liquid biopsy. This is a test done on blood samples that looks for cancer cells from tumors circulating in the blood or for pieces of DNA from tumor cells. This method can be used to find cancer while it is still in the early stages and is going to replace the normally used tissue biopsy, as it will be less costly, painful, and risky for a patient. It may also be utilized as means of measuring the treatment’s effectiveness. And this method is all about big data analytics. It is all about artificial intelligence. This is going to change our lives. And it can’t be done without data collection and data analytics.

Another example showing how impacting AI will probably be incorporated in our real lives is Cisco’s experience in Copenhagen. There, we have been working on environmental issues, trying to improve carbon emission by connecting lights, trucks, and cars intelligently. We found in the city utility gardens that the CO2 levels were running high early in the morning. If we were only measuring the buses, we wouldn’t have made any different decisions. But we were also measuring the schools in that neighborhood. Thus, we found that children were brought to the schools at the same time the buses were going to pass by. All we did was change the rules so the schools opened a little later and the buses went by a little earlier. We didn’t change anything else, but the CO2 levels came down. That is what will happen if you only connect the data.

Change or get killed

In industry, I think we will see AI technology used in two different categories. One is digital transformation, when it is used for transforming a supply chain, a factory, or a retail system. And that will mostly be done by established players looking for efficiency and cost savings.

But a bigger change will be AI disrupting industries for established players. So, we will see the second set of this technology being used by second-tier or third-tier players that want to change their dynamics and will then try to disrupt these markets.

And disruptions of this kind cannot be done by a single company, even a powerful one. It will have to be done by a new ecosystem. Thus, you will see such services as Airbnb, for example, which completely disrupted the travel and hospitality industries on a global scale. And there used to be a time when travelers’ checks were common, but then credit cards came about to kill the former industry. Now, in turn, credit cards are being disrupted by blockchain-based payment technologies, which will someday make credit cards obsolete.

Those are the two places where I see a lot of changes down the road due to artificial intelligence. And one thing I want to highlight is that all those improvements are about AI as it is, not about creating androids. I mean, mankind had better not get down to the android level because, as we know from android movies, they will kill people in the end. So, the future of AI is going a lot more boring that one imagines today. But it is going to be a lot more impactful, because it is all about collecting the data and then doing something with it.

By the way, I want t0 finish with a reference to Peter Drucker, who said that great automotive companies like GM and others would get killed not because they were not gathering information, but because they were gathering the wrong information. So, if you want to have AI, you had better change your business model, too. If you continue making business models the way they have always been, you are going to get killed. The newspapers are not getting killed because of online Google and Facebook; they will be killed because their business model is really bad. So, we need to renew our business models with artificial intelligence on board.

This article is based on Mr. Menon’s speech at the INNOPROM-2017 industrial trade fair in Ekaterinburg.