AI and Internet of Things will drive digital transformation through 2020


Businesses are investing heavily in the Internet of Things (IoT) while remaining cautious about investments in artificial intelligence (AI), reveals the Constellation Research 2017 Digital Transformation Study. However, Constellation expects AI to emerge in 2018 as the predominant area of technological experimentation due to the increasing availability of AI development kits and frameworks.

Nearly half of respondents of the Constellation 2017 Digital Transformation Survey said their organization either had an established IoT strategy with applications in production (19 percent) or have pilot projects underway (28 percent). In contrast, just 25 percent of executives said they were investing in AI.

Investmet in AI Digital Transformation

Constellation Research

Digital Transformation in the era of AI

Growing demand for the IoT and AI is expected to drive large investment in SaaS/cloud and big data technology. Seventy-five percent of respondents said their organization was increasing investment in big data technologies. A full 77 percent of respondents said their organizations would increase investment in SaaS/cloud over the next 12 months, with 45 percent of that total saying the investment would be significantly greater.

Investment in big data/SaaS in 2018

Constellation Research

Digital business models that hinge on AI and IoT such as “as-a-service” and “mass personalization at scale” require large amounts of data and computing power to execute. In addition, the connections for IoT are in the cloud and AI processing will increasingly rely on cloud-based services. These trends will continue to drive investment in SaaS/cloud and big data technologies.

About the survey

The Constellation 2017 Digital Transformation Survey asked C-level executives about the priorities of their digital strategy, recent investments in emerging technologies, near- and medium-term goals, and hurdles to initiatives.

Constellation sought to understand organizations’ investment in emerging technologies that are integral to realizing the potential of digital business. Constellation polled respondents on their organizations’ awareness and adoption of the Internet of Things (IoT), artificial intelligence (AI), synchronous ledger technology (blockchain), big data, and cloud technology.

Highlights from the Study

  • Charging ahead with IoT: Nearly half of respondents say their organization either had an established IoT strategy with applications in production or have pilot projects underway.
  • Cautious about AI for now: Just 25 percent of executives say they were investing in AI.
  • Blockchain remains enigmatic: Less than 20 percent of respondents have invested in blockchain or synchronous ledger technologies (SLT).
  • Appetite for cloud and big data grow to support digital transformation: 75 percent of respondents will increase investment in big data. 77 percent will increase investment in cloud technology.
  • Digital transformation goes mainstream: Nearly 70 percent of respondents indicate they have a digital transformation strategy.
  • Digital transformation focuses on digital business: 64 percent of respondents recognize digital transformation as essential to driving profits.
  • The war for talent intensifies: Sixty percent say their workforce will be more important as digital transformation continues.
Investment in Synchronous Ledger Tech (blockchain)

Constellation Research

Download a complimentary copy of the Constellation Research 2017 Digital Transformation Study



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