Two High-Tech Sectors Poised for Rapid Growth in the Coming Years

Every December The Kiplinger Letter publishes a Year-End special issue that dives deeply into one topic, ranging from demographic changes to robotic advancements. This year, we focus on which segments of the economy are positioned for strong growth over the next five years.

For Alerts subscribers, we wanted to share some of that analysis. Below is the first installment looking at high-tech sectors set to register rapid growth through 2023. Keep an eye out for other tech-focused Alerts that cover high-flying tech sectors.

Drones Will Be Unleashed for an Array of New Business Uses, Including Package Delivery

Look for commercial drones to soar as red tape is cut and technology improves. The fleet of small commercial drones will grow from 111,000 in 2017 to nearly 500,000 in 2022, according to projections by the Federal Aviation Administration. If regulations are updated faster than expected, which is a real possibility, growth will be even stronger. Continue reading “Two High-Tech Sectors Poised for Rapid Growth in the Coming Years”

Promising Trends Emerge for the Internet of Things

The internet of things is on the rise, with billions of additional devices, machines and sensors ready to connect to the web around the globe soon. But the pace of growth hinges on how fast the technology industry can overcome some major road blocks.

Security challenges are perhaps the biggest problem, with hackable products flooding the market and giving a bad rep to the potential of connected gear. Reliable wireless connectivity is another issue since businesses won’t enter the fray unless they know critical data can be transmitted without interruption, and at a reasonable price. Continue reading “Promising Trends Emerge for the Internet of Things”

What Privacy Regulations Mean for Your Business and Investment Portfolio

Look past the current privacy debate roiling Capitol Hill set off by Facebook’s huge data leak.  Businesses will have to deal with new rules of the road when it comes to consumer data. It’s only a matter of time before Congress settles on federal legislation, though serious consideration won’t start before 2019 and may take even longer than that.

Coping with more-stringent, and potentially costly, privacy regulations won’t be easy for many firms. New requirements will touch all types of businesses that deal with consumer data, both small and large, tech and non-tech. That means more money and time spent on managing customer data and keeping tabs on upcoming rules. Continue reading “What Privacy Regulations Mean for Your Business and Investment Portfolio”

Cyberthreats Becoming More Relentless and Destructive

Expect the onslaught of cyberattacks to worsen as launching them becomes cheaper and easier.

“Anybody can now do cybercrime,” says Raj Samani, chief scientist and fellow at computer security software maker McAfee. “The technical skills required to be a cybercriminal are the lowest it has ever been.” Hackers can easily find out how to launch an attack with a simple Google search. They can also pay for certain attacks by the hour.

At the same time, attacks are increasingly sophisticated and hard to detect. Hackers are turning to artificial intelligence software for more destructive digital weapons. And they are using encryption software to mask their traces.

Major cybersecurity companies report a surge in all sorts of raids. Email attacks are rampant against all types of workers. Social media scams, stemming from sites such as LinkedIn, are becoming more common. Insider threats are still hard to stop, such as when a disgruntled employee brings in a USB stick to install malicious software or steal data.

It’s no surprise that cybercrime is costing companies more. The average cost of a data breach for a U.S. company is $8 million dollars, according to a report by IBM Security and the Ponemon Institute. The report examined 500 companies of varying size and found that the average time to detect a breach is about 200 days, leaving a huge gap where criminals can steal info and inflict harm.

A relatively new type of intrusion has exploded in prevalence: Hackers stealing computing resources to mine bitcoin and other digital currencies. Cryptocurrencies require huge amounts of computing resources to mine—the process of compiling transactions in a web of complex math computations. It’s so resource-intensive and expensive that criminals are willing to steal, or cryptojack, someone else’s computer horsepower.

“Compared with well-established cybercrime activities such as data theft and ransomware, cryptojacking is simpler, more straightforward and less risky,” according to a McAfee Labs Threats Report from June 2018. Criminals don’t need to coax an executive into paying a ransom. The stolen computer horsepower can be a significant cost, says McAfee’s Samani.

Hackers are also hijacking connected devices to bombard a website or app with web traffic until it’s forced offline more frequently. The rise of these cyberraids, known as distributed denial-of-service attacks, or DDoS, stems from a surge in cheap internet bandwidth and an explosion in internet-connected devices. Hackers can take control of a swarm of unsecured connected devices to blitz an IP address with traffic.

Weaponizing bandwidth can wreak havoc on businesses during critical times. Consider an online seller darkened during prime holiday season, for instance. These intrusions can also serve as a devastating distraction. While the IT team scrambles to get the site back online, hackers sneak into another part of the network.

One growing fear is large scale DDoS attacks “taking large portions of the internet offline,” says James Willett, vice president of technology at Neustar, a technology company that offers defensive software. Firms can erect firewalls to detect and fend off fraudulent web traffic. Companies can also check with web providers or cloud servicers to see what defenses are built in.

The type of attack varies by industry, according to Verizon’s 2018 Data Breach Investigations Report. Companies should take that into account as they shore up digital defenses. Some trends are intuitive. For instance, hoteliers are frequent targets of point-of-sale raids, which attack store payment terminals, but the education and health care sectors are seldomly hit. Schools and doctors don’t use cash registers that often.

Other industry trends are less obvious. Denial of service attacks are common in education and financial services, but much less common in hospitality and health care. Privilege misuse, where an employee shares data or breaches company IT policy in some way, is a dramatic problem in public organizations. Consider a disgruntled government employee sharing sensitive info with people who aren’t approved to see it. And the manufacturing sector is a ripe target for state-affiliated hackers looking to swipe valuable intellectual property.

The threat of cyberattacks “doesn’t hit home for a lot of small- and medium-sized business owners until it’s too late and they’ve lost everything,” says Bonnie Moss, the executive director of SMB iSAO, a cyber info sharing and analysis organization whose membership includes auto body shops, retailers and nonprofits. The group offers a monthly newsletter, threat alerts, legal advice, updates from standards organization and more. It costs $20 per month. “It’s threat intelligence that people can trust,” says Moss. To find more organizations visit https://www.isao.org/information-sharing-groups/.

Tried-and-true cybersecurity advice still holds, security experts note. Besides keeping tabs on the latest cyberthreats, companies can beef up security by keeping all software up-to-date, backing up data regularly and creating strong login processes.

Cybercriminals Targeting Workplace E-mail More

Your inbox might be the easiest entry point for a cyberattack. Firms are being flooded with fraudulent e-mails from criminals trying to pry sensitive info from unsuspecting workers. The e-mail scams, known as phishing, are a cheap and easy way to infiltrate even the most digitally fortified workplace. E-mail is a goldmine because it contains so much personal and proprietary information, including login details for other online accounts. Continue reading “Cybercriminals Targeting Workplace E-mail More”

Facebook’s Long-Term Plan to Keep Its Business Humming

Facebook is having a rough week. During an earnings call on Wednesday, the social media giant’s chief financial officer said revenue growth will slow in the coming quarters, spooking investors and sending the stock plunging 19%. A staggering $150 billion in value was wiped out in one day.

The selloff came as a surprise to many followers of the company, since CEO Mark Zuckerberg had earlier pointed out many of the emerging trends that could lead to slower growth and higher costs. Continue reading “Facebook’s Long-Term Plan to Keep Its Business Humming”

What the Future Holds for Ever-Smarter Smartwatches

Smartwatches are far more than gee-whiz gadgets. Their evolution shows the future of wireless innovation. By next decade, the Dick Tracy-like wrist bands will harness next-generation wireless service, or 5G, the cellular upgrade that promises faster, more ubiquitous and lower-powered wireless connections.  Smartwatch hardware improvements will find their way into other small devices, such as augmented-reality headsets. Continue reading “What the Future Holds for Ever-Smarter Smartwatches”

Streaming Video is Taking the Fitness World By Storm

Brick-and-mortar gyms are sweating how fast live-streamed workouts are catching on. Fitness buffs are taking direction from top-notch fitness instructors…from their living rooms via live online classes.

Gym owners worry that customers will start ditching memberships in favor of these at-home online classes. The 36,540 fitness clubs in the U.S. attracted 57 million members in 2016, according to the International Health, Racquet & Sportsclub Association, an industry trade group. Globally, health and fitness clubs pulled in $83 billion in 2016.

Fitness videos are nothing new. But those old Jane Fonda VHS tapes were prerecorded, as are many of today’s popular online workouts. The new crop of live broadcasts can be streamed to phones, tablets or TVs and have become appointment viewing for gym rats. The live aspect lures eyeballs with an extra dose of excitement and urgency.

Credit startup Peloton for sparking the phenomenon. The company, founded in 2012, has raised more than $400 million in venture capital and ushered in the streaming revolution about two years ago. It sells a $1,995 indoor bike that includes an attached tablet to watch live spin classes. Peloton charges $39 per month for access to its workouts and now boasts one million members. It recently launched a treadmill, too.

Another fitness app, Zwift, lets bicyclists go on virtual rides with friends from their basements for $15 per month. Bikes are hooked up to indoor trainers that wirelessly connect to a screen that displays a virtual road. The trainer adjusts to conditions, such as making it harder to pedal uphill, and translates the rider’s pedal strokes to the rider on the screen. Users can go for a solo joy ride or race others in real-time on courses in areas such as London, Richmond, Va. or even in made-up worlds.

Facebook, Instagram, YouTube and Twitter are also increasingly popular destinations for livestreamed workouts. The social media sites make it easy for anyone to broadcast themselves to the masses and are especially popular with younger digital natives.

The trend is putting pressure on traditional fitness equipment sellers. “We’re not a hardware company,” Peloton’s CEO said in January. “Those companies are yester-year.” In response, equipment sellers will have to adjust. NordicTrack now sells treadmills with large video screens that play prerecorded workouts. Its tagline: “A true club membership in the comfort of your home.”

Gyms are racing to jump on the bandwagon. Gold’s Gym has an app with prerecorded audio workouts to use at the gym or at home, for example, and 24 Hour Fitness launched an app in January that includes personalized video workouts. “In the fitness industry, competition is at an all-time high already with explosive growth of new entrants to the fitness market,” according to Brad Weber, CEO of FitCloudConnect, a streaming video platform catering to gyms.

Jumping into livestreaming can cost traditional health clubs an arm and a leg. Gyms must invest in software and video production, an especially tough prospect for cash-strapped independent gyms. Reliable, fast Wi-Fi is also a must-have because users often want to stream workouts at the club. Weber argues that “existing fitness clubs do not have the time, money or technical expertise to respond to the Peloton threat with a streaming offering.” Buyers of FitCloudConnect’s software can bet on the livestreamed or recorded workouts increasing membership retention, or they can charge extra for access to trainer classes.

Look for more gyms to partner with streaming fitness outfits and mobile apps, either working closer with fitness-tracking apps, such as Strava or MyFitnessPal, or adopting equipment that includes livestreaming capability. “There are thousands of Peloton bikes in hotels, residential developments, college campuses, professional sports team gyms, social and country clubs, and other ‘commercial’ environments,” says Tim Shannehan, Peloton’s chief revenue officer. Shannehan says the consumer market will always be the primary focus, but that the company “sees loads of opportunity” in commercial settings.

Even if gyms can stem defections, they still risk losing high-priced fitness class customers. Head to a gym these days, and you may catch someone consulting with smartphone exercise apps to tell them the next exercise. That’s a lost opportunity for a class run by the gym itself. And if clubs adopt streaming fitness equipment in their gym, they could be introducing members to a viable alternative.

What comes after live streaming? Companies are already working on virtual- and augmented-reality workouts. BoxVR lets VR-wearing users spar with animated targets flying around. Black Box VR has users grab cable pulleys to go through a stamina-tracking video game. The market will gain traction as headsets become lighter, cheaper and more powerful.

How Facebook Will Cope with a Big Tech Crackdown

The backlash against big tech isn’t going anyway anytime soon. Of all the tech titans bracing for impact, Facebook has the most to lose from increased scrutiny and new regulations in the U.S. and around the world.

The most recent firestorm was sparked by a massive data leak that exposed up to 87 million users to the political consulting firm Cambridge Analytica. Facebook was caught flatfooted by the intensity of condemnation from lawmakers on both sides of the aisle. Continue reading “How Facebook Will Cope with a Big Tech Crackdown”

Who Profits from the New Space Race?

The new space race’s leaders will start emerging over the next 12 to 18 months. Investors in space have wagered that cheaper rocket launches, better small satellite hardware, upgraded antenna equipment and other advances will transform the industry and bring satellite broadband, Earth imaging and other services to a new slate of businesses and consumers. The buzz has lured an estimated $10 to $15 billion of venture capital into space companies over roughly the last 10 years.

Nearly 5,000 small satellites are planned for launch over the next decade, according to North Sky Research, a space market research firm. That’s far more launched per year than past years. The optimism underscores the promise of cheaper, more reliable access to space. Continue reading “Who Profits from the New Space Race?”