2016 has been a big year for everyone, especially marketers trying to reach their audience in the midst of life's daily distractions. With the year coming to a close, here are my thoughts on what's to come in the martech industry in 2017.

1. 2017 will be the year of augmented reality

Although virtual reality (VR) is once again a hot topic (remember the VR hype in the early 1990s?), 2017 will really be the year of augmented reality (AR).

The barriers to entry for delivering a quality AR user experience are much lower than they are for VR, which still suffers from a variety of issues, including stutter and motion sickness. As a result, VR will remain a toy for high-end gaming, especially given the current price-point and hardware requirements.

Meanwhile, vendors can already deliver terrific and affordable AR user experiences with today's technology. The potential use cases for these capabilities for manufacturing (access to manuals), healthcare (patient information and resource location), communication (real-time translations), and other industries and uses is unlimited. And we will see more and more of them affordably delivered in the coming year.

2. Forget about fixed algorithm solutions; experimentation through machine-learning will be key to driving results

Machine-learning has gotten good enough to spot trends and make predictions that could not have been otherwise spotted or made. As a result, machine-learning will become tables takes for analytics and marketing technology solutions. But the real opportunity in this area lies in experimenting with the underlying algorithms.

In a typical Big Data use case, an algorithm is developed and becomes a fixed aspect of the solution, always looking at the data the same way. Over the next year, developers and analysts will start testing algorithms against each other to determine what works for a given use case, and then continue to experiment with the algorithms over time.

Companies that will be successful at doing that will need to go through a two-phase culture shift:

  • First, they will embrace the idea of algorithmic decision-making—that a computer with a solid algorithm will invariably reach a better decision than a human being poring over the data.
  • Second, they will develop algorithmic competition, accepting that the benefits over time will outweigh any short-term inefficiencies.

3. Time-to-value will be the most appealing criterion for Cloud service customers

The ability of Cloud services providers, such as Salesforce and Oracle, to successfully deliver continuous value via the automatic introduction of new features will put a massive strain on the software industry, which will need to re-architect solutions to keep pace.

Customers now expect to simply log in to solutions and see new and improved capabilities, and in general buyers will be far less inclined to go through lengthy systems integrator engagements to get new solutions going. Moving forward, the solutions that win will likely be the ones that offer the fastest time-to-value, even if they aren't the most feature-rich.

We are seeing evidence of this today through the RFPs we receive, which focus much more on time-to-value than they used to. We've also seen it in product announcements. For Dynamics 365, Microsoft combined its ERP and CRM suites into a single user interface. Customers can now add modules à la carte and receive real-time service and feature updates. That is the complete antithesis of how Microsoft sold and delivered these products just 2-3 years ago.

Time-to-value will drive the next competitive wave in many industries, and the vendors that are able to deliver it will do well. Those that can't will be left behind.

4. Tech consolidation will reach new heights

Macroeconomic uncertainty has caused IPOs to slow, and the market is unlikely to bounce back until the Brexit hangover has passed. That fact has triggered a wave of acquisitions as a way to build profitable businesses, and tech titans like Microsoft and Salesforce will continue to consume some larger players in the industry, especially if the targets represent viable businesses and complement the acquirer's other businesses.

Significant "horizontal" consolidation will also take place as vendors group related technologies together to create suites that solve customer challenges more comprehensively. For example, with the explosion of marketing technology vendors, it is becoming overwhelming for customers themselves to stitch together 15 or 16 point solutions into a single marketing platform. As a result, they are hesitating to move forward with initiatives and demanding more comprehensive, integrated solutions.

The result is a huge opportunity for vendors that understand how to properly integrate the solutions they acquire.

5. Say sayonara to the chief digital officer

As companies make the technology and cultural shifts necessary to becoming digital businesses, we will see the continued rise—but then the disappearance—of the chief digital officer (CDO).

The role of the CDO is really to help companies rethink and restructure their businesses to create cohesive, end-to-end, digitally driven business processes, tearing down the real and imagined silos that exist. Once that transformation is baked into an organization through the advancements of technology, the need for the CDO will disappear. We're already seeing this trend in more digitally advanced organizations.

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image of Ryan Donovan

Ryan Donovan is SVP of product management at Sitecore, provider of experience management software that enables context marketing. He is focused on driving the technical evolution of Sitecore's customer engagement platform.

LinkedIn: Ryan Donovan

Twitter: @ryan_donovan