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IT trends for 2020Nowadays, it’s said that “Platform economy” becomes mainstream in the Digital Transformation. What does it actually mean? How will it evolve in the coming years? And what about microservices and serverless functions? In this article, I share my vision and thoughts about these important trends for the coming years. As you can read in my previous vision articles Trends in IT 2019 and Trends in IT 2018, my predictions about microservices, integration Platform-as-a-Service (iPaas), and an API-first strategy continue to be trending  in 2020.

When talking about trends, it’s important to understand what’s going on in general when it comes to business in the B2B and B2C market space. First, let’s look at important (new) regulations that were introduced in 2019, in Europe, North America and the South-Pacific. And secondly, let’s have a look at important trends in general.

Disruption in the financial services industry

New regulations for the financial services industry are causing a major shift in providers of financial services. The most striking change in 2019, which continues in 2020, is the Payment Services Directive 2 (PSD2). PSD2 obligates banks to offer APIs to share account information (PSD2 AISP services) and enable payment transaction data (PSD2 PISP services) and empowers consumers to share this data with licensed third parties. This drives innovation based on ‘open banking’ and offers possibilities for various new service concepts for the Financial Service Providers (FSP) themselves but also for competitors or even new third parties entering the FSP market space. The FSPs give high priority to active servicing for mortgage providers, for example the discussion about interest-only mortgages loans. An interest-only mortgage allows you to only pay the interest that is charged each month for the duration of the loan. You don’t have to repay the amount you’ve borrowed until the end of the term. Therefore, FSPs need to invest in digital and data-driven active servicing concepts. Regulation pushes the pension market towards individualization with so called defined contribution contracts (DC-contracts) and more competition. This forces pension providers to invest in improved digital service concepts and smart communication with their end-customers. These regulations force FSPs to innovate and rapidly change the way they currently do business. Terms like short time-to-market and (data and services) personalization are mission-critical for FSPs in the coming years or even months.

A turbulent market

The United States and China have entered a trade war. Germany, the backbone of the European industry and main economic indicator for the EU, has already suffered from the ongoing trade war, but also suffers from the direct and indirect effects of the Brexit. In 2020, I expect a significant impact by both topics on the global market and in each enterprise around the world. Enterprises must take action to be more productive, innovative and cost-effective, to keep their existence in this turbulent market.

GDPR; data is personal (again)

Just one year after the entry in force of the General Data Protection Regulation (GDPR), it seems that each EU member state has set up the necessary legal framework, and that the new system, strengthening the enforcement of the data protection rules, is falling into place. Enterprises are developing a compliance culture, while citizens are becoming more aware of their rights. At the same time, convergence towards high data protection standards is progressing at international level. The GDPR has made EU citizens, but also other citizens around the world, like the United States, increasingly aware of data protection rules and of their rights. People are aware and demand from enterprises, that their personal data is owned by themselves and not by the large enterprises. This will have a huge impact for companies like Uber, Tesla, Facebook and so on. The way customers use, consume or share their personal data will radically change in the coming years. I foresee raising personal data lockers with APIs as service wrappers and enforced consent management to share personal data in the B2C market space.

Pay what you use, not what you own

Consumers will increasingly demand a pay-what-you-use model instead of an ownership model. Pay-what-you-use works well if the service can be measured effectively and gives more information about how customers use and value products and services. Companies operating on Pay-what-you-use model can get greater feedback to refine their pricing and how they package products and services, to improve their profitability. Pay-as-you-go is initially sold in as a lower expense to a customer, but if bill amounts are predictable and controllable. At the downside; if not, then neither the subscriber or the provider can budget effectively, and consequently the subscriber pays a premium for bursting capacity. However, the Pay-what-you-use model will be mainstream for the coming years. All these generic trends in the B2B and B2C market space can be translated into trends in IT which support and solve one or more of these topics. Looking at these topics and translating them into IT-related terms and trends, I believe microservices, serverless computing, APIs, cloud computing, and platform economy, are the key IT ingredients for successful companies in 2020 and beyond.

Microservices

The demand for personalized data services and operations (for example PSD2, GDPR or the increasing digital demand by consumers) will increase. The call for further decoupling of services and the ability to handle mass requests, stimulates the microservices architectural approach in IT. Microservices concepts are an ideal candidate to implement a decentralized development approach which drives shorter time-to-market and continuous innovation at companies. The WSO2 Cellery framework solution is therefore the perfect fit. It combines the power of Kubernetes, Ballerina and API Micro Gateway concepts. It’s a powerful way of developing and deploying microservice. It’s a controlled and effective but enforced policy.

Serverless computing

With microservices around the corner, the next question is how to deploy and execute them cost-effectively. Serverless computing, for example with Lamba, is the only logical answer. I believe that Serverless computing in conjunction with microservices will be the next big movement in IT in the coming years. But how can microservices and serverless computing be governed and controlled in such a way companies really can rely on them? For me, the answer is a centralized approach for government (like policy enforcement and service discovery) and life cycle management within the same time decentralized development teams. This is also the way Connext, Yenlo’s integration Platform-as-a-Service (iPaaS) solution, is evolving into a centralized platform for decentralized microservices and serverless computing.

APIs and an API-first strategy

Let’s be honest, not every company has a smooth and state-of-the-art IT landscape. That’s the result of 40 years of IT engineering. But no worries, APIs are here to the rescue! With APIs, you disconnect your internal information systems from your data, services or business processes. I believe APIs are the only way to move forward as an enterprise in the digital arena. One of the biggest trends, already started in 2018 and to be continued in 2020, is the API-first strategy. Over 60% of the world’s IT events and conferences in 2019 were about APIs. With an API-first strategy, enterprises first define and roll-out APIs and also take care of the actual (IT) implementation. This allows you to develop with multiple internal and external teams in parallel, which shortens the time-to-market. Remember, APIs are not an IT driven ‘thing’, there should always be a business driver and (new) business model behind each and every API you define.

Cloud computing

Why would you do it yourself? I think cloud providers such as AWS, Azure and Google can no longer be avoided or defeated. We all move to the cloud, some enterprises faster than others, but in the end, we all end-up in the cloud. Even financial institutes, insurance companies and law enforcement moved to the cloud in 2019. So, in 2020, this movement will continue, and the level of adoption will increase. However, I also believe risk awareness will be more important and enterprises will decide for a multi-cloud approach based on Kubernetes. The use of Agile Stack is an excellent result of such a multi-cloud strategy. A multi-cloud Kubernetes managed stack approach which lower risks of a single cloud provider.

Platform economy

Economic systems increasingly operate via online platforms. The most common are the transaction platforms, also known as digital matchmakers. Think of Amazon, Airbnb and Uber. A second type is the innovation platform, which offers a common technology framework on which others can build. This development will lead to a new economic revolution. As the platform economy - which began around 2018 - grows and evolves in the coming years, new opportunities and integration challenges and accountability arise.

We are already in a disruptive timeline and this will continue unabated in 2020. In short: exciting times are upon us.

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Picture of Ruben van der Zwan
Published December 10, 2019

Ruben van der Zwan

Ruben is CEO and founder of Yenlo. He is an IT visionary from the first hour, and always working on creating better ICT solutions. Ruben believes that with technology, we can bring the people in this world together and bring prosperity to everyone. Ruben is an evangelist of open source technology, integration platforms, and WSO2 in particular. He is a frequent speaker on international conferences.

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