Jan 09, 2014
SMAC --- Social, mobile, analytics and cloud mega trends are fueling another renaissance in business software. After a decade-plus of ups and downs, there’s another major turning point underway where these new technologies reinvigorate enterprise customers and IT budgets for years to come.
Mid November we held Edison’s Enterprise 2.0 Roundtable 2013. Among other presenters, we invited Joel Fishbein, Managing Director of Equity Research at BMO to give us the “equity analyst” perspective on CIO priorities, demand drivers, what’s trending, and what the large software vendors are saying about growth.
A series of key points stood out and are relevant in executing 2014-2015. How do your products, services and selling strategy fit into these CIO priorities and trends? And if they don’t, should they or there’s risk of being less of a priority.
Analytics is back to the #1 spot on CIOs priority list, after a 3 year hiatus, driven by the arrival of the Big Data challenge. For years analytics applications have looked for a problem to solve, now big data has brought the market forward. Seems every application must consider what is their analytics, dashboarding and reporting angle. CIO poll --- analytics will be the biggest area of investment next 3-5 years starting in 2013. 90% of the world’s data volume was created in the last 2 years; by 2020, the volume of data will increase by an estimated 50x.
Mobile continues to accelerate at the top of CIO minds at #2, since mobility is a platform shift, similar to mainframe to client/server or client/server to the Internet. Mobile moved up dramatically, from #6 in 2011 and #12 in 2010. Expect mobile and related initiatives to take 10%+ of CIO budgets over time. The software stack is being re-invented for mobile, from operating systems, to databases, to applications and UIs. CIOs are being invaded by mobility. 90 billion devices connected to the internet now, will grow to 50 billion by 2020. 70% of work will be done on mobile or web by 2020. Do you have a mobile strategy as part of your solution? How will you respond to customer demand for mobile?
#3 priority for CIOs --- “Cloud” --- was coined just in 2010. Since then, it’s become the instantiation of enterprises truly adopting the Internet as a platform, as an operating system, for their core business processes. Today about 30% of all companies use some level of cloud service but adoption is growing very fast; 60% of CIOs report cloud as a top IT priority. Yet CIOs struggle to move to Cloud; how can your applications or service help? Part of the attraction is this: in 2009 it took on average 4.5 months to create an application. In 2012 that same application can be created in 4.5 days. Development in an Internet and Cloud world continues to be able to do more with less, faster; a must to maintain any competitive advantage.
Also driven by big data, Collaboration/Workflow has made a rapid comeback up the priority list, from the bottom of the stack to #4. Volume and complexity for big data in the last 3-4 years have taken access to information from bad to worse. Collaboration enables employees to once again see the right information, share across workflow, and make decisions quickly. CIOs are looking for more solutions in this area.
At #5, there’s a new buying center developing and growing quickly in corporate enterprises to be aware of. By 2017 the CMO will spend more on IT than the CIO, according to Gartner. Marketing in Manufacturing, Financial Services, Healthcare and other verticals are maturing from off-line/ad-hoc to on-line/structured process. With so much customer information available, the just-in-time delivery of the right customer experience can transform ad units into commerce units. The CMO is adding applications to organize, automate and leverage the Internet. This is a new growing budget to tap.
CIOs struggle to get a hold of “Shadow IT”, topic #6, and employees that have gone rogue to leverage their own personal technology for business use. Dropbox, Evernote, BYOD, Google Docs, mobile apps, etc are permeating IT and are out of control. CIOs call out major management, security and compliance issues, which they are looking for help on. 30% of CIOs say this is issue is among the top 3.
2014 and beyond are setting up to be exciting times, with a major growth cycle underway in the enterprise software market.
I’d like to hear your comments. Feel free to comment or email me directly at stotia@edisonventures.com
