I always take predictions posts with a grain of salt because they reflect the aspirations of the author as much as a qualified and objective forecast of what will happen in year ahead. but to quote Bill Gates:
We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.
In retrospect, it is evident we are in the midst of a profound technological shift that is rather predictably right on the traditional 10 year tech cycle, depending on when you start your calendar. Two rather enormous shifts have been completed and the consequences are profound, so much so that M&A isn’t going to be enough for legacy vendors to make the shift.
The two big curves that have matured are obvious, social technology and mobile. how we communicate with the world at a small level, who we maintain a relationship with, and the world at large via broadcast capability. This has obviously gone into overdrive with mobility introducing new behaviors into our social interactions given that a smartphone is inherently a communication device, and then how we multipurpose mobility into the greater spectrum on functional interactions we have on a day to day basis.
1) Mobile creates clash of user experiences.
When you are on a mobile device using cloud-based services there is something transformational in play, which is that not only are you bypassing many of the controls that dictate how you use apps but you are also using a network that is not under the control of your company.
The result of this is that device management becomes all important or a non-starter because how many employees are going to allow their company to control their personal smartphone or tablet over a wireless carrier’s network? Not many.
Having multiple user accounts in something like a cloud-based storage service creates UX complexity that providers are starting to address, such as Dropbox’s recent announcement bringing together personal and business accounts in one UX.
2) The NSA screws the tech industry.
We’re already starting to see the consequences of this, which is that while consumers may not care that the government is snooping around their stuff but companies really do pay attention to this. The ramifications to this are that companies selling stuff to business buyers are being hit with specific requirements about where data is stored, and if you are trying to sell in EMEA what this means is that a Safe Harbor statement is no longer adequate.
An open question that in unanswerable right now is the degree to which the infrastructure, service providers, and various data intermediaries serving b2b and b2c markets treat the government as a hostile actor. Hacking and data security threats were previously in the domain of criminal activities and espionage however more recently we have started to see major companies, such as Apple and Microsoft, say these threats are threats to be defended against “regardless of who’s behind them” and represent “persistent security threats”.
Silicon Valley can no longer turn a cheek and say “gee we didn’t know this was happening” when the industry built the very infrastructure that is now being used for large scale domestic spying, and in many cases taking taxpayer money in the background.
3) Big data takes a breather.
The fixation on big data will take a pause in 2014, thank God. The challenge isn’t the technology itself, which is pretty amazing in scope and impact over the long run. What will put the brakes on the hype cycle is simply that customers don’t know what to do with all the data that can be aggregated and analyzed by these technology tools.
For big data to realize the potential of the technology vision, companies need to evolve organizationally and from the standpoint of where their data comes from. big data with just your stuff is rarely big data.
There are a lot of really interesting data plays out there right now and with a few more turns of the crank we will be turnkey with data analytics capabilities that are only fantasy today, all in realtime and with incredible performance, but it’s going to be another 12-18 months in my opinion.
4) Economics will be a constant discussion for big enterprise companies.
The shift from perpetual to subscription and then to SaaS is going to give heartburn to a lot of CFOs at big enterprise software companies. Just last month Oracle’s earnings call focused attention on this subject and it’s not just the necessity to fund the bookings-to-revenue dynamic but also directly impacts sales team compensation and much more.
You really don’t appreciate the requirement that funding the shift to subscription is material until you are in the midst of doing it. There are a thousand details and all of them end up at your bottom line. We’ll hear more about this this from the big public companies in 2014.
5) A lot of technology stuff moves into the stack.
With more and more application services moving to the cloud the requirement to connect the functional componentry, not just the data, forces you to make some strategic decisions about how much of your infrastructure you will move to the cloud at the same time.
In my particular area of focus, identity, it can be expected that identity services for authentication and provisioning will move into hosted environments that are just part of the stack. This is not unlike what happened in the early days of networking when protocol adapters, namespace, and packet routing were in a company’s datacenter. As these technologies matured and the competitive market coalesced around standards, all this stuff moved into what is essentially a black box that you turned on and never thought much about, the same things is happening today with technologies that make cloud services interoperable.
We’ve moved from SDKs to APIs in the last decade and with it has come a level of standardization around the things that are required to deliver an application to an end user, it should therefore be expected that higher value functions like performance analytics, threat detection, identity, and much more will just become part of the toolkit that developers use to build new apps.
(Cross-posted @ Venture Chronicles)