As venture capitalists, we get to see the future happen before most other people do. (Though despite the best intentions of tech founders, sometimes that future never arrives.) But most of the time we’re in a pretty good position to anticipate trends and see tech developments before they go mainstream.
Last year, for example, I noted that 2017 would be the year of the enterprise cloud. Big organizations realized they couldn’t rely on Amazon or Google or Microsoft to make all of their problems go away. Whether because of data security concerns, performance issues, or legacy applications, large organizations needed solutions that utilized the best of what the public cloud has to offer while still leveraging their investment in traditional infrastructure. This has given birth to the hybrid cloud, which is rapidly becoming a dominant platform for enterprises.
The venture community also saw significant enterprise cloud exits in 2017 — IPOs from Mongo DB, MuleSoft, and Okta, as well as Cisco’s acquisitions of AppDynamics and BroadSoft, and HPE’s purchase of SimpliVity.
We expect to see even more in the coming year. Here are some of the broader tech trends we’ll see over the next 12 months.
Hybrid cloud meets AI and Big Data
In 2018, we’ll see a further refinement of how enterprises deploy hybrid cloud solutions, as CIOs grapple with the question of how to transform IT into a strategic enabler for the business. And while Amazon, Google, and Microsoft will continue to play an important role, they will increasingly be part of a broader enterprise ecosytem that may ultimately be orchestrated the next set of emerging technology standards like Kubernetes (containerized app management), Istio/Envoy (service mesh deployment), or independent serverless computing frameworks or new hybrid-cloud native solutions from vendors like MuleSoft (hybrid cloud connectivity), Nutanix (hybrid cloud computing), Rubrik (hybrid cloud data management), Snowflake (hybrid cloud data warehousing), Yugabyte (hybrid cloud operational databases) and others.
The emergence of hybrid clouds will help two other huge trends continue to gain steam in 2018: Artificial Intelligence and Big Data. Organizations that figure out how to harness both their own data and the enormous volume of external data will be the big winners. The ability to run big data platforms on your own hybrid cloud infrastructure is the key to controlling the data, instead of the data controlling you.
As we move forward in ’18 we’ll see higher levels of the AI stack begin to emerge — new types of BI solutions and full-blown applications in a wide range of verticals. We’ll see more startups that understand different markets and how to apply AI and machine learning to solve specific problems in each domain.
Crypto-currency continues to surge
Of course, Bitcoin is on everyone’s mind these days. It would be foolish to predict how high it could go or how rapidly it might fall. But the most important part of Bitcoin is the underlying blockchain technology. The idea that you could have a common digital stored value that is global, transcends borders, and is independent of any nation state is truly revolutionary. In a ubiquitously connected world, that is truly the killer app.
Crypto-currency could end up being something as fundamental as the Internet itself. Those who point to rampant speculation and Bitcoin’s meteoric increase in value as proof of its illegitimacy need to remember the early days of the Internet. Back in 1995, after researchers at the University of Illinois released the first web browser, there was a huge run up in value of Internet-based startups, followed of course by an equally dramatic crash.
But if you look at the value of Internet companies today — Facebook, Google, and Apple combined are worth more than a trillion dollars on the public market — it easily exceeds even the crazy values of the first dotcom boom. Digital currencies could easily be like that.
Globalization feeds the demand for security solutions
Regardless of what any politician tells you, globalization is here to stay. We’re digitally connected across the globe. And that has both good and bad aspects. Malicious actors who live on the other side of the globe can be at your digital doorstep in a minute. That means we need to secure our digital borders even more so than our physical ones.
From a venture standpoint, security has been a white-hot area of investment, similar in a way to Bitcoin. There’s an overabundance of capital chasing opportunities in cyber security. But I don’t think that’s going to change. If anything, the security market will be even much bigger than it is today.
The digital will become physical
At Lightspeed we’re really interested in how computing and data can solve real world problems. From precision medicine to autonomous vehicles, AI to IoT, technology is moving out of the realm of Silicon Valley and beginning to impact peoples’ lives in significant ways. That is certain to continue.
The year 2018 may not mark a milestone in any of these areas, but I believe we’ll continue to see them march steadily forward. And their potential for value creation is enormous.
*image source: Tech Viva
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