Breaking Analysis: Grading our 2022 Enterprise Technology Predictions
from the cube studios in Palo Alto in Boston bringing you data-driven insights from the Cuban ETR this is breaking analysis with Dave vellante making technology predictions in 2022 was tricky business especially if you're projecting the performance of markets or identifying IPO prospects and making binary forecasts on data Ai and a macro spending climate and other related topics in Enterprise Tech 2022 of course was characterized by a seesaw economy where central banks were restructuring their balance sheets the war on Ukraine fueled inflation Supply chains were a mess and the unintended consequences of a forced march to digital and the acceleration still being sorted out hello and welcome to this week's wikibon Cube insights powered by ETR in this breaking analysis we continue our annual tradition of transparently grading last year's Enterprise Tech predictions you may or may not agree with our self-grading system but look we're going to give you the data and you can draw your own conclusions and tell you what tell us what you think all right let's get right to it so our first prediction was Tech spending increases by eight percent in 2022 and as we exited 2021 cios they were optimistic about their digital transformation plans yeah they rushed to make changes to their business and were eager to sharpen their focus and continue to iterate on their digital business models and plug the holes that they the the learnings that they had and so we predicted that eight percent rise in Enterprise Tech spending which looked pretty good until Ukraine and the FED decided it you know had to rush and make up for lost time we kind of nailed the momentum in the energy sector but we can't give ourselves too much credit for that layup and as of October Gartner had I.T spending growing at just over five percent I think it was 5.1 percent so we're gonna take a c plus on this one and and move on our next prediction was basically kind of a slow ground ball the second base if I have to be honest but we felt it was important to highlight that security would remain front and center as the number one priority for organizations in 2022.
as is our tradition you know we try to up the degree of difficulty by specifically identifying companies that are going to benefit from these Trends so we highlighted some possible IPO candidates which of course didn't pan out sneak was on our radar the company had just had to do another raise and I recently took a a valuation hit and it was a Down Round they raised 196 million so good chunk of cash but but not the IPO that we had predicted Aqua Securities focused on containers and Cloud native that was a trendy call and we thought maybe an mssp or multiple managed security service providers uh like arctic wolf wood IPO but no way that was happening in the crummy Market nonetheless we think these types of companies they're still faring well as the talent shortage in security remains really acute particularly in the sort of mid-size and small businesses that often don't have a sock lace work laid off 20 of its Workforce in 2022 and co-ceo Dave Hatfield left the company so that IPO didn't didn't happen it was probably too early for lace work anyway meanwhile you got netscope which we've cited as strong in the ETR data is particularly in the emerging technology survey and then you know Lumia holding its own you know we never liked that seven billion dollar price tag that OCTA paid for auth zero but we loved the Tam expansion strategy to Target developers Beyond sort of octa's Enterprise strength but we got to take some points off of the failure uh thus far of of OCTA to really nail the integration and go to market model with auth zero and build you know bring that into the the core OCTA so the focus on endpoint security that was a winner in 2022 as crowdstrike led that charge with others holding their own not the least of which was Palo Alto networks as it continued to expand Beyond its core network security and firewall business you know through acquisition so overall we're going to give ourselves an A minus for this relatively easy call but again we had some specifics associated with it to make it a little tougher and of course we're watching very closely this this coming year in 2023 the vendor consolidation Trend you know according to a recent Palo Alto Network survey with 1300 secops Pros on average organizations have more than 30 tools to manage security tools so this is a logical way to optimize costs consolidating vendors and consolidating redundant vendors the ETR data shows that's clearly a trend that's on the upswing now moving on a big theme of 2020 and 2021 of course was remote work and hybrid work and new ways to work and return to work so we predicted in 2022 that hybrid work models would become the dominant protocol which clearly is the case we predicted that about 33 of the workforce would come back to the office in 2022 in September the ETR data showed that figure was at 29 but organizations expected that 32 percent would be in the office you know pretty much full-time by year end that hasn't quite happened but we were pretty close with the projections so we're going to take an A minus on this one now supply chain disruption was another big theme that we felt would carry through 2022 and sure that sounds like another easy one but as is our tradition again we try to put some binary metrics around our predictions to put some meat on the bone so to speak and allow us than you to say okay did it come true or not so we had some data that we presented last year and supply chain issues impacting Hardware spend uh we said at the time you can see this on the left hand side of this chart the PC laptop demand would remain above pre-covered levels which would reverse a decade of year on year declines which I think started in around 2011 2012. now while demand is down this year pretty substantially relative to uh 2021 IDC has worldwide unit shipments for PCs at just over 300 million for 22. to go back to 2019 and you're looking at around let's say 260 million units shipped globally you know roughly so you know pretty good call there definitely much higher than pre-covered levels but so what you might be asking why the B well we projected that 30 of customers would replace security appliances with cloud-based services and more than a third would replace their internal data center server and storage Hardware with cloud services like 30 and 40 respectively because we don't have explicit survey data on exactly these metrics but anecdotally we see this happening in Earnest and we do have some data that we're showing here on cloud adoption from etr's October survey where the midpoint of workloads running in the cloud is around 34 percent and forecast as you can see to grow steadily over the next three years so this well look this is not we understand it's not a one-to-one correlation with our prediction but it's a pretty good bet that we were right but we got to take some points off we think for the lack of unequivocal proof because again we always strive to make our predictions in ways that can be measured as accurate or not is it binary did it happen did it not kind of like an okr and you know we strive to provide data as proof and in this case it's a bit fuzzy we have to admit that although we're pretty comfortable that the prediction was accurate and look when you're making hard forecast sometimes you got to pay the price all right next we said in 2022 that the big four Cloud players would generate 167 billion dollars in is and as Revenue combining for 38 market growth and our current forecasts are shown here with a comparison to our January 2022 figures so coming into this year now where we are today so currently we expect 162 billion in total revenue and a 33 growth rate still very healthy but not on our mark so we think AWS is going to miss our predictions by about a billion dollars not you know not bad for an 80 billion dollar company so they're not going to hit that expectation though of getting really close to a hundred billion dollar run rate we thought they'd exit the year you know closer to you know 25 billion a quarter and we don't think they're going to get there look we pretty much nailed Azure even though our prediction was uh was correct about G uh Google Cloud platform surpassing Alibaba we way overestimated the performance of both of those companies so we're going to give ourselves a c plus here and we think yeah you might think it's a little bit harsh we could argue for a B minus to the professor but the misses on gcp and Alibaba we think weren't a self penalty on this one all right let's move on to our prediction about super cloud we said it becomes a thing in 2022 and we think by many accounts it has despite the naysayers we're seeing clear evidence that the concept of a layer of value add that sits above and across clouds is taking shape and on this slide we showed just some of the pickup in the industry I mean one of the most interesting is cloudflare the biggest super cloud antagonist Charles Fitzgerald even predicted that no vendor would ever use the term in their marketing and that would be proof if that happened that super cloud was a thing and he said it would never happen well cloudflare has and they launched their version of supercloud at their developer week Chris Miller of the register put out a super cloud block diagram something else that Charles Fitzgerald was it was or was pushing us for which is rightly so it was a good call on his part and Chris Miller actually came up with one that's pretty good at David Linthicum also has produced a a a block diagram kind of similar David uses the term metacloud and he uses the term super cloud kind of interchangeably to describe that Trend and so we we're aligned on that front Brian gracely has covered the concept on the popular Cloud cast podcast Berkeley launched the Sky Computing initiative you read through that white paper and many of the concepts highlighted in the supercloud 3.0 Community developed definition aligned with that Walmart launched a platform with many of the supercloud Salient attributes so did Goldman Sachs so to Capital One sort of NASDAQ so you know sorry you can hate the term but very clearly the evidence is gathering for the supercloud storm we're going to take an A plus on this one sorry haters all right let's talk about data mesh in our 21 predictions post we said that in the 2020s 75 of large organizations are going to re-architect their big data platforms so kind of a decade-long uh prediction we don't like to do that always but sometimes it's warranted and because it was a longer term prediction we at the time in coming into 22 when we were evaluating our 21 predictions we took a grade of incomplete because a sort of decade-long or majority of the decade better part of the decade prediction so last year earlier this year we said our number seven prediction was Data mesh gains momentum in 22 but it's largely confined to narrow data problems with limited scope as you can see here with some of the key bullets so there's a lot of discussion in the data Community about data mesh and while there are an increasing number of examples JPMorgan Chase Intuit HSBC hellofresh and others that are completely re-architecting um parts of their data platform completely reactivating the entire data platforms is non-trivial there are organizational challenges there's data ownership debates technical considerations and in particular two of the four fundamental data mesh principles that describe the need for a self-service infrastructure and Federated computational governance are challenging look democratizing data and facilitating data sharing creates conflicts with regulatory requirements around data privacy as such many organizations are being really selective with their data mesh implementations and hence our prediction of narrowing the scope of data mesh initiatives I think that was right on jpmc is a good example of this where you've got a single group within within a division narrowly implementing the data mesh architecture they're using AWS they're using data Lakes they're using Amazon glue creating a catalog and a variety of other techniques to meet their objectives they kind of automating data quality and it's pretty well thought out and interesting approach and I think it's going to be made easier by some of the announcements that Amazon made at the recent you know reinvent particularly trying to eliminate ETL better connections between Aurora and redshift um and and better data sharing the data clean room so a lot of that is going to help of course snowflake has been on this for a while now many other companies are facing you know limitations as we said here in this slide with their Hadoop data platforms they need to do some new thinking around that to scale hello fresh is a really good example of this look bottom line is that organizations want to get more value from data and having a centralized highly specialized teams that own the data problem it's been a barrier and a blocker to success the data mesh starts with organizational considerations as described in great detail by Ash Nasir of Warner Brothers so take a listen to this clip so when people think of Warner Brothers you always think of like the movie studio but we're more than that right and then you think of HBO you think of TNT you think of CNN we have 30 plus brands in our portfolio and each have their own needs so the the idea of a data mesh really helps us because what we can do is we can Federate access across the company so that you know CNN can work at their own pace you know when there's election season they can ingest their own data and they don't have to you know bump up against as an example HBO if Game of Thrones is going on so it's often the case that data meshes in the eyes of the implementer and while a company's implementation may not strictly adhere to jamachtagani's vision of data mesh and that's okay the goal is to use data more effectively and despite Gartner's attempts to deposition data mesh in favor of the somewhat confusing or frankly far more confusing data fabric concept that they stole from NetApp data mesh is taking hold and organizations globally today so we're going to take a B on this one the prediction is shaping up the way we envision but as we previously reported it's going to take some time the better part of a decade in our view new standards have to emerge to make this Vision become reality and they'll come in the form of both open and de facto approaches okay our eighth prediction last year focused on the Face-Off between Snowflake and databricks and we realized this a popular topic and maybe one that's getting a little overplayed but these are two companies that initially you know looked like they were shaping up as partners and by the way they are still partnering in the field but you go back a couple years ago the idea of using an AWS infrastructure databricks machine intelligence and applying that on top of snowflake as a facile data warehouse still very viable but both of these companies they have much larger Ambitions they got big total available markets to Chase and large valuations that they have to justify so what's happening is as we've previously reported each of these companies is moving toward the other firm's core domain and they're building out an ecosystem that'll be critical for their future so as part of that effort we said each is going to become aggressive investors and maybe start doing some M A and they have um in various companies and on this chart that we produced last year we cited some of the companies that were targets and we've added some recent Investments of both Snowflake and databricks as you can see they've both for example invested in Elation snowflakes put money into lace work the security firm thoughtspot which is trying to democratize data with AI calibra is a governance platform and you can see databricks Investments and data transformation with DBT Labs material doing simplified business intelligence Hunters so that's you know their security investment and so forth so other than our thought that we'd see databricks IPO uh last year this prediction was pretty spot on so we'll give ourselves an A on that one now observability has been a Hot Topic and we've been covering it for a while with our friends at ETR particularly Eric Bradley our number nine prediction last year was basically that if you're not Cloud native and observability you're going to be in big trouble so everything has got to go Cloud native and that's clearly been the case Splunk the big player in the space has been transitioning to the cloud hasn't always been pretty as we've reported datadog real momentum the elk stack that's open source model you got new entrants that we've cited before like observe honeycomb chaos search and others that we've we've reported on they're all born in the cloud so we're going to take another a on this one admittedly yeah it's a reasonably easy call but you got to have a few of those in the mix okay our last prediction our number 10 was around events something the cube knows a little bit about we said that a new category of events would emerge as hybrid and that for the most part has happened so that's going to be the Mainstay as what we said um that Pure Play Virtual events are going to give way to hybrid and the narrative is that virtual only events are you know they're good for quick hits but lousy replacements for in-person events and you know that said organizations of all shapes and sizes they learn how to create better virtual content and support remote audiences during the pandemic so when we said it Pure Play is going to give way to hybrid we said we we implied our specific we specified that the physical event that VIP experience is going to Define that overall experience and those VIP events would create a little fomo fear of missing out in a virtual component would overlay that serves an audience 10x the size of the physical we saw that really two really good examples Red Hat Summit in Boston small event couple thousand people served tens of thousands you know online Second was Google Cloud next VIP event in in New York City everything else was was was was was virtual you know even examples of our prediction of metaverse like immersion have popped up and and and you know other companies uh are doing Road shows as we predicted like a lot of companies are doing it you're seeing that as a major Trend where organizations are going with their sales teams out into the regions and doing a little belly to belly action as opposed to the big giant event that's a definitely a trend that we're seeing so in reviewing this prediction the grade we gave ourselves yeah maybe a bit unfair it should be you could argue for a higher grade but the but the organizations still haven't figured it out they have hybrid experiences but they generally do a really poor job of leveraging the Afterglow and of event of an event it still tends to be one and done let's move on to the next event or the next city let the sales team pick up the pieces if they were paying attention so because of that we're only taking a B plus on this one okay so that's the review of last year's predictions you know overall if you average out our grade on the 10 predictions they come out to a B plus I don't know why we can't seem to get that elusive a but we're going to keep trying our friends at ETR and we are starting to look at the data for 2023 from the surveys uh and all the work that we've done on the cube and our analysis and we're going to put together our predictions we've had literally hundreds of inbounds from PR Pros pitching us we got this huge thick folder that we've started to review with our yellow highlighter and our plan is to review it this month take a look at all the data get some ideas from the inbounds and then the ETR January survey is in the field it's probably got a little over a thousand responses right now you know they'll get up to you know 1400 or so and once we've digested all that we're going to go back and publish our predictions for 2023 sometime in January so stay tuned for that all right we're going to leave it there for today you want to thank Alex Meyerson who's on production and he manages the podcast Ken schiffman as well out of our Boston Studio I got a really heartfelt thank you to Kristen Martin and Cheryl Knight and their team they helped get the word out on social and in our newsletters Rob hoef is our editor-in-chief over at siliconangle who does some great editing for us thank you all remember all these podcasts are available uh or all these episodes are available as podcasts wherever you listen just like you do search breaking analysis podcasts really getting some great traction there appreciate you guys subscribing I published each week on wikibon.com at siliconangle.com or you
can email me directly at david.palante siliconangle.com or DM me at di vellante or you can comment on my LinkedIn post and please check out etr.ai for the very best survey data in the Enterprise Tech business some awesome stuff in there this is Dave vellante for the cube insights powered by ETR thanks for watching and we'll see you next time on breaking analysis foreign [Music]
2022-12-22 15:33
