Our world is fundamentally different than it was at the beginning of 2020. As early-stage investors, we are still looking for answers to how the “next normal” will play out. Many of the early 2020 forecasts within the technology industry have not come to fruition at the scale that was originally thought. The ongoing COVID pandemic means we will continue to see shifts around which startup ventures will best fit into the long-term picture.
There are 5 Tech Themes we feel will be most impactful as enterprises navigate the shift to a Distributed World.
- Security for the Distributed Enterprise
- Remote Team Productivity
- Application Agility and Resilience Tools
- B2B Sales and Collaboration Tools
- Virtual Delivery and Management of Healthcare
Security for the Distributed Enterprise
New threat vectors have emerged in this distributed environment. The challenge for security leaders has been keeping the organization secure while limiting the friction required to safely work from home. Most security leaders chose to focus their initial investments on setting up additional VPN infrastructure, ensuring their employees are protected against targeted attacks, and amping up their cloud security capabilities.
Much of the existing 2020 security budget may have been leveraged to patch up near-term threats that allow for immediate business continuity. However, there will need to be a multi-layered strategy that focuses on net new investments that create a foundation for long-term success in securing a remote team.
The three emerging security spaces our team sees as most impactful are:
- Automated 3rd Party Risk Management – according to VISO Trust, 65% of public security breaches occur due to the failure of third parties to make good on their security commitments. Given how widespread SaaS tool usage is across most enterprises, security leaders will have to find tools that better automate the process of vendor security due diligence.
- Next-Gen Authentication – Gartner predicts that by 2023, 60% of enterprises will phase out their remote access VPNs. Newer authentication technologies will allow enterprises more performance and access controls around which data is accessible to employees and contractors.
- AI-Powered App Security Orchestration and Collaboration – applications are the top cause of security breaches. Alerts from application security tools are overwhelming security analysts and there is a gap between developers and security teams that needs to be filled with tech. In the DevSecOps space, new solutions are being developed to solve these challenges.
Remote Team Productivity
Requirements to quickly transition to a distributed work environment left many companies scrambling to figure out how to support day-to-day business operations. Now the question becomes how you can make working from home as effective as in-person engagements.
We’ve seen a wave of technologies like edge AI, natural language processing (NLP), and video transcription being applied to existing conferencing and productivity tools to solve for work from home challenges.
The top use cases we see include:
- Work from Home Tech – companies are solving the variety of individual productivity challenges people face when working from home including optimizing voice and video calls. Krisp is one such company that allows users to mute background noise in any communication app.
- Contact Center Transformation – call center reps can no longer work from the traditional office setting. This is forcing enterprises to source solutions that allow reps to work from home while also getting the coaching and training they need. Balto has been working in this space to provide AI-powered live call guidance for sales and contact center reps.
- Enhanced Meeting Intelligence – next-gen conferencing solutions are being developed for enterprises to collect a new layer of intelligence from virtual meetings.
Application Agility and Resilience Tools
As enterprises rapidly transition to the cloud and the pace of software development picks up, we have seen a need for tools to support application agility and resilience. IT organizations are trying to figure out how to move fast without sacrificing reliability for both their internal and external customers. Engineering teams also need high-quality tools to make it easy to deploy and maintain their apps.
Three areas we see having the most impact are:
- Kubernetes Enablement – many organizations want to shift to Kubernetes. Companies like Spectro Cloud are making it easier to deploy apps in Kubernetes across a multi-cloud environment.
- Site Reliability Engineering – as app complexity increases, enterprises have to deal with highly scaled out applications and will do everything they can to avoid highly publicized hacks and outages of their products. This causes a need for next-gen tools to help teams identify and remediate issues in a short timeframe.
- Data Integration – organizations are looking to become more data-centric and are figuring out ways to access data in near real-time across a variety of different sources and cloud platforms. Astronomer is one company tapping into this trend by commercializing an open-source data project that started at Airbnb called Airflow. This platform allows organizations to reap the benefits of its data workflow orchestration capabilities and is in use by top data-driven companies.
B2B Sales and Collaboration Tools
According to McKinsey, customers now expect more from their suppliers including enhanced speed, transparency, and expertise. These expectations will not go away with the new environment and we see next-gen software solutions being a necessity in solving all these challenges.
Two areas we feel will be most impactful include:
- Deals Collaboration Platforms – this ties into a wide-spanning thesis we have that centers around “the decoupling of ERP”. We believe a new wave of large companies can be built by focusing on a specific vertical module across a traditional ERP stack and make the experience better for technology users. Enable is a great example of this approach. They focused their initial efforts on Rebate Management, which is a huge challenge for B2B buyers and sellers. They are now expanding the platform to become a broader B2B collaboration tool to improve financial transparency and operational efficiency between retailers, suppliers, and distributors.
- Remote Sales Enablement – more than 90% of B2Bs have transitioned to a virtual sales model during COVID-19 per McKinsey, but most feel this has been inadequate in the short-term. B2B selling is often built on in-person interactions and deep-rooted relationships. Companies are scrambling to determine how to enable field sales reps to drive as much revenue as if they were still selling face-to-face to their customers. This leaves opportunities for companies to better replicate an in-person experience.
Virtual Delivery and Management of Healthcare
Healthcare has seen a massive increase in the adoption of telemedicine over the past 6 months. Consumers have been pushing for these solutions for years, but now health systems and life sciences companies have been forced to find short-term solutions to ensure patients are being treated. We believe these short-term solutions will turn into long-term industry norms.
Per a McKinsey report in late May, the percentage of consumers in the US using telehealth solutions went from 11% to 46% in the span of a couple of months. This shows telehealth use cases starting to normalize beyond urgent care needs.
Below are a few examples of this trend:
- Reify Health – digital platform to better run clinical trials in the distributed world and foster better collaboration between sponsors and clinical sites.
- Lemonaid Health – telehealth and digital pharmacy platform for a variety of medical needs.
- Outcomes4Me – B2C app for breast cancer patients and a way for health systems to better engage patients remotely.
We’re looking forward to seeing what trends and themes continue to play out in 2020. If you’d like to discuss any of these trends or new ones you’re seeing please get in touch at email@example.com.
Want more trend information? Check out our post on the 3 Top Trends in AI/ML for 2020.
Brendon joined Sierra Ventures in 2017 and leads business development operations for the firm, including the CXO Advisory Board and Annual CXO Summit. In addition, he partners with management teams in the Sierra Ventures portfolio to accelerate their growth by identifying mutually beneficial CXO engagements, key strategic partnerships, and providing support with analyst relations strategies. Brendon also works with the Investment Team on sourcing and due diligence. Brendon has a background supporting CIOs in the healthcare industry and investors in the Venture Capital & Private Equity sectors through his work at Gartner. Brendon holds a MS in Entrepreneurship and BA in Environmental Science from the University of Florida. Outside of work he’s an avid golfer, traveler, and big Florida Gators fan.