We conducted the Annual Sierra Ventures CXO Advisory Board Tech Survey to gain insight into the Enterprises’ views and priorities for 2021. The Sierra Ventures CXO Advisory Board includes F2000 Technology Leaders (CIOs/CTOs) across industry clusters such as Healthcare & Pharma, Financial Services, Retail & Consumer, Manufacturing & Energy, and Technology & Internet. Responses were received from 40+ CXO Advisory Board members.
The survey covered 4 themes:
- Enterprise Effects of COVID-19
- Future of Remote Work
- Cloud Adoption
Top Survey Takeaways:
- Technology Spending Remains Steady
- Digital Transformation Accelerated in 2020
- Remote Work is Still Top of Mind for CXOs
- Focus on Cloud and Cybersecurity is Growing
- Enterprises Remain Interested in Emerging Technologies
Technology Spending Remains Steady
Enterprise budgets were slashed when the pandemic started at the beginning of 2020, but technology budgets appeared to be the exception for many. Instead of cutting funding, executives turned to technology as an enabler of transformation as companies shifted to remote work and accelerated digital transformation. At the time of the survey (December 2020 and January 2021), over 50% of CXO’s reported an increase in their technology budget, while only 30% reported a decrease.
As CXOs plan for 2021, the top technologies they expect to gain the most traction are AI & Machine Learning (AI/ML), Cybersecurity, and Remote Work.
- AI/ML can solve many technology goals associated with addressing the changes caused by the pandemic like improving online customer experience, acceleration of automation capabilities, and enhancing data intelligence.
- Cybersecurity remains a top Enterprise priority and recent highly publicized security hacks have created more demand to secure assets as employees transition to working off-premise.
- Remote Work has become the norm with companies planning for hybrid models even after the pandemic has waned (see Remote Work Section). As we head into a full year of many employees not being in the office, Enterprises expect technologies that help build robust, long-term infrastructure for their distributed teams to gain traction.
Also, Next-Gen Data Management, Cloud Infrastructure, and Customer Experience Tech remain high on the list of technologies expected to gain traction.
Digital Transformation Accelerated in 2020
During our 2020 CXO Summit, many speakers noted a hyper-acceleration of Digital Transformation within their industry. CXOs gave examples of some initiatives being expedited by months to years. Survey respondents echoed this sentiment with over 70% reporting Digital Transformation efforts increasing due to the impact of COVID-19.
Remote Work is Still Top of Mind for CXOs
In the 2020 CXO Tech Survey CXOs reported on the top technologies they’d be focused on for the year ahead (pre-pandemic). The top 3 were:
- Data & Analytics
- Enterprise AI
Future of Work was near the bottom at only 12.5%.
It’s clear that the pandemic has mandated a sudden shift to focus on Remote Work with 81% of respondents reporting an increased investment in the area since COVID-19. Once the pandemic is controlled, we are interested to see if Remote Work / Future of Work will continue to be a key strategic focus for Enterprises.
Many organizational challenges were created with the rapid shift to remote work. While technology was a huge driver in ensuring business resiliency during the pandemic, respondents report that most of the challenges with working remotely actually center around Employee Engagement, Communication Barriers, and Workforce Onboarding & Training. Only 7% of respondents noted Technology Limitations as the biggest challenge with remote work.
Looking ahead, Remote Work is not projected to end. By the end of 2021, an overwhelming 92% of the respondents expect a hybrid work environment. No respondents reported a fully in-office or fully remote approach. We expect continued focus and investment in hybrid infrastructures as the effects of the pandemic have created a new normal for the workplace.
Focus on Cloud and Cybersecurity is Growing
Cybersecurity and Cloud Adoption remain critical investment areas moving into 2021 with both occupying the top 3 for initiatives that have seen an increase in the amount of investment. No respondents reported deprioritizing investment in these initiatives since the pandemic. Clearly, both are “must-have” technology capabilities for enterprises.
There was a lot of momentum in 2020 with the shift to Cloud. The percentage of CXO’s who expect more than half of their workloads to be in the cloud by the end of the year increased from around 35% in 2020 to over 50% in 2021. Also, the number of CXO’s reporting less than 5% of their workloads expected to be in the cloud decreased from 17.9% in 2020 to just 2.4% in 2021. We expect this trend to continue.
A key takeaway from our CXO Call on Scaling in a Multi-Cloud Environment, was, “You don’t choose multi-cloud, it chooses you”. In early 2020, 72.5% of survey respondents reported planning to use a multi-cloud strategy. In this year’s survey, over 85% of the respondents either currently have or plan to have a multi-cloud strategy in place by the end of 2021.
Kubernetes continues to gain traction as a top platform for managing containerized applications. We saw an increase of 16.5% from last year in CXO’s who reported using Kubernetes. We expect this number to continue to grow as Enterprises shift their applications to the cloud and many new companies are being built around Kubernetes and designed to help accelerate implementation, including Spectro Cloud and Speedscale.
Security remains a hot topic, and a multi-layered initiative, so we asked what CXOs expect to prioritize in 2021.
Cloud Security and Identity & Access Management were the top 2 focus areas which makes sense as enterprises have had to adapt quickly to a distributed environment. Additionally, the ongoing shift to cloud adoption plays a role beyond the current effects of the pandemic.
In 2020, Data Privacy was the number 2 security initiative for CXOs based on new customer demands and regulatory changes that were implemented in 2019. While the initiative remains a top focus going into 2021, there was some decrease in prioritization as it fell to number 3.
API Security shot up to fourth place in 2021. This remains a top investment theme we plan to monitor.
Enterprises Remain Interested in Emerging Technologies
Enterprise CXOs are always looking ahead and we were curious which emerging technologies were interesting to our CXOs.
- Containers / Kubernetes / Microservices – this was a technology area we added to the survey this year and it tied for first. Considering the responses around Cloud Adoption and multi-cloud strategy, we believe that it will remain a critical aspect of next-gen application development.
- Hyperautomation Software and Conversational Intelligence – since AI & Machine Learning is a near-term focus for 2021, it makes sense CXOs are seeking more advanced applications in their long-term road map. We have seen startups like Yalo and Balto emerging to tap into global enterprise demands in these spaces.
- Infrastructure as Code – as Enterprises continue to move to cloud environments that are heavily driven by APIs, Infrastructure as a Code or (IaC) will grow in importance. Astronomer is an example of a company in the data orchestration space leveraging IaC.
- 5G – the initial adoption cycle has begun and Enterprises remain intrigued by its enablement of other emerging technologies like AR/VR, Robotics, IoT, Smart Devices, Edge Computing, and more. We expect this to continue to remain an area of interest for CXOs. Movandi is an example of one exciting company in this space that’s building the infrastructure needed for 5G.
Augmented Reality and Blockchain technologies, although trendy, continue to remain low on the hierarchy for Enterprises.
We’re looking forward to continuing to work with our CXO Advisory Board members to stay up to date on Enterprise trends and share the latest technologies being developed to help them innovate and remain ahead of the curve!
Check out the results from our 2020 CXO Tech Survey.
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.