Entrepreneurs, business professionals and investors gathered this week at AlwaysOn Network OnDemand conference in Palo Alto, CA. The event focused on the discussion and exploration of opportunities and trends in the world of cloud, big data, SaaS, and the mobile enterprise sectors. “These are good times for entrepreneurs,” said Tony Perkins, Founder & Editor of AlwaysOn, a major business media brand, at the opening of the OnDemand conference. Addressing the entrepreneurial community in the Global Silicon Valley, Perkins talked about product development and the correlation to a rock tumbler machine. He quoted Steve Jobs, saying, “If you want to build insanely great products, you need to be willing to get inside the rock tumbler.”
Today, innovation and product development are agile, have a global reach, and move fast, with a typical development cycle of six to nine months. Investors’ expectations are aligned along similar time frames, where capital efficiency in financing software solutions has been attractive to investors more than capital intensive innovations. In addition to venture capitalists (VCs), the investment landscape has also changed due to strong seed Angel funding as well as corporate venture entities.
In the enterprise, Software as a Service (SaaS) based solutions and Cloud Business Applications are accelerating. According to Forrester Research, SaaS and data-driven “Smart Apps” are fueling software growth in global markets and attract investors. Such rapid SaaS advancements couldn’t possibly happen in more capital-intensive sectors like energy, biotechnology or life sciences fields. Forrester reports that the SaaS software market will increase 25 percent in 2013 to $59 billion, a 25 percent increase. In 2014, the market is expected to total $75 billion. Forrester lists several ‘smart software’ categories, such as apps enabling direct access to data for decision-making, analytics models based on internal and external sources, and business intelligence. The research firm forecasts these smart software markets to be $41 billion in 2013, increasing to $48 billion in 2014.
The Forrester Research report is titled Global Tech Market Outlook 2013 To 2014. Click here for the report brief.
Similarly to the SaaS evolution, there has been growth in cloud computing. Today, the state of the public cloud is stable and more solid than just a few years ago. In addition, advances in technology, its availability and accessibility, and mass user adoption have been pushing innovations in this space. Another reason for growth is the Go-to market strategy: today, entrepreneurs use inside-sales models to sell to big corporations and utilize less of outside sales techniques.
Investors at the conference noted that in the current decade companies expand worldwide very quickly. Global demand is apparent and businesses can be nimble and exit relatively fast.
Which trends are over hyped?
Which are under-funded or under-rated?
Business leaders at OnDemand 2013 indicated that investment in research and development (R&D) has been overlooked in the last decade. Fundamental research, which used to be a corner stone of American innovation, has dwindled down. Past generations’ investment in Bell Labs, PARC, and other research institutes has been gradually declining.
Another area that is undervalued is industrial software and the utilization of sensor-based data and data collection from devices. Furthermore, ‘comsuming’ this industrial data and using it in creating action to improve operations is also underfunded.
Some business areas are promoted excessively, for example: Messaging and automated marketing systems, as well as Social Media Marketing. Wearable computing is likely to have a shakeup. While cloud is growing, some cloud applications are over hyped, use buzz words and try to leverage off the current trend.
Investors’ favorites include ecosystem solutions, developer services, API, and the ‘discovery’ in data, i.e. after the data collection phase, there is a high interest in convergence of data sources to get new insights and gain multi dimensional aspects. Also, globalization of cloud computing services and business models are of high interest.
While Android platform is booming, Google Cloud computing solutions are very promising. “Cloud has become one of the biggest revenue growth drivers for technology companies,” by Gary Matuszak, Global and U.S. Chair, Technology, Media & Telecommunications.
Several investors and experts at OnDemand said that cross platform and cross domain are the next big thing, where the enterprise, gaming, social, and mobile commerce, coupled with cloud, will be the new wave of developments, with offerings in intersecting markets. Examples include Square and Box.
In fact, Box was announced the OnDemand 100 Overall Winner. Box offers file-sharing capabilities in a hardware-neutral environment and without the high costs associated with enterprise-grade sharing, corporate data storage and network applications. Box provides a reliable cloud service for sharing, collaborating and working with various files, including video, audio, image, text, and more. The technology executes well in deploying mobile applications and has scaled successfully globally. Extended features for business and enterprise users allow for custom branding, mass storage of large (‘heavy’) files, and multi-user administration and management. Furthermore, Box integrates with other widely-used business applications, such as Google Apps and Salesforce. OnDemand selected Box as the overall winner, for its reliable and scalable tools for the enterprise.
1. Box – www.box.com
Headquarters: Palo Alto, CA
CEO: Aaron Levi
Privately held company. Founded in 2005 and currently has 750 employees.
From Box.com website: We have over 15 million users, serve 92% of the Fortune 500, and have more than 21,000 developers building apps on our APIs. Box is on iPad, iPhone, Android, Blackberry 10 and Windows Phone, and integrates with partners such as Google Apps, NetSuite and Salesforce. Box has secured about $300 million in venture funding.
Careers at Box: https://www.box.com/about-us/careers/
Open positions (today): https://www.box.com/about-us/careers/open-positions/
2. AlwaysOn (AON) OnDemand 100 Top Private Companies
The fourth annual AlwaysOn OnDemand 100 presented a list of emerging and mature companies in the cloud infrastructure, SaaS, and on-demand marketplace. Selected companies are reinventing computing, creating new business opportunities and stand out in global markets, bringing versatile and mobile services to everyone in the new digital era. While these businesses are transforming the way we interact with computers and computing resources, they are also creating high-growth businesses that offer huge upside potential for investors.
For additional AON conferences, check http://aonetwork.com/
Photo: Tony Perkins, Founder & Editor of AlwaysOn, in a chat with Ray Lane, Partner Emeritus at Kleiner Perkins Caufield & Byers.