(upbeat music)
>> From the Cube studios in Palo Alto in Boston,
bringing you data-driven insights, from the Cube in ETR.
This is Breaking Analysis with Dave Vellante.
>> Predictions are all the rage at this time of year.
Now on December 29th, 2020,
in collaboration with Erik Porter Bradley
of Enterprise Technology Research, ETR,
we put forth our predictions for 2021,
and the focus of our prognostications,
included tech spending, remote work, productivity apps,
cybersecurity, IPOs, specs M&A, data architecture,
cloud, hybrid cloud, multi-cloud, AI, containers,
automation, and semiconductors. (chuckles)
We covered a lot of ground.
Now over the past several weeks,
we've been inundated,
with literally thousands of inbound emails pitching us
on various predictions and trends in these and other areas.
Here's my predictions folder,(chuckles)
and this is only a portion of the documents
that I've received via email obviously printed them out,
killed a few trees, sorry.
Hello, and welcome to this
week's Wiki Bond Cube Insights powered by ETR.
In this breaking analysis,
we're going to review briefly each of our predictions
for this past year 2021.
And suggest a grade as to how we did.
We're going to do this as a little warmup
for our 2022 predictions,
which we'll be doing over the next couple of weeks.
Now, before we dig in, I want to make an observation,
many of the predictions that we received,
they were observations of trends,
and sometimes not really predictions.
Or, not surprising,
we got a lot of self-serving marketing statements.
Predictions in our view, they should be measurable.
So you can look back and say,
"Okay, did they get it right?"
Now, granted, there are gray areas.
So that's why we'll use a grading system today.
Now, there are also many really well done
and thought provoking predictions,
this is example of one that we received, that is strong,
it's from Equifax CIO, Milind Wagle,
who said within the decade,
data centers will be powered
by 100% renewable energy.
Okay, so, that's clear and we can measure that.(chuckles)
But anyway, thanks to all the PR folks who sent along,
like I said, literally thousands of predictions.
We tried to read them all,
but the volume over the past week or so,
it was just so overwhelming.
And we'll try to scan them
before we do our 2022 predictions.
But today, we want to do that warmup
by evaluating how we did in 2021, so let's get started.
Our first prediction was the tech spending
would increase by 4% this year,
coming off of what we had thought was a contraction in 2020.
And depending on which data you look at,
best case maybe was flat.
We definitely correctly called the continuation
into 2022 of the remote work trend,
and the positive impact it would have on PCs and the like,
but we underestimated the shape of that rebound,
that spend back curve.
IDC has tech spending growth this year at 5.5%,
so we feel like, well, we called the bounce back,
it was more pronounced than we had thought.
In fact, we think that IDC number
is probably going to go up even higher
and we'll address that in our 2022 predictions.
So, we'll give ourselves a B- here.
Okay, next prediction was remote worker trends
become fossilized,
settling in at an average of 34% by year end 2021.
So on average, 34% of the workers would be remote
by the end of this year.
Now, we made the call, but we missed Delta,
I know we missed Omicron.
We said 34% remote,
which would be 2X, the historical norms.
Now the ETR data suggests that was 52% in September.
And it's probably going to be somewhere
in the 40 to 45% range,
by the end of this month into December.
And the thing is,
75% of the workforce is probably still working,
either fully remote, or in a hybrid model.
And hybrid work is probably going to be the dominant trend
that we're going to have to revisit that framework,
or how we think about this whole structure,
and we'll do that again in our 2022 predictions.
So we'll give ourselves a C, on that one.
We'll take some credit for the permanence of the trend,
but the percentage was well off the mark,
thanks to the variants,
as well as some cultural shifts that whole hybrid notion.
Okay, so, (chuckles)
Hey, not really a great start for Erik and me,
but we rebound with the next one.
The productivity increases,
we said seen in 2020 will lead organizations
to double down on the successes,
and certain productivity apps will benefit.
So to measure this, we said,
let's take a look at the most recent quarterly earnings
engaged the revenue growth, year on year as an indicator,
DocuSign was up 42%,
Smartsheet we also called up was up 46% in revenue,
Twilio up 65%, Zoom growth was 35% down from 325%,
confirming our layup call, the Zoom growth would moderate.
It had nowhere to go, but down.
And Microsoft Teams is never been more ubiquitous,
has never seen greater adoption with hundreds of companies
having a hundred thousand or more users,
and thousands of companies with 10,000 users or more.
So we really feel like we nailed this one.
So want to give ourselves an A+.
Okay, so now on to cyber,
it's an area that we've been making calls in,
for a couple of years now.
And we're really pleased looking back here.
We said, permanent shifts in CSO strategies
are going to lead to share shifts in network security.
Now, we said to give you more detail,
maybe that sounds like an easy one,
but we said specifically, identity cloud security,
and endpoint security would continue to benefit.
And we specifically named CrowdStrike, Okta, Zscaler,
and a few others that are targeting their growth rates.
Now, Gartner has the security market growing at 11%,
Okta and Zscaler revenues last quarter grew at 62%,
year over year.
CrowdStrike 63%.
Illumio we also called out,
they raised $225 million on a $2.75 billion valuation
on the strength of its growth, that was in September.
Now, Akamai acquired the Guardiocore for $600 million.
Another company we called out,
they would do what they did
that as a ransomware protection play.
And they paid a huge revenue multiple for the company.
And it seems, the guys listed on the last line
are all talking about subscription, SAS, ARR,
remaining performance obligations, or RPO.
So we feel very good about this look back,
we'll take an A on this one.
No, it's not an A+,
because we were too conservative on the growth
of Okta, CrowdStrike and Zscaler topping at 50%.
They blew that away by another 10 points or so, 10 to 15,
but look pretty good call nonetheless.
Okay, again, the next one you might feel like is a layup,
but not really.
So we said the increased tech spend,
would drive even more IPOs, specs and M&A.
According to spec analytics,
IPO were up 109% this year,
the SPAC attack continued up 109% in 2021
on top of a record 2020.
And according to KPMG, M&A dollar volume was up 19%.
Okay, you might say, "Ah, that was easy call,"
but there was much more underneath this prediction.
We called out UiPath IPO, which was a lock,
but also said automation anywhere, would go public.
UiPath, did (indistinct) did.
We did correctly call the Hashicorp IPO.
We said, they'd either go IPO, or get acquired.
And CloudFlare grew revenue 219% last quarter,
but Akamai was not acquired.
So the degree of difficulty on the overall prediction,
wasn't high,
but the automation anywhere in Akamai events,
we made those calls that didn't happen.
And those were obviously, tougher calls.
So we think there's still deserves a B grade.
All right, as you know,
data is one of our favorite subjects,
and we've reported extensively in the successes and failures
of so-called big data.
We said, in the next prediction that,
in the 2020s, 75% of large organizations
will rearchitect their big data platforms.
And we said, this would occur,
in earnest over the next four to five years.
Now, again, you may say, "Duh, Dave,
but you have to evaluate the prediction based
on the underlying comments here."
The jury is still out on things like snowflakes data cloud,
but we absolutely believe, that it's the right direction.
But then you have Databricks coming in,
and taking a different approach.
They're coming at the problem, from a data science angle,
trying to take on traditional BI.
And then, you got snowflake coming from the analytics space
and moving into AI and data science.(chuckles)
And we asked at AWS re:Invent,
we asked Ben (indistinct) and the Cube,
if there needs to be a semantic layer,
to bring these two worlds together.
And he said, yes,
and that's what he claims snowflake is building.
Meanwhile, you got the big whales like Oracle.
They continue to invest in their capabilities
to try to eliminate data movement.
And then there's AWS,
taking a totally different approach to data
where it gives customers maximum optionality of offerings
and database and other services.
And you can't forget Microsoft and Google.
So, many customers might not take the steps
that we predicted,
because they're comfortable where they are.
And specifically, we're talking about here,
a shift toward domain ownership,
and data product thinking,
and the reorganization of hyper specialized technical teams.
Many of the principles put forth by data mesh.
And we've said, this change is going to take
a number of years to play out four to five years.
So, we start noticing in 2021,
that that's clearly been the case
as we reported on parts of JP Morgan, Chase,
rethinking its data, architecture,
HelloFresh, and many others.
So, this is still an incomplete.
The professor will give ourselves an incomplete on this one,
but we think it's trending in the right direction.
Okay, the next one is always fun discussion,
that's the battle to define hybrid, and multi-cloud.
We said that's going to escalate in 2021,
and we'll create bifurcated CIO strategies.
Now, here we go,
AWS sees the world as bringing its APIs,
and primitives, and model to the edge.
And the data center to AWS is just another edge node.
And the company says that instill believes
in the fullness of time that all data will be in the cloud,
however, that's defined.
In AWS says, all this talk about hybrid
of connecting on-prem to a cloud, they would flat out say,
Adam Solecki told us this, that's not cloud is what he said.
Then, on the other side of the table,(chuckles)
you have the likes of Cisco, Dell, HPE, et cetera, saying,
"Hold on, cloud is an operating model, it's not a place."
And AWS might say, "Yeah."
And AWS, along with its customers
is defining that operating model.
And these other guys would say, (chuckles)
"No, actually you're not, we are with our customers."
And this battle 100% escalated in 2021
with the launch of Apex by Dell, HP,
(indistinct) doubled down on GreenLake,
Cisco's as a service models.
And then of course, Oracle,
which actually announced a true same, same public
to on-prem hybrid capability two years
before AWS announced Outpost.
And of course, Oracle is executing
on that strategy in earnest in 2021.
And the other nuance here
is a concept that we introduced called Supercloud,
which refers to the notion,
that look, something like, for example, multicloud
is not about running within a respective cloud.
It's not about cloud compatibility,
rather, it's about abstracting the complexity
of the underlying cloud primitives,
and building value on top of those cloud services,
on top of the investments in CapEx,
that the hyperscalers have made.(chuckles)
Now, some people didn't like the term Supercloud,
maybe Uber cloud would be a better term.
We're going to continue to use it
to describe this capability, we think it has meaning.
And we're seeing new examples like Goldman Sachs
is financial cloud, running on top of AWS.
So, a super cloud is not as an application,
or a suite of applications running on a single cloud.
Now, if those applications span multiple clouds
like snowflake is trying to do.
Okay, that's a service,
that could span multiple clouds,
or in the case of Goldman Sachs,
it's a portfolio of data, tools, and software,
that's made accessible as a service that floats
on top of a single, or even multiple clouds.
Regardless,
we feel that this was a correct call given the evidence.
And we'll give ourselves an A-,
taking points off for the somewhat anecdotal
and observational measurement system,
that we apply to look back at this prediction.
Okay, the next prediction we made was cloud containers,
AI, and ML, automation are going to power that those big four
are going to power 2021 spending.
Here's a graphic we use to predict that,
it plots survey data for the various technologies,
within the ETR taxonomy.
Net score, or spending momentum,
on the vertical axis and market share,
or presence in the dataset.
It's a pervasive measurement, on the horizontal axis.
The one that matters here is the vertical
that dotted line of 40%,
anything above that is considered highly elevated.
And these four areas have held serve this year,
based on recent ETR survey data that we're not showing here.
We'll bring that into our 2022 predictions.
So, this prediction came in correctly
for the most recent survey data.
And that's our measurement system on this one,
so we're going to take an A, for this one too.
Now, on the penultimate prediction,
here we came back to automation,
saying that all the automation mandate accelerates in 2021
UiPath and automation anywhere we said, we'd go public,
but Microsoft remains a threat
to these pure play RPA vendors.
Well, we gave ourselves a B on this one,
doubling down on automation,
anywhere going public, that was wrong,
but we definitely saw
this year companies leaning hard into automation.
And Microsoft, despite the fact that
it doesn't have as feature rich product,
and offering as UiPath and automation anywhere,
Microsoft remains a very large presence.
We spoke to a lot of customers
at the UiPath forward for event
in October in Las Vegas physical event.
And they confirmed this is true,
but at the same time,
so they're using power automate from Microsoft,
but using in this case UiPath.
So, they've kind of confirmed that,
"Yeah, it's not the same.
We use that for some of our productivity,
where we're an Azure customer, it's easy for us."
But they still leaning heavily
and investing heavily, into UiPath.
And I think the same can be said for automation anywhere.
But power automate shows up
as a big time leader in the Gartner Magic Quadrant,
so it can't be ignored,
but clearly the two leaders in RPA
have a sizable product advantage,
relative to the legacy software players.
Now, if you look at the comment on Pegasystems,
they cooled off a bit as measured by their stock price.
Their revenue grew 13% last quarter on a year on year basis,
but perhaps we overestimated the tailwind effect,
and the company's momentum.
So we'll take a B on this prediction,
correct call and the automation trend,
and the big software vendors piling in, IBM, et cetera.
But the chance we took on (chuckles)
automation anywhere again, was a miss,
so we'll ding ourselves on that.
And our last prediction for 2021 was 5G rollouts push,
new edge IOT workloads,
and necessitate new system architectures.
Now, much of this prediction,
you can see in the underlying bullets here,
really related to the observation
that arm was dominating at the edge.
It would find its way
into the mainstream enterprise workloads.
And we've been asking
a lot of the mainstream companies, the OEMs,
"What do you see with our ARM in the enterprise?"
And he said, "Hey, we don't see it yet."
But very clearly this came into focus in 2021
AWS announced graviton three now,
and new inference and new training,
so, these are different types of workloads
that are emerging in the enterprise.
These are all based on ARM.
Microsoft, Google, Alibaba, Oracle,
and others, are now shipping or readying ARM-based systems
for the enterprise.
When you look at new storage, network,
and security appliances and other systems,
they're very offering often,
including ARM-based processors
to assist with the offloads.
And look, Intel is definitely under pressure,
as we've predicted many times,(chuckles)
not just in our predictions post,
even Pat Gelsinger has admitted,
this is a turnaround, it's going to take at least five years.
That's kind of new and recent data that he's made public.
So we're going to take an A- on this one.
We're going to take off some points for the fact that,
5G rollouts and edge are evolving,
and this is a longer term trend,
but the underlying points
that we made on this slide, are still pretty solid.
Now, if we use the following scale
where A+ is 100 out 100,
A- is 90, a B is an 85,
a B- is an 80, and a C is a 75 out of 100.
And we exclude that incomplete prediction
on data architectures.
We average out to an 87.8, so that's a solid B+.
And so, the professor in a said,
"Hey, we got a little yellow sticky, good effort,
is most of the predictions could be quantified
and we tried to object objectively score them.
There were some layups in there.
So yeah, maybe we'll try to take more risks.
You know we're not, (chuckles)
we we'll see, we like winning.
And so, you always have to couch some of these things
with some obvious ones,
but really try to give some detail underneath,
it's maybe not obvious.
And we'll try to keep it down,
and always we did this year
to one or two multi-year predictions.
So what's next?
Well, Erik Bradley and I
were working on our 2022 predictions.
We're going to release those in the next couple of weeks.
So stay tuned for that.
What do you think?
How did we do?
We're grading ourselves here.
Love to know for we're off base on base.
We're too hard on ourselves, too easy.
Give us your feedback.
Don't forget these episodes,
they're all available as podcasts,
wherever you listen to all you got to do
is search Breaking Analysis Podcast.
Check out ETR website, at ETR.plus.
Remember we also publish a full report every week
on wikimania.com and siliconangle.com.
You can always get in touch
with email David.vellante@siliconangle.com.
You can DM me @Dvellante,
or comment on our LinkedIn posts.
This is Dave Vellante for the Cube Insights powered by ETR.
Have a great week everybody, stay safe, be well,
we'll see you next time.
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