Evangelos Simoudis makes it his job to assess the trends impacting information technology today. As managing partner for Trident Capital with his finger on the pulse of Silicon Valley, he’s well-positioned to monitor how the megatrends of cloud, mobility, social and big data and analytics are transforming the IT landscape as we know it.
These megatrends drive change for companies of all sizes and, as a panelist at next week’s Cloud Business Summit in New York – an event themed around business innovation - Simoudis intends to emphasize that innovation can come from anywhere, not just new companies.
In a conversation with Information Management, Simoudis shared his insights and observations around the megatrends driving innovations in Silicon Valley and how they resonate throughout the world.
Information Management: Trident Captial is a venture capital and private equity firm, and as managing partner, you need to be aware of the impact of new and growing technology areas and innovations. What interesting trends or advances are you keeping an eye on these days?
Simoudis: So for the past [two to four] years, we have been following four megatrends. This includes, cloud, mobile, social and big data, and along with big data the analytics for big data. Now what is interesting is that we have been investing in the cloud since ‘99, so we had caught that trend early on. However, in the last four years or so, we’ve seen mobile, social and data combined with the cloud, creating these four megatrends, and we believe that the interesting applications of these megatrends will come at the intersection of these technologies. So as an example, we’ve made a few investments around the area of social applications for the enterprise. Well, if you look at social applications for the enterprise, companies like Extole or Thismoment or Jobvite, these are Saas applications so they use the cloud as their development and delivery medium. They obviously capitalize on the adoption of social networks, particularly by both enterprise employees as well as consumers, who are then customers of these larger enterprises. And in order for these type of applications to be effective, they really need to analyze both the social data but also other types of data, some of it consumer data, some other types of data, in order to get to the result that their users expect. [That’s] just as an example of how three of these four megatrends are coming together to create an interesting class of applications. Similarly, and we’ve seen that particularly in the last 18 months, a number of large enterprises are starting to rethink their application strategy with a mobile first strategy. That is a direct consequence of how both their consumer customers and their employees have been aggressively moving to mobile for their own personal uses and now they’re starting to influence the enterprise ecosystem through that adoption. And again, as we’re seeing these mobile applications being developed, they tend to bring together cloud, because they tend to be cloud-based at least for part of the application, mobility, obviously, and again data and the analytics of that data.
Saugatuck Technology calls the combined area of these four megatrends the “Boundary-free Enterprise” and other firms have other terms for it. Each individual area is of interest, but as a whole they’re much more. What is fueling the growth behind the megatrends as a whole or individually?
So over the past 10 years we’ve seen three platform changes. And [I’ve] been around the IT industry for the past 30 years, so I’ve seen most of its previous incarnations. If you look at in the past, and again I don’t want to get historical on you, but if you look at previous platform changes – mainframe to client/server to multi-tier Web in the late ‘90s – those took about 10 years each, 8 to 10 years. Yet in the last 10 years we have seen first cloud becoming a platform and being adopted by companies like Salesforce. Then in the 2008 we’ve seen with the emergence of Facebook and LinkedIn, we’ve seen social becoming a platform around which a new class of applications was being built. And now more recently we see mobility emerging as a platform, and I think mobility is a much bigger, much more fundamental platform than I’d say social has been. And I think mobility, as we’ve seen even with the acquisition of Instagram by Facebook, mobility will supersede social. I think that shift is not only in the software layer like many of the other shifts, but it is driven by the hardware layer, again, not unlike what happened with the client/server, which was driven by the emergence of the PC, and then mainframe obviously, which was driven by the IBM 360 architecture back in the ‘60s. So I think here we’re seeing [that] mobility is not only a software architecture driving this change but it is the associated hardware architecture you’re seeing with the mobile devices, smartphones. I mean, Apple just introduced the 64-bit processor on the 5S - that’s big news by the way, that enables enterprise computing now on your smartphone. And same thing with tablets, which a lot of people lump along with the smartphone but it’s quite different, yet a very, very important mobile device which is eclipsing laptops. So look at the pain that Microsoft is in and Dell; companies that built their fortunes on desktop computing are taken by surprise by what mobility and mobile devices are doing.
Next week At Saugatuck’s Cloud Business Summit in New York the panel you’re speaking is about “The Cloud and New Models of Customer Engagement.” What potential do you see for improving customer relationships through cloud-enabled products and services?
I think the big issue there is that a customer is now engaging with corporations in a multichannel way, and that creates both opportunities for corporations but also a lot of challenges. The opportunities, because they have more than one way through which to interact both with their customers and their prospects. The challenge is because now they have to create a consistent message and they have to do the right targeting, they have to, in other words, understand what will be the best channel or channels through which to approach [a] customer or prospect and then with what message to make that approach, and do that in a way that the message remains consistent. So that if this customer receives an email from this company or receives a tweet from this company or a video or a display ad on some browser, the three messages through these three very different channels will be consistent and best-targeted for that particular customer. So that’s the big challenge, and I think enterprises are starting to understand this challenge and are starting to realize that the technologies that they have adopted to date around this customer engagement will need to either be significantly enhanced or significantly upgraded and updated -- which is the reason why we have been investing very aggressively over the past few years in companies that provide such solutions.
Are there any particular insights that you’re hoping to share with the audience at the Cloud Business Summit?
For me there are a couple of points that I would like to make. First, again going back to how we started this conversation, because of these megatrends and how these technologies come together in interesting applications, there has been an explosion of solutions that are provided by both early-stage companies but also more mature companies. And we tend to invest in both types, even though we’re weighing more towards the mature companies. But we’re seeing this explosion of new and very interesting solutions that are coming to market, and obviously these companies need financing in order to grow and push them into the enterprise. The second point is that large corporations, say Global 2000 class corporations, realize they need help in understanding, comprehending and best using this new set of solutions and new set of innovations that are being generated, and for that reason they’re looking a lot more towards Silicon Valley than they’ve ever done before. (Parenthetically, these innovations are not only technological innovations but also business model innovations, solution delivery innovations, so it is not an accident that we hear so much today about innovation but I don’t want it to be understood that it is only technology innovation that we are experiencing. What we are experiencing is innovation in a variety of areas.) So these large corporations are starting now to either frequently visit the Valley or they’ve started sending delegations and establishing offices in the Valley so that they have frequent and direct interactions both with the companies that are creating these innovations but also with firms like ours that fund these companies but also have our own perspective around innovation and around where the world is going particularly with the megatrends we discussed.
Is there anything that we haven’t touched on that you would like to mention?
The one point that I will make, which again plays well, one of the areas that we have been investing in again for the past 12 years has been security. And security has become a very critical issue for enterprises. And it has become a critical issue because of these other four technologies that we have talked about, so the cloud, mobility, the use of data and the various types of data that we bring together in order to create these big data collections. Each one of these creates a set of security threats that need to be addressed. And they need to be addressed so that both the consumer will feel comfortable that they’re interacting with an enterprise that’s done in a secure way, but also for the enterprise to feel comfortable exposing the data in its systems whether it’s to the cloud whether it’s to mobile devices. So again as you see these 4 big areas coming together, security is a big issue that needs to be kept at front of mind. So we’ve been investing in that area very aggressively over the past 12 years. In fact we’ve seen over the past year, year and a half an acquisition spree both for several of our portfolio companies but also in general we’re seeing IT vendors buying security companies, primarily younger innovative security companies in order to address security threats in these areas that we’ve discussed.
For more information about Saugatuck’s Cloud Business Summit 2013, click here.
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