Eric Tan is Senior Vice President of IT and Business Services Coupa, a frontrunner in enterprise spend administration and a former Battery portfolio firm.
Scott Goering is VP of Business Development at Battery Ventures .
Ever for the reason that pandemic hit the U.S. in full pressure final March, the B2B tech neighborhood retains asking the identical questions: Are companies spending extra on expertise? What’s the cash getting spent on? Is the gross sales cycle sooner? What traits will possible carry into 2021?
Recently we determined to affix forces to reply these questions. We analyzed knowledge from the just-released This fall 2020 Outlook of the Coupa Business Spend Index (BSI), a number one indicator of financial progress, in gentle of a whole lot of conversations we now have had with business-tech patrons this yr.
A former Battery Ventures portfolio firm, Coupa* is a enterprise spend-management firm that has cumulatively processed greater than $2 trillion in enterprise spending. This perspective provides Coupa distinctive, real-time insights into tech spending traits throughout a number of industries.
Tech spending is continuous regardless of the financial recession — which helps clarify why many startups are elevating massive rounds and even tapping public markets for capital.
Broadly talking, tech spending is continuous regardless of the financial recession — which helps clarify why many tech startups are elevating massive financing rounds and even tapping the general public markets for capital. Here are our three particular takeaways on present tech spending:
Spending is shifting away from distant collaboration to SaaS and cloud computing
Tech spending ranks among the many hottest boardroom subjects at present. Decisions that was confined to the CIO’s group at the moment are operationally and strategically crucial to the CEO. Multiple causes drive this shift, however the pandemic has pressured companies to function and interact with clients otherwise, virtually in a single day. Boards acknowledge that corporations should change their enterprise fashions and operations in the event that they don’t need to turn out to be out of date. The query on everybody’s thoughts is not “what are our expertise investments?” however reasonably, “how briskly can they occur?”
Spending on WFH/distant collaboration instruments has largely run its course within the first wave of adaptation pressured by the pandemic. Now we’re seeing a second wave of tech spending, during which enterprises undertake expertise to make operations simpler and easily preserve their doorways open.
SaaS options are changing unsustainable handbook processes. Consider Rhode Island’s choice to shift from in-person citizen surveying to utilizing SurveyMonkey. Many corporations are shifting their vendor funds to digital funds, ditching paper checks completely. Utility supplier PG&E is accelerating its digital transformation roadmap from 5 years to 2 years.
The second wave of adaptation has additionally pushed many corporations to embrace the cloud, as this chart makes clear:
Similarly, the problem of sustaining a conventional knowledge heart throughout a pandemic has pushed many corporations to lastly shift to cloud infrastructure below COVID. As they migrate that workload to the cloud, the pie continues to be increasing. Goldman Sachs and Battery Ventures knowledge recommend $600 billion value of disruption potential will bleed into 2021 and past.
In addition to SaaS and cloud adoption, corporations throughout sectors are spending on applied sciences to scale back their reliance on people. For occasion, Tyson Foods is investing in and accelerating the adoption of automated expertise to course of poultry, pork and beef.
All corporations are digital product corporations now
Mention “digital product firm” prior to now, and we’d all consider Netflix. But now each firm has to reimagine itself as providing digital merchandise in a significant approach.