INSIGHTS AND RESEARCH
Nearly all microtrends derive from larger economic and cultural shifts – the Megatrends, thus, enterprise software is not exempt. Enterprise software, although directly emerging out of the technological progress megatrend, has had unexpectedly rapid growth in the past few years. Why? Enterprise software came to be in the 70s and 80s but in the bygone days it primarily concerned the removal of bureaucracy and streamlining communications within the corporate sphere, and this continued to be the main selling point right up until this past decade. Now, however, software itself is changing the traditional practices across almost every industry rather than merely being of help. Software is an agent of digital transformation which is deployable quickly, painlessly, and is thus malleable to any forthcoming new and disruptive technologies.
Owing to the adoption of microservices and application programming interfaces (APIs), as well as artificial intelligence coming to independently manage business decisions, there has been a growing focus on the revival of enterprise software as an investment trend. One of the gravest pain points for any company is organising and analysing the collection and collected data as without these analytics in place companies struggle to predict, improve, and ultimately, sell. A company’s operational processes are, as principal, akin to architectural structures and when changes need to be made at the base level this can be difficult and costly, however, statistics have shown regardless that companies who implement a more tech-open approach outperform their traditional counterparts both medium and long-term.
As stated previously, technology in general is in a constant state of flux; it evolves annually, monthly and in some cases even daily. The variety of enterprise software being brought to the market is vast and executives often struggle to foresee the ‘best’ or the ‘most convenient’ due to sheer amount of products being on offer. One of the bigger standard changes which we expect to permeate for the next few decades is cloud-computing which some companies are just starting to implement and some have already surpassed by implementing ‘metaverse’ systems, so-called ‘web3’, quantum computing and ‘hyperautomation’. Moreover, apart from the current automation trend taking place there are also six further nuanced areas which lead the revived enterprise software microtrend: connected intelligence, interaction explosion, distributed meaning, limitless modularity, perpetual motion, and cybersecurity arms race, as suggested by Bain & Company reports.
Connected intelligence is a niche, ongoing technological breakthrough whereby big data models and institutional analysts are replaced with artificial intelligence (AI). AI allows for customer experience to be personalized based on the data acquired, not roughly but precisely. Furthermore, AI as an embedded machine that is learning in every kind of application allows businesses to streamline the connection between accumulated information (both structured and organic) therefore personalising services and/or optimising the use of existing enterprise resources.
Interaction explosion is a microtrend in which the progression from mobile apps to a multiverse of other digital interactions. In summary; customer service is becoming digitalised because the customers themselves expect this, rather than being a cost-cutting method for corporations. Cold calls and over-the-phone customer service is considered outdated, thus, an agent-to-agent strategy, or perhaps an omni-model strategy that performs well is key, whether an “interaction starts with a person or from an autonomous device” (Bain & Company). The most important aspect of this trend is the ability of machines to interact with one another—and not just in pre-programmed situations, but in contextual and creative ways which allows for the making of decisions in real time based on existing parameters. Conversational AI is already underway in underpinning many people-to-digital interactions and with virtual agents increasingly able to manage interactions companies adjust by looping human labour into the process only if absolutely necessary.
Distributed meaning is a software trend through which companies aim to transgress the process of data usage and storage, in essence, make data meaningful. By “enabling access to more data beyond company walls, powered by a layer of intelligence that facilitates end-to-end transactions and inform[ing] companies about what data is available, how it’s being used, and what it can tell you about customers or suppliers,” distributed meaning allows companies to know more and participate much more actively in the data economy. Open-data ecosystems and decentralised asset classes have seen a massive spike in investment primarily because they challenge the traditional meaning of “ownership” which often involves state control or governance. Companies who successfully digitalise will likewise need to be prepared for decentralisation, and unfortunately those who do not will most certainly be left behind.
Let's look at limitless modularity, perpetual motion and the cybersecurity arms race as defined by Bain and Company’s 2022 leading software predictions. As stated by CBInsights; “Ultimately, [we] expect 2022 to be a year of adaptation, where players across the board will invest in solutions for the new — and increasingly virtual — ‘normal.’” We believe, concretely, that enterprise software is to be one of the leading virtual-tech adapting trends.
Limitless modularity – the progression of open-source coding to standardised cloud-oriented interfaces. To summarise the history of this transition is simple: open-source coding is recently much less stigmatised as ‘sceptical’ or ‘unsafe’ for businesses to employ. Rather, many now rely on existing and readily accessible coding systems for data collection and other operational programming e.g. customer service bots. Furthermore, with the freely available resources, companies need only to invest in modulating the existing parameters to be unique to each area of business, meaning applications are exponentially modified and “seamlessly scalable”(Bain and Company). As enterprise software moves deeper into the virtual sphere there are bound to be bigger and more permanent changes coming in the next couple of years for this industry.
Perpetual motion – the adoption of “traditionally technologically-centric methods… [becoming] the norm across business lifecycles.” (Bain and Company). In short, business design and development will likewise be as technologically engineered as any other code-based structure within a given business – processes are indeed becoming “agile”. (Bain and Company). With AI and other virtual technology, software can learn and adjust processes by itself – meaning a company spends less but achieves more throughout a particular cycle.
Last but not least we are looking at the cybersecurity ‘arms race’. 2020 alone saw an increase of 485% of malware and security breach attacks on company software, exclusive of cryptocurrency traders. Unfortunately, with the scaling of virtual and cloud applications, the aforementioned number is only set to rise. The worry underlying this aspect of the software microtrend is that there is a lack of robustness, thus it is belying current innovation. Attackers and thieves are more and more sophisticated by day, often exceeding the capabilities of the so-called cyber ‘defence systems’, both new and existing. In the near future AI will be headlining the role of the defence, however, until it is fully able to detect fraudulent patterns of behaviour other measures need to be implemented for safeguarding; namely, “secure access service edge (SASE), a cloud-based technology based on digital identity” (Bain and Company). Online safety of companies, employees and stakeholders has and always will be a pain point. Investing in software which protects all sides from ill treatment will be a hugely profitable endeavour.
Do you have a company tacking these pain points and riding the high of these trends? Get in touch via our For Founders page.
October 28, 2022
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