It’s increasingly clear that technology is moving beyond the industry itself. It’s no longer just a part of our world. It has become the primary disruptive force across the entire global economy. If you’d like to learn more about it, stay with us as we discuss the Technology Report 2021 from Bain & Company today!
Reshaping the Global Economy
Technology is critical to businesses. Even more traditional, often “brick-and-mortar,” companies realize the benefits of adopting a tech-led strategy. As an example, Disney recently launched a streaming video service.
source: Technology Report 2021, Bain & Company
Also, the market values of top cloud-native infrastructure software vendors are proliferating.
source: Technology Report 2021, Bain & Company
As a result of launching and scaling up new applications more easily, cloud-native infrastructure software companies have flourished. Thus, when cloud infrastructure and supporting tools get more advanced, companies across industries can build more efficient and effective IT footprints and utilize large amounts of data to enhance their business models.
And by actively managing and drawing insights from large data sets, companies can more rapidly improve their offers based on real-time customer feedback.
Increased accessibility
Access to innovation is increasing among people. As a result of Google’s catapult into YouTube’s growth path, the digital video streaming industry was born. Moreover, Amazon’s dealmaking has facilitated innovation access as well.
source: Technology Report 2021, Bain & Company
Boost in capitalizations
Venture capital is driving the transformation of the economy, and it starts with technology. All venture capital deals by independent venture capital (VC) firms and corporate venture capitalists between 2010 and 2020 were dominated by tech start-ups. In the first quarter of 2020, nearly 70% of venture capital investments went to technology start-ups.
source: Technology Report 2021, Bain & Company
SaaS expansion
Software has contributed greatly to economic growth, new cloud-based business models, and the increased efficiency of businesses. In addition, the research shows that software-as-a-service subscription models offer many returns for mature software companies.
source: Technology Report 2021, Bain & Company
Hybrid cloud on the rise
As enterprise computing environments become increasingly complex, the case for the hybrid cloud has never been stronger. Trying to capitalize on the hybrid cloud opportunity, technology vendors are finding that better understanding the emerging customer archetypes is one way to bring order to the chaos.
For the next few years, data will be spread across on-premise and public cloud infrastructure and the demand for interoperability will continue to grow. The emergence of complex enterprise computing environments underscores the importance of robust tools to monitor hybrid and multi-cloud IT environments effectively. This capability allows for seamless management across various cloud platforms, ensuring optimized performance and cost-efficiency.
source: Technology Report 2021, Bain & Company
Cloud Companies Can Win in Europe
Cloud service providers must adapt their playbooks to meet data security, governance, and regulatory compliance requirements. However, since there are more than 20 official languages in Europe and significant differences between countries, they cannot apply the same playbook in Europe as in other markets.
Bain’s survey found that European CIOs are more concerned about data security, control, governance, and regulatory compliance than their departments in North America and Asia.
source: Technology Report 2021, Bain & Company
Global players must learn to “be more European” as they prepare to comply with regulations and establish local sales and service structures. But on the other hand, companies can also leverage their distinctiveness to differentiate themselves from the competition. Moreover, companies will continue to invest in customer relationships to know customers’ needs and concerns about migrating to the cloud.
The era of artificial intelligence
In the last half-century, the computing industry has undergone three major transitions: the mainframe era, the shift to PC-server computing, and the rise of mobile, cloud, and Internet computing.
Now, we’re on the cusp of a fourth transition, data-centric computing, which will be powered mainly by the increasing pervasiveness of artificial intelligence.
CSPs operate the largest fleets of AI servers, increasing their expenditures on AI computing architecture. Based on Bain’s interviews with CSPs, more than 15% of their servers are currently used for AI computing workloads, which is expected to rise to more than 30% by 2025.
By then, the top-four AI workloads—vision, natural language processing, recommendation engines, and intelligent search—will account for around 70% of CSPs’ AI server fleets.
source: Technology Report 2021, Bain & Company
Furthermore, CSPs are among the most prolific developers of AI-enabled services. For example, between September 2020 and June 2021, Amazon Web Services, Microsoft Azure, Google Cloud Platform, and Alibaba Cloud expanded their AI platform offerings by about 30%.
source: Technology Report 2021, Bain & Company
Changing relations between the US and China
There has been a gradual decoupling of the US and Chinese economies and technology ecosystems for several years. Between 2016 and 2020, technology-related foreign direct investment between the two countries fell by 96%.
source: Technology Report 2021, Bain & Company
Despite the US and China set the world on a path of decoupling, other leading countries and regions are embracing it. By 2030, South Korea plans to become the world’s largest chip manufacturer with a $450 billion investment. By 2030, the EU intends to double its share of global semiconductor production to 20% with a $150 billion investment in “digital sovereignty.”
Operational advantage
Every industry recognizes that its ability to compete comes down to one thing: having the right employees as software and technology become mission-critical. This has resulted in a fiercer war for technology talent. Additionally, increasing demand for the supporting cast ensures technology products succeed.
source: Technology Report 2021, Bain & Company
It is difficult for many companies to compete for top talent because the largest technology companies – Alphabet, Amazon, Apple, Facebook, and Microsoft – and start-ups are grabbing top talent at unprecedented rates.
Getting DevOps
DevOps is a strategic priority for most companies. According to developers and operators, DevOps is the best way to develop and deploy software. More than 90% of companies have adopted DevOps in some cases. However, only about half have rolled it out broadly, with a centrally governed toolchain, integration, and automation.
source: Technology Report 2021, Bain & Company
How to grab tech buyers
Many sellers are trying to keep up with changes. About 35% of buyers already have a vendor preference before engaging with a sales representative.
source: Technology Report 2021, Bain & Company
But to grab tech buyers, leading companies are focusing on three best practices:
- Creating captivating experiences for buyers to digitally discover offerings
- Synchronizing all go-to-market functions
- Trading off investments across go-to-market functions
What’s more, customer relationship management (CRM) deployments commonly fail to meet return on investment (ROI) expectations because of poor integration with other relevant applications. Some improvements are needed here.
To sum up
Technology cemented itself at the foundation of the global economy over the past decade. The ingredients are in place to create an explosion of tech-fueled innovation and growth, unlike anything we’ve seen before. But as we face many opportunities, we still see many challenges out there.
So, what will technology bring us in the coming years? We are yet to see!
