point
Menu
Magazines
Browse by year:
Need for New Technologies and Trends Favoring Entrepreneurs
Vignesh Ravikumar
Analyst-Sierra Ventures
Thursday, May 1, 2014
CIOs are becoming increasingly supportive of the cloud. We are now beginning to see large enterprises moving data centers off-prem, and the process has been gradual. We saw companies like Workday and Salesforce as the first wave of this movement, where critical data was no longer on-prem. Now CIOs are discussing and designing methods of moving business-critical infrastructure and applications are no longer being hosted on-prem. This movement has developed a need for new technologies like SDN, network fabric, and cloud security. These are all areas where Sierra has been spending time.

Security and Predictive Sales and Marketing Tools set to Influence the Future

The hottest technologies within the enterprise today are security and predictive sales/marketing tools. I believe that security is fundamentally shifting, and the threat profiles and vectors cannot be addressed by existing architectures/technologies. Furthermore, the massive influx of security data essentially negates the impact of existing tools like SIEM. For example, the Target breach was not something Target did not see, but rather was a single alert in an ocean of alerts. In addition, the BYOD and mobile trend have introduced new vectors into the enterprise, and at the moment, there are very few solutions in the market that address the growing volume of endpoints on the enterprise network. With respect to predictive sales/marketing, it is a result of data growth and ingestion. The growth of the internet has resulted in large numbers of potential buyers of a product. Large companies now receive significantly more inbound than in the past, and it now becomes a challenge for enterprises to identify their most qualified leads. Today enterprises waste resources by chasing leads that appear to be qualified, but in reality are not. This is where data and predictive analytics have the opportunity to make a significant dent in the market. Giving a business more clarity into its pipeline to cut down sales cycles and improve average selling prices is a highly compelling value proposition. However, this is a very challenging problem to solve given the large quantity and poor quality of data, and thus this is a space that we believe has significant room for disruption.

Viable Opportunities for Bold Entrepreneurs

From a startup perspective, I believe that the aforementioned categories have yet to be won, and thus are still very viable opportunities for bold entrepreneurs to attack. Furthermore, from the startup's perspective it is a very attractive market given the significant amount of deal flow in these spaces. However, I strongly caution entrepreneurs that these spaces have grown quite noisy, and that adoption rates are still very low for most of the next-gen solutions in the space. In addition to the previous spaces, I think networking (as related to the enterprise’s move to the cloud) and enterprise collaboration are two other areas that have significant room for innovation. Networking has seen a significant slowing in growth since SDN's boom in 2012, and there have been some rumblings of companies trying to disrupt networking and the cloud. However, there have not been any major developments at this point. Enterprise collaboration is another interesting space that has hit Gartner’s "Trough of Disillusionment" after companies enterprise social networking failed to deliver on the ROI they had promised. This is an area where tools are still siloed; for example, e-mail is still very much a standalone application. In this day and age of instantaneous communication and content sharing on the consumer side, I believe that someone has the opportunity to create a very large business on the back of this concept for the enterprise.

The Challenge of Sales and Fund Raising

One of the particularly interesting challenges that entrepreneurs face is that the process of sales and fund raising seems like a chicken and egg problem. I consistently hear that sales are hard when you don’t have money and fund raising is hard when you don’t have sales. However, from a VC’s perspective, it is not necessary to go out and win 3 Fortune 500 customers to raise your first round of funding. Rather, the seeds of traction need to be in place for a company to draw a VC’s interest. For example, 20 small deals with very impressive engagement numbers is a very good sign that the product serves a need in the market and people are willing to pay for a solution to that problem. One other challenge that I see is that many entrepreneurs make the mistake of building incremental solutions, rather than creating true disruption. Entrepreneurs must think through the eyes of their customer, and realize that unless a product solves a significant problem, the cost of implementing a marginally better product outweighs the results of the product.
(As told to Sagaya Christuraj)
Twitter
Share on LinkedIn
facebook