Editor’s note: Alison Wagonfeld is an operating partner at Emergence Capital.
At Emergence Capital, we have had the opportunity to invest in visionaries such as Marc Benioff, Aaron Levie and David Sacks who have built major enterprise cloud applications that have formed the basis of the next generation of business software around the world. As we look out to 2015, we are excited to invest in what’s next for the enterprise.
We spend so much time talking about the future, so I thought it would be fun to share the 2015 predictions from Emergence’s five partners — Gordon Ritter, Jason Green, Brian Jacobs, Kevin Spain, and Santi Subotovsky — about the emerging themes for enterprise technology and the technology investment environment:
1. Industry-focused vertical cloud applications (“industry cloud”) will be an even bigger opportunity than horizontal solutions
Over the last decade, we have seen the rise of great horizontal cloud software solutions such as Salesforce, Yammer and Box. We predict that the next era of great cloud based software will solve for specific problems in industry verticals.
Emergence Capital General Partner Gordon Ritter has been at the forefront of this shift to industry cloud. He notes, “The breakout success of companies such as Veeva Systems, Guidewire, and Opower highlight the potential of a focused approach, and we anticipate that this landscape will explode in the coming years.”
2. Companies will begin to pay for enterprise mobile apps
The promise of mobile computing caught fire when Apple ushered in the widespread use of smartphones, but there is still a lot of room for mobile applications to proliferate among business users. This is particularly true for the 80% of the global workforce that do not plug into enterprise IT systems.
General Partner Kevin Spain said the following in a recent enterprise mobile forum: “There is a huge opportunity to serve the 2.5 billion global non-desk workers. At $40 per worker per year, it could be the next $100 billion opportunity for enterprise technology. I predict we will start seeing more enterprise mobile use cases in 2015 that generate real revenue.”
3. Consumer trends will continue to carry over to enterprise
We love helping consumer technology solutions mutate into great applications for the enterprise (e.g. Facebook -> Yammer). General Partner Jason Green believes this will happen at a greater pace in 2015 saying: “Enterprise technology needs to keep up with consumer innovation – we’re going to continue to see successful consumer applications experiment around plays in the enterprise space such as Facebook’s latest business product announcement. I think this is true for some wearables as well – I predict the Apple Watch will do for wearables what the iPad did for tablets.”
4. The market for IoT will began to emerge as standards evolve, paving the foundation for consumer and enterprise use cases
IoT has tremendous potential for enterprise users, and General Partner Brian Jacobs thinks that interesting applications will emerge in 2015. “I expect that by this time next year we will start seeing compelling use cases, and adoption will really take off when a killer app is identified.” We are optimistic about the potential for drones or unmanned autonomous vehicles (UAVs) to deliver value to enterprises through sensor technology. Emergence General Partner Kevin Spain: “I’m really excited to see how the new sensors and drones will revolutionize data collection in industries such as agriculture and land surveying where it has traditionally been very expensive or difficult to obtain.”
5. Google Glass will start delivering on the promise of healthcare improvements
Although Google Glass has not taken off for consumers, we will see compelling applications in work settings in 2015, particularly healthcare where doctors often need both hands and could benefit from real-time data to guide their work. General Partner Kevin Spain: “Doctors using Augmedix solutions for Google Glass tell us they would never go back. They have recaptured two hours of their day, allowing them to focus on patients instead of filling out electronic health forms.”
6. Bitcoin will finally have a killer use case, starting outside the U.S.
Emergence Partner Santi Subotovsky believes 2015 is the year that a game-changing use case for bitcoin is created, but it will not be in the U.S.: “Now that the basic infrastructure for bitcoin exists, in 2015 we will see many applications that use bitcoin as a platform. There are hundreds of international entrepreneurs building bitcoin applications, and at least one will go big in 2015 in a market that does not have the luxury of a reliable currency.”
7. We will start seeing glimpses of productivity technology in a UI-less world
General Partner Gordon Ritter is thinking about a future where user interfaces fade to the background. He explains, “All the time we spend tapping and typing things into our phones and computers is wasted – in order to truly increase productivity we need new ways to capture the maximum amount of accurate data with a minimum amount of input time. In 2015, we will start seeing innovations that will lay the groundwork for a UI-less future.”
8. 2015 could be best year ever for venture returns
Although there is debate on whether or not we’re currently in a bubble, we believe 2015 could be the best year ever for venture returns. General Partner Jason Green expands: “Markets are now receptive, there has been fundamental growth within the tech industry, and we are now seeing the broader risk tolerance that went away for a while. All of these factors lead to the potential for 2015 to be a big year for returns.”
General Partner Brian Jacobs seconds: “Right now we have a healthy IPO market, and I anticipate more M&A from large software companies as nascent industries begin to consolidate throughout the year.”
9. $10B is the new $1B
Whether you agree or disagree with the valuations startups are getting these days, there is no question that a $1 billion valuation is no longer unique. General Partner Jason Green: “it seems kind of crazy, but I think $10 billion is the new $1 billion – in order to truly be considered a ‘unicorn’ company, the new outsized standard is many billions not just one.”
10. Descriptive URLs (.photography, .florist, .wine etc) will become mainstream
2015 will mark the year that the Internet naming protocol moves beyond the world of .com, .net and .org. Hundreds of descriptive domain names were released to the public in 2014, and in 2015 we will see widespread adoption as companies such as Google and Donuts make this a reality for businesses around the world.
