AWS will buy a SaaS company, and other 2022 enterprise predictions

@ron_miller / 1:24 pm PST • January 3, 2022

Image Credits: Tyler E Nixon / Getty Images

It’s always a sticky business predicting what’s going to happen in tech, because who knows what’s going on behind the scenes or what’s coming next.

Would you have thought, for instance, that Salesforce would spend almost $28 billion to buy Slack at the end of 2020? Or that in 2021, Jeff Bezos would step back at Amazon with a domino effect of Andy Jassy moving into his role, and Adam Selipsky coming back after a stint at Tableau to take Jassy’s old job running AWS?

I sure didn’t see that coming, and I’m betting most people didn’t. The tech world moves so quickly, it’s often hard to keep up.

We weren’t using the terms metaverse and web3 (complete with lowercase spelling), and then quite suddenly in 2021, we were. If you told me that the blockchain was going to come back in a big way in 2021, or Facebook would change its name to Meta, I would have laughed in your face. Yet, here we are.

So let’s admit that there are things that we can’t possibly predict, but it seems it’s a part of my job to rear back and throw out some predictions. I would like to think that mine are based on my careful observation of the world I cover in the enterprise, rather than some random musings, but if I’m being honest, it’s probably a combination.

So with that in mind, and the usual caveats, here are my predictions for the coming year:

Speaking of web3, companies (and especially governments) will learn just how difficult it is to retrofit brittle legacy systems to accept digital currency. There will need to be some sort of reckoning to either modernize or let it go for the time being, most likely the latter. Updating systems is challenging and expensive, and it’s hard to see governments spending the money to do it to accommodate digital currency, which is still in its infancy. Pew recently reported that just 16% of Americans have traded, invested or used crypto currencies.
While we’re at it, even though the hype is out of control, I’m betting that most companies will continue to adopt AR/VR slowly in the enterprise in 2022. Just as in the past before the term “metaverse” started trending, there will be some experimental dabbling in areas where it makes sense, but most people will realize they don’t want to do their work with VR hardware on their face all day. And, it’s also expensive to create content.
With Bret Taylor getting promoted to co-CEO of Salesforce this year, the next logical step is for him to take over as solo CEO, and let Marc Benioff follow Bezos into the chairman’s role, where he can concentrate more on his charity work. Benioff has been the face of the company for over 20 years, and he may want to finally step back from that grinding responsibility and enjoy his wealth.
One thing we probably didn’t see coming was the great chip shortage of 2021. It could be some time before that is resolved. It will probably have a bigger impact on consumer goods like cars and cell phones than the bigger use cases like running a cloud data center, as the bigger players like Amazon, Google and Microsoft will be able to continue to get the product they need. It could be tough for others, though, until the parts crisis is resolved up and down the supply chain. Chip companies are working hard to get new facilities up and running, but it takes time to roll out new manufacturing capabilities, which means this won’t be resolved in the short term.
Supply chain issues have extended beyond chips, of course. Some have blamed the labor shortage and just-in-time production techniques, but whatever the reason, there were a litany of supply chain problems in 2021. Those problems aren’t likely to disappear in January, and tech companies could continue to face other supply and distribution problems in the coming year. They are going to have to find ways to adapt to this changing system, whether that’s through technology or developing a wider range of relationships across the world.
We saw a lot of climate-related disasters in 2021, and that is only likely to get worse over time. As that happens, big tech companies will face increasing pressure to operate in a much more sustainable way. That pressure will come from a variety of areas from consumers to government regulators and even financial institutions, who will want to know the impact of your carbon footprint on your bottom line. Software should help, and startups building carbon measuring and mitigation systems should benefit from this.
As governments provide an increasing amount of regulatory oversight on tech deals to keep power from concentrating with the biggest players, it will slow down some deals. We’ve recently seen this with the $19.7 billion Microsoft-Nuance deal in the U.K., which was the biggest pure enterprise deal of 2021 if you don’t include Square buying Afterpay for $29 billion. The question is, will it put a chill on M&A in 2022? I’m predicting it won’t have a major impact on tech M&A overall. Big deals will continue to flow in 2022, even if some face headwinds from regulators.
We were expecting a big SaaS announcement at AWS re:Invent this year. That didn’t happen, but AWS needs to move up the stack, and they will either buy or build a SaaS piece or two in 2022. The former makes sense, as it would get an established business out of the gate, but AWS has traditionally avoided large, splashy M&A deals, preferring to build it themselves. That could change in 2022 as new CEO Adam Selipsky moves to put his on mark on the division.
In addition to GDPR, three states now have consumer data privacy laws, and that trend is only likely to accelerate in 2022. It’s possible we could see the introduction of national law in the United States to bring clarity and consistency for tech companies, rather than a patchwork of state laws, but whatever happens, companies will have to be increasingly cognizant of data protection in 2022, and software companies concentrating on this area should thrive as privacy continues to push to the forefront.
How about we close with something bold: Salesforce bought Mulesoft in 2018 for $6.5 billion, Tableau in 2019 for 15.7 billion and Slack in 2020 for $27.7 billion. The company was quiet in 2021, busy closing the Slack deal. It won’t be too unrealistic to expect something in 2022. Maybe something SaaS-y like Zoom, Box or Dropbox. Maybe Benioff finally gets Twitter, a company he desperately wanted in 2016, as Casey Newton suggested in The Platformer this week. But chances are they won’t stay away from major M&A two years in a row.

AWS will buy a SaaS company, and other 2022 enterprise predictions

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