Predictions For 2016 From Emergence Capital Partners

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Predictions For 2016 From Emergence Capital Partners

The good news for enterprise software is that enterprise technology is becoming more interesting every year, and businesses continue to benefit from the combination of cloud based applications, new hardware (e.g. drones, VR) and the compute power that enables sophisticated analytics.

Here are our predictions for 2016, and stay tuned for the 2017 prediction where virtual reality takes this to the next level.


Industry Cloud Remains Big

Industry vertical cloud solutions will be the biggest segment of enterprise technology spending again in 2016. As my partner Gordon Ritter wrote earlier this year, nearly all verticals are “Uber-vulnerable” to disruption, and there is a window of time for enterprise cloud companies building enabling technology to help the incumbents drive their own innovation by introducing customer-centric technology.


Employee Engagement Goes Mainstream

Employee engagement and culture engagement applications go mainstream. Jason Green predicts, “In an environment where talent is the ultimate competitive advantage, companies will have to figure out how to recruit, measure, manage and retain the best talent and a new generation of cloud based applications will enable this transition.”


Internet Of Things Takes Off

Internet of Things (IoT) applications will show early ROI for companies taking a vertically-focused approach. While the broader platforms are still developing, emerging use cases will emerge in specific verticals such as manufacturing and healthcare, particularly when blending sensor data with predictive analytics. Emergence partner Brian Jacobs notes, “2016 is the year when we will see the shift from middleware to specific applications.”


Mobile Enterprise Apps Gather Steam

Mobile enterprise apps will continue picking up steam as deskless workers increasingly use apps that help them become more productive. We are starting to see how this sector will grow into the $100 billion market that Kevin Spain forecasted.


Commercial Drones Will Be Big Business

Drones will move beyond backyard toys and become a bigger business story in 2016. Kevin Spain notes, “As FAA regulations are finalized, we are going to see increasing number of large corporates spin up drone initiatives, particularly in agriculture, construction and mining.”


A GreenTech Revival Looms

GreenTech will have a second coming, but under a new moniker: the Natural Resources Cloud. The influx of new technologies and new resources (e.g. Bill Gates’ multi-billion dollar Clean Energy Fund initiative) will draw in new entrepreneurs, particularly millennials focused on building socially conscious businesses. My colleague Jake Saper predicts that this time we will see a greater focus on cloud software as the key enabler of viable business models.


New Payment Models Emerge

Freemium 2.0 will emerge in 2016, where applications will be completely free, with monetization happening in the background.  Santi Subotovsky explains, “Revenues will be derived from transactions, enabling companies to give away workflow applications for free. Upsells to premium from free will no longer be the only way to make money for freemium businesses.”


Artificial Intelligence Moves Beyond The Hype

Machine learning, artificial intelligence and natural language processing will be the 2016 buzzwords in enterprise cloud, but we will only see value when applied to specific domains. Gordon Ritter notes, “I’m excited by the impact of sensor data at the word level & tone level, but what matters most is finding teams that understand which questions to ask and which outcomes to use.”


Virtual Reality Becomes Real For Enterprises

Virtual and augmented reality applications for business use cases will emerge in 2016. According to my colleague Joe Floyd, “The first applications for VR and AR in the enterprise will focus on supporting high value workers such as physicians or high value projects like oil rigs because these are the situations that can justify the high cost of hardware. We predict the proliferation of VR and AR applications into the enterprise will increase as hardware costs decline and enabling software technologies continue to develop.”


New Ways Emerge To Climb The Corporate Ladder

New learning platforms will help close the skills gap by redefining the campus interviewing and hiring process. John Chen notes, “In 2016, we will see a new set of platforms that partner with companies to provide rich project-based learning experiences that help new grads acquire necessary skills, work in teams, and get exposure to companies.”