2021 was a banner year for the enterprise application, infrastructure, and tools spaces. We're hopeful that 2022 will have even more exciting things in store.
State of the Market
As the Fed raises interest rates and tightens the money supply throughout the year, the markets will be even more volatile than in 2021. There will be 3 - 4 interest rate hikes this year. However, given the relatively solid state of the economy and the increasing reliance of Enterprises on technology, our investment areas will continue to thrive.
Valuations in venture will begin to stabilize and start their slight descent towards normalcy, at least at the later stage. Public technology company's stock will revert to the mean, and high growth SaaS stocks will likely be 20%+ of their peaks. Two of the three - Tiger, Insight, or Softbank will stop being as aggressive as they were in 2020 and 2021. As a case in point, CBInsights reports that Tiger made 328 investments in 2021, and 107 in Q4’21 alone, so it is unlikely that they keep up this frenetic pace.
Grade assigned to state of the market predictions at the end of 2022: B+
Automation
SaaS and cloud-born organizations paved the way for fast cycles to production and scaling solutions rapidly, as methodologies and solutions trickled down from those organizations to the Enterprise, a large discrepancy between solutions that fit those developers-savvy organizations and the ability to elegantly deploy and manage those solutions inside the broader Enterprise base, where the DevOps and SecOps skill-gaps are more evident. Automation is required at every level to help ease the work of developers and the supporting functions. Budgets will only be allocated to solutions that can reduce the ratio of developers to supporting functions, with an ever-increasing preference for open source delivery. No-code/low-code workflows are table-stakes, emulating intelligence/skilled work, and will be rewarded.
Grade assigned to automation predictions at the end of 2022: B-
Cloud
Aggressive "cloudifications" will happen as corporations of all sizes race to the cloud. COVID 19 accelerated this process, and we feel that this will continue in 2022. The Big 3 (AWS, Axure and GCP) will be the primary beneficiaries of this trend - as well as startups focused on hybrid clouds, data management, and security.
Grade assigned to cloud predictions at the end of 2022: A-