In this article, Matt Garratt, Managing Partner, Salesforce Ventures looks back on a watershed year for enterprise technology companies that enable digital transformation, and considers what the future might hold.
Salesforce Ventures was founded on the belief that the surest way to spark growth and boost customer success is to accelerate the expansion of a cloud ecosystem and support startups that drive innovation. Since then, our thesis has been both well-tested and well-proven. Indeed, the pace of change is accelerating and transitions we thought would take decades are happening right now.
In 2020, we found ourselves in a period of unexpected change, including a sudden switch to remote work and accelerated adoption of cloud technology. Digital transformation became an urgent imperative. When it counted most, the utility and value of the cloud were universally confirmed, and enterprises that embraced digital transformation were made more resilient, efficient, and adaptable.
We also witnessed enterprise technology leaders step forward to stabilize and support their customers, employees, and partners — leaving them even stronger than before. We conducted two surveys of cloud CEOs this year and learned that churn turned out to be lower than expected; and in Q2, when executives had a clearer picture of how the pandemic was impacting their business, almost all of them forecasted they would reach 76% of their plan or more for the year; up from 30% forecasting as such when we asked them in March.
Reflecting on the past ten years makes it clear how far we’ve come and how much has changed. When we first started investing more than a decade ago, cloud-based software was still a relatively small piece of the overall tech industry. The next decade will be even more transformational. We are only in the beginning stages of the transition to the cloud, and there is a long way to go before the world is fully cloud-native.
We’re keeping our eye on several trends set to shape the coming decade, and we plan to invest accordingly:
Data as the linchpin of digital transformation 2.0
To achieve the promise of Digital Transformation 2.0 and Customer 360, you need a holistic view of your customer data. As companies around the world continue their data transformation and bring on more cloud applications that generate and consume data to analyze every aspect of their business, an opportunity has emerged for solutions to seamlessly manage all that information. A number of Salesforce Ventures-backed companies are driving this innovation, including Auth0, BigID, Crossbeam, and Snowflake.
Apps that bring more flow
We will see fewer monolithic products as applications continue to become more cross-product, cross-functional, and cross-cloud. This will lead to collapsing workflows and functionalities across different departments. A number of Salesforce Ventures-backed companies are driving this innovation, including Qualified, Workato, and Automation Anywhere.
Artificial intelligence and automation
As AI matures, we expect more cloud startups to build automation into more products to improve predictive capabilities and product usability at scale. Interfaces will continue to improve and data entry will become more automated — so employees won’t need to log in as often, yet the quality of data will improve. A number of Salesforce Ventures-backed companies are driving this innovation, including Airkit, Process Street, Gong, Qualified, and Outreach.
Remote work and collaboration
Technology never moves backward. Long after the pandemic is over, a number of newly-learned, tech-enabled behaviors are likely to become societal norms. One of those is an increased reliance on remote work. Supporting distributed teams will require continued investment in virtual communications and experiences, data sharing and security, and tools that enable remote sales and service — anything that supports laptops in the field. A number of Salesforce Ventures-backed companies are driving this innovation, including Auth0, Hopin, Tanium, Talkdesk, Outreach, and Qatalog.
Investing with Values
Salesforce Ventures is driven to lead with our values, incorporating social responsibility, sustainability, and diversity into our investment process. Our goal is to contribute to the creation of a more resilient and inclusive economy — one that ensures the long-term wellness of citizens, drives job creation, protects against future shocks coming from climate change, and breaks down systemic barriers across race and gender.
Out of a desire to address the extremely low representation of Black professionals in technical, leadership, and investing roles, we co-founded Black Venture Institute, which aims to 5X the number of Black check writers in three years. We also announced $100 million of intentional capital to empower cloud companies led by Black and underrepresented minority founders and launched a new $100M Impact Fund to continue to invest in companies solving the world’s most pressing challenges.
As 2020 comes to a close, we are appreciative of the resiliency, ingenuity, and generosity of our Ohana — and grateful for our partnership with you. At Salesforce Ventures, our goal is to help the entire cloud ecosystem flourish. If you’re building a cloud company in the areas in which we invest, we’d like to hear from you.
View the full infographic at the link below.