In the midst of the coronavirus crisis, we live in uncertain times. I’m grateful in this chaos that my employer acted fast and took proactive measures, extending the digital and virtual working policies which Qlik largely put in place before this crisis, smoothing the transition.
With “market intelligence” as part of my job description, perhaps I should have a point of view on what this means for markets. From a micro-perspective, it’s useful to start with me. Like most of you, I work from home. I now buy food online. I postpone most purchases that can’t be done from home. I don’t drive or travel. I don’t present at conferences. I minimize physical contact. If my behavior is multiplied by a billion, it’s easy to understand that this is likely going to have broad and deep economic repercussions, beyond the apparent human tragedies.
What is different this time? I’ve long held a hypothesis that the next time a major disruption or black-swan event comes around, it’s the legacy vendors that will be swept away. Strong digital vendors will pounce on this. That would be in contrast with the dot.com bust (2000) but also the financial crisis (2008). As our behaviors now shift dramatically, the nature of this crisis lends itself perfectly to fulfill that theory. So, who will survive? The three questions that all companies need to ask themselves is: Q1) How strong is the recurring cash generation and balance sheet? Q2) Have we made the “the digital switch,” not only in internal systems but also business model-wise? Q3) Is our company agile and adaptive to change?
Legacy companies may answer yes to Q1, and innovative startups say yes to Q2 and Q3. But, the longer this goes on, companies rapidly need to say “yes” to all three questions. Because the longer this goes on, the more we’ll see bankruptcies, exits and M&As. This litmus test needs to be answered by all companies, no matter what industry.
What does it mean for tech? It is, undoubtedly, the case that organizations are now accelerating the shift to SaaS, cloud and online services. And the tech needs to be intuitive. You may not want anyone there to hold your hand when setting up. We also see that being able to handle data and analyze it becomes critical as physical bits rapidly turn into virtual bytes. It’s core to make the digital switch. The current landscape filled with armchair epidemiologists has also highlighted the importance of being able to filter data into attractive interactive visualizations and insight nuggets, wrapped in compelling storytelling.
What is the same? In the last crisis (2008), I was a market analyst at Gartner. To confirm that my memory served me correct, I went back to the vaults, and, indeed, “Business Intelligence” (BI) was among fastest growing software sectors in both 2008 and 2009. Other sectors that weathered the storm well were Web Conferencing/Team Collaboration, Data Integration and Security. To an astonishing extent, I think we’ll see the same technologies thriving this time around. But then the gains were unequally distributed. Underneath the surface, there was turmoil, with an acceleration in M&As and a shift to next generation technologies. Long, services-led, multi-million-dollar projects of semantically layered BI with uncertain ROI took a hit. Agile, business-driven projects thrived. It will be the same this time around. That means, companies need to be creative in finding buying centers and prove value fast.
So, what’s the role of data and analytics in this environment? The impact of COVID-19 is indicating Data and Analytics are being viewed as essential by leaders to measure their current business posture, to find avenues to more deeply engage with customers and drive innovation that results in outcomes. A fresh off the press report from 451 Research backs this up. Below are two key sentences from the report:
- “53% of VotE Digital Pulse: Budgets and Outlook 2020 respondents also named data and analytics tools and platforms as the technology with the greatest game-changing potential for their organization over the next three years, placing it ahead of machine learning/artificial intelligence, containers/container management, software-defined infrastructure and serverless computing.”
- “The coronavirus crisis is causing enterprises to rethink almost everything, but the importance of analytics is not, and should not, be one of those things.”
In other words, when evaluating cutting budget, leaders seem to prioritize data analytics that drive business impact and start from the bottom of the list with less essential investments.
So, what are the lessons learned, and what is the disruption that may happen this time? If the past is a good predictor of the future, then viable and sustainable companies that pass the “digital switch” litmus test will be able to consolidate their markets. But, never waste opportunities in a crisis: agility and innovation is key when creative destruction happens. My colleague, Todd Margolis, came up with a great list of blue sky innovation that may become relevant before we know it. The list includes drone delivery, personal 3D printing, workplace VR, virtual tourism, autonomous taxis, and programmable biologics. This will all need to be fueled by data analytics, supported by AI, distributed clouds, IoT, and all other foundational tech innovation.
ABOUT THE AUTHOR
Dan Sommer is Senior Director, Global Market Intelligence Lead at Qlik, a King of Prussia-based company that helps enterprises around the world move faster, work smarter, and lead the way forward with an end-to-end solution for getting value out of data. He is responsible for the supply, demand, macro, and micro picture and is a former Gartner analyst who specializes in markets, trends, competitive landscape evaluations, and go-to market strategies.