附近上门

Despite the pandemic rankling the economy in the first half of the year, 2020 proved to be healthy for enterprise software investing.

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Some of that likely is due to the virus itself, as the pandemic changed the way people worked and led to an increased need for collaboration tools like and , accelerated cloud adoption by employers, and left IT departments scrambling to secure a wider attack surface as millions more employees worked from home.

Big pops in IPOs from companies like , and others, signal investor interest in the enterprise market. Looking purely at private funding however, the market did slow some.

Investment in SaaS and enterprise software and applications dropped to $29.8 billion year-to-date globally, according to 附近上门 data, as compared to $34.5 billion in 2019. Venture funding for SaaS and enterprise software and applications companies in the U.S. dropped from $24.5 billion in 2019 to $22.7 billion.

What鈥檚 ahead in 2021 is always hard to predict, but venture capitalists and advisers do have their eyes on certain sectors as we near the end of 2020.

Collaboration and work from home

Not surprisingly, many still see collaboration platforms as a place to invest with so much of the world still trying to recapture the in-office experience while dealing with remote work.

鈥淲orking from home has become normal, and moving forward people will work in a hybrid fashion, both working at home and the office,鈥� said , managing director, president and co-founder at .

Das said companies that can solve the multitude of issues caused by working from home鈥攊ncluding collaboration, security and productivity鈥攚ill continue to be attractive. He also anticipates more and more applications being built around platforms that have become popular such as Zoom and Microsoft Teams.

鈥淶oom is becoming a platform,鈥� said Das, whose firm has investments in a handful of work and enterprise tools such as , and .

, managing partner at 1, said the industry will see the stacking of services on communication and collaboration platforms. Certain sectors also could look for cloud-native platforms specific to that industry.

鈥淵ou need that collaboration built into these platforms,鈥� said Garratt, whose firm is an investor in , which helps companies design and launch products.

Systems of record

While data is valuable, moving around that data also is becoming increasingly important. Nothing may illustrate that better than 鈥檚 planned acquisition of Slack for $27.7 billion announced earlier this month.

鈥淚 think one thing that’s very interesting is historically, a lot of the value resided in systems of record,鈥� said , managing director at . 鈥淎nd so who owned the data was king or queen. I think what Slack and other companies show is data in movement is incredibly important.鈥�

Systems of record will obviously continue to be very valuable, but are getting commoditized relative to being able to move that data around more quickly, Sherman said. The fact Salesforce is willing to pay $27.7 billion for Slack may signal a shift in that value equation.

鈥淭he value of moving that data around and moving it quickly, I think, is on the rise,鈥� he added.

Garratt said he sees the shift from systems of record to systems of engagements as 鈥淒igital Transformation 2.0,鈥� as we already are seeing an uptick in SaaS applications and complex tools to move data around.

Data is not only becoming more valuable, but with so much automation it is becoming easier for people to use and move, Garratt said. He pointed to a data structure where companies like Snowflake serve as the management layer, and it flows to tools that manage and catalog it like and platforms like that help keep the company in data compliance. Lastly there are tools like 鈥攁 $15.3 billion Salesforce acquisition back in 2019鈥攖o publish that data.

鈥淭he amount of data in the enterprise has never been great,鈥� he said. 鈥淵ou have to be able to use that data to make strategic decisions.鈥�

Cloud and containers

The broader enterprise technology stack continues to undergo a transformation as companies聽 adapt to the flexibility of the cloud and containers change the way we build modern applications.

鈥淎nything that helps companies move to containers is interesting,鈥� said Ubaid Dhiyan, a director at investment bank , which focuses on tech.

Interest in containers, and more specifically 鈥攖he open-source software platform that allows users to deploy and manage those containers鈥攈as been noticeable in enterprise tech. In July, enterprise software giant bought Kubernetes straup for a reported $600 million. That deal was followed by ponying up $370 million in September to buy , which handles data storage and management for Kubernetes.

Containers and virtualization technologies remain attractive to investors in the space because they make a company鈥檚 applications and other assets more portable to other cloud services, not locking them into one provider.

Dhiyan said hybrid cloud players such as and could eye container technology as they continue to build their clouds. IBM has been increasingly acquisitive of late, making six deals this year after only one in 2019.

Looking Ahead

Even with funding remaining around pre-pandemic levels and large first-day pops on the public market, not every investor remains convinced the market will keep chugging along.

鈥淚 think you have to be wary of some of these high enterprise valuations,鈥� said , managing director of .

Problems brought on by the pandemic such as high unemployment and an accumulation of back rents combined with a sector that has watched values skyrocket, could turn the market bearish, Butler said.

He sees a flight to quality right now in venture capital, and 2021 could see a return to investors looking more closely at company fundamentals.

However, with interest rates and bond yields remaining low, both private and public markets could continue to look toward enterprise software for returns.

鈥淚t could go either way because of that pent-up demand we are seeing,鈥� Butler added.

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