While 2021 was a year in which many hoped the pandemic would end and enterprises would get back to normal business operations, it didn’t work out that way, despite best efforts. While the pandemic initially receded during the summer of 2021, the virus had other ideas; two new variants sent businesses scrambling to respond and forced delays of widespread plans for staff to return to their offices.

The year was also bookmarked by two major events that sent CIOs, security, and business-technology teams scrambling. While the SolarWinds breach initially went public in December 2020, it wasn’t until January 5, 2021 when the CISA, FBI, and NSA jointly announced the extent of the attack and its likely nation-state backing. Fast-forward to December 2021, and enterprises were sent scrambling to patch what is largely considered the most dangerous software vulnerability in Internet history.

Facing the headwinds created by the pandemic and historic cybersecurity events, CxOs kept pressing — even accelerating — their digital transformation and cloud migration efforts, creating highly productive and collaborative remote work environments, all the while keeping their systems and data secure while they were at it. The year was also filled with many acquisitions and cybersecurity incidents.

The race to hybrid work and digital innovation

As the 2020 novel coronavirus pandemic forced enterprises to pivot from on-site to remote work, CIOs and digital leaders were placed at the center of the turn. The good news for digital leaders is, so far, boards of directors and CEOs have been willing to spend much more on technology, at least when they can see the direct business benefit. According to the research firm Gartner, despite sales and revenue shortfalls in so many areas last year, global IT spending rose 8.6% year over year and will have reached $4.2 trillion in 2021 in the final tally. “Boards and CEOs are much more willing to invest in technology that has a clear tie to business outcomes, and less so for everything else,” Gartner wrote.

“The pandemic was a prime opportunity to drive innovation, cultural and procedural change in support of patient safety,” says Bradd Busick, CIO at MultiCare Health System based in Washington. “A major lesson learned during this time is how we can become better operationally driven and technology-enabled,” he says.

Deb Gildersleeve, CIO at no-code platform provider Quickbase, says how, amid a backlog of projects and many companies adopting remote work and hybrid work models, CIOs had to step up as leaders and key decision-makers. “CIOs have learned that they need to step outside of their role as technologists and utilize soft skills, such as problem-solving and listening, to lead unifying fragmented workspaces and promote collaboration across their organization. Especially as remote work becomes standard, CIOs have learned the importance of taking the entire organization as a whole when making decisions to implement new technology,” Gildersleeve says.

2021’s most significant mergers and acquisitions

One of the best ways to understand where enterprise technology is heading and what’s on the minds of CIOs is by watching industry acquisitions. And this year, the most prominent trends here were within collaboration and security.

Perhaps the biggest acquisition to close in 2021 was Salesforce’s $27.7 billion acquisition of collaboration software provider Slack (announced in December 2020), in a move to compete directly with Microsoft Teams. Another big deal to close in 2021 was the $6.5 billion acquisition of authentication and authorization software maker Auth0 by identity management services provider Okta. This is a strong indication that cybersecurity and identity will remain a priority on CxO action lists in the year ahead.

Other notable deals include McAfee Enterprise, acquired by private equity firm STG for $4 billion. The McAfee Enterprise business will be eventually rebranded, while the home security line will remain known as McAfee. McAfee went public recently in 2020 with a $740 million IPO and a $9.5 billion valuation.

Also, Dell made public its plans, in April 2021, to rid itself of its 80% stake in virtualization company VMware, making VMware a standalone business. Finally, technology distributor Tech Data and Synnex announced their $7.2 billion merger deal and intention to merge and create a $57 billion distribution giant. Once completed, the Tech Data/Synnex merger will topple Ingram Micro as the largest IT distributor.

Cybersecurity risks persist

The year was also a year of significant security events as government agencies, international corporations, and supply chains for everyday essentials such as fuel and food found themselves significantly disrupted.

And 2021 was also clearly a year software supply chain attacks took center stage. The year began with a rush among large enterprises and federal agencies following the December 2020 breach of SolarWinds and the warning from the U.S. government that Russia was behind the SolarWinds attack.

Ransomware attacks also made headlines. In May, gas pipeline provider Colonial Pipeline was hit with a ransomware attack that shut down operations throughout the east coast. Also, in May, one of the nation’s largest meat processors, JBS USA holdings, was forced to cease its operations, and it had a substantial impact on the meat processor.

Additionally, throughout the year, every type of business from old school retailers such as Neiman Marcus through modern trading platforms such as Robinhood found themselves breached.

Despite cybersecurity woes, the race to innovate continues

The security breaches in 2021 have kept global information security spending top of mind. According to Gartner, the information security and risk management services growth rate nearly doubled year over year, growing 12.4% at $150.4 billion in 2021, after a 6.4% growth rate in 2020.

“Organizations continue to grapple with the security and regulatory demands of public cloud and software as a service,” says Lawrence Pingree, a security analyst at Gartner. “Looking ahead, we’re seeing early market signals of growing automation and further adoption of machine learning technologies in support of AI security. To combat attacks, organizations will extend and standardize threat detection and response activities,” he says.

Security won’t stop innovation. “However, digital tech initiatives remain a top strategic business priority for companies as they continue to reinvent the future of work, focusing spending on making their infrastructure bulletproof and accommodating increasingly complex hybrid work for employees going into 2022,” adds Gartner analyst John-David Lovelock.

Gartner expects enterprise software, at 11.5%, to have the highest growth in 2022, followed by IT services (8.6%) and data center systems (5.8%). “In the years ahead, we will continue to see the balance between enterprises having to move forward with new business innovations while investing in securing these technological changes,” says Scott Crawford, an analyst at 451 Research.

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