As CIOs entered 2022, the focus — hope — was the enterprise returning to the new post-COVID-19 normal: The continuation of digital transformation efforts, modernizing legacy data architectures and improving cybersecurity posture. While those all remained core objectives, 2022 threw its share of curveballs from the outbreak of war in Europe, lingering supply chain woes and increased economic uncertainty.
Still, CIOs and enterprise technology teams kept pushing forward. Here are the top enterprise tech trends that shaped the year:
The use of low code/no code tools hit an inflection point. Low-code/no-code tools have been gaining popularity for several years. But the Covid-19 pandemic has proven to be an adoption accelerant, as enterprises sought to stretch their on-staff development skills reasonably so business operations could function through the pandemic shutdowns. Today, the use of low-code continues, but predominately to satiate the enterprise’s need for custom software, speed digital transformations and time to value. So much so soon; more than half of low-code users won’t be workers in IT or professional developers.
“The economic consequences of the COVID-19 pandemic have validated the low-code value proposition,” said Fabrizio Biscotti, research vice president at Gartner, in this 2021 statement. “The increased demand for custom software solutions in support of digital transformation has sparked the emergence of citizen developers outside of IT, which, in turn, has influenced the rise in low-code,” Gartner continued.
The growth since 2021 has been considerable, with the low-code/no-code tools market expected to have reached $5.8 billion by the end of 2022 and 41% of employees outside of IT turning to low-code to produce applications — that figure is expected to surpass 50% in two more years.
2022 also witnessed considerable consolidation among low-code platform providers, with technology services company Glabant acquiring low-code platform provider GeneXus, and low-code provider OutSystems acquiring mobile app maker Ionic. We can expect continued M&A and innovation in this space.
Persistent economic uncertainty. While digital transformation budgets are resilient to some economic disruption, they’re certainly not entirely immune from budget cuts. And while CIOs braced for uncertainty in 2022, they will continue their cautious postures well into 2023. But enterprise tech spending is, ultimately, expected to remain strong. In fact, Gartner expects global enterprise technology spending to reach $4.6 trillion in 2023, up roughly 5% from 2022.
That tech spending remains, despite an evident economic slowdown. The International Monetary Fund forecasts global economic growth to slow to 2.7% in 2023, down from 3.2% in 2022 to 6% in 2021. “Enterprise IT spending is recession-proof as CEOs and CFOs, rather than cutting IT budgets, are increasing spending on digital business initiatives,” said John-David Lovelock, an analyst at Gartner. “Economic turbulence will change the context for technology investments, increasing spending in some areas and accelerating declines in others, but it is not projected to materially impact the overall level of enterprise technology spending,” Lovelock said.
Tim Crawford, the founder at CIO strategic advisory AVOA, agrees enterprise technology spending isn’t to be slashed, but he sees more prudence. “Companies aren’t pulling back, but they’re scrutinizing their spending more than they have in the past. There’s a bit of healthy activity that comes from that, and it’s something that should be done regularly. But there’s more of it happening now than really should be, from my perspective,” he says.
“If you look at business-to-business spending and business-to-business growth,” Crawford continued, “it’s still really positive. And we still have consumers that are spending money. We still have low unemployment numbers. As long as we can keep that in check, I think we will be okay,” Crawford says.
AI reality began to match the hype. Whether ChatGPT is the dawn of Skynet or merely a parlor trick will be debated in the months ahead. Regardless of its utility, ChatGPT grabbed ahold of enterprise imaginations firmly toward the end of 2022. And regardless of how profound such large language models will prove over time, ChatGPT moved the ball even further when it came to accepting AI in the enterprise and their belief that AI can be useful in solving real business problems.
But that belief in the utility of AI isn’t universal. It’s barely a majority. Research published by integration platform provider SnapLogic found that while 66% of mid-senior management workers in the US, UK, and Australia want to use AI in their workplace, just a little over half believe using AI will save them time. Further, only 46% said it would improve their productivity, and only 37% said it would reduce risk and errors in their work.
“AI is already in the enterprise and will remain in the enterprise,” says Jonathan Feldman, CIO at Wake County, North Carolina. “That’s never really been the question. The question is where and how will we find the most value in its use?”
Significant enterprise tech acquisitions. There were a number of prominent enterprise vendor acquisitions that will leave the market landscape much different at year’s end than New Year’s Day 2022.
One of the deals that promise to have a lasting impact is Broadcom $61 billion purchase of VMware. With the transaction’s closing, the Broadcom Software Group will operate as VMware, incorporating Broadcom’s existing infrastructure and security offerings as part of the company’s expanded VMware portfolio. The deal is expected to close at the end of 2023. The deal has some existing VMware customers concerned, mainly due to Broadcom having historically raised product prices while cutting support following its acquisitions.
Broadcom execs, aware of the concerns, are trying to reassure customers. “We are approaching the post-closing planning phase of the transaction process with an open mind while drawing from the lessons learned from our previous acquisitions of CA and Symantec Enterprise,” said Broadcom in a blog post.
Other substantiative acquisitions in 2022 include Google’s $5.4 billion purchase of Mandiant, Microsoft’s $19.7 billion acquisition of conversational AI company Nuance, and AMD’s $49 billion acquisition of Xilinx which combines both company’s computing, graphics, and adaptive system-on-a-chip offerings.
The rise of the data lake. Another big trend, already underway before the pandemic and having accelerated through it, is the move toward large data lakes. With the rise in remote work, it became even more critical that enterprises have more straightforward and unified access to their data. According to Mordor Intelligence, data lakes will reach $17.60 billion by 2026, up from just $3.74 billion in 2020 — a 30% annual growth rate.
Because of their architecture, data lakes are more cost-efficient than data warehouses. And while data warehouses are designed for SQL analytics, data lakes are designed to support the needs for the growing thirst for data from existing AI/ML systems.
One of the primary market drivers for data lakes is the superior speed of data retrieval compared to data warehouses. Because of their nature, data warehouses require more time working with data extraction, transformation, and cleaning. That’s time data scientists would rather spend analyzing and modeling their data. In addition, the investment for setting up a data lake is less than setting up a data warehouse.
In 2022, more organizations moved their on-premises data warehouses and stories to cloud-based data lakes. That’s a trend that will continue through the next few years.
While no one knows what changes 2023 and beyond will bring for enterprise technology, the enterprise technology leaders who effectively build the systems most capable of adapting to those changes will succeed.