Last year, the US Federal Reserve removed the punch bowl from financial markets, ending easy money and stratospheric valuations in the venture capital (VC) and startup markets. This has also caused an economic slowdown and potential recession. What does this mean for the hottest startups in cloud infrastructure?
Recent start-ups pursuing cloud infrastructure and communications should focus on return on investment (ROI) and key trends in the cloud infrastructure market. According to ongoing research, the most promising areas for 2023 include hybrid/multicloud management, cloud cost management, data management, cloud security, and edge/cloud convergence. This week, we identified the Futuriom 50, the top 50 private companies chasing these trends.
As these startups tackle these technological challenges, they don’t have the luxury of unlimited funding. They must prove they can help global organizations move to more efficient cloud infrastructures. This multi-part series takes a look at the top trends in the cloud infrastructure market. Then follow up with a deep dive into each category with our list of companies to watch.
First, let’s talk about the market background.
The IPO market needs to pick up momentum
It’s a different world for startups now. The business environment in 2022 presented challenges including rising interest rates, the war in Ukraine, and problems with his supply chain that were lingering due to the coronavirus pandemic and factory shutdowns in China. And after years of easy funding, start-ups and private growth companies are adjusting to the new reality. More reasonable valuations, smaller investment rounds and longer waiting times to list.
In 2022, the market for IPOs is mostly closed. 2021 was a record year for tech IPOs, culminating in the final cycle. For reference, here are some data about the IPO market.
- According to Ernst and Young (EY), 2022 IPO activity fell 45% and 61% year-over-year (YOY) in deals and earnings, respectively.
- A total of 1,333 IPOs raised US$179.5 billion, according to EY.
- In 2021, none of the 15 IPOs raised at least $1 billion or more, according to FactSet.
“Record year for IPOs in 2021 has been replaced by heightened volatility due to heightened geopolitical tensions, inflation and aggressive rate hikes. Weaker stock markets, valuations and post-IPO ‘s performance has further dampened IPO investor sentiment in their IPO plans.”
In other words, adjustments are required.
Despite these challenges, Futuriom 50 has raised over $15 billion, while Celona Networks, DriveNets and Versa Networks have raised $440 million in 2022. So most companies have enough money to figure out his ROI story.
Cloud ROI is key
Private companies now need to set themselves up for potential profitability and more rational growth. Many of the Futuriom 50 will continue to be in demand even in a recession, as companies invest in long-term digitization and cloudification strategies, and cloud technology can provide a very large ROI. Technologies such as AI, machine learning (ML), data analytics, and cloud computing infrastructure are driving new applications and efficiencies.
The demand for these advanced technologies is not going away. Organizations just take a more cautious approach to technology investments.
In conversations with cloud technology leaders, they believe that tackling digital transformation is key to running their businesses more efficiently. They will continue to invest. For example, the data below shows that in the fall of 2022, he expects to continue investing in multi-cloud and hybrid networking technology in a survey of 102 senior-level technology leaders. . Of those surveyed, 46% expect to invest modestly, 41% expect to invest heavily, and in total he expects to invest 87%.
For trends identified in 2023, we used all data, research, and conversations with technology leaders from the past six months. Key trends expected in cloud and telecom infrastructure in 2023 include:
• Trend #1: Hybrid and Multicloud Management — Organizations are looking to diversify their infrastructure and blend public and private cloud resources. This will take hold in 2022 and will likely accelerate in 2023.
• Trend #2: Cloud and Cost Management — A more conservative business environment and the possibility of a recession in 2023 has led business leaders to look to technologies that optimize existing resources and reduce costs, especially using the cloud. doing.
• Trend #3: Data Management and Pipelines — As data explodes in hybrid and multi-cloud environments, the solutions and platforms needed to support effective data systems are emerging, many of which are AI and mechanical. We are using learning (ML).
• Trend #4: Edge/Cloud Convergence — Technology leaders and organizations we track are increasingly finding new ways to connect, manage, and consume data at the edge, working with public and cloud cloud resources. We are considering.
• Trend #5: Integrated Cloud Security—As cybersecurity tools proliferate like rabbits, technology leaders are combining and integrating new security features wherever possible to create a holistic view of data, networking, and cloud computing. I want to protect it in some way.
The new list of Futuriom 50 companies riding these trends includes: Dragos, DriveNets, Elisity, EngFlow, Exabeam, Fivetran, Fortanix, Graphiant, Hazelcast, Hedgehog, Itential, Kentik, Kong, Lacework, Macrometa, Materialize, NetBrain, NetFoundry, Netris, Netskope, PacketFabric, Prosimo, Orca Security, Rubrik, Selector , SonarSource, StackPath, Stackwatch, Stellar Cyber, Striim, Tecton, Teleport, Tigera, TrueFort, Versa Networks, Wib.
This is a big list and has many nuances. Over the next few weeks, we’ll dive deeper into each of these trends and companies.
(Disclosure: Raynovich is the founder and principal analyst of Futuriom, which sells technology market research to some of the companies mentioned in this column. Futuriom 50 is a Futuriom analyst and consultant. It is an independent list voted on by a panel of.The research is supported by an organization that licenses rights to the report after it is published.)