One of the inevitabilities of any industry as it matures is that it becomes more cyclical. Those of us who have been around to experience a few booms and busts know firsthand that this is even more true for IT. Indeed, the big question is not whether tectonic shifts happen, but addressing when they will happen and how. The reason we decided to form ClearSky more than a year ago was that we felt the timing was approaching perfection.
Well, from our perch here in Downtown Boston, things now look about ready to tip over: It’s been a long time since currently shipping technology has seemed so long in the tooth. Years have passed since the big incumbent IT players have been this badly positioned. Most importantly, it’s hard not to be dazzled by all the new ideas that are floating around in the ether, waiting to become the Next Big Thing.
Towards the end 2014, we put together a few industry predictions and the one that seems most obvious now is that the big IT vendors are in a crisis. Growth has slowed – or even reversed in some cases – and the companies seem distracted by the task of managing their shareholders.
So, what do you do to make your shareholders happy if you are a big company? Well, if you are HP, you decide to put a whole chunk of your business on the auction block. If you are EMC, you spend time thinking about doing the same. If you are Dell, you take your ball and go home. If you are Cisco or IBM, you worry that you are next. We’ve seen a slew of activity in the financial markets, and it will continue this year. 2014 was also a busy year for reorganizations and layoffs in technology. These distractions historically provide the best opportunities for new companies.
Here at ClearSky, we have the luxury of being able to focus entirely on solving the problems of our customers without the worry of activist shareholders or corporate politics.
With all the chaos, it is easy to forget that the world is not lacking for innovation, or money to invest in it, for that matter. The public cloud is now here to stay, with the pay-as-you-go business model and endless capacity needed to solve many thorny management problems. Containerization and the open source development stack are rapidly becoming the development platform for the next generation of applications. Raw bandwidth is now becoming abundant enough to make possible a whole new set of businesses, solving some previously intractable infrastructure problems.
It is also hard to recall a more entrepreneur-friendly environment. The amount of money that can be allocated to developing these technologies is immense. For the first time, we are regularly seeing mature private company valuations in the billions of dollars, reflecting the abundance of capital and the scarcity of talent and ideas. A good team, with a solid idea and customer traction, has a great chance to get their shot at the market.
We began this journey by asking a rhetorical question: ”Knowing what we know now, what would we want to be doing in ten years? And where?” Although there is plenty of challenge in the enterprise IT market, we are full of anticipation for the opportunity ahead.