Companies spend trillions of dollars on technology every year. The best investors can see which new companies are serving the needs of big enterprises, and invest accordingly.
To uncover the hottest new trends in business tech next year, we spoke to some of the most successful enterprise-focused VCs in Silicon Valley.
Most startups use Amazon Web Services for hosting their services, which explains why AWS is the fastest growing business within Amazon. But many VCs expect its growth to slow next year.
General Catalyst's Steve Herrod says AWS will continue to be a big player but will face increased competition from Google and Microsoft. NEA's Jon Sakoda agrees that AWS is dominant in the space, but says Google will challenge it in the developer ecosystem, while Microsoft will re-double its efforts on Azure. Bessemer's Ethan Kurzweil says AWS's dominance will weaken 'as alternatives that are specially tailored to a specific use case or company emerge.'
But this may also present more opportunities for AWS, Herrod says, as it will push it 'further into the medium and larger companies that dominate IT spending.'
Emergence Capital's Kevin Spain argues 80% of the global workforce are underserved by technology on the job. There are 2.5 billion non-desk workers in areas like construction, manufacturing, and healthcare, that need apps specifically tailored to meet their needs.
'At $US40 per worker per year, it could be the next $US100 billion opportunity for enterprise technology. I predict we will start seeing more enterprise mobile use cases in 2015 that generate real revenue,' he says.
In fact, Spain's point relates to what Andreessen Horowitz's Steven Sinofsky wrote on Re/code: 'Work will happen first on mobile platforms, for both team agility and organizational security.' He says businesspeople everywhere are already using iPads all the time, with 'enterprise apps, email and browsing (and now Office), doing enterprise work.'
Despite all the attacks we've seen this year, Steve Herrod says it's just 'the tip of the iceberg.' He expects to see more sophisticated, organised crime and nation-sponsored attacks in the cyber space. 'It's clear the current approaches to security aren't cutting it, which is why the security space is one of my biggest personal focus areas.'
Bessemer's David Cowan adds: 'Exploits by nation state adversaries will be discovered in critical industrial systems such as utilities, aviation, and medical equipment. We will see fast growth among security startups who sell simple security services to SMBs (small and mid-size businesses), such as scans, pen tests, fraud checks, and cyber intel.'
This will make more companies to ditch the PC, which are more vulnerable to attacks, and shift their workflow to mobile. Norwest's Matt Howard says because mobile devices are newer, more contained, and more restrictive, they're a safer platform than desktop operating systems. 'The shift to mobility is likely going to be the best solution,' he told us.
An app development technology called 'containers' made big headlines in 2014. Docker continues to be the leader in this space, with seemingly all of the big tech companies like Google, Microsoft, IBM, and VMware, lining up to partner with them.
Led by startup darling Docker, the development technology known as 'containers' really started to take off this year. Basically, containers help companies build apps that are faster and less likely to crash. It helps developers build apps that can run across many different physical machines and cloud services, switching pieces of each app to the best possible place at any given moment.
Jerry Chen at Gerylock believes this is just the beginning. 'Container technologies and adoption will grow immensely, and Docker will get deployed in production by major enterprise customers,' he says.
Steve Herrod agrees: 'The rise of Docker has been one of the true stories of 2014 with its momentum spurring a huge collection of startups betting on its rise.'
But Herrod also says 2015 will be the year container companies really get down to work. 'The rise is real, but I believe 2015 will be the year some of the hype comes down to earth and the real work of making it usable by enterprises gets going.'
The largest US tech IPO this year was Lending Club, an online marketplace connecting lenders and borrowers. Other marketplace apps, like AirBnB and Uber, are disrupting industries that haven't changed in years.
The same marketplace concept is now being applied to the enterprise. For example, according to Trevor Oelshig of Bessemer, Cargomatic is building a marketplace connecting carriers and shippers. Honest Buildings is connecting real estate developers with specialist contractors. 'Consumer marketplaces like AirBnb and Uber have transformed the consumer experience -- it will be no different in the enterprise,' he says.
Bessemer's Jeremy Levine adds freelance marketplaces will change the way traditional teams, like backend accounting officers, function within the enterprise. Companies like Bench connects professional accountants with its customers, while Scripted is a marketplace for content marketing writers.
Beacons are low-powered, Bluetooth-connected hardware that can transmit messages to a mobile device over a short distance within a building. For example, it can be used to send discount coupons when someones walks into a coffee shop, or to send in-store maps to provide directions.
'2015 will be the year of the Beacons. It gives companies hyper-contextual user information based on location,' Norwest's Matt Howard says.
Tech companies are already jumping on this new technology that could revolutionise retail shopping. Apple's iBeacon technology is already built into its iPhone and iPad devices, while Paypal and Qualcomm also have their own beacon products.
In fact, according to BI Intelligence, 67% of retail shoppers have received in-store alerts, while 81% opened the alert. Of those, a staggering 79% said the alerts led to a related purchase.
But beacons aren't just restricted to retailers. They can give updates to travellers at airports or provide additional information at music concerts.
This isn't really a prediction of where businesses will spend, but these VCs believe that these new trends, combined with a much warmer market for tech IPOs, could make 2015 a great year for enterprise-focused venture returns. In the past week, we saw four companies go public at over $US1 billion valuations.
Emergence Capital's Jason Green believes markets will only get better next year. 'Markets are now receptive, there has been fundamental growth within the tech industry, and we are now seeing the broader risk tolerance that went away for a while. All of these factors lead to the potential for 2015 to be a big year for returns,' he says.
Bessemer's Brian Feinstein says industry-specific cloud software companies will lead the way for tech IPOs, as they keep taking market share from on-premise incumbents. 'The success of IPOs like Guidewire, Veeva, Athenahealth, and others have made the public markets more comfortable with the idea that you can build a large software business catering to a single industry,' he says.
Bessemer's David Cowan says most acquisitions will happen in the security space. 'FireEye, Palo Alto Networks, Cisco and Google will be the most active acquirers of security companies.'