The Tech Industries Mission in 2021
Years ago, I stopped doing a predictions article, generally because they seem ridiculous, and most readers view them as fiction. I considered doing a predictions article of things I don’t think will happen, and I still think that is an interesting article but have yet to attempt it. But we still do get questions from clients and media about what we expect in the coming year. As analysts, we get to view the industry from a 20,000-foot view, and there is some benefit to that view in seeing broader trends and connecting macro trends to the microelements of tech.
The challenge for many who try to predict the future is the desire to make a bold prediction, something that will happen that could change a paradigm or bring something dramatically new. A new market, a new technology, etc., is what excites people, but it is not what I expect in 2021. Rather, the challenge we saw in 2020 and the rapid movement of digital transformation happening in both enterprise and consumer markets put a giant spotlight on the reality that tech still has a long way to go. There are still huge numbers of pain points, frustrations, less than elegant solutions that need to be fixed.
So for 2021, the tech industry’s mission is to double down on solving the significant pain points that exist all around us as we use digital devices. I expect this to be able to happen much sooner than years before, largely because of the incredible progress of cloud computing. When you look at the core reason many tech companies were able to make the adjustment to work from home, even if it was not perfect and inelegant, the reality was if this COVID-19 pandemic would have hit a few years earlier, many companies would have had no chance at a transition and many businesses would have come to a screeching halt.
In many ways, I remember how the continual advancements in Internet infrastructure of the 2000 decade led to the massive industry opportunities that hit all at once. Most of the decade was more evolution and solving pain points, and that work led to the mobile era. In many ways, I view the cloud infrastructure and the underlying innovation in silicon as a similar laying of the groundwork for what’s next. But what is next is not coming this year, and that is ok. As I said, there are still many pain points to solve.
Which areas can we expect more digital transformation and a continued emphasis on solving pain points? Well, nearly all of them, but the tech industry’s journey has always been one that is a transition from analog to digital. This is why every company will someday be a tech company, if not by-product then by the process. All processes move from analog to digital, and many products similarly will include more digital elements. This is one reason why the auto industry, and in particular Tesla, has been talked about so much. That is an industry whose products have all but abstained from modern technology. Tesla brought the auto industry into the digital age, and there is no going back. I include this industry in solving pain points, which leads to many opportunities ahead.
I expect more companies to embrace direct-to-consumer, and the number of new brands and new products to increase thanks to the ease of services like Shopify for brands to control their storefronts and go direct to consumers. 2020’s e-commerce surge will no doubt assist this effort going forward, and shopping and buying online for everything is now an ingrained habit for many consumers. While e-commerce has made great progress, there are still pain points to solve in the total experience, automation, delivery, and more.
This point on D2C includes entertainment content. We already see movies go straight to digital services, and I expect this to be the new norm and offer a wide range of new experiences and new content. However, the current unbundled streaming landscape is a hot mess, and while our research and many others proves more consumers are leaving cable bundles for other content services, they find themselves leaving one set of frustrations and finding a whole batch of new ones. There is a huge opportunity here for someone, and as of now, I’d bet on Disney to become the new super aggregator in some way.
Enterprise software is another example where many pain points remain. While many companies embraced the latest technologies to enable their workforce to remotely, it was inelegant to put it kindly. There is still tremendous work ahead to more seamless blend workflows for individuals and teams, and that effort will pay off even when people start going back to the office. I expect big leaps ahead in solving these pain points for this category in 2021.
Lastly, Healthcare is another where I hope more tech companies can make an impact. If anything, the COVID-19 pandemic has certainly shown how broken much of healthcare is in the US but has also shown a further opportunity for digital, like Telehealth and other digital services stand to benefit and bring new opportunities.
While I highlight a few areas, and I’m sure there are more we will see pop up in 2021, the bottom line is, while not sexy, the tech industry’s focus and main push will focus more on solving pain points than pushing brand new inventions, or innovations. This is a good thing because, in order to bring about the new computing paradigm, we need to solve current problems rather than just create new ones.