Professional Documents
Culture Documents
2018 ED IT IO N
For the past five years at Work-Bench, we’ve been investing in a total reimagining of the enterprise technology
stack.
We’re in the midst of a once in a decade tectonic shift of infrastructure that powers the Fortune 1000 and is
unlike anything we’ve seen before. Whereas consumer tech has the Mary Meeker Internet Trends report for an
aggregate view of industry trends, enterprise technology was missing a comprehensive overview of the key
trends. Last year we took action and launched the inaugural Enterprise Almanac to share our thinking on these
trends, and now we’re pleased to release the updated 2018 Edition.
Our primary aim is to help founders see the forest from the trees. For Fortune 1000 executives and other
players in the ecosystem, it will help cut through the noise and marketing hype to see what really matters. It’s
wishful thinking, but we also hope new talent gets excited about enterprise after reading this report. By no
means will most of the predictions be correct, but our purpose is to start the discussion by putting this stake in
the ground.
MI CH AE L YAMN IT S KY
Please share any and all feedback via email at michael@work-bench.com or on Twitter at @ItsYamnitsky. Venture Partner, Work-Bench
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 2
PREAMBLE
ABOUT US
Work-Bench is an enterprise technology focused venture fund based in NYC.
OUR THESIS
Customer-centricity. We make it our focus to deeply understand the business and IT needs of the Fortune 1000 in order to make more informed decisions
in our search for the next enterprise giants. This is highly informed by our backgrounds in corporate IT at leading Wall Street banks and as Industry
OUR MODEL
Our model flows directly from our thesis. We leverage our deep corporate network in New York City and beyond as a way to identify trends, pick the
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 3
PREAMBLE
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 4
PREAMBLE
Team Work-Bench
Jonathan Lehr, Jessica Lin, Vipin Chamakkala, Kelley Mak, Kelley Henry, and Blake Jesse who added significant contributions and healthy debate for the
content of this presentation. Thanks to Tommy Truong for his design work.
Disclaimer
Our views are shaped by anecdotal evidence based on our interactions with entrepreneurs, Fortune 1000 executives, and big tech leaders. Take that for
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 5
2018 MACRO PERSPECTIVE
The Empire Strikes Back
6
MACRO PERSP ECTIVE
VS.
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 7
MACRO PERSP ECTIVE
Early-stage
startups + open-
source
VS. VS.
Growth guard and old guard haven’t peaked yet, with fight in them to go head to head with new guard
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 8
MACRO PERSP ECTIVE
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 9
MACRO PERSP ECTIVE
Source: http://tomtunguz.com/mid-2018-ma/
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 10
MACRO PERSP ECTIVE
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 11
Let’s briefly speculate on megacloud M&A…
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 13
MACRO PERSP ECTIVE
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 14
What about AI and its promise to reshape
technology and transform business as we
know it?
15
MACRO PERSP ECTIVE
Original Framework Source: Jerry Chen’s “The New Moats - Why Systems of Intelligence are the Next Defensible Business Model”
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 16
MACRO PERSP ECTIVE
Weaker: still a significant barrier, but Weaker: tough to sustain with open Stronger: The key value driver
it’s faster to develop and thus harder source, but there is some value in moving forward is developing
to sustain a data moat. novel training, profiling, debugging, products bottoms up, from data
and testing processes. and analytical capabilities to
features and user experience, and
creating a virtuous loop between
the two.
Locus of focus shifting from the
quantity you own to the process
you use to sustain these assets*
Direction = whether this factor will be more or less significant 12-24 months from now
*For more on this topic, see Matt Turck’s “The Power of Data Network Effects”
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 17
MACRO PERSP ECTIVE
Arguably the king of SOI at the moment with very Google leveraged its AI army to build Contact
impressive suite of AI-powered BI offerings under Center AI, with a suite of capabilities to automate
‘Einstein’ umbrella. customer support.
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 18
But wait… isn’t the Achilles Heel of
megaclouds a lack of focus on the details
of real-world applications?
19
2018 = AI startups retreating to the
deep ‘niches’ to generate new
competitive powers
20
MACRO PERSP ECTIVE
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 21
Vertical Theme #1
MACHINE LEARNING
22
TL;DR
1 Despite hopeful promise, startups racing to democratize AI are finding themselves stuck between
open source and a cloud place.
2
To sell to BI? Data scientists? Or straight to the business? No matter who the buyer is, there
continues to be a disconnect between buyers and sellers of data science tools. Crack the code
and you have a billion dollar business in sight.
3 The Empire Strikes back. Large technology companies are #winning at AI.
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 23
MACH INE LE ARNING
Source: https://www.forrester.com/report/InsightsDriven+Businesses+Set+The+Pace+For+Global+Growth/-/E-RES130848
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 24
MACH INE LE ARNING
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 25
MACH INE LE ARNING
Demand for “Machine Learning Engineers” and “Data Scientists” has grown 6-10x in last 5 years
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 26
MACH INE LE ARNING
Sources: https://www.pwc.com/us/en/library/data-science-and-analytics.html, McKinsey Global Institute “The Age of Analytics: Competing In A Data-Driven World.”
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 27
MACH INE LE ARNING
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 28
MACH INE LE ARNING
Source: https://www.forbes.com/sites/adigaskell/2018/03/07/employees-optimistic-about-working-with-ai
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 29
MACH INE LE ARNING
Ambitious attitudes: “AI is a competitive differentiator. We “Suits and Hoodies” at Goldman Sachs
want to own the model, we don’t want Palantir to own it.”
Source: Quotes from interviews with machine learning executives at top-tier Wall Street banks
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 30
MACH INE LE ARNING
3 M ODE L S FO R DATA- DR I V EN I N S I G H T S
#1: DATA SCIENTISTS #2: ‘C ITIZEN’ DATA SCIENTISTS #3: BU SINES S US ER S ELF-S ERVICE
Central data science group delivering Business intelligence groups using Business people using software with
insights to the business. GUI-based AutoML tools to deliver pre-packaged ML models and
ML insights without the help of data reporting dashboards to generate ML
scientists. insights.
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 31
MACH INE LE ARNING
Data scientists take an open source first approach to tooling and will
only pay for cheap point solutions that are easy to use and solve a very
particular need.
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 32
MACH INE LE ARNING
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 33
MACH INE LE ARNING
B UT S IN C E ML ST IL L A I N ’ T EASY…
It takes more experience to tune/debug machine-learning algorithms efficiently than to tune/debug regular code
Root-cause analysis in AI is vastly more complex than regular software… and longer time cycle testing the fix
Algorithm design
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 34
MACH INE LE ARNING
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 35
MACH INE LE ARNING
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 36
MACH INE LE ARNING
Data Scientists generate most of their value much later when they apply predictions to
figure out “what it means” for the business.
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 37
MACH INE LE ARNING
“Our best bet are smart engineers, not AutoML tools. We need to scale our data
science organization significantly to see real lift from these tools. Although there are
areas where AutoML can help us, we cannot justify the investment.”
- Chief Data Officer at F500 eCommerce company
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 38
MACH INE LE ARNING
Model production,
Feature Model training
Data prep/ETL deployment, and
engineering and tuning
monitoring
Soon
Soon
Cloud Composer
Soon
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 39
MACH INE LE ARNING
AutoML startups are tweaking their products and messaging to win over the Tableau wielding BI analyst crowd
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 40
MACH INE LE ARNING
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 41
MACH INE LE ARNING
B I V E ND O R S AR E COM I NG IN H OT…
Expect all modern BI vendors to release an AutoML product or buy a startup by end of next year
Source: https://techcrunch.com/2018/06/13/tableau-gets-ai-shot-in-the-arm-with-empirical-systems-acquisition/
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 42
These AutoML vendors just need a break…
43
MACH INE LE ARNING
Source: https://blog.cerebrodata.com/modern-self-service-data-platforms-c7c90a789068
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 44
MACH INE LE ARNING
A new category dubbed “customer data platform” is emerging as a purpose-built data platform to help marketers be more
Example vendors:
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 45
MACH INE LE ARNING
Proliferation of cross-data set analytical Data scientists live in data cleansing and hate it…
projects. BI and data science teams are
becoming more advanced, forcing IT to rip the
bandaid off their failed data management
initiatives and prepare disparate data sets for
analysis. They are starved for any solution that
can help them do it in an automated way!
Source: https://www.forbes.com/sites/gilpress/2016/03/23/data-preparation-most-time-consuming-least-enjoyable-data-science-task-survey-says/#4294c0036f63
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 46
MACH INE LE ARNING
“We made 20 models last year. Only two made it to production!” Chief Data
Scientist at a major Wall Street Bank.
Data scientists rarely have strong engineering backgrounds and need help with the manual coding required to make
New tools are automating the process of model deployment much like Heroku automates Ruby app deployments
=
*Algorithmia is a Work-Bench portfolio company.
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 47
We couldn’t talk enterprise AI this year
without mentioning this guy…
48
MACH INE LE ARNING
Source: Morgan Stanley “2018 Outlook: Riding the Software Wave,” January 2018.
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 49
MACH INE LE ARNING
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 50
MACH INE LE ARNING
AI E L I T I STS WI L L STICK UP TH EIR NOSE S, BU T W E T H INK SA LE SF ORC E A I IS
IM P RE S S I VE
Salesforce has stitched its newly acquired assets into a 100% automated machine learning pipeline
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 51
Quick peek into the future…
52
MACH INE LE ARNING
Today’s BI tools claim to democratize BI…but they hinge on an ideal, unrealistic requirements.
They require a user who is capable of asking the:
1 Right question. Asking the right question requires analytical skills. This is a hard ask for the nondata pros that make up the majority of employees.
2 Correctly. Most BI tools have “intuitive” GUIs, but they still require extensive training to use and thus users end up using them incorrectly.
3 On the right data. The user must have access to the right data and prerequisite knowledge about the underlying data structure to ask the right
TL;DR: skilled business analyst remain the conduit through which the rest of the business
interfaces with analytics. And vendors are constantly overthrown whenever analytics
projects go haywire.
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 53
MACH INE LE ARNING
‘Actionable insights engines’ will fully automate the data scientist by directly linking cause and causality in business outcomes
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 54
MACH INE LE ARNING
Make your product so easy a 3 year old can use it! Drop the feature bloat — you’ll die before you become everything for everyone.
Incremental algorithmic advances are hitting a plateau. Most of the unique value in your product will come down to the user experience.
Don’t build for multiple buyer personas. Not only is it hard enough to build something in the data science space with basic product market fit,
but buyers are skeptical of collaboration platforms; “[X vendor’s] collaboration features were never interesting to us because we don’t believe
collaboration between data science and BI teams is possible.” - Head of ML & Analytics at a bulge bracket bank.
Play nice with everyone. The space is crowded and it may seem like a war zone out there with large tech companies in adjacent areas making a
splash in the space. Remember that the TAM is massive and no one has truly cracked the code here. Many can win. The market dynamic will be similar to
BI, where there are multiple BI platforms with 90% functionality overlap. Integrate with everyone relevant, starting with the major BI vendors.
Try going vertical. The exit opportunity won’t be as large but at least you won’t be competing with the million other startups attempting to be the
Salesforce of data science. Take a more calculated use case driven bet, and make the solution truly closed loop.
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 55
Vertical Theme #2
CLOUD NATIVE
With contributions by:
Vipin Chamakkala
Principal at Work-Bench &
Cloud Native Sector Lead
@V1P1N
56
TL;DR
1 Microsoft is making inroads in the enterprise. Google is still behind (for now)
Cloud native story continues to unfold with digital transformation initiatives driving the inexorable
3 shift
Site reliability engineering (SRE) model is all the rage for operating the cloud. The battle has
4 begun to be the Salesforce of SRE in cloud era
5 Serverless continues to be a disruptive force, but more so for vendors than end customers today
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 57
TL;DR
PLAYER #1 (CATEGORY LEADER): PLAY ER #2 (FOR NOW): PLAYER #3 (KI LLER PR OD UCTS):
TH E ENTERPRISE COSTCO ENTERPRI SE HERITAGE BU T WH ERE’S THE ENTERPR ISE LOVE?
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 58
CLO UD NAT IV E
Microsoft is at least as prevalent as Amazon in on- … And significant deployments have increased the
boarding late movers to the cloud most in Azure over the last 12 months
Source: Morgan Stanley “2018 Outlook: Riding the Software Wave,” January 2018.
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 59
CLO UD NAT IV E
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 60
CLO UD NAT IV E
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 61
CLO UD NAT IV E
“In 2018, the level of anxiety for decision makers at big organizations around
vendor lock-in will continue to rise - replacing security as the #1 cloud concern.”
- Spencer Kimball, CEO of Cockroach Labs
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 62
CLO UD NAT IV E
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 63
CLO UD NAT IV E
Majority of enterprises are still struggling with containerizing applications, yet they have big lofty strategies that largely fall
in 3 buckets:
#1: TH E MONOC LOUD MODEL #2: THE PRICE B ROK ER MO DEL #3: THE FUNCTIO N BRO KER MOD EL
• Choose a single cloud provider to go all in • Run workloads wherever they will be • Pick and choose clouds for different
with cheapest to deploy capabilities (i.e. AWS for cost, GCP for AI and
• Amazon wins over the majority of this • Kubernetes is a key tool enabling this data pipelines, Azure for legacy app migration)
segment, with Microsoft catching up segment to deploy workloads in the most • Individual teams must manage their own
capitally efficient manner instances and budget, with IT implementing
Enterprise Example light-weight governance
Enterprise Example
Enterprise Example
Still in Flight
*Source: Work-Bench estimates based on interviews with F1000 IT executives.
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 64
The cloud native migration story start with
customers and their harsh demands…
65
CLO UD NAT IV E
Customer expectations = rising. Enterprise Only way to move fast enough is to split
need to build software faster applications into easier to manage microservices
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 66
CLO UD NAT IV E
2017
À la carte option for running Most mature solution Best bet for
micro services on existing for scale out apps greenfield apps
infrastructure
2018
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 67
CLO UD NAT IV E
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 68
CLO UD NAT IV E
Source: https://resources.coreos.com/analyst-reports/hybrid-cloud-drives-growing-container-production-use-and-disruption-451-research-report
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 69
CLO UD NAT IV E
2X
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 70
CLO UD NAT IV E
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 71
CLO UD NAT IV E
1
Services expertise + Distributed systems expertise
Bringing
Kubernetes
2 to the Enterprise
Joined the mix bringing direct
Kubernetes at Google
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 72
CLO UD NAT IV E
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 73
CLO UD NAT IV E
Benefits
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 74
CLO UD NAT IV E
SE RV I C E MES H PR ED ICTIONS
Service mesh adoption still early in 2018. Service meshes are like broccoli… you know you need them but only adopt when
you feel the pain of not having them. With enterprise container and microservices deployments in infancy, we may be waiting
Continued ‘school clique’ dynamics within the community. While most in the real world doesn’t care, small highly opinionated
camps are forming between Istio and Linkerd. Building an enterprise product in a competitive market governed by fickle open-
source “communities" will be a challenge commercial vendors in this space will grapple with.
Security will be the killer use case for service meshes. Scenario: ’digital transformation’ AppDev teams at enterprises writing
microservices on AWS/Kubernetes that need to communicate with on-premise services in a secure manner. Services meshes are
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 75
How will enterprises deal with all this?
76
CLO UD NAT IV E
Source: https://landing.google.com/sre/interview/ben-treynor.html
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 77
CLO UD NAT IV E
APM Logging
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 78
CLO UD NAT IV E
Ticketing
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 79
CLO UD NAT IV E
What is it:
Chaos engineering is the discipline of stress testing a distributed system to build confidence in its ability to withstand turbulent
production conditions (like the traffic load of an eCommerce website on Black Friday).
New tools are emerging to facilitate the process: This stuff is real. Top enterprises (like below) are hiring
chaos engineers:
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 80
CLO UD NAT IV E
Holistic “observability” across infra, traces, logs and all forms of environments (containers/serverless) is all the rage because
today’s complex/heterogenous environments are spewing out rich data that cannot be viewed in isolation.
Legacy vendors and their point solutions won’t last in this next evolution of monitoring as IT will refuse to manage haphazard
integration projects.
Bouyant
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 81
Sailing into the serverless era
82
CLO UD NAT IV E
Resource utilization
uneconomical with server-based utilization of infrastructure
units of measurement in the “pay-as- idle time “Serverless”: actual instance run rate
run time
App components
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 83
CLO UD NAT IV E
With serverless, it’s more economical for an early-stage company to deliver complex middleware functionality
via elastically scalable compute and memory
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 84
CLO UD NAT IV E
SE RVER L E SS = W E AP O N F O R M E G AC LO UD LO C K-IN
Serverless is the ultimate vendor lock-in as the vendor manages the full
stack from server to the runtime layer
+ = lock-in?
“Today, developers have begun to publish and share individual functions. Imagine pushing a button on Github
to instantiate a function or an application. Elegant on-ramp for a developer to become a paying Azure
customer.” - Tomasz Tunguz, Redpoint
Source: http://tomtunguz.com/microsoft-github/
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 85
CLO UD NAT IV E
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 86
Vertical Theme #3
CYBERSECURITY
With contributions by:
Kelley Mak
Principal at Work-Bench &
Security Lead
@kelleymak
87
TL;DR
CISO = no longer the only security buyer; VP Infrastructure/Security Engineer is the new buyer/
1 champion combo to master
2 Security engineering teams will lead shift from bolt-on to built-in security deployed as code
3 GTM motions for enterprise security startups will take a cue from the open source world
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 88
Year in Review…
89
CYBERS ECU R ITY
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 90
CYBERS ECU R ITY
infrastructure?
Source: Morgan Stanley “2018 Outlook: Riding the Software Wave,” January 2018.
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 91
CYBERS ECU R ITY
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 92
CYBERS ECU R ITY
SOAR = CON TINUES TO BE DARLING ACQUIS IT ION TARGET FOR LEGACY CO’S
Sizable M&A for SOAR (Security Operations, Analytics, and Reporting) vendors focused on automation….
$350M
$100M
While automation is hot, there is still a gap in triage analytics and response workflow tools
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 93
CYBERS ECU R ITY
Helpful tools for IT to comply with GDPR Closed loop solutions that replace the legal
>
regulation in accordance with a legal team’s decision making regarding GDPR with software
mandate
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 94
Ok, now on to the exciting stuff ahead…
95
CYBERS ECU R ITY
What it means: Traditional ‘infosec’ becomes back office as CISOs increase reliance on outsoucers/MSSPs to
Source: https://www.forrester.com/report/CISO+Career+Paths+Plot+Your+Course+For+Advancement/-/E-RES141371
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 96
CYBERS ECU R ITY
Source: https://www.aporeto.com/blogs/hybrid-and-multi-cloud-security/enterprises-becoming-cloud-native-journey-thoughts-kubecon/
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 97
CYBERS ECU R ITY
Cloud-native security trends favor security to be built-in as opposed to bolted onto infrastructure
Security engineers have the hybrid DevSecOps skills to lead the implementation of cloud-native security
Source: https://www.forrester.com/report/Microservices+And+External+APIs+Underpin+Digital+Business/
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 98
CYBERS ECU R ITY
Built-in Bolt-on
Whereas CISO and Infra teams think bolt-on, the security engineering orgs think built-in
2 0 1 8 E N T E R P R I S E A L M A N A C // @WORK_BENCH // #2018ALMANAC 99
CYBERS ECU R ITY
TL;DR: Identity is an essential first building block of microservices security, yet it has played second
fiddle to network monitoring *Scytale is a Work-Bench portfolio company.
• The depth of new built-in security products are beyond the scope of CISO org. Target security engineers
• Open source is the new marketing tactic for enterprise security. Build a community of web-scale security
• InfoSec startups: target the progressive newly minted CISOs looking to implement the basics.
103
TL;DR
1 Ebbs and flows: SaaS ate infrastructure. In due time, infrastructure will eat SaaS
4 There will be a day when developers choose their company’s business software
105
SaaS-holes are the new status quo
SaaS vendors are becoming mighty and taking advantage of it — using aggressive tactics to expand dollar share within
existing accounts, often by shoving excessive features and extensive contract terms down customers’ throats. Customers have
no choice but to succumb to these closed-ecosystem tactics.
108
SAAS
SA AS - HO LE DEATH GR I P TACTICS
Up-charging:
SaaS providers manage your business logic …Meaning they can up-charge you
and the latest copy of your data… 30% or more every year
You can either spend millions with the …Or spend 12-months recruiting a team
vendor’s preferred service provider… with the right skills to manage customization
SaaS ate infrastructure: SaaS integrates all layers of the IT stack, allowing vendors to extract more rents than
Suites > best of breed: It’s the Costco mindset: Enterprises choose the platform with the most features to
Systems of intelligence: Value increases with scale: more customers = more partners = more functionality =
more data = improved algorithms = better functionality and user experience = hard to migrate.
SA L E SF OR CE = V ERTI CA L DISRUPTOR
1 2 3
Salesforce commands greater In part because SaaS eats Forcing analysts to constantly
share than Siebel ever did infrastructure… adjust their market forecasts
Installing software is easy: SaaS made installing software easy at a time when
configuration was difficult. Docker/Kubernetes changes all this: software can be
installed anywhere and live in minutes.
Data security is imperative: SaaS was never viewed as more secure than on-
premise software but the cost savings and flexibility outweighed the risks. “It’s time to reconsider the SaaS model in a modern
CASBs emerged to provide a salve for the CISO but with data breaches at an all context, integrating developments of the last nearly
two decades so that enterprise software can reach its
time high and GDPR mandates looming, we’ll see the SaaS/on-premise
full potential.”
equation re-examined. Grant Miller, CEO of Replicated
Source: https://techcrunch.com/2018/06/17/after-twenty-years-of-salesforce-what-marc-benioff-got-right-and-wrong-about-the-cloud/
Abstraction is shifting further from infrastructure to the app layer to speed application development and customization, diluting
the need for ‘SaaS as an app platform’
App
Middleware
Database
OS
VM
Sales Aggressive enterprise sales Sales Free trials, friendly telesales Sales Aggressive enterprise sales
focused on cross-sell and focused on cross-sell and
account penetration account penetration
Marketing Annual conference with Marketing Infamous “no software” Marketing Annual conference with
disgruntled customers drum beat disgruntled customers
Note: we’re only picking on Salesforce because it is the most successful SaaS vendor.
116
SAAS
The rise of AWS and quick-spinning database services means software no longer must be beholden to the underlying
infrastructure. Enterprises already prefer VPC to SaaS for infrastructure tools, and we expect business software to follow suit.
Source: mattermost.com
B UT DON’ T GE T TO O EXC I T ED KI D S …
#1. Salesforce is the new IBM. Many major enterprises just migrated to Salesforce, and no one will fire you for buying Saleforce.
#2. It’s easier to budget for SaaS than headcount to self-manage software. Most enterprises are strapped for developers; they need them for
#3. SaaS out-of-the-box functionality is hard to match. Major SaaS vendors integrate with everything. Disruptors face an uphill battle figuring out
#4. If it ain’t broke don’t fix it mentality is still a thing. Organizations with a major reliance on SaaS platforms are stuck in the same sunk cost fallacy
TL;DR: The disruption of SaaS will take many years to play out. Either the numerous pain points will become acute enough to
take action or we’ll have to wait for today’s CIOs to overturn and for a new generation of buyers to come in.
PE RH AP S D E V E LO P E RS W I L L CATALY Z E T HE SHIF T ?
After all, they feel the biggest SaaS tax dealing with the cleanup when integration and customization work hits the fan…
Example:
Source: contentful.com
@ITSYAMN ITSKY Sign up for our Enterprise Weekly newsletter, a weekly digest of
@WO RK_BEN CH
121