The year 2020 impacted the entire global way of life like never before as every business trend that we knew has been turned on its head. One huge benefit that came from the pandemic in 2020 was the acceleration and rapid innovation of certain software technologies. Let’s take a look at some of the more significant software development trends that have shaped the industry in 2020 and will continue to influence it in a post covid 2021. These will impact the startup world and lead to opportunities in venture capital investment in future tech-enabled startups.
- Low/No Code – First and foremost in the area of software development, we are seeing no code, low code, as well as code automation, blast off. Business process management and no-code or low-code development software will converge to provide companies with all-in-one platforms to run their business. Also, code automation will allow developers to automate the most repetitive aspects of their day-to-day tasks. Both of these will allow for more rapid development of software and speed to market. Startups have already greatly reduced the time it takes to create market-ready software products such as apps or web platforms. This will make them move even faster!
- Cloud everywhere and the advent of multi-cloud The pandemic led to an acceleration and scaling to the cloud. Forrester predicted Global Public Cloud IT infrastructure market would grow to almost 120 Billion USD with 35% growth in 2021.1 Simply put, cloud solutions provide flexibility and improve productivity which allows the ability to scale rapidly without having to restructure or recode your platform. This allows the flexibility for SaaS, IaaS, and PaaS to rapidly build apps, manage teams and communicate, as these services can be easily adopted and rolled out. Md Kamaruzzaman says, “Cloud is the forerunner industry, which actually becomes stronger than ever during the pandemic…No matter which industry you are in (Government, Startups, Agriculture, Healthcare, Banking), plan cloud migration as the entire world moves to cloud sooner than later.”2
- AI for All – Artificial Intelligence has been democratized and available even for the relative novice thank to the rapid advancement of processing and deep learning. Worldwide revenues for the artificial intelligence (AI) market, including software, hardware, and services, are forecast to grow 16.4% year over year in 2021 to $327.5 billion.3 Startups can now leverage the prevalence of AI technologies (easily available APIs can be found at Facebook, Google, and Microsoft) to solve and create like never before. In the advent of advanced image recognition, for example, we have seen deep fake videos where deep learning and image processing power have accelerated its use; this leads to all kinds of cybersecurity issues. China has been at the forefront of capturing and monitoring the movement of its population through advanced face recognition AI which is especially helpful but extremely authoritative as it has controlled movement during the pandemic. Also, in 2021, we are seeing breakthroughs in natural language processing, where AI will write articles or write small software programs. This has been demonstrated both in AI writing articles and AI to combat the fake writing of these articles!
- Digital Mirror or Twin Factories – by far a favorite software technology trend in 2021 are digital mirror or twin factories which utilize AI and deep learning to create a virtual replication of a real-world entity, such as an airplane, a manufacturing plant, a supply chain or even a city. 2020 statistics put the market size for digital twin technology at approximately $3.1billion with an estimated compound annual growth rate of 58% meaning that by 2026, it’s market size will hit the 48 billion-dollar mark.4 According to Jason Hill, “In the past, it was not feasible, both technically and economically, to handle the volume of data required to generate realistic digital copies of an object. However, the costs of computing, storage, and bandwidth have now dropped dramatically, enabling the rapid collection, aggregation, and analysis of data, generated by connected, smart technologies.” 5 A well-constructed Digital Twin can facilitate the simulation of possible scenarios and predict possible outcomes, allowing companies to try new strategies out digitally before rolling them out in the real world. Not only does this save valuable time, but it can also help to identify possible flaws with a strategy before it is deployed and can cause issues 4 This, in turn, leads to evaluating trade-offs and improving efficiency in design and manufacturing. Once again, China with the help of 5G technologies has been at the forefront of the digital twin revolution as it seeks to digitize its cities of Shanghai and Beijing. Xiaopeng An, cofounder of Xpeng motors (a large Electric Vehicle manufacturer in China) says, “in the future, two systems will coexist in this society, one is the physical world we see, and the other is the digital twin that we cannot see.” 6
There are of course many other trends that will lead to powerful and innovative startups in 2021 and beyond such as advanced cybersecurity, biometrics, edge computing, and ongoing iterations in cloud infrastructure. All of these will affect the way startups evolve and you can count on Elementz Ventures to be on the lookout for these companies.