In 2015, the exponential changes taking place within the technology industry was a recurring theme in the business world. Change was no longer just ubiquitous; it was accelerating. Today, this message has become even clearer as technological advancements continue at a rapid pace and are revolutionizing every aspect of our daily lives.
I wrote how this is fundamentally changing the consumer experience in a recent article published by Fast Company entitled “The Rise of Millennials, Crowdsourcing, And Automation.” But what about the enterprise? Here are two massive trends that business leaders need to watch in 2016:
The vertical cloud comes of age
For some years now, many cloud vendors have sold their products to multiple industries – an approach that has worked exceptionally well for companies like Workday and Salesforce. In 2016 and beyond, thanks to key technology developments across the public and private arena including low cost web hosting services and no-cost open-source programming languages, we will see the vertical cloud come of age, particularly in highly regulated industries such as healthcare, government, and financial services – industries that have largely been neglected by Silicon Valley due to the unique complexities involved. According to Frost & Sullivan, the opportunity in healthcare cloud will grow from $903 million in 2013 to $3.5 billion in 2020, while TechNavio predicts cloud financial services will grow 25% per year through 2018.
With the privilege of focus, vertical cloud solutions will be game-changing with obvious benefits. It offers more tailored offerings to address specific needs and solve unique industry challenges; it offers rapid ease of deployment, eliminating the need for lengthy implementations to customize and “verticalize” a “one-size-fits-all” product; and it allows those vendors to develop true industry expertise and deeper customer relationships such that customer feedback can rapidly evolve into newer and better solutions over time.
Ultimately, this enables those vertical cloud solutions to grow faster and establish dominant market share than traditional software vendors. Gartner estimates that the 2015 vertical spend of $113 billion will grow at 7 percent per year, something that Salesforce took note of last year (following Infor’s lead at their Dreamforce event) by doubling down on their vertical-focused strategy.
Regulators will aggressively play ‘catch-up’ to keep up with the impending regulatory tsunami
In 2016, there will be a growing number of regulators and regulations from the SEC, FINRA, DoL, CFPB, IRS, CFTC, OCC, state regulators, and others. The rapid and revolutionary shifts enabled by technology in recent years have caught regulators off-guard in everything from hospitality and transportation to healthcare and cybersecurity. But in 2016, I expect regulators across industries and countries to aggressively play catch-up and apply new levels of pressure on many disruptive companies.
We’re seeing this start now, with regulators across the globe poking holes in Uber’s business model. Right here in San Francisco, Prop F, aimed at regulating AirBnB’s impact on the tight housing market, failed to pass but still garnered 45 percent of the popular vote.
Not surprisingly, this game of regulatory catch-up is even more pronounced in highly regulated industries such as financial services. For example, the Department of Labor has proposed new rules requiring financial advisors to disclose any potential conflicts of interest with funds they recommend, while leaders at the SEC consider if and how to regulate robo-advisor firms, perhaps holding them to a fiduciary standard for offering (automated) advice.
Hearsay Social, for one, is helping firms and advisors navigate the impending tailwinds by keeping them abreast of these changes and offering solutions to remain successful.
As regulators continue to keep up with these massive changes, 2016 will be a year where businesses across industries will need to prepare for the shifting regulatory landscape while still delivering value to their customers. To overcome the overhead costs and time required to manage to regulatory guidelines and policies, companies will need to find ways to drive efficiency and growth by leveraging technology that enables their workforce to be more productive and compliant.