Second Annual Report Reveals Innovation is a Top Priority for Enterprise IT Organizations Amidst COVID-19
Today, Sapphire Ventures, a leading venture capital firm that invests in innovative enterprise software companies and helps them become companies of consequence, released its second annual CIO Innovation Index: Startup Engagement Trends for the Crisis CIO. The report finds that while startups account for 10% of the IT budget today, that number is expected to grow by 50% in the next 12 months, proving that CIOs are increasingly interested in adopting emerging technologies to help run their businesses during the current environment.
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For more than a decade, Sapphire Ventures has been building a robust network of decision makers at global enterprises, and in particular CIOs and IT leaders, in order to introduce these companies to new and innovative technologies. The annual CIO Innovation Index provides Global 2000 companies and startups with a set of benchmarks and best practices for adopting venture-backed startup technologies.
This year’s CIO Innovation Index was fielded as COVID-19 began to emerge as a global threat, delivering valuable insights on how corporate IT leaders are shifting their strategies due to the pandemic. Preliminary results from the survey were published last month in the Special Report: The Impact of COVID-19 on Enterprise Innovation, which found that nearly 50% of CIOs are increasing their IT budgets as spend moves to critical technologies such as cybersecurity, automation, collaboration and cloud computing.
Sapphire Ventures surveyed more than 100 CIOs, including IT leaders at AEG Worldwide, Avnet, Blue Diamond, Flex, Kao and Kraft Heinz to understand how they are engaging with startups and emerging technologies. Last year, the study introduced a framework for how large enterprises are discovering, testing and implementing emerging technologies. With the framework as an outline, this year’s report provides an overview of technology investment trends, details how enterprises are approaching the proof-of-concept (POC) process and outlines CIO leadership strategies for driving innovation and startup involvement.
“I’ve found that VCs like Sapphire Ventures are a valuable source of information on innovation in spaces like AI, cloud, automation and cybersecurity,” said Max Chan, CIO at Avnet. “In my experience, VCs can help CIOs parse signal from noise when they are trying to navigate crowded startup ecosystems in search of winners in emerging technology categories.”
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“Enterprises are under a tremendous amount of pressure to transform into digital businesses so that they can operate with speed and agility, and create new revenue sources with digital services,” said Ramin Sayar, President and CEO of Sumo Logic. “This trend is accelerating the importance of solutions like Sumo Logic that deliver real-time continuous intelligence for performance, availability, and security, ultimately enabling CIOs to deliver the best experience possible—both to their employees and customers.”
“In this work-from-home world, technology has become the only link connecting us with coworkers, which means companies move at the speed of IT support. For the first time, even CEOs are feeling the pain of slow tech help, since getting in-person support isn’t an option,” said Bhavin Shah, CEO and Founder of Moveworks. “The result I’ve seen is CIOs realizing they don’t have years to play around with AI toolkits and DIY automation. They’re on the hot seat to speed up support right now — with AI solutions purpose-built to instantly resolve IT issues on day one.”
Key report findings include:
- CIOs are adopting emerging technologies across all categories. The top three areas IT leaders are investing in include artificial intelligence (AI) and machine learning (83%), next-gen data management (78%) and cybersecurity (75%).
- CIOs say that the venture capital community is the top channel for discovering innovative startups, followed by industry analyst reports, conferences and professional networks.
- The POC process, which allows enterprises to evaluate startup technologies, is critical for driving innovation within large organizations. Nearly 60% of CIOs report POCs as part of their startup evaluation process, 40% of which are paid.
- CIOs are much more individually involved with startups in 2020 with 58% serving as advisors, 46% as mentors and 42% as investors. Of those CIOs uninvolved with startups, 78% say they’d like to advise a startup.
“The 2020 CIO Innovation Index is an important benchmarking tool for enterprise IT leaders, CIOs and startup CEOs. This year’s report provides invaluable insights on how CIOs are grappling with the accelerated pace of digital transformation due to COVID-19,” said Rami Branitzky, Managing Director at Sapphire Ventures. “I’m pleased to see that as part of their digitization strategies, CIOs are investing in emerging technologies provided by startups. Our commitment to building bridges between corporate innovators and our portfolio companies has never been greater.”
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