Industry executives and experts share their predictions for 2024. Read them in this 16th annual VMblog.com series exclusive.
Increase in SaaS, Shadow IT, Security Breaches, AI, and Vendor Solution Assessments
By Alex Hoff, Chief Strategic
Officer and Co-Founder, Auvik
2023 has been an eventful
year for the tech industry, dominated by heightened risks of network disruption
and security threats, growing buzz around AI, and an increase in the use of
SaaS programs to complete daily tasks. Amid the growing hybrid and remote
workforce, the IT landscape will continue to evolve in the upcoming year,
adapting to address the evolving needs of users and employees alike.
As we look ahead to 2024,
Auvik's co-founder and Chief Strategic Officer, Alex Hoff, predicts the
following events will take a front seat in the year to come:
Expect
an Assessment of Vendor Solutions and Tooling
We are entering a new year in a
suboptimal economic environment. Funding for tech startups will be slow, and
not all companies will survive - even those that provide unique, innovative and
effective IT solutions. Many startups were funded in 2020 and 2021 when much
more capital was available. Budgets have
tightened for IT organizations, non-critical solutions have been cut,
subscriptions have been canceled, etc. That has resulted in customer churn for
many companies that are not already cash-flow positive, and these businesses
don't have access to new funding due to the lack of available capital.
Over the next twelve months, some of the
vendors enterprises are relying on today will fold - or they will be acquired -
and that is going to cause disruption for CIOs and IT managers. It is critical
to take careful inventory of all IT solutions your company currently relies on
and assess whether each tool is a necessity, or a "nice-to-have." If it's a
must-have, then IT teams will need to compile research on suitable alternatives
and their costs, to be prepared in case the vendor disappears. IT teams will want
to have this list of acceptable alternatives ready and be prepared to make a
switch in a relatively short amount of time.
There are several considerations when
determining what among your tech stack is an essential vs. a "nice-to-have."
For example, strategic platforms that support sales, marketing, payroll, etc.
are critical. Other tools such as niche sales forecasting tools are less
critical. If these were to disappear in 2024, they likely wouldn't be at the
top of the list to replace. Every business is different and must conduct their
own assessments of IT tools to determine what needs a contingency plan, and
what they could simply do without.
Even with this less than rosy economic
outlook and what it will mean for many tech startups, organizations should move
forward with strategic technology adoptions and initiatives that will provide
meaningful value. IT innovation is key to driving improved efficiencies and
productivity, so this is not a time to be hesitant. Before taking on new
projects, IT leaders need to carefully consider the task at hand and whether
internal resources should be dedicated to achieving the stated goals or if
specialized, outside vendors would be the more economical choice. Is it a core
competency, and should you do it yourself? Lean on vendors, partners, and
professional services organizations for projects unless you believe it's your
core competency.
Get Ready for AI, but Beware of AI
Marketing Hype
With the launch of ChatGPT at the end of
2022, 2023 ushered in peak hype around AI. Vendors rapidly reacted to the
stunning user adoption rates of ChatGPT by introducing their own versions of
"generative AI" into their software, whether it involved real machine learning,
LLMs, NLP, etc. - or if it was all smoke, mirrors and buzzwords. There are some
legitimate and very exciting uses of generative AI, but some marketers would
lead you to believe its powers are far more ubiquitous than it really is - at least
for the moment.
As a result, in 2024 you'll need to
review your vendors that claim to use AI to understand what type of AI they are
using, what data is being fed into their systems, and how that data is being
handled. Third-party vendor assessments should require an understanding of what
generative AI models (open vs. closed) and what iterations of the model
(GPT-3.5, GPT4) are being used. Make sure your data is not being used to train
a model that is public, which could creat data privacy risks. In evaluating any new potential tech
solution, IT teams must also consider how the solution will impact the overall
process. Is it simplifying a process, or adding unnecessary complications? If
the latter, best to think twice.
Additionally, before adopting any new
technologies and solutions that claim to use generative AI, IT leaders must
carefully consider how this aligns to existing challenges or goals. Where are
your inefficiencies? What are your core business goals? If a flashy new
generative AI solution doesn't serve a specific and meaningful purpose, best to
put it back on the shelf. Don't let technology wag the dog. Find the real
business problem first, then pursue the proper solution.
Controlling Sprawling SaaS and Shadow
IT Will Reduce Waste, Cut Costs
Both MSP and internal IT teams will face
a similar set of issues that have emerged since the rapid digital
transformation that arose during the global COVID pandemic. Starting in 2020,
organizations moved quickly to remote-first and hybrid workforces. As a result,
they adopted many new cloud and SaaS technologies to make their businesses work
in the new normal.
Now that the dust has settled and
organizations are starting to have a consistent work environment (whatever that
may look like for each company), IT teams must take stock of any new
applications that were adopted through shadow IT or that were bought as a
knee-jerk reaction to the pandemic but have not actually been put to good use
in the months and years since. IT leaders must have a complete and thorough
understanding of all SaaS tools in use in their environment - regardless of
whether they were purchased through the proper channels, bought independently
by individual employees with a corporate credit card, or are free subscriptions
for SaaS services. An excellent example is Zoom or similar video-conferencing
tools. Almost all organizations today rely on such a service, but oftentimes
the subscriptions are not centralized. Some employees may be using their own
independent, free-to-use version, while others are using a company-paid-for
licensed version. And this is just one example of hundreds of different types
of SaaS services that exist within a company's IT environment.
Another consideration is to evaluate your
vendors and identify if those vendors offer additional services or
functionality that you're currently getting elsewhere. Consolidation is
critical to control costs and improve efficiencies. It's often more advantageous
to use a few preferred vendors for multiple services rather than individual
point products from countless different service providers.
IT leaders must understand what SaaS
solutions are being used, what is being wasted, and what is driving their
business effectively. According to Gartner, about 25% of SaaS licenses are
wasted*, so identifying and right-sizing those costs will be critical for
organizations that are looking to trim budgets.
*Gartner
Market Guide for SaaS Management Platforms, Dec. 2022
Third-Party
Data Sharing Will Raise Risks of Security Breaches
More third-party SaaS vendors and cloud
platforms are increasingly involved in security incidents. These vendors are
creating a compounding and growing set of accessible company information on the
Dark Web, which causes a cascading effect. The more information available, the
more likely that information can be used to breach an organization. In this
environment, having an accurate inventory of what systems are being used by
your organization becomes critical for maintaining operational efficiency, but
also to help identify all your risks related to third-party suppliers and
service attacks.
In the digital world
we all live in, data flows within and between just about every service we use.
Far too often, when a breach happens, security teams and IT leaders don't know
their own exposure in terms of corporate data and assets until it is too late.
It's critical to understand all the risk factors, and follow the best practices
for security, training, and compliance. In the case of homeowners, having a
fire extinguisher and an alarm system are the best practices for safety and
security. That doesn't mean you won't experience a fire or break-in, but your
odds are much better when you can make continual progress to maintain strong
compliance and security frameworks. If you take the necessary steps and follow
best practices, you will lower your attack surface.
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ABOUT THE AUTHOR
As co-founder and Chief
Strategy Officer, Alex shapes the long term vision and strategy for Auvik.
Prior to this role, Alex has helped lead sales, customer success, product and
engineering as the organization grew. Alex holds a bachelor of mathematics degree
with a major in computer science from the University of Waterloo and an MBA
from Wilfrid Laurier University.