Despite ongoing economic uncertainty, we know that 2023 will require us to do more with the data we have, protect it better, and find new ways to uncover insights through improved Data Management. 2023 will require everyone to be nimble with their data, but I don’t see the economy derailing growth in this area. In fact, I believe there is still a lot of value hiding in our data.
For 2022, I predicted advancements in ML/AI, and growth for SaaS services. Those trends will continue this year, and with more tools and better integration, many companies are seeing improved results from their cloud-based deployments. Here’s how I see 2023 unfolding for Data Management.
- ML/AI adoption continues: The economy won’t change the adoption of AI and opportunities for revenue growth – there’s just too much momentum and value for data science despite the headwinds. Companies like Amazon and Walmart have demonstrated how to improve retail by leveraging data, and Amazon has shared frameworks to guide marketers. Pre-trained models are readily available on AWS, through Google Cloud and on Azure for anyone to use and accelerate your machine learning initiatives.
- Growth in customer data warehouses drives ELT and CDC: It used to require a seven-figure budget to purchase and configure a good data warehouse. Today, the cloud provides access to scalable systems on demand that can deliver short-term horsepower when needed without a long-term investment in systems. The shift to ELT (extract, load, transform) gives data analysts more flexibility to pull the info they need, and take a more active role processing the data. At the same time, with all this data flowing in, CDC (change data capture) becomes more important to maintain consistency and reliability with a constant flow of streaming data.
- Data trust and governance are required for data democratization: We’ll see growth and improvement in the types of tools that help “citizen analysts” gather value from data, including Atlan, Collibra, Alation, and other data cataloging software. Adding metadata – these all make data easier to use and create value from. At the same time, people need to be able to observe the accuracy of data as it goes through a system so they can feel confident in trusting their data. And data governance is becoming more important with European privacy regulators and financial regulators. Improvements in access and trust in the data will also improve governance.
- Streamed data becomes critical: As companies look for ways to react quickly to customer needs and validate behaviors, we’ll see more emphasis placed on analyzing streaming data on the fly, watching the revenue slope, and seeing how trends are changing on the fly. Traditionally you’ve seen this with credit card fraud – if your card is used to buy something in San Francisco, and then used in New York City five minutes later, that’s a strong signal for fraud. But it’s also important in manufacturing, energy markets, and even consumer packaged goods to look at how manufacturing lines are flowing, what prices are changing, and which data signals indicate a problem that needs intervention. Centralizing streamed data will help companies flag issues while the problem is actually happening.
- Perpetual licenses fade into the sunset: The practice of purchasing and operating on-prem servers will fade away as companies like SAP and Oracle move more customers from lifetime license agreements to service-based offerings. A recent JP Morgan survey found that IT buyers were only planning to increase spending on Oracle’s products by 1%, compared to a 60% increase in cloud data platforms like Snowflake or Microsoft. At the start of 2022, Microsoft eliminated perpetual licenses under its Open Licence program, and SAP reported 38% growth in cloud revenue for Q3 2022. The acceleration of this shift away from perpetual licenses will allow enterprise software companies to compete better with companies like Workday or ServiceNow, and allow customers to defer large investments given the uncertain economy.
Given all the change of the past few years, we’ll see how this all plays out. But we know that Data Management will be an important part of every business. Ways to manage that data efficiently and effectively, with a limited budget, will help companies through any downturn. More use of cloud technology will help companies optimize budgets with dynamic demand pricing. And people will look more to their data to support their business, and react quickly to the next market shift, no matter where it goes.