06/01/2014

By Raju Vegesna, Evangelist, Zoho


2015 is going to be a big year for the technology industry. Here are our predictions for what the year will bring.

The Tech Bubble
We are in a bubble and many people do acknowledge this. No one knows how long this party will last. Will it end in 2015? My guess is as good as anyone’s. But one thing is for sure, when it ends, it won’t end well. We have seen this before in 2000. Let's just hope things don't get even more insane than they already are.

Profitability of tech companies
Not a lot of SaaS companies are profitable today. Even the well-known ones with huge valuations have been losing money. This is a trend to keep a close eye on. If this trend doesn't change, this could get ugly.

Consolidation
We expect to see some consolidation next year. We are noticing that businesses are getting tired of implementing multiple solutions from multiple vendors and having to deal with integrations, multiple billing cycles, maintenance etc. Businesses are opting for integrated business apps and we expect this trend to accelerate. This is from a customer's point of view.

What does this mean from vendor's perspective? There will be consolidation. We should expect multiple acquisitions. Vendor consolidation will happen, driven by customer demand to broaden product portfolios.

Company valuations
While we expect consolidation to happen, we don't think vendors will be open to paying a premium price tag (that other smaller vendors are demanding). This will sort itself out and the valuations will come down, especially when there are lots of unprofitable companies. Profitability is something several companies ignored during the past few years. Profitable companies, will be valued at a premium.