2024 Predictions from the Condensing the Cloud Team
If last year taught us anything, it’s that change is a constant — particularly in the technology industry. But as we step into the year 2024, we remain confident that the world of cloud computing will continue to drive technological advancement and business evolution at global scale, even if there are a few twists and turns along the way.
On that note, we spoke with members of the Condensing the Cloud team here at Battery Ventures to gather some predictions on what technology leaders can expect to see this year across talent acquisition, sales and marketing strategy, platform development, the evolution of artificial intelligence and more.
We’ve included our predictions below, but we want to hear from you, too. What are your predictions for 2024? You can share them here or at the button below.
Technological / Thematic Predictions
“2024 will be the year of ubiquitous AI-powered products (thanks to open-source innovation).” — Brandon Gleklen, Principal (Bio; LinkedIn)
“The latest capabilities of frontier models will grab the headlines, but I am equally excited about the product opportunities created by open source. You can already download large language models locally on your phone and run them without server support and someone even got llama2.c to work on a Galaxy watch. By the end of 2024, I predict that we will see LLM-powered experiences everywhere, with GPT 3.5 quality models becoming accessible on increasingly cheap hardware with no need for internet connection. Data never leaves the device, which means no privacy concerns.
Envision AI integrated within your action figure, capable of conversing and participating in imaginative stories, or an AI-embedded wine fridge that can discuss your wine selection. The presence of AI will become ubiquitous in our daily lives, with open source driving some of the most innovative and exciting products of 2024.”
“We will see an observability market shakeup.” — Danel Dayan, Principal (Bio; LinkedIn)
“I predict that 2024 will usher in a new generation of observability companies. Increasing challenges and customer dissatisfaction related to high cost, data overload, team segregation and lack of actionable insights are pushing organizations to seek more effective and efficient observability solutions, underpinned by new OLAP systems like Clickhouse and collection agents like Otel, Prometheus and eBPF that are becoming the standard.
Today’s incumbents were born in a different IT / infrastructure environment than the one that we currently live in, and recent acquisition shakeups, including Cisco’s acquisition of Splunk* and Francisco Partners’ acquisitions of Sumo Logic* and NewRelic, create a void for modern, cloud-native alternatives to capture market share. There are few infrastructure software markets as large as observability, so the stakes are high.”
“Privacy will play a more significant role in enterprises’ compliance priorities.” — Barak Schoster Goihman, Venture Partner (Bio; LinkedIn)
“Data privacy regulations have become more widespread in recent years, with specific laws in different regions. With the introduction of AI-related legislation such as the EU Artificial Intelligence Act and the United States’ proposed Artificial Intelligence Research, Innovation and Accountability Act, organizations dealing with sensitive data will face additional pressure to comply with privacy programs. This will increase the need to automate governance controls to maintain privacy.”
“Widespread vertical B2B AI software adoption will require meaningfully improved accuracy.” — Scott Goering, Business Development Partner (Bio; LinkedIn)
“Enterprises are actively building a roadmap of use cases for AI. In 2024 and beyond, the cost of being incorrect will differentiate adoption. In legal, healthcare or finance, accuracy will be the difference between long proof-of-concept (POC) cycles and adoption. The flip side is that speed to market, integrations and time-to-value will have a higher impact in areas where the cost of being wrong is low.”
“Open-source foundation models will find their stride in the enterprise.” — Jason Mendel, Vice President (Bio; LinkedIn)
“In 2024, I expect to see open-source models find their niche in this AI arms race. Last year, closed foundation models took the world by storm as OpenAI, Anthropic and Cohere captured mind share by providing the abstraction companies needed to quickly get their prototypes up and running. But using these closed, proprietary, third-party models can be cost-prohibitive to many when used at scale, from both an inference and fine-tuning perspective.
As more companies deploy AI in production, they will consider implementing the new wave of smaller, open-source model alternatives and look to have deeper controls and auditability as they build and refine on their own proprietary data. I also expect to see discourse and development on the topic of OS licensing for these models. Large companies like Meta and Google, along with deep-pocketed startups like Mistral, have already started to pave this path. My team and I are excited to see how companies in this space continue to push ahead.”
“Identity will become the next cloud-security frontier.” — Danel Dayan, Principal (Bio; LinkedIn)
“The attack surface for cybersecurity will expand and become even more sophisticated as AI gives rise to a new wave of social engineering attacks. These attacks won't just target enterprise data but also users' identity. This convergence of two growing security concerns – identity security and data security – will push the boundaries of traditional cybersecurity methods and defenses.
As such, identity security will be pushed into the spotlight as enterprises find ways to verify, audit and secure their users, their access and their actions, with data emerging as a new primitive of zero-trust as enterprises try to understand not only the identity of users and actions but also what data is being accessed and how it is being used.”
“Multimodal models will expand the world of problems we can solve with AI.” — Patrick Hsu, Associate (Bio; LinkedIn)
“The growth of AI in 2023 has mostly been focused on language and images, but each in their own silo. As ChatGPT (and other chat interfaces) went viral, users began to realize the power of giving models additional context to improve their performance and understanding. This is no different from how we as people work today, but sometimes a description is not enough, or an image is not quite worth a thousand words on its own.
In this next year, I expect multimodal models to change the way we think about what problems we can solve with AI and how we approach them. Do we still need printed service manuals for our hardware or will a picture and a short description be enough to find the solution? Can we show these models an example report format, graphs and all, and have it mimic that exactly? The possibilities are vast and my team and I are excited to see how this changes the AI landscape.”
“AI security will be a top priority for CISOs.” — Jason Mendel, Vice President (Bio; LinkedIn)
“In 2024, AI security is set to become a top priority for chief information security officers (CISOs) as organizations transition from AI prototypes to production use cases. The rapid productionisation of models, both predictive and generative models, has fueled excitement but has also raised concerns about new security, operational and data risks. In 2024, as increasing AI adoption expands the enterprise attack surface, the urgency behind AI security will intensify, prompting CISOs to implement the necessary guardrails to safely and securely leverage AI models.”
“AI-powered dev tools will become an integral part of the software development workflow.” — Payal Modi, Associate (Bio; LinkedIn)
“This past year, there was a surge in AI developer copilots, which can handle tasks ranging from writing tests to creating feature code to generating documentation. But as these tools mature and become even more advanced, I predict that they will shift from nice-to-have assistants to an integrated part of every developer’s daily workflow.
As these tools automate away complete tasks which are more mundane or repetitive (like writing boilerplate code, assisting with codebase migrations or upgrading dependencies), they’ll free developers to focus on more critical and complex work. Alongside this, with more machine-generated code, methods of handling and understanding how the code was written and reviewed will be shaken up.”
“Orchestration engines will merge developer workflows with AI workflows.” — Danel Dayan, Principal (Bio; LinkedIn)
“Workflow orchestration engines became mainstream in 2023 as developers saw the value in separating business logic from state logic. This gave rise to orchestration engines such as Orkes, Temporal, Restate and Inngest, to name a few.
In 2024, as more applications introduce AI features as part of their workflows, the need to maintain state across application logic and AI logic remains the same and these platforms are well positioned. AI-powered applications will require integrated LLM and vector database support, observability and auditing of model interactions, and workflow task retry and state handling for RAG scenarios. These workflow engines already have these capabilities for application code and will start to support more of the AI ecosystem to merge these two disciplines.”
Operational Predictions
“Best of breed is out, integrated stacks are in.” — Max Schireson, Operating Partner (Bio; LinkedIn)
“The last three decades have been a long cycle of specialization. The long march towards best-of-breed, where each specialized solution was viewed as a competitive advantage, now feels like a night of too-hard partying; and technology users have a headache from the complexity hangover.
Two — or ideally more — vendors will need to go out for each new vendor that comes in. Startups will need to demonstrate how adding their technology simplifies the stack. Making the jump from early adopters to the mainstream will be much harder, and startups whose value proposition isn’t crystal clear and aligned with either simplification — or extremely clear and immediate business value — will see their growth fade, and over time, their customers churn.”
“Talent’s appetite to join the most innovative companies in their spaces will increase and company differentiation will be more important than ever.” — Jenny Kang, Talent Partner (Bio; LinkedIn)
“With the explosion of new companies in hot spaces like AI and big tech companies heavily investing in AI, talent will follow the highest potential companies in their sectors. With ever-growing competition, companies will need to show commercial traction earlier and have differentiated tech and strong messaging to attract the best people.
Companies planning to upgrade leadership, particularly in GTM functions, should expect top-tier talent to be hotly pursued by many suitors and command high comp offers, even in this fraught market. With the increasing number of PE and growth equity deals, more executives who have traditionally focused on venture-backed companies will become more open to looking at PE-backed opportunities. With this, talent will become increasingly selective on what they look at and will do deeper due diligence to mitigate risk.”
“Generative AI’s impact on sales will soon be measured at the organizational level.” — Bill Binch, Operating Partner (Bio; LinkedIn)
“For most sales teams right now, generative AI isn’t doing much more than making individuals more productive — a single account executive may use the technology to research their territory, for example.
In 2024, I predict we will see more tools and frameworks emerge for how whole teams (i.e., the entire sales organization) can use generative AI in repeatable fashion. We’ll see AEs and SDRs use these tools to increase the productive selling time, i.e. they will spend more hours per week actually speaking with buyers rather than researching buyers.”
“AI will become an indispensable team member, not just a tool — revolutionizing roles like customer support and improving productivity across organizations.” — Sudhee Chilappagari, Vice President (Bio; LinkedIn)
“In the coming year, AI will evolve from mere assistants to team members for every knowledge worker, not only automating tasks but enhancing decision-making and creativity. From fine-tuning pipelines for sales reps, helping marketers to create creative visual content and guiding developers in crafting precise test cases, this shift will open the door to unprecedented efficiencies.
I also predict that AI will soon become the future of customer support, with over 50% of support queries resolved — not just heard — by AI agents in the coming year. With high turnover rates (30-45%) and the costly cycle of hiring, training and managing support reps, enterprises are at a crossroads. Coupled with the macroeconomic pressures to cut costs and boost profits, AI will take center stage in customer support this year.”
“AI will change the ways by which organizations are structured, paving the way for the rise of the data engineer.” — Evan Witte, Business Development Director (Bio; LinkedIn)
In 2024, I expect to see a fundamental shift in how enterprise data organizations are structured as more companies explore and implement generative. As AI becomes adopted at a broader scale, it will augment the roles of data scientists by streamlining workflows, boosting creativity and enabling teams to focus on complex tasks like problem-solving, strategy development and model refinement. In this, I expect to see more hybrid roles emerge that combine data science, data engineering and AI expertise, making professionals who bridge these disciplines highly sought-after in the evolving data landscape.”
*Denotes a Battery portfolio company. For a full list of all Battery investments, please click here.
The information contained herein is based solely on the opinions of Max Schireson, Jenny Kang, Bill Binch, Scott Goering, Brandon Gleklen, Danel Dayan, Jason Mendel, Sudhee Chilappagari, Evan Witte, Patrick Hsu and Payal Modi, and nothing should be construed as investment advice. This material is provided for informational purposes, and it is not, and may not be relied on in any manner as, legal, tax or investment advice or as an offer to sell or a solicitation of an offer to buy an interest in any fund or investment vehicle managed by Battery Ventures or any other Battery entity.
This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and is for educational purposes.
Content obtained from third-party sources, although believed to be reliable, has not been independently verified as to its accuracy or completeness and cannot be guaranteed. Battery Ventures has no obligation to update, modify or amend the content of this post nor notify its readers in the event that any information, opinion, projection, forecast or estimate included, changes or subsequently becomes inaccurate.