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Eric Hanselman

Welcome to Next in Tech, an S&P Global Market Intelligence podcast, where the world of emerging tech lives. I'm your host, Eric Hanselman, Chief Analyst for Technology, Media and Telecom at S&P Global Market Intelligence. And today, we're going to be looking at the year ahead, looking at some of the trends and topics that our research has been covering with returning guest, Simon Robinson, Head of Research for TMT. Simon, welcome back to the podcast.

Simon Robinson

Thanks, Eric. How are you doing? Happy New Year.

Question and Answer

Eric Hanselman

A very Happy New Year to you as well as we were kicking this all off. And as part of our New Year's celebrations, we have our trends reports up for those that are familiar with the 451 Research world, our previews of late. But they are out, and they are even more wide-ranging than they have historically been.

And if we look at what we've been covering, the trends reports, I was looking, just enumerating the whole set, we are covering all sorts of things in terms of both technology, market perspectives, a whole set of things. We've really covered a pretty wide swath, yes?

Simon Robinson

Yes, we certainly are. They've always been fairly comprehensive in terms of their suite. But I think this time around, even more wide-ranging. We essentially have published a set of predictions around each of the markets that we cover. Now historically, that's been focused on more of the technology segment. and we certainly are doing that again this time, but we've now expanded that to focus on additional segments in media and technology.

So expect to see insights in that body of work from cloud, from multichannel and broadband, fintech, customer experience, employee experience, security, IoT, data AI analytics, media, DevOps, cloud native. This is -- it all adds up to a fairly weighty volume, but I think is an excellent demonstration of our capability, both the breadth of it, but also the depth that we get into the key aspects that are driving each of these segments that are core to what we see happening in the industry.

Eric Hanselman

Well, I think that's one of the challenges we've got discussing it on the podcast is figuring out which to cover. Well, because the other thing, for those that aren't familiar with the previews and trends, we really are digging into a whole set of trends that are happening in each of these areas. And looking for each individual report, it actually digs into somewhere between, I know for most of them, 8 to 10 different specific topic areas that they're looking at the year ahead and a lot of perspectives in terms of where this is.

And a lot of thought about what's happening and what are pretty complex markets, and more importantly, some of the interactions between them. And that, I think, is something that's really, to my mind, the interesting part of a lot of the trends. It's that thought-provoking piece of really getting people to get -- looking that -- a little bit further ahead, taking a look at what's happening, really sort of triangulating what's coming next in what are a set of areas that very far and wide.

Simon Robinson

Yes, that's right. And part of what we're doing and why we're doing this a little bit differently is the new capability that we have in this group. We are operating now as a single TMT research team. This is a change that we made following S&P's acquisition of IHS Markit, which was completed earlier last year, and brought together the 2 separate research groups, 451 Research on the technology side, Kagan research on the media and telco side into 1 research team. And this has paved the way for some pretty exciting changes. Firstly, the hive mind just got even bigger. We now have an even...

Eric Hanselman

Yes, if you think about what that integration looks like. Well, it's interesting you say hive mind because when we think about that cross-pollination and all, extend the [ APR ] metaphor in there, it really is the great synergy of bringing a lot of these different pieces together, it's being able to pull together a lot of these perspectives across these areas.

Simon Robinson

Well, that's right.

Eric Hanselman

And that's the thing. And I -- this has been the -- the fun thing about this last year is the extent to which we've been able to actually look at all these different intersections and all these places in which the aspects of tech always been. Again, that's sort of kind of been where we've lived. But as you said, now we've got this much bigger team that's all integrated, is much larger family to be able to bring all this together.

Simon Robinson

Right. And it's about being able to tell a story end-to-end. And I think as looking at the entirety of the digital transformation story, the evolution of the economy to a digital-first footing, this is meaty, impactful, exciting, fast-changing trends. And this is what -- as you said, this is what's so exciting about this space.

I think we've never -- certainly, if you look back on the 451 side, we've never been about technology for technology's sake. We've always been about the context and why this technology at this time, what is it helping to enable further at the stack. But now we can -- I think with this broader group, we can deliver an additional set of perspectives in a more maybe outcome-oriented approach. We can start to make these connections right across the value chain.

And really, the core of it has always been -- for us, has been to answer that so what question. Why should I care? And now because we can look right across the value chain from the consumer experience, from the employee, from the customer experience point of view, right down to the building blocks, the foundations of the technology, that, to me, really exciting.

And if we bring in the sort of additional breadth that the broader IHS -- former IHS organization brings to us as well, it just allows us to further broaden our perspective, to apply that TMT lens to some specific verticals and as well as every industry being disrupted by technology, we see that technology itself is getting pulled down into some vertical industries. You can append the tech to pretty much every market segment. And we've been going down this road for some time.

For example, you've got the new fintech channel, which I know we've discussed on the podcast. But there's much more we can and will be doing here across additional vertical markets, whether that's in automotive and mobility, the energy space, doing more in finance, supply chain, there is just so much more perspective and potential we can add here, which is really exciting.

Eric Hanselman

Well, it's -- one of the things that I've had the pleasure of being able to dabble a little bit in with some of the podcast guests over the second half of the year as we started to bring a lot of these perspectives together, we've started to get more integrated into more of this family and actually look at what those outcomes are. But that's one of those things that I'm looking forward to in the year ahead for my New Year's wishes of being able to actually bring all of this together in a much more formalized fashion and actually start to look at some of the synergistic research outputs that are actually starting to pull this together.

You mentioned fintech. I mean look at what's happened in the transformation of what was a relatively discrete set of technologies in payments and their integration. And this is one of those things we've been talking about with Jordan McKee and his team about some of where that fits. Now we're really seeing this as a complete technology layer that extends across all sorts of different aspects. It's not just that back end to the customer interaction piece. It's now something that -- and this is something that Sheryl Kingstone was talking about on the last episode. This ability to be able to integrate all of the customer interaction pieces throughout that journey, and the extent to which that also extends to employee interactions as well.

So it's not just customer experience, it's employee experience. It's the total experience package and it's the technologies that come across it. I mean there's just so much -- and that's just one area. When we start looking at other aspects of the general areas we cover, we keep seeing all of these amplifying effects when these aspect of technologies start to blend together into a much greater hole than just the sum of the parts.

Simon Robinson

Yes, indeed. And where I sit as kind of Head of Research, what kind of gets me excited is our ability and how important it is to clients to be able to connect some of these dots. Technology is, as we know, is an increasingly integral part of the fabric of every industry. But it's also -- it's the way that these technologies are overlapping, coalescing, interconnecting. These are often more of the more interesting spaces. Yes, we'll always provide the specific sector view, but I think providing data and insight into how these industries, these technologies are coalescing is also really important.

And also, I mean, just from the perspective of being an analyst, when you get smart analysts collaborating, that's when the fun starts. That's what our analysts enjoy doing. That's when you get some of the most interesting insights and data sets. Take metaverse as an example...

Eric Hanselman

All right. You said the M word now. So...

Simon Robinson

There you go. There you go. There you go. Yes, so set the alarm bell going.

Eric Hanselman

All right. We've gone there. So okay.

Simon Robinson

So we'll kick off the new year, we'll go straight there. Yes, I know it's somewhat of a divisive topic. It's certainly a noisy topic. But once you get past that noise, we do believe that what we see emerging here is a kind of a vision for the next iteration of the Internet. That is exciting. I mean what is that going to be?

If you look at how we're defining metaverse, I'll give you a definition that comes from Ian Hughes, who's leading our coverage here -- although what we talk about is definitely a collaborative effort. He talked about it as a -- of meta as a single shared, immersive, persistent 3D virtual space where humans interact with each other and with data to enhance the physical world as much as replace the physical world. So I mean, you think about all the components in that, there is so much that needs to happen to make this a reality, to deliver this. I think that's why there's excitement, that's why there's a bit of skepticism because there is so much that it needs to come to fruition here. But it's across every segment that we cover.

Eric Hanselman

It is indeed. I joke about it, but Sheryl Kingstone was talking about the customer experience aspects, the fact that this now opens new markets, the fact that this is yet another channel for engagement for organizations in terms of both their employees and their customers. And I think the thing -- one of the things that we touched on the last episode, I think it's really interesting that what you mentioned and Ian calls out is the 3D nature of it. The fact that we're moving into an environment in which we need to determine how we actually get that greater, richer level of engagement.

And some of the things that AWS was talking about and reinvent in terms of support for 3D spaces, a lot of the things that we're looking at in terms of some of those next-gen models, there are so many different pieces, to your point, that the metaverse touches, not only what's the supporting infrastructure that has to build it, what are the ways in which it gets leveraged, what are the aspects of the metaverse more broadly that is going to drive engagement, how do you connect to it, all the telco pieces about this.

As the meta folks are fond of saying, it's the telcos' job to be able to provide performant connections to all this, but yet there's infrastructure that has to manage it. You've got the environment itself. There are just, again, so many different facets and so many different intersections where various aspects of the technologies all happen to blend together.

Simon Robinson

That's why there's so much interest in our world, from our clients, whether you're a provider of, let's call them, legacy capabilities or the supporting infrastructure, as you say, at the chip level, the networking level, the data center and colo level, whether you're a data company, what happens on the regulatory side, whether you're an application software company, this is, in some fashion, an opportunity. And that's before we even get to some of the metaverse specific companies that have emerged already and will continue to emerge. We've already identified over 100 pure-play metaverse companies today, and that's only going to increase.

Now the adoption is obviously focused, concentrated in the gaming space today. That's where the metaverse is most real. But we're seeing a huge amount of interest in the enterprise setting, in the industrial setting, in all sorts of other settings as well. One of our media analysts, for example, was recently at a sports rights conference. The biggest topic of discussion was sports rights in the metaverse. Yes, the reality of delivery is probably a number of years away in terms of being fully realized. But the groundwork is being laid now, and that's where -- we're engaged in just a whole range of really interesting conversations with the providers looking to participate in these spaces and other stakeholders looking to take advantage.

And the fact that the metaverse will touch almost everything, I think it puts the fact that we now have this entire view of the TMT landscape and puts us in a really strong position to offer some unique differentiated perspectives and data sets, and it will be a real team effort. So big focus for this year, but really looking forward to it.

Eric Hanselman

Well, and it's not that there aren't a lot of things that are going on in these individual markets simply by themselves, a lot of transformational aspects that are taking place, taking a look at -- or just looking at some of the trends pieces. The fact that we're now starting to see maturing of cloud, starting to look at managing costs through fin apps, the -- what's happening on the media side, cord cutting continues. We've got so many different things that are taking place, the return of advertising in free and ad-supported streaming to be the whole [ fiesta now ]. I mean there are just so many things that are taking place alongside all of the integration aspects and intersectional pieces.

Simon Robinson

Yes. I mean it's never been a quiet industry. And we're at an interesting place from kind, I guess, a TMT industry point of view. 2022 overall was a bit of a reality check after what was a kind of a golden era through the -- the pandemic was actually really good for the TMT industry. But when we look at what's happening with the broader economy and how that -- those things are playing out in TMT specifically, you look at the headlines, it paints a fairly sober picture. We've seen tech layoffs. We've seen some struggles in terms of the streamers, in terms of their growth. But we're in a bit of crypto winter. TMT valuations have obviously fallen.

Eric Hanselman

The shortage of market headwinds.

Simon Robinson

That's right. That's right. Much lower M&A volumes. Difficult to raise capital and debt. So if we kind of put the -- okay, what is actually going to happen this year? Some parts of the market are going to be challenged. And if we've learned anything over the past few years, it's to expect the unexpected. I mean this uncertainty is the prevailing strong sentiment. It certainly isn't going away. And I think we should expect some ongoing belt-tightening.

Eric Hanselman

Well, when we look at the current conditions, it's just an awful lot from an economic perspective, and this is -- I look at the macroeconomic perspectives and the trends and the fact that there is still -- our data shows that businesses are still concerned. They're really looking ahead. Granted, as you're saying, there are all these conflicting aspects that are taking place. I mean we see a lot of interesting market indicators that are showing -- are we headed for a soft landing, are we headed for a recession, so many conflicting indications, but strong labor markets at the same time. I mean this is a tough thing.

And I guess the question that I'll raise is really what should organizations be considering for the year ahead? I mean, you're identifying, I think, what was some of the -- probably what I'd see is the underlying piece of this, which is be ready for the unexpected, and then put in place the means to give you the ability to be able to react in whatever the situations are that shake out.

Simon Robinson

Yes. So yes, a couple of things. I think we might see a change in emphasis in how, as you say, organizations have really been embracing technology to kind of maximize the opportunity that's been created through a growing market. I think we're going to see a change in emphasis from growth from the top line to the bottom line or really to the expense line. And I think there's a role technology can play here to help companies with greater efficiencies with some savings there.

And obviously, there are a lot of different ways that, that can play out. But maybe a couple to highlight. One would be this notion of ESG and sustainability. I don't think that -- I don't think sustainability, in particular, is going away. And yes, it's great to be green and organizations are having -- embracing this to help achieve their net 0 goals and so on, but if you could also make the case that there is -- we can embrace new processing technologies to save money, to reduce the kind of cost footprint of the technology stack, actually, I'd argue that's going to be the bigger driver for adoption.

Eric Hanselman

Yes, it's the economic case that's underneath it.

Simon Robinson

Yes, sustainability actually becomes even more important in this environment. And I think we're already seeing a lot of emphasis here on the procurement side, but on the vendor side as well. I think that's going to continue this year.

Eric Hanselman

Well, it's -- we've seen headwinds certainly because of the situation in Ukraine and the energy demands and the shift in energy demands that's created. And yet, that still reinforces that same point of being able to be more energy efficient, more energy independent, clearly, is something that helps in those sort of difficult situations as well and things that from an economic perspective ought to affect the bottom line of the business.

Simon Robinson

That's right. And when we're talking about bottom line, things like -- you mentioned FinOps. Depending on your perspective, some organizations may still be looking -- viewing cloud as quite a new thing. But to others, cloud is now something they've had in their organizations for 10 to 15 years, and it's reached a level of scale and maturity where we're moving on to a different set of issues and focuses. So a lot of organizations are looking at that cloud spend and saying, actually, how can we get more efficiency here? As you say, it's a whole new discipline of FinOps has emerged and will continue, I think, to really get attention as the proportion of not just IT spending, but overall organizational spending of a whole range of cloud services continues to grow.

Eric Hanselman

Well, we're getting to that stage of that next level, the second order function, which is we've now got technology to manage the technology that's manning the technology.

Simon Robinson

That's right. That's right. Yes.

Eric Hanselman

So additional layers, but again, focusing on efficiency and ensuring that we can actually put this stuff to work without breaking the bank.

Simon Robinson

So there's a lot of focus on this year, Eric. I mean the bottom line is we've got a big team, we've got a bigger team, but we've got a very, very busy team, and they're engaged in really, really interesting topics in technologies or take us through the year.

Eric Hanselman

Well, I think listeners can look forward to an expansion or a further expansion of all the things that we wind up covering. There's a lot to look forward to in the year ahead.

Simon Robinson

There certainly is.

Eric Hanselman

Well, thank you, Simon. This has been great, but we are at time. Thank you for being back on the podcast.

Simon Robinson

Great to be the first guest of the new year. Thank you.

Eric Hanselman

Absolutely. Kicking it off with a bang. And that is it for this episode of Next in Tech. Thanks to our audience for staying with us. And thanks to our production team, including Caroline Wright, [ Ethan Zun ] and Syed Wajih Abbas on Marketing and Events teams; and our studio lead, Kyle Cangialosi. I hope you'll join us for our next episode where we're going to be diving in back into actually a much more future-looking topic, quantum or maybe not so future. We'll see. I hope you'll join us then because there is always something next in tech.

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