On Tuesday, venture capital firm, Sapphire Ventures, announced the release of its second annual CIO Innovation Index. The latest report titled “Startup Engagement Trends for the Crisis CIO” details increased investment in startup IT spending in the next year. The 2020 report was “was fielded as COVID-19 began to emerge as a global threat,” and, as a result, provides insights into the various strategies IT leaders have adopted amid the coronavirus pandemic.
“Enterprises are under a tremendous amount of pressure to transform into digital businesses so that they can operate with speed and agility, and create new revenue sources with digital services,” said Ramin Sayar, president and CEO of Sumo Logic, in a press release. “This trend is accelerating the importance of solutions like Sumo Logic that deliver real-time continuous intelligence for performance, availability, and security, ultimately enabling CIOs to deliver the best experience possible—both to their employees and customers.”
The 2020 index report is based on a survey of more than 100 CIOs to determine how these executives are interacting with startups and implementing the latest technology solutions. Startups currently account for approximately 10% of IT budgets, according to the report, however, this figure is expected to increase by 50% in the next year. Overall, the top areas for IT investment include (in order) artificial intelligence (AI), machine learning, “next-gen data management,” and cybersecurity.
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In August, Sapphire Ventures published the survey’s preliminary findings in the “Special Report: The Impact of COVID-19 on Enterprise Innovation.” Nearly half of CIOS were increasing IT budgets on “critical technologies” including automation, cloud computing, collaboration, and cybersecurity.
“In this work-from-home world, technology has become the only link connecting us with coworkers, which means companies move at the speed of IT support. For the first time, even CEOs are feeling the pain of slow tech help, since getting in-person support isn’t an option,” said Bhavin Shah, CEO and founder of Moveworks, in a press release. “The result I’ve seen is CIOs realizing they don’t have years to play around with AI toolkits and DIY automation. They’re on the hot seat to speed up support right now—with AI solutions purpose-built to instantly resolve IT issues on day one.”
The report also details how organizations are “approaching the proof-of-concept (POC) process” and illustrates CIO strategies to guide innovation and engage with startups. Nearly six-in-10 CIOs reported that POCs were a component of their organizations’ evaluation procedures. Additionally, 40% of these POCs were reportedly paid.
The report also focuses on the roles CIOs take as organizations engage with startups. Nearly six-in-10 (58%) of CIOS served as startup advisers, 46% served in a mentor role, and 42% served in an investor role. For CIOS who did not report being involved with startups, more than three-quarters (78%) reported that they’d like to serve as startup advisers.
“While the next 12 months will be interesting to say the least, we believe that startups are playing an important role in helping enterprise CIOs modernize their businesses and adapt to the evolving conditions,” said Shruti Tournatory, vice president at Sapphire, via email.