Nine companies that could define the future of enterprise software

Software may have eaten the world , but the world has changed — and a new wave of enterprise software has an appetite.

Heading into 2021, the enterprise software industry has a wealth of opportunity before it, not least as a result of COVID-19. As companies raced to make better use of cloud computing, their needs shifted: They now need to build, deploy and monitor software in wholly new ways. At the same time, companies are also using digital systems more than ever — whether that's for customer engagement, internal communication, staff training or something else entirely. And on top of all that is the natural march of technological progress as technologies like AI and VR mature and finally become usable in the workplace (or home office).

Of course, there's no denying the influence of Big Tech on the enterprise software landscape: The tech giants accounted for 58% of global cloud infrastructure services spend as of Q3 2020, according to Canalys , while Microsoft 365 and G Suite together account for virtually the entire enterprise productivity suite market.

But to better understand the future of enterprise software, it makes more sense to look at the smaller companies that are innovating their way to success with powerful, focused products. These are the kinds of companies that will inspire new ideas inside Big Tech, be acquired by it or — if things go very well — forge whole new sectors for themselves.

Protocol surveyed the enterprise software landscape to find some of the most interesting companies hoping to define the future of enterprise computing. They're not all obvious choices — one, Discord, has no immediate plans to enter the enterprise market; another company, OpenAI, was founded as a research nonprofit — but they could all go on to have an outsized influence on the future of enterprise software.

Snowflake

• What it does: Snowflake pioneered cloud-based data warehousing, a specialized form of database that acts as a central repository for internal data sources. Compared to data lakes (another popular enterprise database type, also offered by Snowflake), data warehouses are more structured , allowing for faster, more responsive SQL queries.
• Why it matters: Making an SQL query is often a first step for business analysis using tools such as Tableau, R and even Excel. So data warehouses could serve as the foundation for enterprises to build out their data analysis capabilities, to better anticipate demand, price products more effectively and analyze customer behavior. In April, Snowflake CEO Frank Slootman told Protocol that the pandemic has catalyzed demand in data services: "When things get dislocated like this, the need for data and analytics becomes much more pronounced."
• How it's doing: Snowflake managed to raise nearly $3.4 billion through its IPO in September, adding to the $1.4 billion it had raised from 2016 onward. For all the investor confidence, though, Snowflake's data warehouse offering competes in a crowded sector against Amazon Redshift, Google BigQuery, Cloudera, Databricks and IBM Db2. (Amazon also happens to be Snowflake's primary cloud provider: Snowflake committed to spending at least $1.2 billion on AWS services over the next 5 years.)

HashiCorp

• What it does: HashiCorp's managed services help software developers test, provision and deploy software on cloud services. Terraform, one of its most popular tools, allows developers to set up public cloud infrastructure, add security features and automatically adjust capacity based on demand.
• Why it matters: HashiCorp's services can help enterprises adopt a multicloud approach, which reduces reliance on any one public cloud provider. Most of HashiCorp's core services are open source, though it sells them as managed services with additional features. For now, this model appears to be giving HashiCorp's customers the best of both worlds: Managed services tend to be more user-friendly, while open source tools offer more flexibility. (In fact, this hybrid model helped popularize the open-source Kubernetes standard, which didn't gain much traction until Google launched the cloud infrastructure project as managed services.)
• How it's doing: The San Francisco-based company has raised $350 million in funding since its start in 2012, garnering a $5.1 billion valuation. Like Snowflake, HashiCorp maintains a fraught symbiotic relationship with big cloud providers: HashiCorp's services spur demand for cloud services, but Amazon, Microsoft and Google operate their own managed services that, to some degree, also compete against those offered by HashiCorp.

Twilio

• What it does: Twilio's APIs allow developers to integrate text-, voice- and video-based communications into their apps.
• Why it matters: In the near term, Twilio is helping enterprises adapt to the pandemic by shifting customer engagement to digital channels. For example, Alaska Airlines expanded its relationship with Twilio to send boarding passes over SMS, reducing agents' potential exposure to the coronavirus. Longer term, Twilio's success will be predicated on its ability to help companies foster more personalized communications, which it can do by integrating customer data tools into its APIs.
• How it's doing: Twilio's customers already include big names such as Uber, Lyft, Airbnb, Yelp, DoorDash and Inuit. (When you get a text message saying an Uber arrived, you're benefiting from Twilio's services.) But it's recently prioritized reducing its reliance on a handful of its biggest clients: The company's top 10 customers accounted for 31% of total revenue in 2016, but that figure declined to 14% of total revenue by 2020. In October 2020, Twilio agreed to acquire Segment — whose API allows enterprises to integrate consumer data sources — for $3.2 billion in stock.

Oculus

• What it does: Oculus makes VR headsets, enterprise VR applications and an enterprise VR platform for third-party developers.
• Why it matters: It isn't an obvious candidate, given that Facebook purchased Oculus in 2014 for $2 billion based on Mark Zuckerberg's thesis that "Oculus has the chance to create the most social platform ever." But it went on to launch Oculus for Business in April 2019 (primarily focused on VR for training simulations) and in September 2020 chartered a more ambitious course with the introduction of Infinite Office, a fully virtual office environment accessible through VR. Infinite Office is definitely ahead of its time (if that time arrives), but the general concept of VR workplace collaboration is already gaining traction for niche use cases.
• How it's doing: Oculus is the only entity on our list that is part of a Big Tech company, so cash isn't much of a problem: While Facebook has poured ample resources into growing VR as an entertainment and social platform, it has sensibly also attempted to position VR as an enterprise tool. Companies including Walmart and Hilton have used Oculus headsets to develop training modules, simulating difficult scenarios employees may face (including Walmart's ostensibly unpleasant Black Friday simulation). But there are only so many companies that spend enough on employee training to justify the cost of custom-made VR programs. To spur the development of more accessible enterprise VR applications, Oculus launched a developer partnership program that has attracted more than 120 participants.

JFrog

• What it does: JFrog's end-to-end DevOps platform helps companies manage code repositories, monitor the software development pipeline and eventually deploy applications across hybrid and multicloud environments.
• Why it matters: JFrog's core value proposition is making it cheaper and faster to develop software, particularly in cloud environments — which tend to increase the complexity of the development process. JFrog's breadth of offering is what's really caught the attention of DepOps types; its Xray product, for instance, can continuously monitor software packages at all stages of development for security vulnerabilities.
• How it's doing: Co-headquartered in California and Israel, JFrog was founded in 2008 by Fred Simon, Shlomi Ben Haim and Yoav Landman. Over a decade later, JFrog raised $509 million by going public in September 2020. Its DevOps platform is used by more than 75% of Fortune 100 companies. Right now, JFrog doesn't have any one-to-one competitors, though some of its offerings compete against products from Microsoft-owned GitHub, IBM's Red Hat, VMware and Pivotal Software.

OpenAI

• What it does: OpenAI is a research organization dedicated to advancing artificial general intelligence. It created GPT-3, one of the world's most advanced language models.
• Why it matters: OpenAI, along with Google's DeepMind, is at the forefront of attempts to develop an AGI, rather than AI for a specific commercial use case. It's difficult to say right now exactly how the company could transform the future of enterprise — for instance, Microsoft aims to commercialize OpenAI's GPT-3 model, which could be used to improve customer service chatbots, aid with legal research or automate aspects of coding — but if it does crack the problem of AGI, business everywhere will be transformed.
• How it's doing: OpenAI was founded in 2015 as a nonprofit, with $1 billion in funding from donors including Elon Musk, Peter Thiel, Sam Altman and Reid Hoffman. The group set out to open-source research findings to help ensure that AI "benefit[s] humanity as a whole" but since then OpenAI has embraced a commercial approach. In 2019, the company shifted to a "capped-profit" model ; later that year, Microsoft invested $1 billion in it. And in 2020, OpenAI announced that its GPT-3 language model — arguably its largest known accomplishment so far — would be licensed exclusively to Microsoft, though it's still available to the broader public through an API.

Scale

• What it does: Scale uses machine learning and human contractors to label data sets that are then used by its clients to train autonomous systems.
• Why it matters: Data labeling is one of the most labor-intensive stages of AI development: Data scientists report spending up to 80% of their time aggregating, cleaning and labeling data, according to Georgetown University's Center for Security and Emerging Technology. Scale claims to speed up the overall AI development process by making it faster and cheaper to obtain high-quality training datasets.
• How it's doing: Scale is only four years old, but its client list is impressive: General Motors, Toyota, Airbnb, OpenAI, Otto Motors and the U.S. military have all relied on it to help develop training data for AIs. Earlier this month, Scale announced the close of its Series D funding round through which it raised $155 million at a $3.5 billion valuation, more than triple its previous valuation.

Discord

• What it does: Discord is a consumer chat platform that blends Slack-like public channels with private group messaging, with a focus on voice.
• Why it matters: Discord isn't an enterprise company, nor has it come forward with plans to become one in the future. But we included it on the list because it has become one of the most innovative consumer chat companies, and many of these innovations will likely be co-opted by enterprise platforms. For instance, in October, Slack introduced Lightweight, a riff on Discord's signature always-on audio channels, which makes it easier to drop in and out of calls. And there's always the chance that Discord decides to take the enterprise route itself.
• How it's doing: Discord was launched in 2015 as a chat service primarily aimed at gamers. It has since surged in popularity among a wider audience, with 100 million active monthly users as of June 2020. Discord reached a $3.5 billion valuation over the summer, but it hasn't fully developed a monetization model — the company has avoided selling user data or ads, though it added an optional premium subscription tier.

Okta

• What it does: Okta helps enterprises manage user authentication and provides IT teams with dashboards that make it easier to control user access and understand how internal applications are being used. It has also layered new services onto its core product, including consumer identity authentication.
• Why it matters: User authentication services help enterprises manage proliferating software portfolios: Enterprises on Okta's access management service used an average of 88 applications, while 10% of the customer base used over 200 applications — and that trend shows no signs of slowing. The need for user authentication has also grown as companies shift to remote work: Workers seek the flexibility that comes with being able to securely access enterprise software across multiple devices, including personal phones and tablets.
• How it's doing: Okta was founded in 2009 and went public in 2017. It has benefited significantly from the pandemic-induced shift to remote work, with usage of its core multi-factor authentication service nearly tripling year-over-year in Q2 2020. Okta has focused on expanding its partnership ecosystem and deepening integrations to remain a step ahead of the competition.