Contents CONTENTS 04 THE VIEW FROM GP BULLHOUND 06 RECAP OF 2020 PREDICTIONS 08 TECHNOLOGY PREDICTIONS 2021 10 PREDICTION 1 Education in the 21st century 12 PREDICTION 2 The new patient-doctor relationship 14 PREDICTION 3 I want it NOW e-commerce 16 EXPERT VIEW Ruslan Fazlyev, Ecwid 18 PREDICTION 4 The next social network 20 PREDICTION 5 Consumers taking control of privacy 22 PREDICTION 6 Survival of the fittest 24 EXPERT VIEW Lindsay Cook, FitOn 26 PREDICTION 7 Cash is no longer king 28 PREDICTION 8 The future of work 30 PREDICTION 9 Martech all-in on customer experience 32 EXPERT VIEW Lindsay Willott, Customer Thermometer 34 PREDICTION 10 Epic’s ultimate battle royale…with Apple 36 A LOOK BACK AT PAST PREDICTIONS 40 METHODOLOGY 45 DISCLAIMER 3 THE VIEW FROM GP BULLHOUND The view FROM GP BULLHOUND PER ROMAN MANAGING PARTNER BRANDON OVERMYER OKAN INALTAY ALEC DAFFERNER VICE PRESIDENT ASSOCIATE PARTNER ASSISTANT OLIVIA HORNSTEIN DANIEL ROBERTS ANALYST MINYA SHIDHAYE ANALYST ANALYST MATTHEW YOUNG 4 THE VIEW FROM GP BULLHOUND In its fourteenth year, our Technology Predictions report analyses how the latest trends and the leading visionaries in these ecosystems are shaping our future. Our methodology in selecting the coming year’s predictions is shaped directly by our experience in working with the world’s leading entrepreneurs and cutting-edge technologies, balanced with unique market insight gathered across our global network. Perhaps different than in recent years, given that we have not experienced this type of market volatility since 2008- 2009, we expect the predictions we feature for 2021 to accelerate at an even more rapid pace due to the nature of the drivers around public health risk and societal shifts emanating from the COVID-19 pandemic. The ultimate winner today is the consumer. From online shopping, payments and fitness, to how companies are fighting to understand and retain us, technology is keeping companies alive and perhaps permanently changing our behaviour patterns. We expect sustained and even increasing demand in each of these spaces next year and beyond as more consumers become comfortable with operating online. Expect tough competition among those aiming to provide easy-to-use platforms and services. As consumers and software lovers, however, one big question that many are trying to solve is how we can keep our data safe. Rather than a differentiator for technology companies, privacy controls will become standard in the future. This issue is even more important given how many work remotely today and our dependence on technology to communicate and collaborate. The office is certainly not a thing of the past, but it may look a little different in the future. We expect employers to restructure their work models to include more remote options or a hybrid of remote and office. While communication in general is ever-improving with technology, how we socialise has seen the most radical change. Enter the next social network: gaming. Think less phone calls and instead more unique universes where you can spend time with friends and family on an island in Animal Crossing. Now enjoyed by the masses, with gaming you only need one device to access the world. Two previously stagnant sectors, education and healthcare, are also undergoing much needed transformations as a result of the world being forced to move further online. Everyone in the world needs access to both, and tech is finally modernising these systems. Again, companies providing easy-to-use platforms will continue to redesign these crucial services. The last trend featured for 2021 is Epic’s battle with Apple. Developers, who build the software we enjoy and rely on, are challenging the leverage of tech giant ecosystems and fighting for equal rights, such as payment rakes. Time will tell what the future brings to maintain harmony between the two, but needless to say that Apple will need to zero in on a better middle ground. Core to our mission at GP Bullhound, in this year’s report we also feature three interviews with true trendsetters using tech for good in their fields to help shape the future of technology: Ruslan Fazlyev, CEO of Ecwid; Lindsay Cook, Co-founder & CEO of FitOn; and Lindsay Willott, Founder of Customer Thermometer. The world has come to learn just how much we rely on technology to help traverse one of the most difficult periods in history. At GP Bullhound we are proud to work with innovative, world-leading companies and their visionaries transforming innovative ideas into reality. We hope our 2021 tech predictions help you to navigate the opportunities and challenges to come. 5 THE PREDICTIONS RELATIONAL DATABASES MAKE WAY FOR DATA LAKES COMPANIES TURNING TO VERTICALISED AI SOLUTIONS TO SOLVE REAL BUSINESS CHALLENGES AI/ML SHOWING QUANTIFIABLE RESULTS IN MARKETING Source: (1) Rayome, A. (2019, 20 June) Why 85% of AI projects fail. TechRepublic. Retrieved from www.techrepublic.com; (2) Maximize Market Research. (2020, 2 November) Artificial intelligence (AI) in marketing market: Industry analysis & forecast (2019-2027). Bipartisan Millennial. Retrieved from www.bipartisanmillennial.com Recap of GP Bullhound’s 2020 PREDICTIONS The huge acceleration of digital transformation in the global economy has meant that demand for sophisticated data processes has skyrocketed. As organisations increasingly seek differentiation through the utilisation of existing and new data, accessibility and the way that data is stored have become hugely important, with data lakes clearly demonstrating supremacy over relational databases and other legacy products. While there has been significant uptake in working with unstructured data sets, relational databases will yet remain an important component for organisations the foreseeable future. This trend has been proven in 2020, as businesses continue to struggle with their enterprise-wide AI strategies. Instead, point solutions and AI integrated into vendor software is where it is having the most impact on companies. According to Pactera Technologies, 85% of AI projects fail to deliver the intended results to enterprises (1), with many failing due to the inability to integrate AI models into existing systems/architecture. Until this skills gap is bridged, most businesses will continue to use purpose-built AI tools to solve specific business needs. As all things in our lives become increasingly digital, consumer spending is increasingly happening on digital channels. E-commerce has grown rapidly during COVID-19 and as a result, marketers are turning to data-driven, highly personalised campaigns and content. According to a recent study of 600 executives, 9 out of 10 companies use AI to improve customer journeys (2). With increasingly accessible and analysable data, this adoption of technology to more accurately target consumers and improve ROI is set to continue. THE WAR IN STREAMING FILM AND VIDEO ESCALATING TO A FRENZY Content consumption in the age of COVID has skyrocketed, impacting the media industry and society in an even bigger way than we could have predicted. While Netflix remains the anchor streaming platform for most people, we have witnessed the meteoric rise of other major contenders such as Disney, Apple and HBO. And importantly, while it seems as though a multi-platform approach is being widely adopted by consumers willing to pay for multiple services to access the premium content they want to consume, we continue to see increased offers to bundle premium services from the likes of Apple, Amazon, and AT&T, among others. 6 THE PREDICTIONS Sources: (1) Kaplan, O. (2019, 22 August) Mobile gaming is a $68.5 billion global business, and investors are buying in. TechCrunch. Retrieved from www.techcrunch.com; (2) Hamilton, J. (2020, 21 September) Xbox Game Pass Subscriptions Have Shot Up By 50% Over The Past 6 Months. Screen Rant. Retrieved from www.screenrant.com; (3) Pratt, M. (2020, 9 October) 4 edge computing trends to watch in 2020 and future. TechTarget, SearchCIO. Retrieved from www.searchcio.techtarget.com GAMING EMBRACES THE ERA OF SUBSCRIPTION AND STREAMING CORPORATE SOCIAL RESPONSIBILITY TAKES CENTRE STAGE 5G LANDGRAB: THE RACE FOR COMMERCIAL DEPLOYMENT OF 5G THE EDGE OF TOMORROW APPLE A13 BIONIC SETS THE PRECEDENT FOR ON-DEVICE AI/ MACHINE LEARNING TECHNOLOGY EVERYTHING AS A SERVICE While there are still some technical limitations preventing the mass adoption of game streaming, particularly on mobile (now close to half of the $152bn global gaming market (1)), console gaming and PC gaming has fully embraced streaming and subscription models. Xbox Game Pass reached 15m subscribers as of September 2020, ahead of Sony, Nvidia and other competitors, helped by the addition of new games and expansion onto multiple platforms (2). As these trends continue (boosted by COVID) we expect streaming and subscriptions to become the default way games are consumed and purchased. Customers of B2B and B2C brands are demanding corporate social responsibility. Technology is empowering organisations to unify their CSR efforts and simplify these initiatives, leading to greater transparency and a more efficient supply chain. We are seeing fast growth in the market for CSR software, and we believe this will be boosted by increasing awareness and greater adoption of CSR initiatives and technology in the APAC region. 5G touches virtually every aspect of the communication ecosystem and is still in its infancy with regards to adoption. However, the rollout continues apace with increasingly more devices enabled for 5G and the networks expanding their 5G capabilities as quickly as possible to as much of the population as they can to establish leadership in the space. Huawei’s global 5G hardware dominance has been dented by geopolitical priorities, yet tower companies are forging ahead with their chosen partners to upgrade our current telecoms infrastructure. It remains to be seen who will be the winners in each category, but there is no doubt the race for 5G is in full swing. The edge computing software market is growing very rapidly, and it is no surprise as to why. By 2025, 55.9bn connected devices will generate more than 79 ZB of data (up from 13 ZB in 2019) (3), signifying the increasing importance of running data-intensive processes on devices and how that can have significant business outcomes. With edge computing receiving a significant boost from widespread availability of 5G networks, we are seeing existing and new businesses increasingly building solutions to serve this growing need and adoption. Apple’s A13-Bionic chip represented an unprecedented incremental leap in on-device mobile compute capability, allowing the tech giant to shape the feature set of the next-gen smartphone with machine learning. Not only has Apple followed up with an even more powerful A14 Bionic using an industry-first 5nm manufacturing process, but 2020 also saw the release of Samsung’s substantially upgraded Exynos 990 chip, Huawei’s latest Kirin 820, and Qualcomm’s powerful Snapdragon 865 Plus variant, which is found in a variety of Android devices. While Apple continues to rule the roost in terms of compute power and graphical capabilities, the competitive gap has somewhat narrowed for 2021. There is no greater proof that this prediction has become reality than the fact that pet owners can now buy grass for pets to relieve themselves, as-a-service. While this is one of the more amusing examples, it is true that the benefits of an as-a-service model are clear and becoming widely adopted. Dell recently announced it is moving all products to as-a-service models, in recognition that IT spending is transitioning from CAPEX to OPEX and businesses ever changing needs are better addressed by agile solution delivery and packages. 7 Note: (1) 2020, July. Education Technology Market Size Report, 2020-2027. Grand View Research. Retrieved from www.grandviewresearch.com Technology Predictions 2021 EDUCATION IN THE 21ST CENTURY I WANT IT NOW E-COMMERCE THE NEW PATIENT-DOCTOR RELATIONSHIP THE NEXT SOCIAL NETWORK Over the course of more than a decade, GP Bullhound’s Technology Predictions report has established a reputation as an industry-leading analysis of the trends and innovations shaping the global technology sector. What follows are the 10 trends we believe will define tech in 2021. The pandemic has revealed the escalating need for smarter education, everywhere, as well as how students, teachers and parents can benefit from the solutions technology can provide. With the tech education market slated to surge by 18% each year (1), there will be endless advancements and adoption of education tech worldwide. There is a paradigm shift in e-commerce, despite today’s macroeconomic challenges, with more diverse demographics embracing the ease of shopping online. We expect sustained demand into the future as more diverse demographics and geographies are increasingly accustomed to easy buying and faster delivery or pickup for everything from groceries, medication, and consumer staples, to discretionary products. Healthcare is undergoing a much needed revolution the world over. As patients continue to shift away from traditional in-person medical visits to telemedicine and virtual care, we will see increased investments in health systems that utilise telehealth tools and rapid growth for companies providing easy-to-use platforms for patients and doctors. Video games have significantly evolved since PAC-MAN graced our screens, as has the social dynamic of gaming. The multitude of platforms means better access, connecting the masses. worldwide. Visiting and speaking with friends can all be done through gaming – all that is needed is one console, PC or phone, to access the world. 1 3 2 4 THE PREDICTIONS 8 SURVIVAL OF THE FITTEST MARTECH ALL-IN ON CUSTOMER EXPERIENCE CONSUMERS TAKING CONTROL OF PRIVACY EPIC’S ULTIMATE BATTLE ROYALE… WITH APPLE Digital fitness is a new star in the global consumer subscription software ecosystem. Traditional gyms and fitness centres had to move online to survive when the pandemic hit, and while some may see this as a temporary business glitch, online fitness will be a permanent diversification as individuals have quickly adapted to at-home fitness. The personalised digital customer experience is setting brands apart globally, and customer data is key. This is a rapidly transforming space, with increasing demand and likely future consolidation, as the convergence of marketing, customer experience and cloud communications gains momentum. As consumers we have enjoyed our personalised experiences from software tools for some time, but is our data safe? Many are asking this question and some are even opting out of the personalisation benefits in favour of more privacy. Not only will products offering privacy controls be a differentiator for tech companies, they will be the new standard for consumers in the future. App developers have taken a stand against Apple and its payment rake, one of its more significant revenue streams, and the list of developers fighting for equal opportunity is growing. While Apple has slashed its fee by 50% for its small- developer base – a move we expected for some time – will it be enough? Is this more fuel for Epic’s fire? We expect the tech giant to further change its app developer approach as more companies challenge its immense ecosystem leverage. 5 9 6 10 THE PREDICTIONS CASH IS NO LONGER KING THE FUTURE OF WORK No longer just for techies, digital wallets and payments are now mainstream. Moreover, it is no longer a space just for start-ups. Major tech players are entering the race for the rapid advancement in digital banking across geographies in developed and emerging markets. Expect more countries to join Sweden on its path to be the world’s first cashless nation. Employers are rethinking the future of the office with the ever-increasing reliance on collaboration tools as well as rapid, successful adoption of communication and collaboration tools within their organisations for optimal productivity. The future of work is bright, and we expect more remote and hybrid models post-pandemic. 7 8 9 PREDICTION 1 10 Source: HolonIQ (as of 8 October 2020) Note: (1) 2020, August. COVID-19: Are children able to continue learning during school closures? A global analysis of the potential reach of remote learning policies. Unicef. Retrieved from www.data.unicef.org; (2) 2020, July. Education Technology Market Size Report, 2020-2027. Grand View Research. Retrieved from www. grandviewresearch.com; (3) Bursztynsky, J. (2020, 31 July) The coronavirus pandemic helped boost Apple’s iPad and Mac sales. CNBC. Retrieved from www.cnbc.com. PREDICTION 1 Education in the 21st century ONLINE EDUCATION / E-LEARNING RAPIDLY EVOLVING Over 90% of countries have implemented remote learning policies due to the pandemic, but at least 463m students worldwide remain cut off from education, mainly due to a lack of such policies or equipment (1). Online education and e-learning platforms aim to provide stable groundwork for students, teachers and parents to be taught and teach outside of the traditional classroom. As each generation becomes more technologically savvy, adapting to technology-based learning platforms has come at an opportune time as different countries globally grapple with the correct way to bring students back in person, while continuing online education. Many students learn at different paces, and companies such as BYJU, based in India, create personalised learning programmes for children, based on their proficiency. For younger students, Boddle Learning and Vooks integrate gaming and education, motivating academics through online entertainment while teaching critical skills. In 2019, the global education technology market was valued at $76.4bn, with a CAGR of 18.1% from 2020 to 2027 (2). Google Classroom facilitates and streamlines student and teacher organisation with an easy-to-use application, accessible from all devices. ‘The dog ate my homework!’ is no longer an excuse, as this service also mitigates the risk of students losing assignments or readings. As students benefit from online education platforms, companies such as Seesaw assist teachers and parents in integrating and becoming more helpful in the transitional process. Similarly, Miro is an online whiteboard platform that enables accessibility for students to collaborate virtually. Online education and e-learning platforms are made possible by the hardware they are used with. Apple iPad sales dramatically increased as students were forced to learn at home beginning in 2020, and analysts note that Apple’s Mac and iPad units are ‘actually benefiting nicely’ from the pandemic due to increased remote work and learning trends (3). The pandemic has shown that many education systems were stagnant and that technology can provide many benefits, such as allowing streamlined and creatively managed sophisticated systems for all. We expect to see continued adoption of remote learning and general technological advancements in the classroom when the pandemic recedes. GLOBAL EDUCATION VC FUNDING, 2010-Q3 2020 ($BN) $8.3BN OF GLOBAL EDTECH VC 2020 AFTER Q3 ($BN) 4.2 0.7 3.2 0.9 4.4 1.3 8.2 1.8 7.0 8.3 2010 2015 2011 2016 2012 2017 2013 2018 2014 2019 2020 0.5 20.3 12.5 3.8 2.0 2.1 CHINA USA INDIA EUROPE ROW 11 PREDICTION 2 12 Source: Butcher, L. (2020, 17 June) Telemedicine’s tipping point. Knowable Magazine. Retrieved from www.knowablemagazine.com. Note: (1) 2020, May. Telehealth—A Technology-Based Weapon in the War Against the Coronavirus, 2020. Frost & Sullivan. Retrieved from www.go.frost.com; (2) Jercich, K. (2020, 6 May) Telehealth has staying power, should benefit from lasting regulatory changes. Healthcare IT News. Retrieved from www.healthcareitnews.com; (3) Bainbridge, R. (2020, 7 Jul) Telemedicine - breaking down the barriers to change. International Travel & Health Insurance Journal, Issue 234. Retrieved from www.itij.com. The new patient-doctor relationship TELEHEALTH / HEALTHTECH BRINGING BACK THE HOUSE CALL There has been a relatively recent shift away from in-person medical visits in favour of telemedicine. Patients are increasingly opting into using video and photo images to describe their symptoms to physicians instead of the now cumbersome task of scheduling an in-person visit. Patients are also realising that they can receive certain types of high-quality care more safely and efficiently through telehealth tools. Frost and Sullivan estimates a sevenfold growth in telehealth by 2025 – a five-year CAGR of 38.2% (1). This forecast is further supported by a recent study in the Journal of the American Informatics Association, which illustrated how virtual urgent care visits at NYU Langone Health grew by 683% and non-urgent virtual-care visits grew by a staggering 4,345% between 2 March and 14 April this year (2). Cigna, the large insurance conglomerate, disclosed that the number downloads of its telehealth app rose by 130% and logins increased by 134% between February and March 2020, while telehealth customer usage increased by 514% globally during the same period (3). As a result of the pandemic, we expect the patient-doctor relationship to permanently change as different technological tools come to replace or enhance many of tasks carried out by physicians today. Conversational AI will likewise be increasingly utilised to answer patient questions and scheduling without much need for staff support. As more routine check-ups are carried out over video or phone, telehealth will become a more integral part of the patient- doctor relationship. Moreover, ancillary components of technology, such as video camera and video platform streaming latency, are set to benefit from widespread 5G adoption as more sensitive healthcare conversations that require high-quality imagery are carried out over video. These changes in habits are likely to lead to increased investment in digital and diagnostic tools to make medical care more readily available in areas where conventional healthcare infrastructure cannot currently reach. We expect increased enrolments for health systems that embrace telehealth tools and rapid growth for the companies that provide an easy-to-use platform for patients and doctors. PREDICTION 2 TELEMEDICINE ADOPTION DURING COVID-19 HAS USED INTENDS TO USE DOES NOT PLAN TO USE/UNAWARE 72% 19% 8% 47% 24% 29% 70% 19% 11% 71% 18% 11% 53% 30% 17% 49% 28% 23% DECEMBER-19 JANUARY-20 FEBRUARY-20 MARCH-20 APRIL-20 MAY-20 13 PREDICTION 3 14 Source: YCharts (as of 5 November 2020) Note: (1) Statista (as of 5 November 2020); (2) Koetsier, J. (2020, 12 June) COVID-19 Accelerated E-Commerce Growth ‘4-6 Years’. Forbes. Retrieved from www.forbes.com; (3) Moore, C. (2020, 22 June) Coronavirus drives e-commerce…. Fox Business. Retrieved from www.foxbusiness.com; (4) Dr Wulff, C. Lockdown, Shake Up: The New Normal for Shopping in Europe. PWC Germany. Retrieved from www.pwc.de; (5) Berthene, A. (2020, 1 October) Online merchants gain an extra $107bn in 2020 thanks to pandemic. Digital Commerce 360. Retrieved from www.digitalcommerce360.com; (6) Maheshwari et al. (2020, 9 October) Customers Still Like to Shop in Person…. The New York Times. Retrieved from www.nytimes.com. I want it NOW e-commerce E-COMMERCE, CURBSIDE PICKUP, 2-DAY DELIVERY IS NO LONGER FAST ENOUGH The need for social distancing and increased penetration of the Internet has pushed people across age groups and professions to work, learn, communicate and shop online. US online retail sales saw a 4.3 point jump between Q1 and Q2 2020 (1), reflecting the paradigm shift to e-commerce. Despite the GDP and macroeconomic challenges, e-commerce growth has essentially accelerated by 4-6 years (2). Only 5.1% of US e-commerce shoppers were 45 years or older pre-pandemic, and this group is expected to increase to 5.8% in 2020 (3) as they are especially vulnerable to severe illness from COVID-19 and often require contactless shopping. Given the paradigm shift in consumption patterns across the globe, we expect to see older demographics to increasingly embrace e-commerce. We also expect to see increased demand for the Buy Online Pick-up In Store (BOPIS) channel. PWC published a report on European shopping and found that 28% of European consumers who live in urban areas used online shopping as the main channel for buying groceries during the lockdown, which is an increase of 10% compared to pre-pandemic levels (4). BOPIS offers an effective alternative to deliveries - the conventional model for online transactions - while eliminating delays due to disrupted supply chains. While total US online sales grew 42% YoY as of August 2020, BOPIS sales grew 259% (5), driven by the change in behaviour of the shoppers who now want to shop online but still receive products right away. Three-fourths of the top 50 retailers in the US now offer curbside pickup, with Target and Best Buy as prime examples (6). Target’s curbside sales grew more than 700% in Q2 2020, while Best Buy reported nearly $5bn in online revenue, of which 41% originated from in-store pick-ups (6). As more diverse groups of people begin to recognise the ease of searching, customising and paying online, we expect the demographic change in e-commerce to continue to grow for the foreseeable future. Moreover, in the post-pandemic economy, we expect sustained demand for BOPIS as consumers become comfortable with this hybrid model of online purchases with in- store pick-ups, especially for groceries, medication and consumer staples, as well as some discretionary products. PREDICTION 3 US E-COMMERCE SALES ($BN) $131 $153 $134 $157 $140 $160 $146 $212 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q1 2020 Q4 2019 Q2 2020 COVID-driven jump in e-commerce growth started in Q2 2020 15 EXPERT VIEW 16 Expert view: Ecwid RUSLAN FAZLYEV CEO OF ECWID Ecwid is an e-commerce platform serving small businesses worldwide. This remains an underserved niche, and because of all the complexity of e-commerce, we need to find a simple way to address this market and make it accessible. It is not enough just to be available, it also needs to be easy, as these businesses do not have an IT department or large budgets. We empower SMB’s to sell online on their websites, social media and marketplaces, with a true omni-channel approach. And through this, we see a vast amount of market data in geographies across the world and different channels from social media, such as Facebook or Snapchat, to country- specific marketplaces, such as Yandex in Russia. I believe true ‘disruption’ actually starts from the lower end of the market. The dynamics of public markets may push companies to go up market eventually, which ultimately makes them less suitable for the SMBs. We are a company that is passionately and specifically focused on those small revenue per user customers. According to BuiltWith, which provides data from a variety of e-commerce channels, Ecwid was ranked no. 10 globally last year and no. 4 this year. This increase in market share is a result of our unit economics, ease of use, and freemium business model. Shopify and our other competitors are actually competing with most players in the market, while at Ecwid we are instead integrating with them. What is unique about our approach is our partner business. We enable other players to provide a strong e-commerce option as part of their broader portfolio of offerings – for us it is about collaboration, not competition. And that is a very asymmetrical approach versus almost any other company in our market. While our growth is powered by enabling our partners to compete better, we also want to win the head-to-head competition from players like Shopify and BigCommerce, so that our partners can use Ecwid as a weapon in their portfolio. The COVID-19 pandemic has forced late e-commerce adopters to learn new patterns of consumption. The reality is that even post-lockdown, once customers figure out how easy this way of consumption is, it will stick long-term. This will inevitably expand the economy, because when it becomes so much easier to consume, you tend to consume more. Even countries with little e-commerce pre-pandemic, Italy for example, have seen adoption rapidly accelerate. Ecwid is now the leading e-commerce solution based on number of sites represented in Italy, as well as France and Germany. In today’s world, everything has to be simple and one-click. It has to be available right there where the customer and consumption are; in other words, it has to be omni-channel. All of these existing marketplaces, such as Instagram, Facebook, Pinterest, Amazon Marketplace and the web, are likewise experiencing transformational growth – as a merchant, you need to be exposed to all of these channels or you are losing some amount of revenue. At Ecwid, we package all of this for small businesses to deploy simply and quickly. Total online sales in the US grew by 42% YoY as of August and BOPIS sales grew 259%. Ecwid, over a similar period of time, actually saw BOPIS grow by 446%. I believe US consumers just tend to more easily adopt new approaches to buying, and possibly the stricter lockdowns during this pandemic contributed to this as well. We know that 30% of small businesses shut down this year will never reopen. Because we are well-funded and have healthy unit economics, we believe that it is important to give back to small businesses so that they can make it through this year. We have moved paid-plan features to free throughout 2020 to help provide relief, such as curbside pickup, gift vouchers that help customers support their local stores, tipping for food delivery, etc. Post-pandemic, I believe the good behavioural changes are going to stay, such as the reliance on online commerce, local delivery, pre-order and BOPIS. RUSLAN FAZLYEV 17 PREDICTION 4 18 Sources: (1) Anderton, K. (2019, 21 March) Research Report Shows How Much Time We Spend Gaming. Forbes. Retrieved from www.forbes.com; (2) Piscatella, M. (2020, 12 October) U.S. Video Game Spending This Holiday Projected to Reach a Record $13.4 Billion. NPD. Retrieved from www.npd.com; (3) Jaeger, L; Zarb, N.; David, A. (2020, 26 August) Global Gaming Study: More Gamers Spending More Money in COVID lockdowns – Which Publishers Will Benefit? Simon-Kucher & Partners. Retrieved from www.simon-kucher.com (also graph source). The next social network SOCIAL GAMING AN INTEGRAL PART OF SOCIETY Video games have evolved dramatically over the past 40 years from individuals being siloed into their own Atari-produced Pong terminals at the arcade to chatting with each other across the world in Fortnite. The reach of gaming has expanded greatly since Pac-Man ruled the roost and has been growing steadily with gamers in the US playing on average seven hours and seven minutes per week in 2019, an increase of 20% from 2018 (1). This figure is likely to increase this year due to the influx of gamers and game time stemming from the pandemic. The NPD Group alone is projecting US consumer spending on video games to reach $13.4bn in the November-December 2020 holiday period, an increase of 24% YoY (2). However, gaming is a global affair and growth is not limited to the US. A recent study by Simon- Kucher found that there was an 11% increase in time spent gaming across the world due to COVID-19, a figure it expects to remain elevated in the future (3). The social dynamic of gaming has also changed with increased access, and games are now enjoyed by the masses. Due to this large shift, we expect games to ultimately become truly synchronous with social networks of the world. The pandemic has only helped to accelerate this shift. Individuals are starting to choose to squad up in Call of Duty: Warzone or visit their friend’s island in Animal Crossing: New Horizons in favour of a phone call. Fortnite has recently added in-game video chat, and more often friends are now discussing their favourite Twitch streamers’ recent streams rather than what television show aired the previous day. This change in video games, becoming the next form of social networks, will be further spurred by the interoperability of video game hardware. Many games today are available across numerous platforms such as mobile, Microsoft’s Xbox, Sony’s PlayStation, and Nintendo’s Switch. Gone are the days of purchasing a console to be able to play one game. All that is needed is one console, PC or phone, to access the world. PREDICTION 4 MONTHLY SPEND INCREASE IN GAMING, MAY-JUNE 2020 VS. PRE-COVID-19 PRE-COVID-19 AFTER COVID-19 160% 80% 140% 60% 120% 40% 100% 20% 0% OVERALLINDONESIAAUSTRALIAMEXICOBRAZILNETHERLANDSCHILESINGAPORECHINASPAINGERMANYCANADAUNITED KINGDOMFRANCETURKEYINDIAUNITED STATES19 PREDICTION 5 20 Source: Levine, B. (2020, 14 January) How retailers struggle between data privacy and personalization. ClickZ. Retrieved from www.clickz.com. Note: (1) Bohn, D. (2020, 14 January) Google to ‘phase out’ third-party cookies in Chrome, but not for two years. The Verge. Retrieved from www.theverge.com. Consumers taking control of privacy PRIVACY GOES HEAD-TO-HEAD AGAINST ADVERTISING The combination of remote work, new privacy regulation and an increase in consumer adoption of subscription software for completion of tasks has brought privacy and data security concerns to the forefront of consumers’ minds. For many years, consumers have enjoyed the personalised experiences from multiple software tools. However, many are now questioning what they are giving up for such personalisation, namely data privacy. Privacy regulations such as GDPR and CCPA have attempted to protect consumers by forcing technology companies to obtain explicit consent prior to obtaining personal data, but these policies have not completely eliminated data privacy violations as evidenced by the large fines that have already been levied on numerous technology companies such as Google and Facebook. As a result of these violations and data security concerns, consumers are now beginning to take a more proactive approach to forgo the unique experiences that have been provided to them through various technology tools in order to secure more personal privacy. This shift in consumer preferences for a more privacy-centric offering has been aided by large technology companies optimising their offerings to be privacy-centric, such as Google’s ban on third-party cookie tracking advertisers by 2022 (1). On the other hand, Apple also plans to allow consumers to take control of their privacy by allowing them to opt out of app tracking in iOS 14. This change in approach from big tech will likely help smaller technology companies that have put privacy first, such as the search engine DuckDuckGo. Moreover, big tech’s embrace of privacy will also likely help the burgeoning privacy ecosystem. We expect to see more product offerings integrating privacy controls to meet the new consumer standard, and legacy technology companies following the lead of Apple and Google to create more private platforms. Rather than a differentiator for technology companies, we believe privacy controls will be the rule for consumers in the future. PREDICTION 5 HOW CONSUMERS VIEW GREATEST BENEFITS FROM PASSING THEIR DATA OVER 55% 33% 44% 23% 39% 15% 37% PERSONALISED EXPERIENCE CONVENIENCE EXCLUSIVE CONTENT OFFERS AND DISCOUNTS LOYALTY SCHEMES CUSTOMER EXPERIENCE EASIER PAYMENTS 21 PREDICTION 6 22 Source: Ang, C. (2020, 15 September) Fitness apps grew by nearly 50% during the first half of 2020, study finds. World Economic Forum. Retrieved from www.weforum.org. Note: (1) COVID-19 Digital Engagement Report. Twilio. Retrieved from www.twilio.com; (2) Howell, M. (2020, 19 October) Apple Fitness+ vs. Peloton vs. Fiit: which at-home fitness subscription is best for you. The Telegraph. Retrieved from www.telegraph.co.uk; (3) Thomas, L. (2020, 6 May) Peloton sales surge 66%, as more people buy bikes during coronavirus pandemic; shares jump. CNBC. Retrieved from www.cnbc.com; (4) Henderson, A. (2020, 10 May) 13 best fitness apps and online training programmes. Independent. Retrieved from www.independent.co.uk. Survival of the fittest THE RISE OF DIGITAL FITNESS / CONSUMER SUBSCRIPTION Fitness studios and gyms had two options when the pandemic hit: go digital or go under. Gyms and workout studios typically require extensive in-person interaction, and consequently were the first to shut down during the pandemic. Traditional gyms, trainers and fitness of all kinds had to transform their platforms digitally to remain profitable. According to Twilio, 92% of companies surveyed around the globe say transforming to digital communication is now extremely critical to address current business challenges (1). Likewise, investors are paying up for technology fitness companies able to replicate or approximate the gym experience at-home. The Telegraph, a London published newspaper, mentions the global fitness app market is expected to grow at a rate of 21% from 2019 to 2026; the future of fitness is here, and it is digital (2). ClassPass, who previously partnered with local in-person fitness boutiques, has since launched live workouts where more than 500 studios have added livestreamed, bookable classes to the platform, allowing studios to personalise their own experiences. Peloton, a stationary bike with livestream cycling classes, saw a massive surge in paid users across the globe, growing revenue by 66% YoY to $524.6m (3). Peloton offers cycling bikes, treadmills, and a $39 monthly subscription to livestream fitness classes. California-based Zwift also provides an engaging and social element, simulating competitive cycling races, such as the Tour de France with trainers, in the comfort of your own home. Fiit, a UK fitness startup goes for £10 a month and allows accessibility anywhere and for everyone with its variety of cardio, strength and rebalance classes all online (4). Alongside advancements in at- home tools and devices, Strava and Whoop integrate performance metrics and feature cross-compatibility for users. As companies offer monthly subscriptions, it is clear digital fitness is a thriving sector in the global consumer subscription software ecosystem. Many industries view the pandemic as a temporary change in business, yet the fitness industry proves at- home fitness could be a permanent diversification from the traditional in-person gym with its unlimited availability and competitive prices. We expect online fitness will continue to flourish as companies address the fast-growing exercise-at-home-market in the post-pandemic world. PREDICTION 6 INDIA MENA EUROPE ASIA-PACIFIC US REST OF THE WORLD Q1-Q2 2020 FITNESS APP DOWNLOADS GLOBALLY (GROWTH BY NUMBER OF DOWNLOADS) 45.1% 13.5% 12.4% 15.8% 7.2% 6.0% Between Q1 and Q2 2020, fitness app downloads grew by 46% worldwide due to COVID-19 lockdowns 23 EXPERT VIEW 24 Expert view: FitOn LINDSAY COOK CO-FOUNDER & CEO OF FITON I joined Fitbit as one of the first marketers and left as the Head of the Consumer Devices group where I was responsible for the hardware and software product launches. Running Fitbit’s competitive intelligence, I became immersed in the health and fitness category and after analysing all of the digital fitness products, I found myself extremely disappointed with what was available on the App Store. So many apps commanded high prices for what were basic and uninspiring products that included only GIFs of someone doing a push up. It became clear that the market was being woefully underserved and there was a huge opportunity to build a better product for people like me, whose school or work schedules and busy family life make it almost impossible for them to find time for the gym. In developing FitOn, I teamed up with the founder of AllTrails, who had 20+ years of consumer subscription experience. Our vision was to design a premium app that empowered anyone, anywhere to get fit and find time for self-care. We believed the most effective avenue to reach people was using the ubiquity of the smartphone. With today’s technology at our fingertips, there is no longer a need to define fitness as just an hour at the gym. It is the 10 minutes you have in the morning, 5 minutes in the middle of the workday or 30 minutes before dinner. FitOn was also created to address a fundamental failure of the fitness industry, which is that no one seemed particularly focused on the user experience after someone joins. We decided to offer a freemium experience with unlimited high-quality workouts on your phone. We then layered on additional, value-added features as part of a premium service, which included downloading workouts, premium music, and integration with wearables. We continue to focus on driving innovation beyond just the core workout experience and have introduced digital coaching, personalised meal plans and live video calls with friends. One of the keys to our success has been the substantial organic growth we have achieved by offering an incredible experience that people cannot help but share with friends. Our business model is built on converting this excitement into subscriptions to help support our mission to help people get fit. We knew that women aged 25-45 years were a crucial community to win in digital fitness and spent our first year laser focused on addressing their needs. While we have seen our members become increasingly more international, we were ecstatic to have driven more downloads of FitOn in the US in the first half of 2020, than Peloton Digital and Nike Training Club. We have also been able to achieve four times the industry average retention over the first 30 days because of the quality of our fitness content, our product and our focus on the social experience. We have also seen huge growth in our business, by over 200%, during COVID-19. The pandemic has acted as a forcing function for some, but I believe digital fitness was already at a tipping point and headed towards exponential growth. Digital fitness has become a compelling alternative to traditional means of exercise and wellness. The pandemic only served to propel this trend forward with so many people growing accustomed to working out at home. Our future will see software and hardware continuing to coexist as people use both for their health and fitness. Our focus is to serve the mass market of customers who cannot afford to spend thousands on equipment and to instead make use of the hardware already in their pocket or in their home. We are also excited to be working with a broad range of gyms to provide their members with a synergistic digital experience. We look forward to continuing to leverage the smartphone to provide everyone with a gym in their pocket and an engaging social fitness experience they just cannot find anywhere else. LINDSAY COOK 25 PREDICTION 7 26 Source: Statista (as of 5 November 2020) Note: (1) 2020, August. Big Tech In Payments. CB Insights, Research Briefs. Retrieved from www.cbinsights.com; (2) The Payments Industry Landscape: What Does It Look Like Today? Cardknox. Retrieved from www.cardknox.com; (3) Ahmed, A. (2020, 15 July) Digital Payments Industry Surpassed the $4.1 Trillion Mark, Origin and Future of Digital Payments. Digital Information World. Retrieved from www.digitalinformationworld.com (also graph data). Cash is no longer king THE ACCELERATION OF DIGITAL PAYMENTS Once only a niche solution for the most tech-savvy consumers, digital wallets have grown considerably in recent years to become truly mainstream. An ever-expanding list of digital wallet solutions have been adopted as the pandemic causes us to rethink the safety of something previously routine like handling currency. With the digital payment industry representing a $3.6tn opportunity, at a 13.5% CAGR between 2020 and 2025, we are witnessing a tectonic shift in consumer behaviour towards NFC payments and digital banking more broadly (1). Up to 60% of payments were made using contactless methods in 2019, and today more than half of Gen Z consumers use their digital wallets at least once a month and a remarkable 75% use a digital payment app (2). A growing number of major tech players have also begun to enter the digital banking market, placing major bets in the space. In addition to start-ups in recent years, Amazon, Apple, Facebook, Google, Microsoft, and Samsung are entering the fray full force. Innovative point-of-sale financing solutions such as Klarna and Affirm have offered an entirely new way for consumers to transact directly with a growing list of brands and even ‘buy now, pay later’. In the past year, we have noticed many big fintech players adopting consolidation as one of their key strategies to gain competitive advantage and enter new markets. For example, PayPal invested in Tink, a Sweden-based developer of an open banking platform, and Fiserv acquired Bypass, an enterprise POS system earlier this year. This strategy helps companies in expanding their product offering by adding the personalisation component and on the same hand provides up-selling opportunities, thus boosting their top-line revenues. Leading the global charge with an average of 529 cashless payments per capita annually, Sweden is already on a path to become the first cashless nation in the world as early as 2023 (3). As regulatory barriers are overcome, infrastructure further develops and convenience of functionality increases within society, we expect rapid advancement in digital banking across geographies in developed and emerging markets. PREDICTION 7 VALUE OF GLOBAL DIGITAL PAYMENT TRANSACTIONS ($TN) DIGITAL COMMERCE MOBILE POS PAYMENTS $3.2 $5.4 $3.6 $6.1 $6.7 $4.1 $4.8 2017 2018 2021E 2022E 2023E 2019 2020E 27 PREDICTION 8 28 Source: Curry, D. (2020, 30 October) Slack Revenue and Usage Statistics (2020). Business of Apps. Retrieved from www.businessofapps.com; Hilberath et al. (2020, 22 September) Hybrid Work Is the New Remote Work. BCG. Retrieved from www.bcg.com. Note: (1) Brynjolfsson et al. (2020, June) COVID-19 and Remote Work…. National Bureau of Economic Research. Retrieved from www.nber.org ; (2) Kaufman et al. (2020, 30 June). Remote Work Works—Where Do We Go from Here? BCG. Retrieved from www.bcg.com; (3) Slack FQ1 2021 report; (4) Zaveri, P. (2020, 30 April) Microsoft Teams now has 75m daily active users…. Business Insider. Retrieved from www.businessinsider.com; (5) Conger, K. (2020, 12 May). Facebook starts planning…. The New York Times. Retrieved from www.nytimes.com. The future of work THE EVOLUTION OF COLLABORATION AND REMOTE WORK At the beginning of 2020, companies slowly began to implement work from home policies to slow the spread of COVID-19, giving employees the ability to trade in their office desks for home offices or living room workstations. By April, 31% of those in the US that were employed in March had made the switch to remote work (1), causing employers to exclusively rely on communication and collaboration software to create optimised remote work models and remain connected. Many companies with efficient remote work models around the world saw a 15% to 40% increase in productivity from employees (2), primarily due to some of the current tools that focus on internal team communication, project management, video conferencing and collaboration that were not fully utilised previously. Asana, Zoom, Slack, Google (G-suite) and Microsoft (Teams) all saw a significant uptick in usage. Slack added a record of 12,000 net new paid customers in Q1 (3), while Microsoft Teams added 12m active daily users in just one week in early March (4). With this adoption of tools within organisations, employees from less technical backgrounds are leveraging these solutions that would otherwise have not been necessary. This growing reliance on communication and collaboration tools has forced employers to rethink how the future of work will look given the rapid, successful adoption. Large tech companies such as Facebook, Google and Twitter are proving that these models can be successful long-term and have changed their current work policies, announcing that their employees can work from home indefinitely (5). However, companies with fully remote models are few and far between and most employers still see the value that in-person collaboration and interaction adds to team performance and productivity. While we do not expect the concept of the office to go by the wayside, employers are rethinking the concept and purpose of the office environment. The future of work is unknown as employers will need to reconfigure work models to best fit the needs of employees while also delivering optimal levels of productivity, which will invariably include a remote or hybrid model and increased reliance on communication and collaboration tools. PREDICTION 8 SLACK VS. MICROSOFT TEAMS DAILY ACTIVE USERS SLACK MICROSOFT 50m 30m 10m 45m 25m 5m 20m 0m 40m 35m 15m SEP-17JAN-19MAY-18SEP-19JAN-18MAY-19SEP-18JAN-20JUL-20NOV-17MAR-19JUL-18NOV-19MAY-20MAR-18JUL-19NOV-18MAR-2029 PREDICTION 9 30 Source: 2020, April. Digital Marketing Software Market Size Worth $151.8 Billion By 2027. Grand View Research. Retrieved from www.grandviewresearch.com. Note: (1) 2020, March. Customer Data Platform Market Report. ID: 5006120. Research and Markets. Retrieved from www.researchandmarkets.com; (2) Levine, B. (2019, 4 March) MarTech Today research: Guide to picking an identity resolution platform. Martech Today. Retrieved from www.martechtoday.com. Martech all-in on customer experience CONVERGENCE OF MARTECH, CX AND THE CUSTOMER JOURNEY As COVID-19 accelerates the shift towards digital channels and experiences, digital customer experience (CX) has become an important differentiator and the ultimate battleground for brands globally. A growing proportion of customers now expect personalised experiences across the entire digital journey, which drives customer loyalty and top-line growth. The need to go beyond marketing by adding context to sales and customer service experiences is leading companies to rethink their martech stack to enable enterprise-wide CX. Understanding customer data is key to achieving this vision, and many companies are harnessing zero and first-party data and analytics to power unique experiences across a range of use cases and channels. Companies retooling their CX are looking to build a complete picture of their customers by unifying data from a variety of customer touchpoints and sources including transactions, CRM, social media, mobile apps and website behaviour. The market has responded and the major Marketing and Experience Cloud vendors including Adobe, Oracle, Salesforce and SAP all released Customer Data Platforms (CDP) this year, entering a market projected to reach in excess of $10bn in the next five years (1). When combined with other technologies including identity resolution, decisioning, automation and machine learning, CDPs enable companies to deliver hyper- personalised experiences across all channels at every stage of the customer journey. The acquisitions of Twilio by Segment, Emarsys by SAP and Evergage by Salesforce are all examples of this trend. The demise of third-party cookies and proliferation of devices further highlight the importance of direct-to-consumer interactions and first-party data, and is a key growth driver for the identity resolution software market (led by companies including Throttle and Signal), which is poised to grow to $2.6bn by 2022 (2). The growing importance of social channels within customer services, and platforms such as Instagram and Pinterest increasingly offering one-click transitions to e-commerce, is driving the convergence of customer engagement and Voice of the Customer platforms with social media marketing and analytics. Recent examples of this trend include the acquisitions of Nielsen Social by Talkwalker and Socialbakers by Astute. We expect to see increasing demand for Customer Experience Platforms powered by first-party data and automated decisioning, with a focus on AI-enabled customer insights. We forecast continued consolidation among marketing automation, CX and cloud communication players as the convergence of marketing, customer experience and cloud communications gains momentum. PREDICTION 9 US DIGITAL MARKETING SOFTWARE MARKET ($BN) $49 $152 2020 2027 17. 4% CAG R 31 EXPERT VIEW 32 Expert view: Customer Thermometer LINDSAY WILLOTT CEO OF CUSTOMER THERMOMETER I first became interested in the confluence of marketing and CX in my graduate job in a CRM company. I was fortunate to grow my career as the nascent concept of multi-channel, seamless relationships with customers was finding its voice. Four years later the dot com bubble burst and I saw an opportunity to start a tech marketing agency that was very different, focused on revenue generation and CX throughout the sales and marketing funnel. I started The Marketing Practice in 2002, one of the largest independent B2B tech agencies in the world. Instead of marketing being at the top of the funnel and sales at the bottom, where marketing has a database, generates leads and drops those leads to sales, we focused on demand and revenue generation, but through the lens of what truly influenced and motivated the customer. Born from the idea of understanding the ongoing relationship with end-client satisfaction, I went on to found Customer Thermometer. In this business we have built a SaaS company where the customer experience is as good as the product quality – they are equally important to our success. Customer experience is so critical for business now, to both drive lifetime value and reputation. Customer Thermometer allows people to regularly check how people are feeling without wrecking the customer experience they are trying so hard to craft. Many survey tools hark from the market research space, and were never intended to gauge customer feedback. Research and feedback are two very different things. People have frankly gotten excited about the possibility of asking hundreds of questions, and support, service, CX and brand teams are all throwing questions into the mix, but the resulting surveys are terrible for customers to use. Setting us apart from our competitors, Customer Thermometer starts with your existing customer touchpoints and, as seamlessly as possible, drops in the opportunity for customers to give feedback in a way that is on-brand, engaging and fun. You cannot market ahead of reality anymore, and you cannot sell a great thing and then support it poorly. With online reviews, feedback and social media, customers are the arbiter of your future reputation. It is no longer just about the product. The service around the product, the subscription and the lifetime value all come into this, and these myriad touchpoints now determine your brand. Customer support used to be a back-end function but now is stepping firmly into the world of marketing and reputation. Companies are starting to understand that customers have a journey, a lifetime, and they want to map it. The two important steps to be successful using our platform are acting on the data to close the loop – contacting customers – and measuring a range of touchpoints instead of just one. The distinction between product and resolution satisfaction is particularly challenging in the Service Desk market. We put the ability within our flow for the survey responder to say ‘this is why I gave the feedback I did’. With the pandemic, three in five consumers have changed who they buy from and money is pouring into retention marketing. People will not spend time on difficult-to-use websites or AI chatbots. For B2Bs that relied on expensive salespeople flying around, their glossy brochures and websites have been left to languish and will not cut it next year. Moreover, lightweight systems are the watchword for 2021. Whether people are rolling out big Martech or CX platforms, businesses with traditional in-person delivery models need to change quite significantly. I see interesting opportunities in proactive customer service. One-to-one marketing, utilising the information from the back of the business to the front, can energise and engage your market. I expect future CX to be real time, where product development sits with customer support teams and uses that information to connect with markets, rather than relying on disjointed research. LINDSAY WILLOTT 33 PREDICTION 10 34 Source: Sensor Tower Store Intelligence, 2020; Chitkara, H. (2020, 5 October) Apple and Google are embroiled in legal battles…. Business Insider. Retrieved from www.businessinsider.com. Note: (1) Perez, S. (2020, 22 July) Apple digs in heels over its App Store commission structure with release of new study and (2) Perez, S. (2020, 24 September) App makers band together to fight for App Store changes with new ‘Coalition for App Fairness’. Tech Crunch. Retrieved from www.techcrunch.com; (3) Apple press release (2020, 18 November). Epic’s ultimate battle royale… with Apple APPLE FACES INCREASED PRESSURE FROM DEVELOPERS On 10 July 2008, the world received one of the most innovative digital distribution platforms to date – the Apple App Store. Providing developers the ability to create and distribute their software in a safe environment, the App Store is the bedrock for some of the most iconic applications that have changed the way people live and interact. However, these relationships with Apple have drastically changed over the past few years as Apple’s 30% commission on app sales and in-app purchases (1) has been met with retaliation and frustration from some of the largest developers in the ecosystem. Epic Games, creator of Fortnite and one of the largest app developers in the space, is leading the charge against Apple, filing a high-profile lawsuit over its supposed anti-competitive practices for app distribution and related payment rake (2). Since making its position known, Epic Games has received public backing from other large developers who have had similar experiences with the App Store creator – namely Spotify, Microsoft and Match Group. With the support of these larger developers, smaller players are seeing this battle as an opportunity to make their voices heard. Other app makers such as Basecamp, Deezer, European Publishers Council, Tile and five others have formed the Coalition for App Fairness, a non-profit organisation that seeks to create a level playing field for app makers (2). In an effort to combat these advances, Apple reduced its commission by half, to 15%, but only for small developers (3). Faced with waves of resistance, Apple will need to defend its position on its commission structure to maintain one of its most significant revenue streams. Having followed the decentralisation of app distribution over the past several years and the recent actions taken by Apple, we believe that Apple will need to further reduce its fees on some or all apps to avoid regulatory action and keep its rapport with developers as other distribution platforms start to claim their part of Apple’s market share. We expect that Apple’s historic one-size-fits-all app developer approach will increasingly evolve as more companies push to counter Apple’s immense ecosystem leverage by creating experiences their users crave. PREDICTION 10 GLOBAL CONSUMER SPEND ON APPLE APP STORE & GOOGLE PLAY STORE ($BN) APPLE APP STORE GOOGLE PLAY STORE $9.7 $14.5 $12.0 $19.0 $5.1 $7.7 $6.2 $10.3 Q3 2017 Q3 2019 Q3 2018 Q3 2020 35 HISTORICAL PREDICTIONS The past, present and future A LOOK BACK AT OUR CRYSTAL BALL OF PREDICTIONS 2014 2015 EYE TRACKING REACHES CONSUMER MASSES CURVED SMARTPHONES TO FLOP IN 2014 SMART MACHINES MARKET TAKING-OFF MAJOR LANDSCAPE CHANGES IN THE WORLD OF PAYMENTS SOCIAL MESSAGING MARKETS TO CONSOLIDATE NEW MEDIA OUTLETS TAKING-OFF MARKETPLACES TO GO VERTICAL BREAKTHROUGH IN INDOOR LOCATION, COMMUNICATION AND MARKETING INTERNET OF THINGS TO MOVE FROM SMART TO INTELLIGENT SHOPPING GOES ‘CLICK & MORTAR’ THE BATTLE OF ‘WHERE’ TO UNFOLD ADVANCED DATA ANALYTICS CLIMBS TO TOP OF CORPORATE AGENDA SAAS ADOPTION PERMEATES THROUGHOUT THE ENTERPRISE CLOUD STORAGE PLATFORMS GO MAINSTREAM Mass consumer applications of eye-tracking technology to hit the market in 2014; e.g. Pizza Hut to provide subconscious menu that tracks eye movement to understand what customers are craving. Curved smartphone market to grow as big players tackle consumer pain points of high price points and lack of perceived value of the curved design. SmartThings and IoT to penetrate the market; innovations, investments and acquisitions in the market to continue. Changes in the Fintech landscape to include new cleaner cryptocurrencies and digital blockchain technology to be applied to other industries for transparency. Consolidation in social messaging industry; high number of users make these apps attractive to strategic partners searching for growth. New media brands producing engaging content in various delivery formats to attract masses of audiences. Vertical marketplaces to become more prominent than horizontal marketplaces, given increased investment in the space. Indoor location communication and marketing to break through and a number of large retailers leading the way for beacon technology implementation. IoT to turn intelligent by harnessing insights from actionable data uploaded to the cloud. E-commerce retailers such as Birchbox, Bononos and Amazon opened retail stores, proving that bricks-and-mortar has a place in the retail market. Map applications to proliferate and develop features such as detailed lane navigation, restaurant reservation, estimated travel time, etc. Big data and data analytics applications to become attractive to businesses with increasing investments flowing to this industry. Adoption of cloud SaaS enterprise applications to increase across companies to increase productivity and efficiency. Adoption of cloud storage to increase significantly due to time and money saved in IT management and fewer internal resources deployed. Adoption to pan across enterprises and consumers. 36 HISTORICAL PREDICTIONS 2016 END-TO-END SERVICE DISRUPTION GOES BEYOND UBER AND AIRBNB RETURNED FOCUS ON CUSTOMER LONG-TERM VALUE IN MOBILE GAMING COMPREHENSIVE CYBERSECURITY PROTECTION TO BECOME THE NORM VIRTUAL REALITY BECOMES REALITY AUTOMOTIVE INDUSTRY RIPE FOR INNOVATION ALTERNATIVE LENDING CONTINUES TO SHINE BRIGHTLY IN FINANCIAL TECHNOLOGY SECTOR DIGITAL VIDEO BECOMES MORE MEASURED TO KEEP GROWING UP 3D PRINTING MOVES FROM PROTOTYPING TO END-PRODUCTS CONTINUED EMERGENCE OF ONE- STOP SHOPS IN AD-TECH THE WAVE OF TECHNOLOGY & PRODUCT EXITS TO BE STRONG IN 2015 ‘QUANTIFIED SELF’ TRANSITIONS FROM NICHE TO MAINSTREAM GAMING GIANTS FORTIFY POSITIONS IN TOP GROSSING CHARTS, GOBBLING UP CHALLENGERS ‘DESKLESS’ WORKERS COME TO FOREFRONT IN ENTERPRISE MOBILITY SHIFT Companies offering end-to-end consumer experience using a fusion of software and labour, such as Uber and Airbnb, to penetrate consumption spend. Customer retention is the focus of gaming companies with realistic graphics, culturalisation and gaming community management. Increased adoption of big data security options and multi- factor authentication, as well as biometric authentication for consumer apps to permeate user landscape. The rise in the popularity of virtual reality to revolutionise a wide variety of industries such as media, sports, gaming, entertainment and education. New innovative operating systems geared towards the car will spur growth, which will be dominated by third-party software and technology players. While much of the early innovation within the Fintech sector has occurred in mobile payments and cryptocurrencies, alternative lending to emerge as one of the leading innovations. With digital video on a trajectory to be the largest video format in the future, major tech/media-focused platforms to adjust their capabilities to capture their share of the video audience. 3D printed products to emerge in end-product applications, such as dental implants, etc., and in larger but less price-sensitive industries where products are lighter, versatile and durable. Ad-tech space to see consolidation as larger players diversify into digital advertising segments and acquire pure- play ad-tech companies and agencies. As tech companies grow and cash accumulates, there will be market consolidation across sectors led by Apple, Amazon, Facebook, Google and Twitter, targeting consumer experience, electronics and one-stop-shop digital tools. With the rise of mobile devices, big data, and social media, waves of innovation to follow in the form of hardware and software start-ups creating various products and services tracking activities such as exercise, diet, sleep patterns and vital signs. As gaming remains as one of the most lucrative forms of digital content, consolidation to continue and smaller independent developers to look to build their user base until acquired. The enterprise has experienced some seismic technology paradigm shifts in recent years, leading to growth in enterprise mobile app companies. CYBERSECURITY CONTINUES SOUL SEARCHING Advanced cybersecurity solutions for the enterprise will become ubiquitous and a ‘must have’ for business operations. DRONES TO FLY INTO HEADWINDS OF UNCERTAINTY The promise of drones is undeniable, but drones functioning responsibly at mass scale to remain unproven. 37 2017 2018 UNICORN HUNTING NOW IN SEASON E-SPORTS TAKES CENTRE STAGE THE DAWN OF VR/AR CONTENT SAAS SOFTWARE REIGNING SUPREME TECH IPOS SET FOR TAKE OFF MOBILE TRUMPS TV IN CHINA TRANSLATION TECHNOLOGY TAKES HOLD THE UNLIKELY COMEBACK OF THE SOFTWARE SUITE YEAR OF THE EUROPEAN DECACORN INTERNATIONAL LABOUR ARBITRAGE FLOURISHES THE NEXT GENERATION OF ARTIFICIAL INTELLIGENCE AN UNEASY FUTURE FOR POLITICS AND TECHNOLOGY CORDLESS CONTENT ANYWHERE AND EVERYWHERE FINTECH SHIFTING TECTONIC PLATES DRIVERLESS CARS STILL REQUIRE HUMAN DIRECTION SOCIAL MEDIA TRANSFORMATION A number of tech unicorns to lose their ‘mythical’ status as they become hunted by the reality of slowing growth, weak fundamentals, high cash burns and unrealistic expectations. The rapid growth of e-sports to continue and become a billion-dollar industry primarily driven by its huge fan base. The VR/AR industry is at the peak of its hype cycle, with hardware currently progressing ahead of content. Developers will need to produce software to drive what is set to be the next major platform. An increasingly mobile workforce has led to mass adoption of SaaS. The market, however, remains very fragmented and will see some consolidation. Global uncertainties have contributed to sluggish performance for IPO markets, but these to see rebound in the upcoming year. Mobile phone usage to overtake TV consumption in China. Translation technology to enjoy widespread consumer adoption due to advances in machine learning. Companies to turn back to spending large amounts of money on IT platforms to aid their digital transformation efforts. European unicorns continue to demonstrate resilience in comparison to their Asian and US counterparts, with the expectation that they will continue to do so going forward. Companies to abandon traditional tech hubs in favour of smaller and up-and-coming places. ‘AI’ has been making waves since Alpha Go toppled the 18-time world Go Champion, Lee Sedol. As 2016 saw a record level of investment in AI, it is clear the technology is here to stay. Tech firms to come under scrutiny for the content they allow on their platforms with specific regard for politics. Millennials are leading the movement against cable networks, radically changing the way we consume media, causing networks to challenge the rise of over-the-top services. Traditional financial institutions to fight back as they try to disrupt themselves in an attempt to stem the impact of ‘banks 2.0’. As cars become more connected and less industrial, the market to open to tech players such as Google, Baidu, Apple and Uber. As users are exposed to both domestic and foreign platforms in an increasingly flat world of consumer technologies, Western and Asian social media giants to begin offering vastly similar features. HISTORICAL PREDICTIONS 38 2019 OVER AND OUT EMAIL AUGMENTED REALITY ADAPTS FOR EARLY ADOPTION DIGITAL BANKING CONTINUES TO RISE RETAIL TECHNOLOGY GETS SMARTER ARTIFICIAL INTELLIGENCE IS THE END OF REPETITION, NOT THE END OF LIFE A BREAK-UP OF AN ADVERTISING DUOPOLY END OF THE BOYS CLUB CYBER SECURITY EXPOSURE AND ADOPTION CRYPTOCURRENCY WILL GROW UP INDUSTRY 4.0 REGULATORS RULE ON BOOM AND BUST OF ICOS APP DISTRIBUTION MOVING AWAY FROM APPLE AND GOOGLE EMPLOYEE ENGAGEMENT GOES HIGH TECH CONSUMER SUBSCRIPTION SET TO ECLIPSE ADVERTISING LAST MILE DELIVERY GOING THE DISTANCE Email to be overtaken by more information workplace communication tools and YoY growth in corporate email to cease. AR to enjoy a rapid increase in consumer adoption due to improvements in technology. Consumer adoption of digital banking tools to increase as digital transactions continue to increase YoY. Traditional retail to embrace innovative technologies to usher in the new age of retail. AI will not be the end of the white-collar workforce, but will be embraced to improve working conditions and create more flexible ways of working. Brands to break up the large advertising hold of Google and Facebook with the development of their own end- to-end services. Corporate initiatives to bring about gender balance through improvements in accessibility to female entrants. There will be widespread consumer adoption of digital security in light of hackings in 2017. Institutional capital to flow to cryptocurrencies as blockchain activity continues to increase. Factories to embrace artificial intelligence and robotics, spurring the fourth industrial revolution. Regulators to begin regulating the booming ICO market and create definitive guidelines and regulations for the space. Apple and Google to see widespread backlash from developers fed up with their commission fees. HR to embrace AI and data analytics to make capital management more efficient. Consumers to accept subscription models over traditional advertising as concerns of data misuse continue to mount. More retailers to focus on how to improve last mile delivery solutions to keep pace with vendors such as Amazon. HISTORICAL PREDICTIONS 39 This report is based on the expert insights of GP Bullhound’s worldwide team alongside detailed analysis of investment trends across the global technology landscape. It is intended to provide our predictions for growth, investment, and impact in the digital economy in 2021. Each year, we present a transparent assessment of our predictions from the previous report to maintain a high level of scrutiny on our own research. Conceptually predicting tech of the distant future is in many ways simpler than predicting near-term advancements, but our challenge is identifying which technologies will see the greatest progress and market adoption in 12 months. Historically, we have highlighted significant trends standing the test of time; e.g. our predictions for IOT, wearables and collaboration tech, as well as critical trends in cybersecurity, cloud and edge computing. Many will continue to evolve, eventually forming the foundation for future tech in years to come. METHODOLOGY Methodology Our recent marquee credentials ECOVADIS INVESTMENT BY CVC GROWTH PARTNERS $200M SENDINBLUE INVESTMENT BY BRIDGEPOINT DEVELOPMENT CAPITAL & BPI $160M MARIADB INVESTMENT BY GP BULLHOUND FUND V BUSUU INVESTMENT BY GP BULLHOUND FUND IV TALKWALKER ACQUISITION OF NIELSEN SOCIAL ORCA PACIFIC ACQUIRED BY MIGHTYHIVE/ S4 CAPITAL ALLYO ACQUIRED BY HIREVUE REVOLUT INVESTMENT BY GP BULLHOUND FUND IV MOTIF ACQUIRED BY CHARLES SCHWAB MENIGA INVESTMENT BY GROUPE BPCE UNOMALY ACQUIRED BY VISTA EQUITY LOGICMONITOR 7NXT ACQUIRED BY OAKLEY CAPITAL CHALLENGERMODE INVESTMENT BY GP BULLHOUND FUND IV EDITED INVESTMENT BY WAVECREST GROWTH & BERINGEA $29M 40 AUTHORS (1) League table data represents selected transaction advisors. Time period is 2016-Q4 2019. Global M&A transactions between $10m and $300m ABOUT US About us GP BULLHOUND GP Bullhound is a leading technology advisory and investment firm, providing transaction advice and capital to some of the best entrepreneurs and founders. Founded in 1999, the firm today has offices in London, San Francisco, Stockholm, Berlin, Manchester, Paris, Hong Kong, Madrid and New York. MERGERS & ACQUISITIONS CAPITAL TRANSACTIONS INVESTMENTS INSIGHTS & EVENTS We are the no. 1 global advisor (1) to leading technology companies in competitive international sale and acquisition processes. The firm has completed 420 successful M&A transactions to date, worldwide, with a total value of over $18bn. We are a leading global advisor to companies and their owners on capital related transactions including venture capital, growth capital, acquisition funding, secondary block trades and initial public offerings. The firm has completed 120 rounds of financing for technology companies to date, with a total value of $2bn. Through our investment team, we provide investors with access to category leading technology companies. Our assets under management total more than €330m and our limited partners include institutions, family offices and entrepreneurs. Our events and speaking activities bring together thousands of leading digital entrepreneurs and technology investors throughout the year. Our thought-leading research is read by thousands of decision-makers globally and is regularly cited in leading newspapers and publications. ASSISTANT PER ROMAN MANAGING PARTNER BRANDON OVERMYER OKAN INALTAY ALEC DAFFERNER VICE PRESIDENT ASSOCIATE PARTNER OLIVIA HORNSTEIN DANIEL ROBERTS ANALYST MINYA SHIDHAYE ANALYST ANALYST MATTHEW YOUNG JENNIFER ELLER RESEARCH EDITOR 41 CORPORATE RESPONSIBILITY 42 CORPORATE RESPONSIBILITY Corporate responsibility GP BULLHOUND Our ESG initiatives are a continuously evolving process that we are incredibly passionate about. Applying these principles will allow better long-term financial returns for companies and investors, and a closer alignment with the values of our team and society. We believe tech contributes to the greater good and provides solutions to solve many of the world’s problems and injustices. ENVIRONMENT & SUSTAINABILITY ETHICS & COMPLIANCE LABOUR & HUMAN RIGHTS INVESTING & ADVISING RESPONSIBLY With our CSR group and carbon footprint programme we work towards mitigating our environmental impact by reducing our energy consumption and waste generation, digitalising communications and materials, optimising our archiving with Data Life Cycle Management and server virtualisation, and prioritising sustainable procurement. We have formal compliance policies in place against corruption, bribery and to ensure third- party information security. As a way to contribute to a better world now and tomorrow, we give back a share of our success by supporting charitable non-profit organisations, with emphasis in areas where tech intersects with human rights, education, health, diversity and the environment. With 20 nationalities represented within our team, we champion diversity, respect, education and equal chances for all. Our employee benefits include parental leave, flexible work, healthcare coverage, training and mentoring, and company stock ownership. Our cultural board and Women @GPB groups work on enhancing company culture and gender diversity. We consider multiple criteria when selecting the companies we work with, such as their impact on the environment and society, their approach to talent, equality, regulatory compliance, as well as financial health and political risk. GP Bullhound is a member of the British, Swedish and Hong Kong Private Equity and Venture Capital Associations, and follows and supports the UN Principles for Responsible Investment. 43 OUR TEAM JOY ABIOLA ALESSANDRO CASARTELLI NATALIE DEAN ANDREA LÓPEZ CANDICE MOSTISSER ED PRIOR JAIME SENDAGORTA ROBERT AHLDIN BEV BOETTCHER GIOIA CERBELLI MATTHEW CHOI JOAQUIN DEL RIO BRIONES OLIVIA HORNSTEIN FELIX LUTJEN PRAVEENA MUTHUKUMAR SVEN RAEYMAEKERS MINYA SHIDHAYE JOHANNES AKERMARK GUILLAUME BONNETON FREDDIE DODGE LAURENCE DEVRIESE ELSA HU ASHLEIGH MACDONALD SIMON NICHOLLS JOEL-OSKAR RAISANEN KEVIN SIAGAM SETH ALPERT CAOIMHE BRADLEY GAIA CIBRARIO CAROLIN DREWES JAVED HUQ MANISH MADHVANI DAVE NISH JASON NORDLICHT JULIAN RIEDLBAUER JOY SIOUFI CLAUDIO ALVAREZ FELIX BRATELL IMAN CRISBY GENESHE EDELMAN OKAN INALTAY MARVIN MAERZ SANDRA NÚÑEZ MANON RODIER DANIEL ROBERTS SIR MARTIN SMITH ERIK ANDERSHED JOYCE BYRNE ERIC CROWLEY JENNIFER ELLER JOFFREY EZERZER STAFFAN INGEBORN ALEXIS MAJOS BRANDON OVERMYER PER ROMAN GREG SMITH SUSANNA ANDERSSON ANNA ARCE-LEPLAU HUGH CAMPBELL FRAENZE GADE MIGUEL KINDELÁN ALON KUPERMAN BULAT MARDANOV ADAM PAGE CECILIA ROMAN MARIA SOSNA REDA BEN LARBI ADAM BIRNBAUM JON CANTWELL ALEC DAFFERNER VICTORIA MARTIN VICTORIA PALMA EHRICHS JOHAN ROSLUND JOE TABBERER CHARLOTTE CAREW-GIBBS JOAKIM DAL RAVI GHEDIA MONA HAUTALA MARIA LAZAREVA DIPAM PATEL OLIVER SCHWEITZER JESPER ROTHE DAVID TRAVIS KARL BLOMSTERWALL IAN CARROLL CARLOS DE LA ESPERANZA HAMPUS HELLERMARK INGE HEYDORN PIERCE LEWIS-OAKES JAIME MORENO BEN PRADE ALEXIS SCORER VINCENT WEI VICE PRESIDENT EXECUTIVE DIRECTOR VP FINANCE DESIGN COORDINATOR ANALYST ASSOCIATE VICE PRESIDENT PARTNER OFFICE MANAGER ASSOCIATE DIRECTOR ANALYST OFFICE MANAGER ANALYST VP FINANCE PARTNER ANALYST DIRECTOR PARTNER ANALYST ANALYST EXECUTIVE DIRECTOR FINANCE MANAGER PARTNER ANALYST ASSOCIATE SENIOR ADVISOR OFFICE MANAGER ANALYST ASSOCIATE DIRECTOR MANAGING PARTNER VP TECHNOLOGY ASSOCIATE PARTNER EXECUTIVE DIRECTOR PARTNER VICE PRESIDENT EXECUTIVE DIRECTOR MARKETING OFFICE MANAGER ASSOCIATE VICE PRESIDENT GRAPHIC DESIGNER ANALYST ANALYST CHAIRMAN DATA SCIENTIST OFFICE MANAGER DIRECTOR RESEARCH EDITOR ASSOCIATE NON-EXECUTIVE DIRECTOR ANALYST VICE PRESIDENT MANAGING PARTNER PARTNER OFFICE MANAGER FUND OPERATIONS MANAGER MANAGING PARTNER EXECUTIVE DIRECTOR ASSOCIATE VICE PRESIDENT SENIOR ADVISOR OFFICE MANAGER ANALYST PARTNER PARTNER VP EVENTS EXECUTIVE DIRECTOR PERSONAL ASSISTANT PERSONAL ASSISTANT VICE PRESIDENT VICE PRESIDENT CARL WESSBERG JADE WILLIAMS EVGENY YAKOVLEV MATTHEW YOUNG PARTNER PERSONAL ASSISTANT ANALYST ANALYST DIRECTOR HR MANAGER PARTNER ANALYST DIRECTOR ANALYST PERSONAL ASSISTANT VICE PRESIDENT EXECUTIVE DIRECTOR ANALYST GENERAL COUNSEL ASSOCIATE DIRECTOR FINANCE ASSOCIATE PARTNER ASSOCIATE DIRECTOR STRATEGY EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR ASSOCIATE 44 DISCLAIMER Disclaimer No information set out or referred to in this research report shall form the basis of any contract. 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