innovation

CIO Innovation Index: A Blueprint for Successful Startup Engagement

A total of 72 CIOs and VP/SVP-level IT executives were surveyed in a quantitative survey conducted by Illuminas, a global research consultancy, with respondents coming from the Sapphire Ventures’ CIO network list and individuals from third-party recruitment databases. The data collection period for both sample sources took place between May and July 2019.

 Some of the most notable findings from this inaugural CIO Innovation Index include:

  • Startups are a clear fixture in most enterprise IT landscapes, consuming a median 10% of IT budgets – with the expectation that spending will grow to 15% of budgets over the next 12 months.
  • Corporations recognize the need for a different engagement process for startups, with 70% of CIOs dedicating a lead for startup engagement, and 80% have a defined onboarding process for startups.
  • Startup maturity matters to CIOs, with over half of respondents stating a clear preference for later-stage startups (Series D in funding and later) – and only 7% citing a preference for earlier-stage (Series A-B) startups.
  • Having a corporate strategy is paramount – CIOs who reported having a comprehensive IT strategy for emerging technology showed a greater propensity to successfully implement emerging technologies, and shorter duration Proofs of Concept (POCs). POCs are now a standard part of startup evaluation at large enterprises. However, 61% of CIOs stated that less than a third of their POCs convert into productive implementations and purchase of the startup’s technology.
  • Artificial Intelligence (AI), Machine Learning (ML) and Augmented Analytics are domains where CIOs are engaging far more with startups that established vendors.
  • Beyond AI and ML, the innovation landscape in IT is very much shared between established vendors and startups.
  • A majority of CIOs reported that startups, relative to established IT vendors, deliver more modern architecture, faster pace of product delivery, better customer experience and more responsive product roadmaps to the CIOs’ organizations – but come with their own challenges in the form of lack of global capabilities and ability to scale their technology. 

Key Findings:

  • The innovation landscape for emerging technologies is increasingly shared between startups and established vendors.
  • Artificial Intelligence/Machine Learning is one technology area CIOs are focused on, with 81% of respondents saying they were making investments in these technologies. The majority (67%) indicated they were investing in AI/ML technology from startups compared with 36% that said they were investing in this area with established vendors — indicating CIOs are nearly 2x more likely to engage startups on AI projects than established vendors.
  • The market’s interest in AI has not gone unnoticed by the venture capital community. In 2018, AI startups raised a record $9.33 billion, or nearly 10% of the year’s total VC investments – a 72% increase from the prior year’s funding in this category.1
  • While AI is the leading area of investment, it is remarkable that a majority of the surveyed CIOs are actively investing in every area of emerging technology covered by the CIO Innovation Index — with the exception of Quantum Computing — as shown by the table below. Similar to AI, the VC funding in other highly-cited domains (Augmented Analytics, Containers/Kubernetes, Cybersecurity, etc) continue to be robust and growing.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

To read the full report, click here! 

 

Sapphire Ventures is an active collaborator with the global CIO community, often brokering connections between innovative startups and enterprises looking to solve business problems with emerging technologies. Based on what we’ve learned from this work, we believe that digital innovation will continue to be a key corporate differentiator, and that today’s emerging technologies will have an increasingly important role as they mature.

Post Your Comment




Leave another comment.

In order to post a comment, you must complete the fields indicated above.

Post Your Comment Close

Thank you for your comment.

Thank you for submitting your comment, your opinion is an important part of SandHill.com

Your comment has been submitted for review and will be posted to this article as soon as it is approved.

Back to Article

Topics Related to this Article