What’s NOT hot in 2023: product strategy

As an antidote to the glut of 2023 trends blogs, I’m here to tell you what’s NOT hot in 2023.

Photo by Fredy Jacob on Unsplash

So you’ve heard all about what we know going into 2023:

• Economic uncertainty due to a potential recession and geopolitical tensions
• “a shift of 10% of automation budgets from transformation to resilience.” — Forrester
• Consumer and employee distrust: employee monitoring, greenwashing, return-to-work mandates
• Cybersecurity and so many breaches

Yet, I’d like to spend some time talking about what’s NOT hot for 2023. This blog shows how to predict where organizations are reducing investments, putting products into maintenance mode, or switching products to an operations mode from a growth mode. To be clear, these predictions aren’t always major tectonic shifts. Instead, product managers can use them to fine tune where they’re already going.

Number 1: VMs are on the way out

For years, I’ve talked about the rise of containers and Kubernetes that give organizations more agility with workload placement, scalability, cost-efficiencies, fine-tuned security, and deployment velocity (plus so much more). In 2023, Cloud native continues to grow at the expense of virtual machines. What we’ll see is more of those VM-based workloads being moved to containers or even retired (IDC and Forrester). Yes many, many workloads are still on VMs, but that investment is changing fast. A wildcard in this prediction is where Broadcom will take VMWare post acquisition. Keep an eye out to see how they evolve.

Takeaway: Product managers should look for opportunities in VM migrations, containers-based technologies, and cloud-native methodologies.

Number 2: Only one cloud for all your workloads

The death of “one cloud to rule them all” is here. Few companies are pushing for a monocloud strategy at this point. Why? For several years, enterprise workloads have sprawled into several clouds, even while the corporate policy was to focus only one cloud (plus on-prem). How this happened:

• Acquisitions: Company A who uses Azure bought Company B who uses IBM Cloud. Workload and data stickiness is very real, so it’s nigh impossible to migrate Company B to Azure. I’ve seen acquired company workloads remain on their original cloud for 5+ years.
• Shadow IT: With easily accessed public clouds, the CTO/CIO office can no longer control a Line of Business (LoB) and where its developers place workloads. Forrester predicts that “Enterprise business leaders, not IT, will drive more than 40% of API strategies.”
• Data sovereignty and data gravity: not every cloud provider has a footprint in the region or country where organizations must run their workload. So an organization will select the cloud that has the region they need. Part two of this situation is that data egress charges tend to be expensive. So data gravity means that your data will stay put wherever it started and unlikely to migrate.
• A marriage of best features: In the last couple years, organizations are looking to marry up the best cloud services from a variety of hyperscalers. So you’ll see a solution that is made up for Service A from AWS, Service B from Google Cloud, and Service C from IBM Cloud.
• Cost efficiencies: Optimization of IT costs means that workloads will run wherever the best TCO is for that workload. So that could be mean a combination of serverless apps in one cloud, the data in another cloud, and SaaS in another.

So hybrid cloud (or super cloud, meta cloud, cross-cloud, poly cloud) now clearly embraces workloads that are intentionally spread across on-prem data centers, edge compute, and multiple public clouds. Multicloud workloads are the path forward.

IoT and the edge are dead. Or are they?

IoT has grown and shrunk and grown again over the last ten years. But the pundits can’t make up their mind. Some see a decline in consumer spending on smart devices due to recessionary fears, and thus the IoT market will be littered with abandoned devices.

On the other hand, networks are growing farther into the edge from city centers, to industrial plants, to rural areas such as farms. How that happens is through a variety of network solutions: MEC, SDWAN, satellite, regional clouds, and 5G. To put it bluntly, software networking is growing more complex, not simplifying. Multicloud networking will be the norm, and IT departments will be in the driver seat to handle the application connectivity among clouds, the edge, and on-prem. Watch for ZTE (zero trust edge) to help spin up and spin down secure deployments to the data-rich and low-latency edge environments.

Takeaway: Product managers should look for opportunities in multicloud technologies, especially for connectivity, data lakes, security, and integration services.

Number 3: Swivel-chair IT tasks, instead of automation

Between the dramatic improvements in automation and AI assistance, jobs that require a human to manually do repetitive tasks are declining. These IT tasks are sometimes referred to as swivel chair tasks. These manual tasks include things like reviewing error logs, provisioning infrastructure, monitoring live dashboards, and so forth.

Let’s look at cybersecurity’s manual processes. For example, security that is bolted on or silo’ed within the IT department will no longer be enough. Costly, multifaceted attacks mean that governments, banks, healthcare, universities, non-profits, and more can’t hope to band-aid their way through their cybersecurity efforts. So instead, expect to see workforces that are trained in cybersecurity and products that are secure by default. Don’t let your company expose itself to the pitfalls of citizen developers (aka individuals without software engineering training) who use “low-code” tools and skip security protocols.

A more contentious example is when enterprises still lean into hand-crafted insights and content versus AI assistance. Whether you like using a chatbot to resolve a customer support issue, the number of real humans providing customer support are dwindling fast. Some enterprises do tout “in-country operators,” but only after you’ve gone through hoops to find a 1–800 number or the live chat link on the website. And take that one step further, ChatGPT is showing that initial content creation and information synthesis are possible at a much lower cost, especially for less complex tasks. Yep, ChatGPT might not deliver exactly what you hoped for or might be just wrong. But it’s a far cry from a human wandering the internet and drafting content after hours of effort.

Takeaway: Product managers should look for opportunities in automation, AIOps, staff upskilling, robotic/business process automation, low-code/no code, or sustainability.

Number 4: Ignoring sustainability and ESG

Although there’s been a lot of fervor over sustainability (and its sibling ESG) in the investment banking world, the reality is that sustainability is no longer considered a cost center and instead is a profitable way to run your business. Examples of sustainability adding to the bottom line:

• Choosy customers and consumer trust
• Safety tracing in the supply chain
• Waste reduction in inventory
• Costly fines from governmental regulations
• More efficient and thus cheaper infrastructure
• Automation to lower costs

Be wary of greenwashing and other trust-breaking initiatives, which activist investors are quickly to identify. Transparency is key here!

Who has the upper hand: employers or employees?

Another controversial topic within ESG is who’s in the driver seat: the employer or the employee. Yes, jobless numbers in the United States have returned to the historic lows of 2019. Yet, late 2022 saw layoffs, return-to-work mandates, and other human resource debacles. Whether it’s corporations or city governments, employees are not seeing the benefits of returning to work in the face of high crime in city centers, work/life flexibility, and the climate impact of long commutes.

So it’s hard to find and retain great skills, and organizations need to use ESG to burnish their reputation as a great place to work. The potential recession might flip who has the upper hand in 2023.

Takeaway: Product managers should look for opportunities where: environmental changes reduce operations costs, ESG culture attracts top talent, or sustainable products bring new customers to existing product lines.

Number 5: Fringe and controversial technologies

An uncertain economy and geopolitical instability have cooled some earlier technology darlings. Some pundits even switched teams and now call these “fringe or controversial technologies.” So what’s no longer hot?

• Cryptocurrencies: a series of currency meltdowns, fraud, and bad PR have shrunk the crypto field considerably.
• Metaverse and virtual reality: With metaverse standards still emerging and little profitablity, the metaverse is in its nascent period. Yes a product manager can find areas to invest in, but don’t expect a clear market or even a clear definition of a buyer in 2023. Even I thought virtual reality (VR) would be much further along than it is today (see my 2022 and 2021 predictions).
• NFTs: How many Saturday Night Live sketches does it take to show that this once-hot space lacks credibility?

Well that’s it for my list what’s “Not Hot” in 2023. I’d love to hear your feedback because this list is even more polarizing than my prior years’ lists.

Sources for my trends:

• My own insights, on-going reading, and research
• Forrester 2023 overall Predictions: https://www.forrester.com/report/predictions-2023/RES178290
• Software predictions: https://www.forrester.com/report/predictions-2023-software-development/RES178160
• 2022 costliest cyberattacks: https://securityintelligence.com/articles/13-costliest-cyberattacks-2022/?social_post=8523013494&linkId=195504872
• Cloud native from 451: https://clients.451research.com/reports/201516/files/451_Preview_CloudNat_2/Page2
• Edge and networking from Forrester: https://www.forrester.com/report/predictions-2023-edge-iot-and-networking/RES178202