Enterprise technology will be driven by seven trends in 2022.

The explosive success of enterprise IT companies over the last two years has been astonishing by any standard. 2020–2021 expedited the long-awaited digital transformation journey across all industries, fueled by practically insatiable pandemic-driven demand. With 2022 on the horizon, these are the most important technological trends and advancements that will drive industry prospects and growth in the coming year.

1. Welcome to the metaverse.

The metaverse - a collaborative, shared, virtual space – is not only possible, but already exists. Other major industries and brands have recently converged, adopting aspects of the metaverse to create new business and monetization models, as well as new paths to customer engagement. The videogame industry has been at the forefront of the evolution, but more recently, other major industries and brands have converged, adopting aspects of the metaverse to create new business and monetization models, and new paths to customer engagement. The metaverse is here, whether it's a streaming service that hosts digital "watch parties," consumer products companies that offer augmented reality-enabled product-trial tools, or cruise ship and theme park operators that use artificial intelligence (AI) and the internet of things (IoT) to provide seamless guest experiences.

Enterprise technology enterprises and manufacturing domains will continue to expand use cases in 2022. Customers' expectations will rise, and as democratized material becomes more widely available, the metaverse will become a place for customers other than gamers to congregate, transact, and live. Continuous infrastructure and integration enhancements will provide a more smooth and realistic experience across activities and transactions over time, making the metaverse a better replication of real life.

2. The blockchain is no longer merely for transactions.

At first, blockchain was all about transaction security and integrity. That use case is still relevant and evolving, but in the next three to five years, distributed ledgers will become more relevant and distributed ledgers will grow dramatically, presenting intriguing potential for enterprises beyond cryptocurrencies. Payments and settlements, which benefit from the automation provided by distributed ledgers (e.g., Microsoft's blockchain system for monitoring video game residuals and royalties), will remain the front-runners, but they will not be the only viable, scalable use cases. IoT "transactions" are also good prospects, as they require scalability and monetization of identities and accuracy.

The next significant advancement in blockchain will be in the area of customer experience. Decentralized finance will gain popularity, and ease of use will become a key factor in acceptance. Consider banking services without banks, title firms without paper titles, and electronic wallets that can hold more than just bitcoin (loyalty points, property titles, and basically anything else that can be "digitized"). Keep an eye on the regulatory landscape, as it will soon take center stage in this sector.

3. The use of hybrid work will increase zero trust.

According to the EY Work Reimagined survey, more than half of the workforce would consider quitting if remote work choices were unavailable. Organizations will continue to enhance the trust-based architectural paradigms required to protect hybrid work environments as their workforce becomes more dispersed and distant.Many organizations are moving away from traditional network and perimeter-based security and implementing "zero trust" architectures, which rely on verified, real-time validation of trust across identities, data, and applications. In 2022, the use of zero trust security principles, which require explicit verification of trust independent of network location, will grow, giving enterprises a higher level of cybersecurity and resiliency.

Zero trust will give you the freedom, visibility, and control you need to achieve your digital transformation goals. While implementation methods differ, it is prudent for businesses to develop multiyear strategies that not only simplify security operating models, but also allow for consistent, automated enforcement, resulting in increased customer trust, faster time to market, and improved analytical capabilities.

4. "Just in case" supply chain priorities will take precedence over "just in time" supply chain priorities.

Almost all industries are experiencing extraordinary chip shortages, which will last for years. The shortages are the result of major, long-term changes in the semiconductor market, including the ongoing transition to new technology levels, increased use of semiconductor capacity across industries and products, and geopolitical realities that distort short-term supply and influence long-term capacity decisions.

As a result, the semiconductor supply chain will necessitate fundamentally different management approaches, stretching both large and small firms' capacities. In terms of tactics, this will entail purchasing and transporting larger stockpiles of vital components. Strategically, this will necessitate significant changes in 2022 and beyond, such as the redesign of products using alternate components and increased commonality across product families, the redesign of custom chips still based on old semiconductor technology, and product life cycle management with in-depth knowledge of the life cycle of critical semiconductor parts to better navigate future product impacts.

A manufacturer of electronic health goods, for example, handled its supply chain problem in three stages. First, the corporation decided that safeguarding its revenue was worth the extra expense of spot-purchasing important components and allocating them to critical production. Second, other goods were altered to take use of readily available, standardized components. Third, the corporation shifted to contract manufacturers with greater market clout who might assist with product redesign.

5. The adoption of consumption-based business models will continue to accelerate.

In the coming year, the shift to subscription and consumption-based business models will accelerate even further. More than 90% of corporate technology companies are adopting subscription/consumption-based business models, according to an EY global assessment of 700 IT companies, driven by market technological trends and the prospect of more predictable income streams, leading to greater valuations. Although consumption (or "by the drink") models are still in their infancy, customers are increasingly demanding transparent pricing that matches their organization's real consumption.

As cloud marketplaces become more common in driving enterprise application sales, there is rising pressure on enterprise technology businesses to align their business models with cloud service providers' usage-based approach. This move necessitates systemic changes to sales organizations, such as shifting from point-in-time sales and/or renewals to driving customer success and usage, establishing accurate and real-time usage reporting, and integrating invoicing with cloud providers. This is a significant shift in the way management thinks, performs, and compensates its employees. Everyone from sales and marketing to operations and finance will be responsible for rowing the boat in the same direction in the future.

6. Direct-to-consumer sales will grow – and adapt – in the future.

We expect to see a further increase in direct-to-consumer (D2C) business models, as well as the incorporation of D2C features into traditional technology, media, and telecommunications (TMT) enterprise IT strategies, as a result of their success. From brand and market elevation, social media will promote commerce and business transactions. For larger commercial technology purchasers, we expect e-commerce to increase capabilities for not only seamless product purchases, but also finance, transportation, warranty, and post-sales support. Building and maintaining brand loyalty, on the other hand, would demand ongoing improvement of last-mile delivery, which is both the most inefficient and visible aspect of the supply chain.

Enterprise sellers will be able to give clearer incremental value propositions and self-defined fit-for-purpose solution buying scenarios as a result of this increased client intimacy, resulting in higher pricing margins. We expect the merging of channels and marketplaces to provide greater purchasing options for both large and small businesses. All of this should result in automated up-sell/cross-sell recommendations depending on events. Given the momentum, expect "sellers" to become less human as industry adopts increasingly more characteristics gleaned from consumer D2C successes.

7. The criterion for deciding whether or not to migrate to the cloud will change.

Cloud migration will continue to advance, allowing businesses to cut costs and implement operations more quickly than ever before. What was originally a "lift and shift" to the cloud as quickly as feasible has evolved into a gradual and purposeful modernization to a holistic, improved system. This mindset shift is largely due to a slew of lessons gained regarding 1) end-state value misses, 2) unoptimized workloads, 3) inefficiencies in operation models, and 4) a widening skills gap.

According to the EY Global Information Security Survey, cloud technologies are expected to account for 14% of IT spending by 2023, as businesses prioritize customer experience and operational-led digital transformation programs. Companies will be thinking about holistic business strategies for modernisation and workload placement as their journey to the cloud continues. Prioritizing automation, reduction (removing application waste through retirement and refactoring) and abstraction will be key for firms looking to modernize in 2022. Companies that want to stay agile and inventive in 2022 will need flexible technology and a "cloud-first" approach.

Responding to market needs has never been more difficult, with higher customer expectations, poorer levels of trust, and the complexity of an increasing number of rules. Enterprise technology organizations may construct a successful strategic road map for 2022 and beyond by focusing more on these seven technological trends.