A Contributed Article by Salil Deshpande, Managing Director at Bain Capital Ventures

Niels Bohr, one of the greatest thinkers ever and the founder of quantum
mechanics, had a sense of humor, once remarking, "prediction is very
difficult, especially about the future."
I don't feel that I can predict the future any better than my peers;
however, it forces me to think about the future and solicit feedback. And, it
puts just enough pressure on me to have fun, extrapolate and be wrong, which I
enjoy almost as much as being right.
Let's see how I did. These were my five
predictions for 2014. (1) memory
is the new disk, (2) I got 99 problems and I brought
them all up to the cloud (3) event-oriented
non-blocking reactive applications (4) venture
firms will raise larger funds in 2014 than they have since 2007 (5)
for now Bitcoin
is a commodity not a currency.
How did I do?
Memory
is the new disk.
A minority of people thought I was saying that Flash SSDs are the new
disk, which isn't saying much, even though flash is the most disruptive thing in storage in many decades and its
impact is yet to be fully realized.
No, what I meant is that DRAM is the new disk. And I made two
investments (for Bain Capital Ventures) along this theme. One is Redis Labs, the company that's commercializing the open-source Redis NoSQL database. The other is Hazelcast, a JCache-compatible distributed in-memory computing
framework that lets you create complex data structures that are
cluster-distributed and cache-coherent.
In-memory computing started out as a special-purpose use case, as
caches of disk databases. But DRAM has become cheap enough that it's now
reasonable to throw together a cluster of commodity servers with terabytes of
DRAM. This means it's become a more broadly applicable use case within the last
year or two. For example, per datacenter, Twitter holds 105 terabytes in Redis,
out of which it serves 39 million queries per second, and it has many
datacenters.
In the one year we've been invested in Redis Labs, it has gathered
3,600-plus paying customers (many with multi-terabyte databases) for its cloud
service, with its on-premise version just released. The January 2015 Wired
Magazine article Open
Source Keeps Chipping Away at Oracle's Empire noted that
Redis is the fastest growing database, currently #3 in popularity among all
NoSQL databases (after MongoDB and Cassandra) and very close to becoming #2. Similarly,
one of the biggest ecommerce sites in the world uses Hazelcast on a large
number of commodity servers with 256 gigabytes of RAM at multi-terabyte scale
with response rates in microseconds via JCache.
I
got 99 problems and brought them all to the cloud.
Analysts have been predicting for years that recurring revenue models
would become a fundamental means of merchandising in the 21st century.
That time has finally come. I
invested in Aria
Systems, which is a beneficiary. Prior to cloud apps, only industries like
telecom and insurance needed to deal with complex recurring-revenue management.
But in the new world everyone needs to. And managing all the permutations and
combinations of different pricing tiers, charging models, billing frequencies,
product bundles, metering and provisioning is incredibly complex.
Enterprise resource planning systems like SAP ran
manufacturing-economy companies that made widgets. In the digital economy,
systems like Aria are the new ERP. Seventeen of the Fortune 500 companies
launched on the Aria Active Monetization platform in 2014.
Event-oriented
non-blocking reactive applications will be ever more important.
In late 2014, Amazon announced AWS
Lambda, a distributed compute service that runs code in response to events
and manages the compute resources automatically and elastically for you, so you
don't have to think about machines, disks, memory and queue servers.
I made two investments in this theme. One is Typesafe,
the company that's commercializing Scala, Akka and Play,
the language and frameworks that promote event-oriented reactive programming.
The other is Iron.io,
which provides an AWS Lambda-like queuing and execution service on all clouds
(not just Amazon) and also on-premise.
Venture
firms will raise larger funds in 2014 than they have since 2007.
In fact, the venture industry set a post-dotcom bubble record. Venture Capital Journal reported that
U.S. venture firms raised $33 billion for new funds in 2014, the most since
2001. That compares to $29.5 billion raised in 2007, $25 billion in 2008 and
$17.6 billion in 2013. The 10 largest funds took in more than 40 percent of the
$33 billion. My firm, Bain Capital Ventures, raised
$935 million in 2014. VCs were also incredibly active in 2014, investing more than
$40 billion, the most since the dotcom
days.
Bitcoin
is a commodity not a currency (for now).
To be a currency, Bitcoin needs price stability, which it does not
have. And it's still awkward for ordinary people to transact using Bitcoin. But
as a store of value and an alternative to fiat currencies conjured up by
sovereigns in which one must put one's faith, Bitcoin continues to strengthen
in suitability and it remains a topic of future prediction.
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About the Author
Salil Deshpande is a Managing Director at Bain Capital Ventures.
Based in Palo Alto, he focuses
on infrastructure software and open source. His "greatest hits" include Lending Club (peer to peer lending), SpringSource (application servers), Buddy Media (marketing platform), DataStax (NoSQL databases), MuleSoft (cloud and enterprise
integration), and DynaTrace (application performance
management); and his current portfolio includes Typesafe (the Scala language; Akka and Play frameworks for Java), Redis Labs (the Redis
NoSQL database), Hazelcast (in-memory
data-grids for Java), Aria
Systems (ERP for recurring revenue
businesses), Iron.io (queues and workers in the
cloud), Concurrent (Cascading and Driven), and ZeroTurnaround (faster Java redeployments).