Friday, October 24, 2014

Mobile Operators are Seeking New Revenue Sources

Mobile service providers will find the next decade to be full of new challenges and opportunities. Meanwhile, the mobile internet phenomena has offered a welcomed increase in service revenue, but there were also some unanticipated negative side effects.

Juniper Research claims that voice and messaging traffic lost to Over-the-Top (OTT) mobile internet application providers -- such as WhatsApp, Facebook and Skype -- will cost mobile network operators $14 billion in lost revenues globally this year, that's up by 26 percent since 2013.

Their worldwide market study found that in a number of European markets -- including Italy, Spain and the UK -- operator mobile voice revenues had fallen to less than 60 percent of their value five years ago.

Juniper analysts argue that a combination of instant messaging (IM), Voice over IP (VoIP) and social media substitution was primarily responsible, resulting not only in lost revenues but in additional costs due to the scale of signalling traffic.


However, according to the Juniper assessment, there's an array of new product or service opportunities with the potential to deliver cumulative revenues to mobile service providers in excess of $66 billion over the next five years.

Juniper believes that the resulting upside revenue potential from these new offerings could more than offset the ongoing decline of core service revenues on an annual basis by 2018.

"In areas such as M2M (Machine to Machine) and mobile money, mobile operators can achieve a substantial revenue uplift by focusing on full service provision rather than simple connectivity," said Dr. Windsor Holden, Head of Consultancy and Forecasting at Juniper Research.

Additionally, Juniper recommends that mobile network operators implement direct carrier billing to retain a foothold in the lucrative mobile content space, and enhance their big data analytics capabilities to monetize consumer insights that can be gleaned by studying their subscriber's historical transaction data.

Other findings from the market study include:
  • Without optimization, mobile data delivery costs will increase by more than three times over the next three years.
  • Implementation of NFV (Network Function Virtualization) solutions offer operators the potential of both cost savings gained by reducing their dependency on legacy proprietary hardware, and by accelerating their new go-to-market activities.
  • Mobile network operators can also boost core revenues by introducing higher-value shared data plans or by bundling content into a monthly subscription fees.

Thursday, October 23, 2014

Next-Gen Data Center Fuels Open Platform Demand

The ongoing shift to next-generation data center architectures continues to impact the legacy vendor community. The advent of cloud and mobile computing -- as well as exponential growth in data variety and velocity -- is upending the traditional data center innovation model.

This shift drove average gross margin down 60 basis points year-to-year to 41.9 percent in the second quarter of 2014 for server, storage and networking original equipment manufacturers (OEMs) tracked by Technology Business Research (TBR).

"OEMs willing to share intellectual property -- and profits -- with ecosystem partners are setting themselves up to reap the benefits of tapping niche innovation, driving partner loyalty and remaining in-tune with customer's evolving application requirements, all while reducing up-front investment risk," said Krista Macomber, data center analyst at TBR.

These benefits will include more stable bottom-line hardware performance, as well as higher-margin, higher-profile software and services opportunities.

While previously the partner ecosystem served the primary purpose of reselling point products for server, storage and networking OEMs, TBR research indicates it is through the ecosystem that OEMs are able to tap niche, value-add innovation and facilitate workload-optimized solutions increasingly.

Some OEMs embraced the trend toward collaborative, open-source software- and services-led innovation delivered on top of low-cost, customized bare-metal hardware. Others continue investing in the channel and bringing reference solutions to the market, but have been slower to shed their proprietary hardware-led business models.

The shift from proprietary to industry-standard hardware is evident in the financial performances of the data center vendors. TBR estimates x86 server revenue for these vendors rose a cumulative 8 percent year-to-year in 2Q14, with aggregate ASP rising 9.7 percent as customers deploy mission-critical workloads increasingly on these platforms.

In contrast, proprietary server revenue for legacy vendors tracked in TBR fell by 16.7 percent year-to-year during the quarter. "The competitive landscape is in flux across the server landscape, and it’s no longer just about sheer processing performance and efficiencies," Macomber said.

With a server refresh spurred by Intel’s recent “Grantley” chip launch underway, OEMs are jockeying to regain market share lost in recent quarters to original design manufacturers (ODMs) including Quanta and Wistron that have grown exponentially on the back of their ability to deliver high-volume orders of customized hardware at near-zero margins.

TBR believes that value-add software capabilities -- such as automation and unified management -- will prove just as critical to competitive displacements and customer loyalty, as customers seek to reduce the IT administrative burden and increase flexibility and optimization in their infrastructures.

Cloud, Big Data and Mobile industry disruptors also continue to impact financial performance within the storage segment. Overall revenue for vendors tracked in TBR dipped 1.8 percent year-to-year during the quarter.

As the lines between servers and external storage arrays blur due to the industry trending toward converged and open-source software-defined infrastructures, storage vendors are pushing portfolio boundaries through a blend of alliances, acquisitions and organic innovation to capitalize on exponential data growth.

From a networking standpoint, legacy vendors continue to experience year-to-year revenue declines as a result of its struggles in emerging markets, demonstrating the negative impact of a proprietary, closed hardware business model when competing for infrastructure build-out and modernization contracts.

Average networking revenue for the segment, however, increased 0.4 percent year-to-year in 2Q14 for vendors covered within TBR's Data Center Benchmark.

Wednesday, October 22, 2014

Designing Mobile Device User Interface Innovations

Small consumer electronics, such as smart wearable devices, create new challenges for user interface (UI) designers that must find innovative ways to enable human interaction via emerging technologies. As a result, semiconductor component integration and software development will also evolve.

The dominance of touchscreen user interfaces will reduce over the next 5 years as more sensors are introduced to mainstream products and entirely new product form-factors emerge, enabling and necessitating new user interfaces -- such as voice, gesture, eye-tracking, and neural.

The latest ABI Research market study examined popular UI methods as well as the natural sensory technologies transitioning from research labs into future consumer electronics product solutions.

"Touch got mobile device usability to where it is today, but touch will become one of many interfaces for future devices as well as for new and future markets," said Jeff Orr, Senior Practice Director at ABI Research.

Orr believes that the really exciting opportunity arrives when multiple user interfaces are blended together for entirely new experiences.

Across 11 unique features from wireless connectivity to embedded sensors, ABI Research found that hand and facial gesture recognition will experience the greatest growth in future smartphone and media tablet shipments, with a CAGR of 30 percent and 43 percent respectively from 2014 to 2019.

The range of applications for gesture recognition span user attentiveness to device navigation control. The impact of UI innovation in mobile devices will be felt across a wide range of consumer electronics applications, including the car and in the home.

As mobile applications integrate more technology, the UI must be kept simple enough to be intuitive. Packing a mobile device with sensors goes little beyond being a novelty. Complexity contradicts good UI design and a critical mass of engaging mobile applications are required for mainstream adoption.

This balancing act is best observed in today’s automobiles where myriad of subsystems are working with the driver to arrive at a destination safely with a minimal amount of learning.

Key components have also evolved from single-function elements into multi-sensor, single-chip packages. This has not only benefited the handheld form-factor, but been the premise for the leading commercially available wearable devices.

As multiple sensors and gadgets work real-time to collect data from an individual and the surrounding environment, the potential for complexity arises once again with each person looking to have their own personalized experience.

Tuesday, October 21, 2014

Enterprise Networking Vendors Prepare for Disruption

The introduction of open source software platforms and bare-metal systems into the legacy enterprise network realm will eventually disrupt the status-quo for leading vendors that have previously benefited from the lack of unruly innovation.

Meanwhile, established vendors can still take advantage of the apparent resistance to change within many traditional IT organizations that depend upon the conservative leadership of cautious CIOs.

Results from the latest market study by Technology Business Research (TBR) indicate growth in the enterprise networking market is accelerating, as demand for cloud, mobility and security solutions -- particularly in developed markets -- escalated and major suppliers leveraged their dominant market positions to capture customer spending.

Total enterprise networking revenue among the benchmarked companies grew 4.3 percent year-to-year in the first half of 2014, that's more than the 0.9 percent growth in second half of 2013.

Vendors capitalized on improved discretionary IT spending in developed regions like Northern and Central Europe and the U.S. market, although demand slowed in emerging markets such as Russia and China.

Network Security’s leading growth of 13.5 percent year-to-year in the first half of 2014 underscores the importance enterprises place on maintaining a secure network amid the advent of mobile cloud computing.

"Protecting their IT infrastructure remains a top priority for enterprises, and vendors are reaping the benefits," said Scott Dennehy, senior analyst at TBR.

TBR believes that in addition to solidifying mission-critical relationships with customers, expanding in the security space generates opportunities for high-margin add-on software and services sales.

With hardware commoditization driven by cloud and software-defined networking (SDN) threatening to upend the networking industry, leading vendors are transforming their business models to maintain relevancy and drive long-term growth.

This includes realigning resources to capture growth opportunities in areas such as cloud, software and services. Many vendors will face challenges executing in these new areas, as the focus on applications and services does not play to their core strengths in hardware.

However, vendors such as Cisco increasingly will leverage strategic partnerships -- such as Red Hat for its open source enterprise software portfolio -- and apply supplementary acquisitions to remain key players in the changing enterprise IT and networking landscape.

The TBR "Enterprise Network Vendor Benchmark" identifies revenue and growth leaders in Network Infrastructure, Wireless Networks, Unified Communications and Collaboration (UC&C), Network Security and Services, and highlights vendor strategies and future moves as well as overall market trends in each segment and geography.

Monday, October 20, 2014

Growth Potential for Enterprise Mobility Applications

As we approach the end of 2014, it's important to revisit the enterprise mobility application marketplace. Clearly, the mobile cloud apps trend will be far reaching in 2015 -- it will touch every department within many organizations and it will be adopted by most forward-thinking industries.

The upside for further market development and growth is already significant. 451 Research expects the Enterprise Mobility Management (EMM) market to grow from $3.8 billion in revenue in 2014 to $9.6 billion in 2018.

EMM, defined as a set of tools that include mobile device management, mobile application management, mobile email container applications, mobile application platforms, mobile back-end as a service (MBaaS) and mobile virtualization, can be used solo, in parallel or in a tiered fashion across a mobile environment.

451 Research sees these as important tool-sets adopted by the enterprise, and as critical enablers of future mobile computing. As enterprises increasingly adopt EMM, they believe this will lead to a market CAGR of 22 percent from 2013 to 2018.

This forecast is based on the latest global market study by 451 Research, which presents data generated via a bottom-up analysis of 125 vendors that participate across the six EMM segments that they currently track.


"EMM is moving from tools that control mobility, to instrumental elements that enable productivity for a growing number of mobile-enabled employees," said Chris Hazelton, research director at 451 Research.

According to their market assessment, mobile apps in the enterprise are growing in importance and are the key to driving business transformation, and EMM will play a key role in putting these apps in the hands of users.

As companies move from a reactive to a mobile-first strategy, EMM technologies will be the foundation for any deployment.

While 43 mobile device management vendors currently generate the largest proportion of total EMM revenue, 451 Research expects an uptick in revenue from all segments -- especially from 38 market participants in the mobile application management segment.

Friday, October 17, 2014

Explore the Internet of Things - Market Outlook in 2020

The Global Networked Economy is entering the next phase of its ongoing evolution. Emerging phenomena, such as the Industrial Internet, will help to launch progressive applications that will require new market development leadership.

The outlook for these upside opportunities are boundless.

Imagine a highway where cars are able to safely navigate to their destinations without a driver. Imagine a home where an elderly patient’s health is closely monitored by her hospital physician. Imagine a city that significantly reduces waste through sensor-embedded water pipes, buildings, parking meters and more. These are no longer scenarios from a distant future -- they're happening today.

Nearly 12 billion internet-connected devices will be in use worldwide by the end of 2014, according to the latest global market study by Strategy Analytics.

That is equivalent to 1.7 devices for every person on the planet -- a ratio which will rise to 4.3 by 2020, when 33 billion devices will be in use.

"Back in 2007 PCs accounted for two thirds of internet devices -- now it's only 10 percent," said David Mercer, principal analyst at Strategy Analytics.

The impact of the internet on daily lives has increased rapidly in recent years. Huge growth potential still lies ahead, in terms of both the number of devices relying on internet connectivity and its geographic reach.


The report that resulted from the study, "Connected World: The Internet of Things and Connected Devices in 2020," quantifies the scale of the connected device opportunity across the Internet of Things (IoT), smart home, smartphones, PCs, media tablets, smart TVs, internet media devices and wearable devices.

According to the Strategy Analytics assessment, traditional connected devices like PCs, smartphones and media tablets now account for less than a third of all connected devices in use.

Emerging categories alone will connect an additional 17.6 billion devices to the internet by 2020.

The Internet of Things is leading to rapid growth in new categories like machine-to-machine (M2M), smart objects, smart grid and smart cities. But this is just the beginning of what's to come.

"The Internet of Things has already connected five billion devices and we are only at the beginning of this revolution," says Andrew Brown, executive director at Strategy Analytics. "Smart cities and smart grid are just two of the ways in which the internet of things will touch everyone’s lives over the coming years and decades."

Thursday, October 16, 2014

Public Cloud Services Market will Reach $113 Billion

This year has been a pivotal period for many public cloud service providers. They've fully tapped the early-adopter segment of the market. The leading providers have also overcome much of the early inertia and resistance from legacy CIOs within the multinational enterprise marketplace.

The Shadow IT phenomena will continue to transform how Line-of-Business (LOB) users make purchase decisions. The path forward is clear for the savvy CEOs that choose to fund this growing trend. Eventually, even the most reluctant traditional IT leaders will embrace a hybrid cloud model, to actively participate in this business technology transformation.

The public cloud services market will nearly double over the next four years from $67 billion in 2014 to $113 billion by 2018, according to the latest global market study by Technology Business Research (TBR).

The TBR "Public Cloud Benchmark" identifies revenue and growth leaders across SaaS, PaaS and IaaS -- highlighting their strategies and future moves, as well as overall market trends in each segment and geography.

"The public cloud market is maturing, driving SaaS vendors to tailor their portfolios and teams vertically while IaaS and PaaS vendors invest in developer tools, pricing models and global expansion," said Jillian Mirandi, senior analyst at TBR. "Pressure from traditional incumbents is affecting fast-growing, pure-play vendors, and the spend among pure plays will continue to decline."

Early-to Market Public Cloud Revenue Leaders

According to TBR's assessment, portfolio developments across 2Q14 highlight the Salesforce.com ability to build out a portfolio of industry-specific solutions through internal development and ecosystem collaboration.

The launch of the Salesforce1 for Retail portfolio in June illustrates that Salesforce.com is internally developing solutions such as Mobile Clienteling, while a partnership with Philips to create a healthcare platform demonstrates ecosystem collaboration.

Microsoft will consolidate its Cloud Accelerate and Cloud Deployment programs into the Cloud Solution Provider Program to ease engagement between the company and its partners.

TBR views this consolidation as a step in the right direction for Microsoft as it aims to create value-added opportunities for partners around its cloud solutions. Additionally, Microsoft reduced program fees for partners to encourage them to resell Azure and Office 365.

To maintain IaaS leadership, Amazon (AWS) will utilize ongoing price cuts and service launches to remain competitive with Microsoft and Google on cost. Additionally, a higher-touch sales model and small but growing professional services team will help AWS better compete with the rapidly expanding cloud portfolios of IBM and HP.


Forward-Looking Public Cloud Revenue Growth Leaders

In September Box announced a beta version of Box for Office 365, enabling customers to access documents stored on Box without leaving Office applications. Also in September, Box announced Box for Industries and Accenture as a partner to help expand Box into the healthcare industry.

TBR observes that the Google cloud business is rolling out portfolio additions and improvements more rapidly than it has in recent years. By focusing on developers and acquiring tools such as monitoring, Google will add value and elevate its position against IaaS leader AWS.

The Google Apps portfolio has also become more attractive to enterprise customers through the launch of Google Drive for Work -- a premium edition of Google Apps for Business that includes unlimited storage, an API audit for developers, and increased security and management tools.

Establishing additional SoftLayer public cloud data centers in London, Hong Kong and Dallas, as well as more recently opening data centers in Melbourne, Australia, and Toronto, continues to drive IBM’s public cloud growth globally.

Furthermore, IBM’s recent acquisitions of security solutions providers CrossIdeas and Lighthouse Security Group LLC boost IBM’s global cloud revenue growth.

TBR believes that security is of top concern among multinational enterprises when deciding to transition to cloud, particularly in Europe, where data sovereignty has somewhat inhibited public cloud adoption.

Wednesday, October 15, 2014

Responsive Web Design Enables Mobile Commerce

When a buyer visits a company's website, will their visit result in a good user experience -- regardless of the device they're using at the time? More often than not, that experience is within a smaller screen on a mobile device -- such as a smartphone or media tablet.

Savvy marketers are already starting to influence the adoption of mobile-first design strategies for their online properties.  Making it easier to buy something via a mobile device is a forward-thinking competitive advantage, because this activity will become more mainstream over time.

eBusiness teams are working on rebuilding their legacy desktop site experiences to be responsive across all web-enabled touch-points, but it's a huge undertaking and few organizations have the budget or risk appetite to redesign all of their web assets in one fell swoop.

Many teams start with the easy places on their website -- such as the home page, the category pages, the campaign landing pages -- after all, these pages don't contain complex transactional logic or processes.

Growing Momentum for Mobile-Friendly Websites

Ten percent of all U.S. smartphone users and 20 percent of all U.S. media tablet online adult users have made a purchase on these respective devices in the past three months, according to the latest market study by Forrester Research.

However, the bad news is that 90 percent of mobile phone users and 80 percent of tablet users are still purchase holdouts. Why is that?

Some 53 percent of these holdouts cite that they avoid "checking out" on mobile devices simply because they are either used to or find it easier to buy on a PC. Apparently old habits die hard.

So how can brands convince holdouts to embrace buying on their mobile device? By providing the services and information the customer wants exactly when they're looking to make a purchase on their mobile device -- in the mobile moment.

To get there, Forrester argues firms should forget conventional wisdom and embrace responsive web design (RWD) as a perfect fit for most transactional scenarios.

In fact, 63 percent of eBusiness professionals rank RWD as a technology investment priority for this year, compared with 40 percent in 2013.

"Starting an RWD project by rebuilding the most complex part of your site may not be intuitive, but RWD is a great way to develop touchpoint-optimized experiences while maintaining the consistency of complex web processes," according to the Forrester assessment.

These study findings were based upon a survey of more than 4,000 online respondents in America.

Tuesday, October 14, 2014

100 Million Smart Watches in Use Worldwide by 2019

A Smart Watch can be defined as a smart wearable accessory that can be worn on a user's wrist, offering a range of smart functionality in conjunction with an external platform -- such as the smartphone or media tablet.

The smart capabilities can range from displaying phone call, text and email alerts to accessing stock and weather information or any fitness, sports or commerce applications -- such as heart rate monitoring, payments or ticketing.

Juniper Research has forecast that more than 100 million smart watches will be in use worldwide by 2019, with a host of premium brand launches over the next 12-18 months bringing the category into mainstream consumer consciousness.

According to the findings from the latest Juniper market study, differentiation is now shifting from hardware towards other features that allow new capabilities, such as GPS and NFC connectivity.

It argues that the functionality is likely to become standard in the next few years, particularly as Apple has offered payment and NFC capability via the Apple Watch.


They also claim that the range of functionality available means that it is unlikely that a ‘killer app’ for smartwatches would evolve.

Juniper cites the example of Fitbit, which grew to dominance in the fitness space with a mantra of ‘one size doesn't fit all’, and varying device form factor.

They argue that, given the greater scope for development in smart watches, the industry should not expect a single capability to make or break the category.

Additionally, they believe that as international vendors including Google, Apple, Sony, and LG roll out high-end products, demand for notification-based watches like the Martian Notifier will diminish, even in markets where budget pricing is the biggest purchase driver.

Hence, they says that smaller players will need to respond to increasing consumer expectations or lose further market share.

Other key findings from the study include:
  • Smart watches will slowly gain more sales outlets as brands outside the technology sector, such as luxury watch maker TAG Heuer, enter the smart watch space.
  • High functionality and premium branding means that the average smart watch price will remain above $200 until 2020 at the earliest.

Monday, October 13, 2014

Worldwide PC Shipments Totaled 78.5 Million Units

Once PC vendors let go of their great (unfounded) hope that high-cost Ultrabooks would deliver a huge windfall in sales, then they were able to focus more on the real demand for low-cost notebook PCs and Chromebooks in the marketplace.

Worldwide PC shipments totaled 78.5 million units in the third quarter of 2014 (3Q14) -- that's a year-on-year decline of -1.7 percent and a sizable improvement over the forecast of -4.1 percent, according to the latest market study by International Data Corporation (IDC).

Many of the trends from the second quarter remained relevant and contributed to the 3Q14 results. Commercial PC purchases played a key role in many markets, with the top three vendors -- Lenovo, HP, and Dell -- all showing solid year-on-year growth.

Conversely, fierce competition and a spiral toward tablet-like prices helped to further consolidate the market. Shipments of entry systems, including Chromebooks, continued to inject an important source of volume and sustained improved consumer demand in certain markets over recent quarters.


On a geographic basis, mature markets still drove the market, with North America and parts of Europe seeing significant improvements across segments.

Although Windows XP migrations has slowed, an improved business outlook, tablet saturation in some markets, and expanded offerings of competitive notebooks have factored in recent positive trends.

Emerging regions as a whole proved disappointing, although stronger than expected consumer demand in Asia-Pacific, spurred by the continued expansion of entry-level portable PCs and helping to redirect consumer attention back toward PCs, provided a silver lining.

"Although shipments did not decline as much as feared, these preliminary results still show that 3Q14 was one of the weaker calendar third quarters on record in terms of sequential growth. The third quarter has historically been driven by back-to-school sales and renewed business purchasing, which were weaker than normal this year," said Jay Chou, Senior Research Analyst at IDC.

Chou added, "The current growth of lower-priced systems, while encouraging in the short run, brings concern for the long term viability of vendors to adequately remain in the PC space."

PC shipment growth in the United States remained slightly faster than most other regions in the third quarter and overall the U.S. PC market came in right on forecast with 4.3 percent year-on-year growth.

Solid back-to-school sales, a strong performance from key vendors, the continued acceptance of Chromebooks, some commercial uptick from Windows XP to Windows 7 migration, and the slowdown in tablet sales are among the factors that helped the PC market to continue on its positive growth rate trajectory.

Moving forward, IDC expects a healthy holiday season, hence the U.S. PC market may maintain a positive growth rate. However, low demand for large commercial refreshes, combined with competition from 2-in-1 systems, may limit the growth potential.