Technology | Media | Telecommunications

Friday, February 05, 2016

Exploring the Demand for Hyperconverged Infrastructure

More enterprises are opting for the convenience and lower-costs of next-generation computing platforms that enable them to scale their IT capabilities rapidly. Frequently referred to as web-scale of hyper-scale solutions, these integrated systems deliver cloud-like economics within enterprise data centers.

Hyper-convergence is a type of IT infrastructure with a software-centric architecture that tightly integrates compute, object storage, networking and virtualization resources -- typically in a commodity x86-based hardware platform -- which are supported by a single vendor.

Upcoming data center refresh projects are driving 2016 enterprise investments in servers and converged infrastructure, according to the latest comprehensive market study by 451 Research.

Hyperconverged Infrastructure Market Development

Among enterprises in the study, 60 percent plan to increase spending on servers, and 79 percent plan to spend more on converged infrastructure in 2016.

Spending on hyperconverged infrastructure will be particularly strong in 2016 with 86 percent of respondents planning to increase spend and over 32 percent planning a major server and storage refresh project.

According to their latest "Voice of the Enterprise: Servers and Converged Infrastructure" market study, which surveyed over 780 enterprises in North America and Europe, vendors will not benefit equally from
spending allocations in 2016.

Cisco is expected to gain the most with 70 percent of its customers planning to increase spending allocations on its server portfolio. HP, IBM and Oracle had customers that were likely to cut spending, than those planning to spend more.

Budgets are strong for the majority of converged infrastructure vendors. The newly formed EMC Converged Platforms Division, formerly VCE, leads in budget increases -- 78 percent of its customers plan to increase budgets in 2016 with 32 percent in the above $2 million spending bracket.

“We see a sea change in the industry with Dell’s acquisition of EMC/VCE, and Nutanix filing for IPO,” said Nikolay Yamakawa, senior analyst at 451 Research.

Key Drivers for Increased Market Adoption

The 451 Research analysts believe that these shifts in emerging hybrid cloud computing environments are placing a spotlight on converged infrastructure solutions and providing IT buyers with more options.

Converged infrastructure vendors most commonly get into enterprise environments through a technology refresh project, especially a server refresh. Decision-making authority on converged infrastructure is most often shared by general infrastructure staff and server staff.

But the ultimate procurement decision to adopt this technology rests with the chief technology officer (CTO) or the chief information officer (CIO), while management is most often delegated to cross-functional groups.

“To ensure success, vendors need to communicate with all converged infrastructure stakeholders in a target organization and provide training early in the process to help with customer on-boarding,” added Yamakawa.

Thursday, February 04, 2016

Upside Growth for Public Cloud-Based Email Services

Software as a Service (SaaS) applications continue to lead the ongoing enterprise migration to cloud-based service offerings. Given the recent trends, corporate email is a SaaS application that's likely to experience significant new growth during 2016.

The cloud email market is still in the early stages of adoption with 13 percent of identified publicly listed companies globally using one of the two main cloud email vendors, according to the latest worldwide market study by Gartner.

Gartner found that 8.5 percent of public companies use cloud email from Microsoft's Office 365 service, while 4.7 percent use Google Apps for Work. The remaining 87 percent of companies surveyed have on-premises, hybrid, hosted or private cloud email managed by smaller vendors.

These findings are based on an automated examination of a large number of publicly available email routing records. Gartner used the email server addresses in the domain records of nearly 40,000 public companies globally, to find out which ones point to cloud email services from Google or Microsoft.

Rapid Adoption of Cloud Email Solutions

"Although it is still early days for cloud email adoption, both Microsoft and Google have achieved significant traction among enterprises of different sizes, industries and geographies," said Nikos Drakos, research vice president at Gartner.

Companies considering cloud email should question assumptions that public cloud email is not appropriate in their region, size or industry. Gartner believes their findings suggest that many varied organizations are already using cloud email, and the number is growing rapidly.

Among organizations using cloud email from Google and Microsoft, Microsoft is ahead in most industries, particularly in regulated industries including utilities, energy and aerospace. Google is ahead in industry segments with more competition and less regulation, such as software publishing, retail, advertising, media, education, consumer products, food and beverage, and travel.

"Among public companies using cloud-based email, Microsoft is more popular with larger organizations and has more than an 80 percent share of companies using cloud email with revenue above $10 billion," said Jeffrey Mann, research vice president at Gartner. "Google's popularity is better among smaller companies, approaching a 50 percent share of companies with revenue less than $50 million."

In some industries — such as travel and hospitality, professional services and consumer products — the highest usage levels are among the companies with the biggest revenue. More than a third of companies in these industries with revenue above $10 billion use cloud email from one of these two vendors.

Wednesday, February 03, 2016

Enterprise Mobile Cloud Apps Gain Momentum in 2016

As average price for smartphones continue to fall, enterprise workers across the world -- particularly those in emerging markets -- are seeking to improve their productivity via Mobile Cloud applications while away from their office.

This additionally signals an advantage for mobile network operators, whose handset data plan revenues from the enterprise segment can expect to exceed $200 billion in 2020, according to the latest global market study by ABI Research.

"The importance of smartphones to the enterprise worker cannot be underestimated," says Dan Shey, managing director and vice president at ABI Research.

ABI believes that network operator services need to focus on driving the most value from the smartphone to the enterprise user, such as assisting in choosing the right devices and applications, and offering services to manage device content and functionality.

Outlook for Enterprise Mobility Apps

Looking ahead, operators also need to help businesses leverage the smartphone and their voice and data connectivity services as a key component in their Internet of Things (IoT) solutions.

Voice services are still an important revenue component for mobile operators. As such, these services must continue to provide consistent and quality network performance domestically while offering increasingly simplified, cost-effective access to voice and data services when traveling internationally.

And security is also a critical element to enterprise smartphone usability. Operators can play a crucial role in supporting security application needs while also offering enterprise workers guidance toward smartphone usage and security best practices.

According to ABI's data analysis, North America leads in total mobile enterprise revenues across voice, messaging, handset data plans, mobile broadband, business-to-employee applications and enterprise mobility management services. However, the Asia-Pacific region will overtake North America in 2017 to become the biggest market for enterprise mobility revenues.

"Enterprise is becoming more connected, across both people and machines," concludes Shey.

Mobile communication service provider smartphone strategies must evolve to support the myriad of new software applications, and growth opportunities that will stem from the billions of connections in the Internet of Things.

According to the ABI assessment, the partnerships that AT&T, Verizon, Tele2 and Vodafone created with major ICT suppliers are all a step in the right direction toward building integrated solutions that can leverage smartphone applications and services.

Tuesday, February 02, 2016

Smart TVs Top List for OTT Video Streaming Devices

Why are traditional pay-TV services being disrupted by alternative lower-cost video entertainment services? Perhaps it's due to the apparent ease-of-use in searching for something to watch. Or, maybe it's the variety of video consumption options, as well as the huge depth of available television series and movie content.

Whatever the primary reason, and despite the widespread availability of inexpensive ancillary online video streaming devices, 32 percent of over-the-top (OTT) TV Users still prefer having the native connectivity of a Smart TV set.

This finding is according to data from the latest TDG market study, a survey of 2,000 U.S. adult broadband users -- 60 percent of which use an OTT video streaming service on their home television set.

Streaming Online Video Device Preference 

When asked which TV streaming platform they prefer, 32 percent of OTT TV Users selected their smart TV. Interestingly, this is pretty much equal to the penetration of smart TVs in general within this market.


Game consoles followed second, selected by 25 percent of OTT TV Users, while Internet set-top boxes were preferred by 17 percent of survey respondents. Streaming video sticks and Blu-ray players were selected by just 10 percent of OTT TV Users.

Why the Consumer User Experience Matters

Why do smart TVs top the list of preferred devices for OTT video viewing? According to Michael Greeson, director of research at TDG, this likely boils down to the device user experience.

Greeson says "With smart TVs, viewers are not required to manually switch inputs from the TV to another device or pick up a different remote controls in order to access their favorite streaming apps and programs."

Monday, February 01, 2016

Analysis of Average Monthly Spending on SVOD Services

Video entertainment viewing in the typical American household has evolved. Gone are the days where broadcast television gained the lion's share of consumer attention. Meanwhile, legacy pay-TV services have struggled to keep pace with shifting customer preferences and numerous alternative lower-cost offerings.

Average monthly spending on subscription video-on-demand (SVOD) services among U.S. broadband households increased from $3.71 per month in 2012 to $6.19 per month in 2015, according to the latest market study by Parks Associates.

Parks examined new business models emerging from the increasing consumption of over-the-top (OTT) content in the American video entertainment market -- including new experiments in content windowing.

How the OTT Trend Disrupted the Market

"Multiple content players have held onto traditional content windowing strategies for years, but OTT technologies and emerging business models have finally forced these companies to experiment with new windowing strategies,” said Glenn Hower, research analyst at Parks Associates.

Their analysts believe that new models for movies include day-and-date availability, as with the movie 'Beasts of No Nation', where it was released for streaming the same day as in the theater.

For streaming TV shows like the Netflix Studios series 'Jessica Jones' or the Amazon Studios series 'Transparent', viewers can watch full seasons all at once, satisfying people's desire to free themselves from traditional linear broadcast TV constraints.


According to the Parks assessment, consumers have quickly adopted these new viewing habits as part of their OTT monthly subscriptions.

Broadband Household Spending on Video 

A typical price point for a subscription service is $7-$10, but several niche services are available for under $5, according to Hower.

U.S. broadband households on average spend less than $1 per month buying and less than $1 per month renting digital video, indicating they purchase less than one digital video a year and rent between one and four videos per year.

"The subscription model clearly dominates in the U.S., which could create a disconnect in value propositions between consumers and content providers, who might seek out revenues from more lucrative transactional services over low-margin SVOD services," Hower concluded.

Currently they are exploiting multiple digital distribution outlets to monetize current and library TV content, including authenticated catch-up players, third-party aggregators, and direct-to-consumer subscription services.

There are also bidding wars for premium library TV content, with Netflix paying a reported $118 million for the 'Friends' TV series and Hulu paying a reported $160 million for the 'Seinfeld' series.

Friday, January 29, 2016

Digital Transformation Tech Spending will Reach $2.1B

Across the globe, more CEOs and CIOs are attempting to capitalize on digital business transformation initiatives, to create a progressive environment that delivers a strategic competitive advantage. Likewise, vendors seek to offer the cloud, mobility and social commerce solutions that these companies require.

Worldwide spending on digital transformation (DX) technologies will grow to more than $2.1 billion in 2019 with a compound annual growth rate (CAGR) of 16.8 percent, according to the latest market study by International Data Corporation (IDC).

According to the IDC assessment, spending on DX technologies within the United States market will follow a similar trajectory, reaching nearly $732 million in 2019.

IDC defines digital transformation as the continuous process by which enterprises adapt to or drive disruptive changes in their customers and markets (external ecosystem), by leveraging digital competencies to innovate new business models, products and/or services.

Transforming Core Commercial Practices

Digital transformation involves enterprise-wide change requiring innovation in at least one of the following areas: Organization (workforce); Omni-Experience (customer); Operating Model (business model/process changes); Information; or Leadership -- as a part of a strategic business technology implementation.

IDC says that enterprises will invest the most -- nearly half the worldwide total in 2019 -- on DX technologies that support operating model innovations. These projects will typically focus on making business operations more responsive and effective by leveraging digitally-connected products/services, assets, people, and trading partners.

Technologies that support information innovations will be the fastest growing segment throughout the forecast period, approaching one-third of all DX spending by 2019. These investments will focus on technologies that help companies to better extract and develop the value and utility of business-related information.

"Digital transformation is not just a technology trend, it is at the center of business strategies across all industry segments and markets," said Robert Parker, group vice president at IDC. "Enterprise investments in digital transformation will constitute the majority of growth in technology markets over the next five years."

Industries Leading DX Strategy Adoption

The vertical industries with the largest DX spending worldwide in 2015 were discrete manufacturing at $224.7 million, followed by process manufacturing and transportation. These three industries were also the DX spending leaders in the United States market in 2015. However, DX spending by U.S. retail and healthcare providers is forecast to move these two industries into the number 3 and 4 positions by 2019.

The retail industry is forecast to have the fastest growing DX spending, both worldwide and in the U.S., with a five-year CAGR of more than 21 percent. Worldwide, healthcare providers and resource industries will follow closely, while telecommunications and healthcare providers will be the next fastest growing industries in the U.S. marketplace.

"Digital transformation has altered, and will continue to alter, the landscapes of business, education, and government, making this one of the fastest growing areas of technology spending," said Eileen Smith, program director at IDC. "Line of Business leaders must apply these technology-enabled changes to unleash productivity gains and significant competitive advantage across their organizations."

Thursday, January 28, 2016

Global Telecom Providers Adapt to Digital Transformation

Each new year brings a fresh set of industry and market predictions from the leading analysts. This year, the Internet of Things (IoT) is a hot topic. The Analysys Mason annual Technology, Media and Telecom (TMT) predictions reveal which trends will make an impact in the marketplace during the next 12 months.

According to their assessment, telecom network operators and their suppliers must pay close attention to these 10 key trends for their decision-making during 2016 -- note, they are listed in order of significance.

Top-Ten TMT Predictions for 2016

  1. The contest for worldwide dominance in low-power, wide-area (LPWA) wireless networking technology will be confined to NarrowBand IoT (NB-IoT) and LoRa wide area networks for IoT.
  2. The most important M2M sector in 2016 will be connected cars – the number of connected vehicles will increase to over 150 million, with the largest network operators reaping the benefits.
  3. Google will decisively intervene in the communication services market with Android N: it will support Rich Communications Suite (RCS) services natively, while also opening up the smartphone native-dial capabilities to third parties.
  4. Network operators will be extending service reach to non-SIM devices such as tablets and smart watches; they will also integrate real-time features into IoT initiatives, such as smart homes and connected cars.
  5. The proportion of mobile network operators that offer fixed broadband services will rise to above 50 percent worldwide in 2016.
  6. Average monthly data consumption per household will exceed 100GB in developed markets in 2016.
  7. Network operators and telecom equipment vendors will increase the adoption rate of LTE-A to enable mobile broadband speeds above 500Mbps and support the transition to 5G.
  8. Communications service providers (CSPs) will prioritize short-term gains over new service delivery opportunities. As a result, network function virtualization (NFV) spending will nearly double in 2016, outpacing software defined networking (SDN) spend, to account for more than 20 percent of the $9.5 billion software-controlled networking market.
  9. Network virtualization technology will enable distribution of content delivery elements much closer to the mobile network edge to improve customer experience even as video traffic grows, as demonstrated by at least one high-profile "mobile edge computing" commercial deployment.
  10. CSP to digital service provider (DSP) conversions will increase in 2016 and will require stronger relationships with digital content providers, including leading video and music distributors.

The Analysys Mason TMT predictions are based on worldwide primary research supported by analysis. They come from research focused on five key long-term themes for communications service providers, which include: digital economy and IoT, the future of communication, convergence, network innovation and digital operating models.

Wednesday, January 27, 2016

Cloud-First Strategies are Driving Public Service Adoption

More enterprises are adopting a cloud-first strategy, taking advantage of the speed and agility of cloud computing for infrastructure, platforms and application services. Some nations now have a national movement. Case in point: many South Korean companies have a public cloud-first strategy, with 70 percent of IT organizations reporting an increase in cloud service investments through 2017.

As demand blossoms, the worldwide public cloud services market is projected to grow by 16.5 percent in 2016, reaching a total of $204 billion -- that's up from $175 billion in 2015, according to the latest global market study by Gartner.

According to the Gartner assessment, the highest increase in cloud adoption will come from Infrastructure-as-a-service (IaaS), which is projected to grow by 38.4 percent in 2016.

Cloud advertising, the largest segment of the global cloud services market, is expected to grow 13.6 percent in 2016 to reach $90.3 billion (see Table 1, click to enlarge).


"The market for public cloud services is continuing to demonstrate high rates of growth across all markets and Gartner expects this to continue through 2017," said Sid Nag, research director at Gartner.

Gartner analysts believe that this strong growth continues reflect a shift away from legacy IT services to cloud-based services, due partly to the trend of more organizations pursuing a digital business transformation strategy.

Continued Public Cloud Market Development

Gartner predicts that the IaaS segment will remain the fastest-growing public cloud services sector in 2016, currently forecast to reach $22.4 billion.

"IaaS continues to be the strongest-growing segment as enterprises move away from data center build-outs and move their infrastructure needs to the public cloud," said Mr. Nag. "Certain market leaders have built a significant lead in this segment, so providers should focus on creating differentiation for success."

Cloud Software-as-a-Service (SaaS) is forecast to grow 20.3 percent in 2016, to reach $37.7 billion. As more software vendors shift their business models from traditional on-premises licensed software to public cloud-based subscription offerings, this trend will likely continue to accelerate.

In addition, the entry of some major legacy software vendors into the public cloud market last year will fuel further growth of the SaaS market, in the coming years. Moreover, hybrid cloud services that are focused on specific vertical industry applications will continue to have a bright outlook.

Tuesday, January 26, 2016

How Auto Insurance Adapts to the Internet of Everything

The automotive industry is transforming rapidly as it embraces new paradigms -- such as active safety, on-board automation and car sharing services. The onset of the Internet of Everything (IoE) has also created new applications for sensor data that can be applied toward the development of new business models.

As an example, the Usage Based Insurance (UBI) subscriber base broke through the 10 million member barrier, mainly driven by the ongoing adoption of these offerings within the U.S. and Italy. While it's been a turning point for the market, many obstacles remain.

According to the latest market study by ABI Research, fundamental UBI impediments include privacy concerns, low awareness and perceived value, lack of scalability of on-board diagnostics (OBD) approaches and unclear future business models.

Market Development Challenges

UBI first-mover profitability gains -- based on the self-selection of low-risk drivers -- will ultimately not be sustainable. The auto insurance industry aims to address these issues through smartphone and embedded car OEM approaches, integration of UBI in a wider set of telematics and connected car services, turnkey solutions and customer-centric CRM approaches, and the use of contextual rating variables.

"While the auto insurance industry actively addresses issues, it is important to note that ADAS in the short term and driverless vehicles in the long term will dramatically reduce accident risk," says Dominique Bonte, vice president at ABI Research.

ABI analysts believe that this will inevitably result in UBI and auto insurance largely losing its relevance, which is apparently a reality that the involved parties are often reluctant to accept.

The new automotive smart mobility landscape offers multiple opportunities for UBI providers who are keen on leveraging their data analytics assets, risk assessment and auditing expertise:

  • Getting Involved in the Connected Car Big Data and Analytics explosion through a wide range of services from traffic, weather, parking spaces and prognostics to AI-enabled driver car algorithms, including quality and performance monitoring.
  • Extending Offers from Personal Insurance to product, fleet and corporate liability coverage.
  • Launching Cyber Security Services and Insurance, especially related to real-time monitoring of vehicles on the road.

According to the ABI assessment, with the known automotive safety threat now shifting from the physical to the digital environment, auto insurers will need to transform their commercial operations accordingly.

"In this respect, UBI should be seen as a stepping stone toward a more holistic risk assessment and insurance approach," concludes Bonte. "It will address new challenges in a smart mobility landscape consisting of shared driverless vehicles, multi-modal transportation, and an experience-based, usage- and data-centric IoE environment."

Monday, January 25, 2016

Public Cloud Service Revenue will Reach $141B in 2019

The overall public cloud computing service provider market will likely experience a period of ongoing consolidation in 2016, as more vendors choose to exit the sector. Others will continue to develop their existing market niche and thereby focus more on meaningful value-added options, rather than the lowest price.

According to the latest market study by International Data Corporation (IDC), worldwide spending on public cloud services will grow at a 19.4 percent compound annual growth rate (CAGR) -- that's about six times the overall IT spending growth -- from nearly $70 billion in 2015 to more than $141 billion in 2019.

IDC Public Cloud Services Forecast

Software as a Service (SaaS) will remain the dominant cloud computing method, capturing more than two thirds of all public cloud spending. That being said, global spending on Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) will grow at a faster rate than SaaS -- with five-year CAGRs of 27 percent and 30.6 percent, respectively.

"Over the past several years, the software industry has been shifting to a cloud-first (SaaS) development and deployment model. By 2018, most software vendors will have fully shifted to a SaaS/PaaS code base," said Frank Gens, senior vice president at IDC.

IDC believes that this means many enterprise software customers, as part of their next major software upgrade assessment, will seriously consider a SaaS solution. Put together, new cloud-first solutions and traditional software apps migrating to the cloud will drive more CIOs and their company data to the cloud.

Large enterprise will continue to be the primary adopter of public cloud, with combined spending of more than $80 billion in 2019. However, SMBs will also contribute to cloud spending, with more than 40 percent of the worldwide total for public cloud. Moreover, IDC says that growth will likely come from companies with fewer than 500 employees.

Public Cloud Market Development Trends

To date, the industries with the largest public cloud services expenditures were discrete manufacturing at $8.6 billion, followed by banking and professional services at $6.8 billion and $6.6 billion, respectively.

By 2019, IDC predicts that professional services will move ahead of banking into the number two position worldwide. These three industries were also the public cloud services spending leaders in the Americas and in Europe, Middle East, and Africa (EMEA) during 2015.

However, telecommunications was the second largest industry in the Asia-Pacific region and is forecast to move into the top industry position by 2019. The telecom sector will be the fastest-growing vertical industry over the 2014-2019 forecast period, with a worldwide CAGR of 22.2 percent.

According to the latest IDC assessment, leading industries such as media, state and local government, education, retail and transportation will also experience five-year CAGRs that are greater than 20 percent.

"Cloud services will remain the essential foundation of the IT industry's 3rd Platform of innovation and growth. As the cloud market enters an innovation stage, there will be an explosion of new solutions and value creation on top of the cloud," said Eileen Smith, program director at IDC.

Industry-specific applications will gain momentum as CIOs look for solutions that can be configured to their unique business and vertical industry requirements. Furthermore, organizations across all industries will eventually shift toward cloud-first strategies -- to enable their bold digital business transformation initiatives.