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Thursday, April 27, 2017

How the Digital Growth Pioneers Gained an Advantage

Most chief executives are now focused on growth during 2017. New growth is the primary business priority for 58 percent of CEOs, according the latest market study by Gartner -- note, that's up from 42 percent of CEOs in 2016. Moreover, product innovation and technology are gaining in significance.

"IT-related priorities, cited by 31 percent of respondents, have never been this high in the history of our CEO survey," said Mark Raskino, vice president at Gartner. "Almost twice as many CEOs are intent on building up in-house technology and digital capabilities as those plan on outsourcing it (57 percent and 29 percent, respectively)."

Gartner analysts refer to this trend as the re-internalization of IT -- the process of bringing the capability back toward the core of the enterprise because of its renewed importance to achieving a competitive advantage. It's essentially the digital technology skills and capabilities that more forward-thinking senior executives crave.

Emphasis on Digital Growth Strategies

Forty-seven percent of CEOs are directed by their board of directors to make rapid progress in digital business transformation, and 56 percent said that their digital improvements have already delivered profits.

Although a significant number of CEOs still mention eCommerce, more of them align new IT infrastructure investments to advanced commercial activities -- such as digital product and service innovation, exploring the Internet of Things (IoT), or adopting digital platforms and associated supplier ecosystems.

According to the Gartner assessment, some CEOs have already advanced their digital business agenda -- 20 percent of CEOs are now taking a digital-first approach to business development. "This might mean, for example, creating the first version of a new business process or in the form of a mobile app," said Mr. Raskino.

Furthermore, 22 percent are applying digital business technologies to their traditional processes. That's where the product, service and business models are being changed, and the new digital capabilities that support those are becoming core competencies.

Although more CEOs have articulated their digital growth ambitions, the survey found that nearly half of the respondent CEOs have no digital transformation success metric. In contrast, for those who are quantifying progress, revenue is a top metric -- survey results indicate 33 percent of CEOs measure digital revenue.


Demand for Progressive Digital Growth Leadership

While the whole C-suite is likely to be engaged in digital growth planning, more chief executives will seek qualified technical guidance. "CIOs should help CEOs set the success criteria for digital business," added Mr. Raskino. "It starts by remembering that you cannot scale what you do not quantify, and you cannot quantify what you do not define."

Many CEOs say that being open-minded, entrepreneurial, adaptable and collaborative are the most-needed leadership qualities. Besides, wise CEOs might consider elevating their digital business ambitions, plus task a savvy CIO or CTO to guide them and track the appropriate success metrics.

"CIOs should also help them toward more-abstract thinking about the nature of digital business change and how to lead it," concluded Mr. Raskino. "The disruption it brings often cannot be dealt with wholly within existing frames of reference."

Wednesday, April 26, 2017

Global IT Security Revenue will Reach $135 Billion

As more business technology infrastructure moves online, so does the potential for exposure to cyber threats. Cybercrime is a great concern to most companies. Mobile computing and an expected 46 trillion connected devices in use by 2021 translates into more demand for effective security solutions.

According to the latest worldwide market study by Juniper Research, while the growing enterprise spend on cybersecurity is increasing rapidly, it's apparently not keeping pace with the corporate liabilities caused by potential data breaches.

IT Security Market Development

Their latest study findings have resulted in a forecast that global IT security revenue will reach nearly $135 billion in 2022 -- that's up from an estimated $93 billion in 2017.

However, over the next five years, corporate data breaches will likely have cost organizations a cumulative total of $8 trillion in fines, lost business and associated remediation costs.


The research also found that businesses are now faced with a plethora of different cybersecurity solutions to choose from today. Many of which don’t integrate well with each other, and they also require a high-level of experienced technical expertise to manage.

This means that threats can be missed, and small businesses -- which are now very likely to be targeted by cybercriminals -- are the least able to effectively manage their online security needs.

To deal with this increasing complexity, several cybersecurity firms are using cognitive systems with machine learning to monitor network and computer program behaviors, thereby detecting and eliminating many anomalies without involving an IT professional. This can alleviate the skills gap that small businesses face when considering appropriate security measures.

Outlook for Managed Security Services

Juniper Research expects Managed Security Service Providers (MSSPs) to leverage Artificial Intelligence (AI) technologies to provide more affordable services to these businesses, making the best of limited security budgets, and providing a mechanism to make the industry consolidate.

"AI provides a solution for the cyber security market's talent gap, performing similar roles to human experts," said James Moar, senior analyst at Juniper Research. "However, in order to succeed these new approaches must also bring simplicity and interoperability to end users, in what is a very fragmented market."

Tuesday, April 25, 2017

Cloud IaaS Revenue will Reach $4.79B in Latin America

Cloud computing adoption and growth is a worldwide phenomena. Every region of the globe now has markets where traditional IT infrastructure applications are migrating over to public cloud platforms. That said, prior on-premises IT infrastructure continues to play a key role in digital transformation projects.

The Latin American cloud infrastructure-as-a-service (IaaS) market is set to grow as cloud service providers flock to the region to take advantage of the massive customer pool. Public, private and hybrid cloud service models as well as customized, best-fit solutions are accelerating the adoption of IaaS solutions.

Latin America Cloud Market Development

Hybrid cloud models will be particularly popular among enterprises due to their ability to support clients' strategy implementation, migration, and infrastructure management requirements.

"To ensure the optimal use of existing infrastructure and compliance certificates, most companies will invest in hybrid cloud deployments," said Renato Rosa, program manager at Frost & Sullivan.

Besides, their analysts believe that cloud service providers have the opportunity to become key enablers of this digital transformation by rolling out IaaS solutions.

According to the latest regional study by Frost & Sullivan, the IaaS market will grow at a compound annual growth rate (CAGR) of 33.4 percent from 2016 to 2021 -- reaching $4.79 billion in revenue. The countries covered by their study include Brazil, Argentina, Colombia, Mexico and Peru.

Although IaaS technologies are enjoying enthusiastic acceptance within the Latin America market, they're not growing at an optimum rate. This is mostly because cloud service provider customers are still somewhat concerned about the security, application performance, and privacy requirements of their IT apps -- especially when they're hosted in the public cloud.

Outlook for Latin America Market Upside

Cloud providers are working to mitigate some of these security and governance concerns by providing data encryption and multi-factor authentication. The leading cloud providers in the region are also helping clients to develop Hybrid IT skills that enable them to plan for on-premises and off-premises system integration.

"Significantly, pure-play IaaS is becoming a commodity solution in the Latin American market," said Rosa. "Therefore, the most successful cloud service providers will be those that differentiate themselves through value-added services or feature-rich solutions."

Monday, April 24, 2017

Cloud Object Storage: Another Race to the Bottom?

Just when industry analysts were starting to believe that the buyers of cloud computing services were motivated more by upside business opportunity, and less by cutting IT infrastructure costs, a new price war has erupted that's driven yet another vendor race to the bottom.

In its latest analysis of cloud computing services, 451 Research revealed that the cloud price battlefield has shifted from virtual machines (VMs) to cloud object storage. The analyst firm predicts that other services -- particularly databases -- will undergo the same pricing pressures over the next 18 months.

Cloud Services Market Development

Until recently, the prices of cloud related services beyond compute held steady in the face of intense vendor competition, according to the latest market study by 451 Research. Virtual machines have been the traditional battleground for price cuts, as providers have sought to gain attention and differentiation.

The tide has now turned, with cloud object storage pricing declining in every region, including a drop of 14 percent over the past 12 months. For comparison, the cloud mainstay of VMs has dropped a relatively small 5 percent over the same period.

Analysts believe market maturity is leading to cloud service price cuts moving beyond compute. Other factors include increasing cloud-native development and faith in the cloud model, as well as a competitive scrum to capture data migrating away from legacy on-premises IT infrastructure.

While some in the industry have speculated that public cloud service providers have been using cheap VMs as loss-leaders in their product portfolios, 451 Research finds that, even in the worst case, profit margins for VMs are at least 30 percent.

According to the 451 assessment, there's no justification to believe that cloud computing is anywhere near a commodity, just yet. Analysts believe the cloud market is not highly price sensitive at this time, although naturally, end users want to make sure they are paying a reasonable price.

"The big cloud providers appear to be playing an aggressive game of tit for tat, cutting object storage prices to avoid standing out as expensive," said Jean Atelsek, analyst at 451 Research.

Outlook for More Cloud Price Cuts

This is the first time there has been a big price war outside compute, and it reflects the fact that cloud object storage has moved into the mainstream. While price cuts are good news for cloud buyers, they are now faced with a new level of complexity when comparing service providers.

The cloud storage battle started in the third quarter of 2016, when 451 Research identified a reduction in the IBM SoftLayer (now part of Bluemix) cloud object storage prices. Google, AWS and then Microsoft followed suit, with price cuts as well.

The 451 Research Digital Economics Unit predicts that prices for virtual machines and cloud object storage will continue to come down, with relational databases likely to be the next competitive battle front.

Friday, April 21, 2017

IoT Packaged Solutions and Services Market Momentum

Nearly all segments of the Internet of Things (IoT) market recorded double-digit growth in the fourth quarter of 2016 (4Q16), driving an overall 19.3 percent year-to-year revenue gain to $8.2 billion, according to the latest study by Technology Business Research (TBR).

This market is still evolving. "We expect growth to continue apace as more customers undertake implementations due to the emergence of packaged use cases, standards are adopted and pricing models become more rationalized," said Daniel Callahan, analyst at TBR.

Cloud services was the fastest-growing segment, at 63.5 percent year-to-year as customers increasingly adopted centralized analytics, storage and other intensive computing applications -- such as artificial intelligence (AI) and machine learning.

IoT Solution and Services Market Development

However, despite its growing popularity and market mind-share, cloud services accounted for only a small portion of the total. Software remains a giant part of the IoT market and a sizable portion of the IT vendor's revenue.

According to the TBR assessment, this is due to a large number of legacy implementations and the reality that many customers have not signed on to the costly data transport and compute power necessary when starting on the cloud, focusing on edge instead. In most cases, customers are beginning with experimental implementations on the edge, leveraging software and only moving to the cloud when the ROI is proven.

The experimentation on the edge and the necessity of Hybrid IoT -- the combination of edge and centralized cloud capabilities -- are also delivering ICT infrastructure a more permanent position in the IoT stack, rather than it being a victim of cloud-based IaaS. The ICT infrastructure segment grew 6.6 percent year-to-year in 4Q16 to 10.3 percent of total revenue.

IT services grew 13.5 percent year-to-year in 4Q16 and remains a crucial component of the IoT market due to the necessity of build, run and training services in IoT. However, TBR noted that IT services revenue growth decelerated from 15.2 percent year-to-year in 2Q16.


TBR believes IT services will increasingly be the victim as more prepackaged, low configuration IoT solutions emerge and as AI takes over much of the run aspect.

That said, business consulting grew 28.6 percent year-to-year. TBR reports that business consulting will be less impacted by standardization, prepackaged solutions and AI due to the complex knowledge and creativity necessary to guide transformation.

The security and connectivity segments, necessary aspects of an IoT solution, grew 28.2 percent and 16 percent year-to-year, respectively. Both of these segment's revenues scale extremely close to IoT adoption -- as more devices and sensors are deployed by customers the more security and connectivity are required.

Based upon revenue, the top three vendors were IBM, Microsoft and Cisco. These vendors, which registered nearly $2.4 billion combined, led the market for numerous reasons, including:

  • They are market leaders in defining and acting on an IoT go-to-market strategy and did not hesitate on investing in M&A activity to build advanced capabilities, including in AI, machine learning, platform infrastructure and vertical expertise.
  • Each chooses to brand themselves as, or act as through partnerships, a full-service or multi-line vendor. This simplifies customer interaction, an extremely important tenet in IoT, and increases the ability for the vendors to cross-pollinate.
  • All three have a deep-rooted presence in the enterprise, large legacy customer bases and brand awareness for market-leading technology. All have wide partner networks.

Thursday, April 20, 2017

An Uncertain Future for the PC Market Lingers in 2017

Worldwide personal computer (PC) shipments totaled 62.2 million units in the first quarter of 2017 -- that's a 2.4 percent decline from the first quarter of 2016, according to the latest market study by Gartner. Moreover, it's the first time since 2007 that shipments fell below 63 million units in one quarter.

That said, the PC industry experienced modest growth in the business market, but this was offset by declining consumer demand. Some people will refrain from replacing older PCs, and others have abandoned the PC market altogether. Gartner's study did not include Chromebooks, which are in greater demand.

Regardless, Garner has emphasized that the business segment of the market still considers the PC as an important device, and it's the main work computer device for many businesses.

Personal Computer Market Development

"While the consumer market will continue to shrink, maintaining a strong position in the business market will be critical to keep sustainable growth in the PC market. Winners in the business segment will ultimately be the survivors in this shrinking market," said Mikako Kitagawa, principal analyst at Gartner.

According to the Gartner assessment, vendors who do not have a strong presence in the business market will encounter major problems, and they will be forced to exit the PC market in the next five years. However, there will also be specialized niche players with purpose-built PCs, such as gaming PCs and ruggedized laptops.

The PC industry is also experiencing a price increase. Over two years ago, the price hike was attributed to the local currency deterioration against the U.S. dollar. This time around, the price hike is due to a component shortage.

DRAM prices have doubled since the middle of 2016, and SSD has been in short supply as well. The price hike will suppress PC demand even further in the consumer market, discouraging buyers away from PC purchases unless it is absolutely necessary. The price hike started affecting the market in 1Q17.

In the U.S., PC shipments totaled 12.3 million units in the first quarter of 2017 -- that's a 2.4 percent decline from the first quarter of 2016. The U.S. market has experienced a modest decline for two quarters. Much of the decline is attributed to the weak consumer market.

Global Outlook for Personal Computers

PC shipments in EMEA totaled 17.9 million units in the first quarter of 2017 -- that's a 6.9 percent decline year over year. All major regions in EMEA experienced a decline in the first quarter. However, Russia saw single-digit PC growth, which was attributed to stabilization of the local economy.

Gartner reports that the Asia-Pacific market demonstrated some stabilization, as PC shipments totaled 22.8 million units in the first quarter of 2017 -- that's a 0.8 percent decline from the first quarter of 2016. PC spending in China began to show a modest recovery. Steady economic conditions were an influencing factor driving a PC refresh.

Wednesday, April 19, 2017

Contactless Payments will Reach 500 Million Users

Contactless payment cards offer an array of benefits to both the retailer and consumer, such as faster throughput at the Point of Sale (POS) terminal, potentially leading to increased sales and reduced operating costs from cash handling.

However, to succeed the contactless card needs the attendant payment infrastructure to be upgraded to support contactless transactions, thus requiring co-operation from the various stakeholders in retail payments.

Contactless Payment  Market Development

According to the latest market study by Juniper Research, the number of OEM-Pay contactless users -- including Apple Pay, Samsung Pay, and Android Pay -- will exceed 100 million for the first time during the first half of 2017, before surpassing 150 million by the end of this year.

The combined market share of Apple, Samsung, and Google (via Android Pay), increased from 20 percent in 2015 to 41 percent in 2016, as a proportion of total mobile contactless payment users. Juniper forecasts that this will rise to 56 percent by 2021, as the trio’s combined user base exceeds 500 million.


The research found that Apple Pay and the alternative wallets are set to establish themselves as the primary contactless mechanisms of choice in the U.S. market. However, the challenge facing Apple and its rivals is to ensure that the infrastructure is in place for consumers to make in-store payments.

"We believe that as contactless usage gains traction and consumers or merchants recognize the speed and convenience it offers, then, as in European markets, there will be a further and significant increase in availability at the point-of-sale," said Nitin Bhas, head of research at Juniper Research.

Contactless Payments Growth Outlook

According to Apple, the proportion of U.S. retailers supporting Apple Pay rose from 4 percent in 2014 to 35 percent in late 2016. Plus, the future growth outlook is bright.

The research found that 2015 and 2016 were both watershed years for Host Card Emulation (HCE) in terms of commercial service deployments. Juniper estimates that at least 194 banks had introduced such services by the end of 2016.

Juniper expects that PayPal, already near ubiquitous in the online space, will likely deploy a portfolio of contactless payment and loyalty solutions that will allow it to compete effectively for market share.

Tuesday, April 18, 2017

Financial Service RegTech Revenue will Reach $6.45B

Agile regulation technology (RegTech) solutions are in high demand in the global financial services industry. Financial service organizations are embracing RegTech solutions for enhanced efficiency, proactive compliance, real-time risk monitoring and improved governance.

Collaboration with RegTech solution providers will be key for financial service organizations to gain a better return on investment, mitigate implementation and complex IT infrastructure barriers, and enable quicker conversion to dynamically evolving regulatory changes.

The RegTech solutions market is expected to reach $6.45 billion by 2020, growing at a compound annual growth rate (CAGR) of 76.1 percent by 2020, according to the latest market study by Frost & Sullivan.

"A rising demand for easy-to-use, regulatory-compliant solutions for anti-money laundering (AML) and know-your-customer (KYC) requirements are steering RegTech start-ups to enter these segments and -- with the help of cloud computing, big data analytics and machine learning technologies -- provide innovative, affordable and effective solutions," said Dhanvin Sudarsan, research analyst at Frost & Sullivan.

Venture capital firms are actively investing in innovative RegTech companies that provide cutting-edge solutions. Regtech companies active in the financial service sector include:
  • FundApps, which offers a software-as-a-service (SaaS) platform that delivers a cloud-based, managed service to automate shareholding disclosure by organizing regulatory information, and combining regulatory compliance content and technology.
  • AQMetrics, a cloud-based platform that offers an effective, innovative, and simplified solution to address regulatory risk and compliance issues.
  • Scaled Risk, which integrates in-memory analytics and big data to provide real-time, scalable, and flexible risk management solutions for banks and other financial services companies.
  • Onfido, which leverages machine learning to provide next-generation background checks for banks and business for their KYC, AML, and credit risk checks.
  • Qumram, which provides a fully transparent and compliant digital audit trail of online, mobile, and social interactions. Every interaction is recorded and can be played on request without any technical assistance. This aids the digital compliance of financial organizations.

"While technology adoption and regulatory compliance are clearly the way forward for financial service organizations, complex data verification, costly legacy systems, uncertainty in upcoming regulatory reporting, and conflicting data sets are factors hindering RegTech market growth," concluded Dhanvin.

Collaborative strategies will empower new digital growth opportunities and swift adaption to a dynamically evolving ecosystem, said the Frost & Sullivan Digital Transformation team. There's a significant upside for the adoption of emerging applications for cognitive systems and blockchain technologies within this sector.

Monday, April 17, 2017

China Leads the Growth of Global Robotics Adoption

Across the globe, the development and practical application of robotic technology has gained momentum during the last decade. While it's true that automation is typically applied to lower costs and improve productivity, new and emerging use cases will drive demand.

Investment in robotic systems and related services will more than double in China, growing from $24.6 billion in 2016 to $59.4 billion in 2020, according to the latest market study by International Data Corporation (IDC).

Robotic Systems Market Developement

"China continues to lead the growth of worldwide robotics adoption, primarily driven by strong spending growth in process manufacturing and cross-industry applications," says Dr. Jing Bing Zhang, research director at IDC. "In China, we are also seeing an accelerated growth in the adoption of commercial service robots especially for automated material handling in factories, warehouses and logistics facilities.


China is the single largest and the fastest growing robotics market in the world, and will account for more than 30 percent of the worldwide robotics spending in 2020.

According to the IDC assessment, manufacturing continues to dominate China's investment in robotics, with discrete and process manufacturing accounting for over 50 percent of spending in 2016.

From a technology perspective, China spending on robotic systems -- which includes industrial, service and consumer robots and after-market robotic hardware -- is expected to reach $29 billion in 2020.

Services-related spending, which encompasses application management, education and training, hardware deployment, system integration, and consulting, will grow to over $15.8 billion in 2020.

Robotics Market Research Resource

The IDC Worldwide Commercial Robotics Spending Guide quantifies the robotics opportunity from a region, industry, use case, and technology perspective.

Spending data is available for more than 52 use cases across 13 key industries in eight regions. Data is also available for a wide range of robotics hardware, software, and services categories. The detailed segmentation and timely, global data is designed to help vendors targeting the market to identify opportunities and execute an effective strategy.

Friday, April 14, 2017

5G Mobile Network Deployment Creates New Challenge

Wireless communications and mobile internet access over cellular networks continue to be an essential component of next-generation telecommunication system enhancements. While deployments of 4G network technologies are still occurring across the globe, plans are underway for 5G.

That being said, 5G deployments indoors and in venues may be delayed by one year or more, when compared to outdoor 5G deployments starting from 2020. ABI Research estimates the global equipment market for in-building wireless -- including active distributed antenna systems (DAS), passive DAS, and repeaters -- will reach close to $10 billion by 2025.

5G Wireless Infrastructure Market Development

The overall system revenue in 2025, which includes services and equipment, will grow at a CAGR of 15 percent to reach $19 billion in 2025. Out of this market, 5G in-building wireless equipment will account for $509 million in 2025.

"As 5G nears full specification, mobile network operators will face challenges for indoor mobile coverage, including signal propagation, next-generation fronthaul or backhaul, and massive MIMO," says Nick Marshall, research director at ABI Research.

According to the ABI assessment, early 5G deployments indoors and in venues will be a migration building on the features of 4G LTE-Advanced and 4G LTE-Advanced Pro. This will happen technology by technology and frequency by frequency, avoiding costly total equipment replacements.

5G is a multi-technology HetNet, comprised of a combination of different cell types and access technologies to seamlessly adapt to an array of use cases and applications.

Network functions virtualization (NFV) migrates cellular signal processing to a remote telco data center, while mobile edge computing (MEC), in a countervailing trend, migrates IT compute and storage to the network edge within the building or venue for low latency use cases and applications.

Massive MIMO, a key challenge that 5G will face as it nears full specification, refers to the use of multiple antennas at the base station and mobile device.

Outlook for 5G Mobile Network Technologies

"We believe that future 5G networks will rely on NFV and MEC to alter the architecture and topology of the RAN by leveraging telco data centers to virtualize signal processing in the cloud," concludes Marshall.

With 5G standards yet to be finalized, many equipment vendors are actively researching and developing 5G equipment with a variety of approaches. These companies include Nokia with its AirFrame/AirScale Radio Access, Ericsson with its ERS, and CommScope with its OneCell.