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Friday, January 23, 2015

Cloud Infrastructure Spending will Reach $36.8 Billion

The migration of IT workloads to public cloud service providers continues in 2015. Meanwhile, the forward-thinking enterprise CIOs are making plans to transform their data centers to accommodate the applications they intend to keep.

Maturation of cloud computing infrastructure and demand for sustainable benefits will drive the marketplace for new hardware and software components to a 14 percent CAGR from 2014 to 2018 -- reaching $36.8 billion -- according to the latest market study by Technology Business Research (TBR).

"Customers are increasingly integrating public and private cloud resources into day-to-day, mission-critical workloads and processes," said Krista Macomber, analyst at TBR.

However, TBR believes that securing, managing and integrating these complex heterogeneous cloud environments is very challenging.

For cloud components vendors, this means embracing more systems integrator partners and expanding their adoption of popular open-source cloud management tools are likely to be necessary steps to maximizing long-term growth opportunities.

Although low-cost, high-volume hardware vendors and legacy virtualization software providers have led cloud components opportunities in recent years, TBR says enterprise customers are beginning to increase their spend on operations management and security software -- as they complete their deployment of hybrid cloud environments.

As a result, vendors such as Cisco, HP and IBM that are driving toward a software-defined, open-source, multi-platform cloud components strategy are posting leading year-to-year growth rates and expanding revenue bases.

"IBM is a great case study in cloud components revenue trends. Plenty of opportunity remains for vendors to sell open and flexible hardware into a slew of cloud customer bases ranging from cloud service providers to small businesses. However, IBM has chosen to exit the x86 server space," Macomber explained.

Moreover, TBR reports that IBM continues to struggle with financial turbulence that will be troubling for multinational enterprise customers and channel partners that both seek signs of future stability, following the ongoing decline of IBM's legacy hardware and software business units.

While some vendors will choose acquisitions and organic development to round out their portfolio gaps, others will lean more heavily on partners to more quickly and cost-effectively fulfill end-customer requirements for open-source solutions that help to avoid vendor lock-in.

For all vendors, the TBR market study findings indicate evolving channel programs and restructuring direct sales or professional services teams -- to articulate cloud workload knowledge and DevOps culture expertise -- are critical to a vendor's ongoing success.

Thursday, January 22, 2015

U.S. Must Compete in the Global Networked Economy

Leichtman Research Group (LRG) latest market study has found that 79 percent of U.S. households get a broadband Internet service at home -- that's an increase from just 20 percent in 2004.

Broadband adoption reached 95 percent of all households with Internet service at home -- that's an increase from 94 percent last year, 89 percent in 2009, and 33 percent in 2004.

The mean reported time spent online at home per day is 2.8 hours among all individuals online at home -- that's up from 2.2 hours per day in 2009. Given these findings, why is President Obama now seeking to increase internet service provider (ISP) competition in America?

It's about ensuring that the U.S. is prepared for the next wave of disruption in the Global Networked Economy. In order to compete globally, he believes that America requires infrastructure that's at parity (both capabilities and retail price) with the recognized broadband market leaders around the globe.

Challenging the Broadband Duopoly

LRG also found that the seventeen largest cable and telephone providers in the U.S. -- representing about 94 percent of the market -- acquired over 700,000 net additional high-speed Internet subscribers in the third quarter of 2014.

These top broadband providers now account for 86.6 million subscribers -- with top cable companies having over 51.2 million broadband subscribers, and top telephone companies having nearly 35.4 million subscribers.

Other findings from the market study include:

  • Overall, broadband additions in 3Q 2014 amounted to 135 percent of those in 3Q 2013.
  • The top cable companies accounted for 83 percent of the net broadband additions for the quarter versus the top telephone companies.
  • The top cable companies added about 580,000 subscribers, representing 133 percent of the net additions for the top cable companies in 3Q 2013.
  • The top telephone companies added about 120,000 broadband subscribers in 3Q 2014 – compared to a gain of about 80,000 in 3Q 2013.
  • Over the past year, there were about 2,930,000 net broadband adds – compared to about 2,540,000 over the prior year, and 2,925,000 two years ago.

Despite there being 86.6 million broadband subscribers in the U.S. via major cable and Telco providers, the industry has added subscribers at a faster pace over the past year than it did over the prior year. According to LRG, over the past year, cable companies accounted for 86 percent of the 2.9 million net broadband adds.

Apparently, the American ISP duopoly of cable and Telco providers is prospering, regardless of government attempts to generate more competition in the marketplace and thereby increase broadband service capabilities while lowering the retail cost of services.

Wednesday, January 21, 2015

Demand for Smart Street Lighting, Enabled by IoT

Throughout 2015 there will be a groundswell of practical new Internet of Things (IoT) related applications within many municipalities across the globe. We have mentioned public parking automation previously. Another emerging scenario is the enhancement of public street lighting.

The installed base for Smart street light luminaires is set to grow rapidly, with network controlled nodes set to rise from 2 million today to 40 million by 2019, according to the latest market study by ABI Research.

"Alongside the energy savings, lifespan, and quality of light improvements that LEDs offer, the enhanced controllability of this technology through the adoption of intelligent networking solutions has the ability to revolutionize the way cities utilize their street lighting infrastructure in order to deliver an attractive, sustainable, and safer living space," said Andrew Zignani, research analyst at ABI Research.

The technology choices are also evolving. Power Line Communication (PLC) networking solutions are currently dominant but will face increasing challenges from both Radio Frequency (RF) and cellular technologies over the forecast period.

By 2020, RF solutions will make up over two-thirds of installed smart street light luminaires. While cellular implementations are currently very limited, the independence from the electrical distribution network and the lack of additional gateways required can enable smaller business cases down to the single luminaire level.

However, according the the ABI assessment, most municipalities will require a combination of IoT-related technologies to achieve their ambitions.

Though each connectivity solution has its own advantages and disadvantages -- due to the vast structural and regional complexities in street lighting infrastructures -- a hybrid approach that incorporates a combination of PLC, RF, and cellular technologies will need to be adopted in order to ensure the most widespread, reliable, and cost-effective coverage.

To date, high initial costs, lengthy payback times, and fragmented and proprietary connectivity solutions have all hindered market growth. However, several alternative financial schemes, such as energy performance contracts, are being adopted in order to remove potential barriers.

Many municipalities are also beginning to see the great potential for their street lighting infrastructure to become a foundation on which other smart city and IoT applications can be built.

When upgrading to LED street lighting, city managers may be reluctant to spend the extra funds required on a controlling system, unless this is positioned as a foundation for further smart city development. Integration with other aspects of the smart grid can considerably strengthen the case for networked control adoption.

ABI believes that the transition towards IPv6 connectivity solutions will allow greater flexibility in future upgrades and extensions to the smart city network, enabling different organizations, suppliers, and communications methods to integrate together and form a more intelligent, resilient, and sustainable city infrastructure. Advances in embedded Linux software applications will also accelerate the adoption of these IoT solutions.

Tuesday, January 20, 2015

Now 178 Million Americans Own a Smartphone

Thoughts of Mobile Cloud leadership are top of mind, as software apps become the battle ground of the American smartphone marketplace. And, new mobile enterprise applications are going to be the focus of further research during 2015.

Meanwhile, comScore released data from their latest market study, reporting key trends in the U.S. smartphone industry for November 2014.

Apple ranked as the top smartphone manufacturer with 41.8 percent OEM market share. Once again, Google Android led as the number one smartphone platform with 52.6 percent platform market share.

Facebook ranked as the top individual smartphone app in America. Google has, by far, the most smartphone applications within the top ten ranking positions.

Smartphone OEM Market Share

178 million people in the U.S. owned smartphones (73.6 percent mobile market penetration) during the three months ending in November -- that's up by 2 percent since August.

Apple ranked as the top OEM with 41.8 percent of U.S. smartphone subscribers.

Samsung ranked second with 29.7 percent market share (up 0.8 percentage points from August), followed by LG with 7.6 percent (up 0.9 percentage points), Motorola with 5.2 percent and HTC with 3.7 percent.

Smartphone Platform Market Share

Android ranked as the top smartphone platform in November with 52.6 percent market share (up 0.6 percentage points from August), followed by Apple with 41.8 percent, Microsoft with 3.4 percent, BlackBerry with 2 percent and Symbian with 0.1 percent.

Top Smartphone Applications

Facebook ranked as the top smartphone app, reaching 69 percent of the app audience, followed by Google Play (52.1 percent), Google Search (51.8 percent) and YouTube (50.8 percent). Facebook Messenger ranked in the Top 5 Smartphone Apps for the first time.


Monday, January 19, 2015

Clouds Drive the Evolution of IT Professional Services

There once was a time where Information Technology (IT) professional services was a high-growth sector of the global economy. Organizations in all regions of the world were engaged in the deployment of monolithic CRM and ERP applications. Teams of software engineers and consultants were hired to manage these expensive projects. The results were often disappointing.

Today, the traditional IT Services business models have been disrupted by the transition to X-as-a-Service models, which combined with longer decision cycles around emerging complex hybrid cloud computing environments leads to continued pressures on vendor revenue growth.

According to to the latest market study by Technology Business Research (TBR), cautious client spend on transformational projects and extended decision cycles are occurring in the IT Services market, with average trailing 12-month (TTM) revenue growing 1.5 percent year-to-year in 3Q14.

That's slightly higher than the 1.2 percent year-to-year growth in 2Q14 but lower than the 2.6 percent year-to-year growth in 3Q13. TBR believes that IT Services revenue growth has been impacted by economic uncertainty and the commoditization of traditional IT professional services.

Meanwhile, there is now a focus on business outcomes -- rather than technology outcomes, plus a shift to providing IT infrastructure through Opex, rather than Capex. Furthermore, all vendors have been impacted by a reduction in public sector spending.

"IT Services revenue growth is bottoming out and will continue to be slow in 2015," said Elitsa Bakalova, professional services analyst at TBR.

While vendors used organic investments, partnerships, acquisitions and delivery to differentiate, revenue growth of all IT Services decelerated year-to-year in 3Q14.

Analytics layered onto back-office outsourcing operations resulted in business process outsourcing (BPO) revenue leading growth in IT Services in 3Q14. BPO revenue growth slowed the least, by 10 basis points year-to-year, to 5.1 percent in 3Q14, as vendors provided industry-specific services, integrated analytics and cloud computing services into BPO solutions and increased automation.

Portfolio expansions around SMAC technologies in conjunction with security sustained consulting and systems integration (C&SI) revenue growth in 3Q14. Workload migration to new cloud service environments maintained applications outsourcing (AO) revenue growth.

In IT Outsourcing (ITO) vendors adapted their legacy service delivery models to more comprehensive cloud-based platforms and included infrastructure service integration and orchestration capabilities that manage service delivery in hybrid multi-sourcing environments.

Cost reduction and bottom-line operational efficiency remain key levers for spending, joined by higher attention to cybersecurity as sophisticated attacks become more prevalent in organizations across the globe.

However, Line of Business (LoB) leaders continue to fund IT projects that result in meaningful digital service transformation, with the expectation of significant improvements to top-line revenue growth and the advancement of competitive differentiation in the marketplace.

Friday, January 16, 2015

Global PC Shipments Reach 80.8 Million Units in 4Q14

Smaller declines in personal computer sales around the globe are a welcomed change. Worldwide PC shipments totaled 80.8 million units in the fourth quarter of 2014 (4Q14), that's a year-on-year decline of -2.4 percent, according to the latest market study by International Data Corporation (IDC).

Total shipments were slightly above expectations of -4.8 percent growth, but the market still contracted both year on year and in comparison to the third quarter.

IDC reports that although the holiday quarter saw shipment volume inch above 80 million for the first time in 2014, the final quarter nonetheless marked the end of yet another difficult year -- it was the third consecutive year with overall volumes declining.

On an annual basis, 2014 shipments totaled 308.6 million units, that's down by -2.1 percent from the prior year. Besides, the forward-looking trend doesn't indicate any meaningful improvements.

Although the U.S. and Europe remained stronger than other markets, growth in these mature regions slowed from earlier in the year. Asia-Pacific (excluding Japan) continued to strengthen, seeing only a very slight increase in volume.

Similarly, commercial demand, which boosted growth earlier in the year, has slowed while consumer demand is gradually returning. That said, the overall market has been fueled by low-priced systems, including growth of Google Chromebooks and new promotions of Microsoft Windows 8 systems.

"The strength from market leaders, as well as improvement in Asia-Pacific and the consumer market more generally, are positive signs for the PC market," said Loren Loverde, vice president at IDC.


Regional Highlights from the Market Study

United States -- the U.S. PC market concentration has increased to 83 percent of shipments coming from the top 5 vendors. Portable PC growth remains strong with double-digit growth from a year ago, while desktop shipments declined by more than -10 percent.

Europe, Middle East, and Africa (EMEA) -- PC shipments in EMEA posted a slight increase in the fourth quarter, fueled mainly by strong consumer demand during the holiday season. Political and economic factors, especially unfavourable exchange rates, also negatively impacted numerous countries across the region.

Japan -- The market continued to slump following a surge of XP replacements a year ago. Vendors took the time to clear excess inventory in the channel, leading to a lean quarter. Volume fell below 3 million units in the quarter, a drop of -35 percent year on year and its lowest level since the fourth quarter of 2006.

Asia-Pacific (excluding Japan) -- APeJ continued to stabilize with growth rising to positive territory following several years of significant declines. Slowing growth in tablets and smartphones as well as promotions of lower-priced Windows 8 + Bing systems helped relieve some pressure on the PC market.

Thursday, January 15, 2015

Environmental Benefits of Smart City Traffic Management

Awareness of the need for improved sustainability in densely populated urban areas has been greatly heightened in the 21st century, particularly as the information age has enabled mankind to measure quantitative data in relation to the environment.

Furthermore, many cities do not have the ability to add infrastructure and expand horizontally. This can lead to increased levels of traffic congestion, or excessive crowding on public transportation.

That said, the findings from a recent market study by Juniper Research indicate that Smart City traffic management and parking projects will reduce cumulative global emissions by 164 million metric tonnes of CO2 between 2014 and 2019 -- that's equivalent to the annual emissions produced by 35 million vehicles.

Smart City initiatives can benefit the environment, while also positively impacting the quality of city dweller lives. With about 700 million automobiles projected to be on city roads across the globe by 2019, demand for innovative solutions to the challenges of growing communities has advanced.


The Juniper study also found that high levels of city traffic congestion -- combined with advancements in Internet of Things (IoT) sensors and software solutions -- has driven plans to reduce high traffic levels through smart initiatives.

Juniper analysts believe that the establishment of a sensor-networked and monitored city communications infrastructure -- efficiently phasing traffic lights, and providing real-time guidance to drivers -- can aid significantly in reducing urban congestion.

Furthermore, digitally monitored parking spaces able to dynamically alter prices according to available spaces help control time spent cruising for city parking.

Forming a Smart City Ecosystem is Key

Additionally, Juniper found that while purpose-built Smart Cities, such as Masdar and Songdo, can be considered a technological success, the benefits have not yet been fully realized owing to lack of citizen participation.

"Cooperation between all parties, as we have seen in Amsterdam for example, is essential," said Steffen Sorrell, research analyst at Juniper Research. "Furthermore, cities need standards and open data to avoid information roadblocks."

Other key findings from the study include:
  • Smart grids will dramatically reduce energy consumption in cities through rapid smart meter deployment and intelligent distribution automation.
  • Smart street lighting is also expected to produce significant cost savings, aided by the fall in LED fixture costs. Smart networked control systems will further add value.

Wednesday, January 14, 2015

How IoT Analytics will Reach $5.7 Billion in 2015

In the coming years, the deluge of data from internet connected sensors and other devices will be significant. The revenues generated from integrating, storing, analyzing, and presenting Internet of Things (IoT) data will reach $5.7 billion in 2015, according the the latest global market study by ABI Research.

In the next 5 years, ABI believes that the market will expand dramatically, to an extent that in 2020 it's estimated to account for nearly one-third of all big data and analytics revenues.

"About 60 percent of this year’s revenues come from three key areas -- energy management, security management, as well as monitoring and status applications," said Aapo Markkanen, principal analyst at ABI Research.

Within these segments, there are analytic applications that reduce the cost base of asset-intensive operations (condition-based maintenance), automate routine workflows (surveillance), or even enable new business models (usage-based insurance).

According to ABI's assessment, these early growth drivers also have in common the fact that the economics of IoT connectivity align easily enough with the requirements of analytic modelling.

Making sense of IoT-kind data from machines and sensors data comes often with its unique challenges, such as the need for time-series databases in storage, and for relatively deep domain expertise in analysis.

These kinds of factors create a certain mismatch with many leading technologies that have been designed for more traditional, digital-first analytic environments. This, in turn, is attracting the growth of start-up level activity -- aimed at filling the apparent gaps in the market.

ABI says what's truly remarkable about this market is how much of the innovation actually comes from new start-ups. Take, for instance, the ParStream geo-distributed architecture, the Cyberlightning 3D visualization technology, or the Peaxy work on software-defined data access.

All three address some of the problems that usually come up in discussions with end-users. Meanwhile, of the more incumbent vendors likes of Datawatch, Informatica, Software AG, and Splunk seem well-positioned to seize the emerging IoT big data opportunity.

Tuesday, January 13, 2015

Internet of Things M&A Deals Reached $14.3 Billion

According to the latest market study by 451 Research, a variety of acquirers increased their mergers and acquisitions (M&A) activity within the Internet of Things (IoT) marketplace during 2014, spending a combined $14.3 billion to acquire 60 companies.

By comparison, that spending is almost eight-times the total spent by acquirers prior to 2014 -- representing a forty-fold increase over 2013. Meanwhile, the ongoing interest in the IoT-related venture capital investment market is likely to blossom during 2015.

The number of corporate M&A deals increased more than twofold, with companies such as Google, Samsung, Cisco, Intel, PTC, Qualcomm and others increasing their effort to position IoT as a key contributor to business growth strategy.

451 Reserach analysts believe that the sharp rise in deal-making activity in 2014 suggests that market forces surrounding IoT have become sufficiently compelling, which has simulated major IT vendor action.


"Acquirers don’t want to cede anything to a growing list of competitors as demand for IoT services in both consumer and industrial markets builds," said Brian Partridge, vice president of the mobility team at 451 Research.

The growth will drive enterprise spending across several categories -- including embedded computing systems, communication infrastructure, IP networking, cloud and data center technologies. Together, they will form the foundation of the next generation of connected devices and related IT services.

Vendors with the intention of being multifaceted mobile tech sector leaders over the next decade need to make their move soon, by choosing market segments. So far, M&A activity in was almost evenly split between IoT-enabling horizontal infrastructure, and vertical industry IoT applications.

In the infrastructure arena, acquirers closed 20 deals, primarily targeting a broad range of sensors, semiconductors, software platforms, security infrastructure and connectivity technologies.

451 Research noted that within the market verticals, the transportation and logistics segment led the field with 11 transactions, followed by the fitness and healthcare segment with 10 transactions. Acquirers also purchased five companies related to the home automation segment.

Monday, January 12, 2015

Asia-Pacific Region to Lead Multi-Screen TV Adoption

During the course of 2015, more people will watch broadcast television, pay-TV programming and a variety of other video content on a greater range of consumer electronics devices.

The commercial implications of this transition will impact the whole Technology, Media and Telecommunications sectors in numerous ways. In some markets it creates a significant new upside opportunity, in others the incumbent video entertainment service providers will experience subscriber declines.

In particular, advertiser supported programming will experience some disruption, as more marketers continue to shift their budgets from traditional broadcast media channels to online digital media.

In addition, the growth of connected consumers accessing the internet for the first time -- many enabled by low-cost smartphones and media tablets -- in the Asia-Pacific region will increase the significance of this rapidly emerging consumer marketplace.

For the 51 countries covered in the latest worldwide market study by Digital TV Research, the gross number of overall viewers will climb from 5.60 billion in 2010 to 11.32 billion by 2020.


Although it will continue to be the dominant device -- both by viewers and by duration watched -- the TV set share of total viewers will fall from 73 percent in 2010 to 42 percent in 2020.

Viewing on the other devices will grow dramatically.

As an example, by 2020, 3.98 billion people will watch video content via a PC or laptop over a fixed broadband connection -- that's up by 80 percent on 2013.

Smartphones viewers of video content will total 1.53 billion people -- that's triple the 2013 total.

Tablet viewers of video content will be 1.10 billion by 2020 -- that's five times the 2013 total.

Moreover, China will have 2,890 million viewers by 2020 -- that's up from 1,483 million in 2010.

India will supply a further 2,347 million by 2020. Furthermore, India will add nearly 1 billion gross viewers between 2014 and 2020, with China adding 897 million.