Technology | Media | Telecommunications

Friday, July 29, 2016

M2M Data Fuels New Cloud Object Storage Use Cases

Machine-to-Machine (M2M) connectivity has become a key product offering from global telecom service providers and a significant new revenue stream. They've also developed complex service propositions, designed to reduce costs and increase efficiency for their wireless network customers.

Unique business models will apply emerging technology concepts to enable innovative applications for the Internet of Things (IoT). As an example, in-vehicle infotainment services, such as Apple CarPlay and Android Auto, will generate large amounts of new cellular M2M mobile data traffic.

Exponential Growth of M2M Data Traffic

Over the next five years, this explosion of new mobile applications will account for up to 98 percent of all M2M data traffic, according to the latest worldwide market study by Juniper Research. Most of that new data will be saved in hyperscale cloud object storage platforms.

Their study found that data intensive applications -- such as Internet radio, music streaming and information services -- will generate approximately 6,000 peta bytes of data per year by 2021. That's the equivalent to over 300 billion hours of music streaming.


Market Development of M2M Offerings

"The wider M2M market offers a reprieve from declining traditional voice and messaging revenues. Mobile operators are now champing at the bit to capitalize on the growth of M2M," said Sam Barker, analyst at Juniper Research.

However, their research cautioned that for mobile network operators to maximize their opportunity, they will need to evolve beyond merely providing connectivity and enablement, and offer substantive value-added services to their customers.

Moreover, according to the Juniper assessment, M2M technology will further the development of autonomous driving systems in the future. Cellular V2V (vehicle to vehicle) technology -- enabled through M2M technology -- is expected to be the cornerstone of the system over the coming years.

Consequently, mobile operators will need to ensure that their networks remain able to cope with the projected increases in data traffic, especially in urban areas. Future smart city systems, such as smart parking and smart intersections, will drive data usage and the potential strain on wireless networks.

Meanwhile, other less data-hungry M2M modules will see significant increases in adoption across an array of key industry verticals -- including healthcare, agriculture, smart metering and smart home automation.

Thursday, July 28, 2016

Smartwatch Market Reaches Pivotal Stage of Growth

When a consumer electronics vendor launches a new product category they are often uncertain about the overall market demand. While early-adopters may adopt the new device relatively quickly, the mainstream user market is far less likely to be interested or motivated to buy.

Sometimes the leading vendor in a category will abruptly reach market saturation, as a key indicator of the future outlook. For the first time, the worldwide smart watch market saw a year-over-year decline of 32 percent, according to the latest global market study by International Data Corporation (IDC).

Smartwatch vendors shipped 3.5 million units in the second quarter of 2016 (2Q16), which was down substantially from the 5.1 million shipped a year ago. Apple held the top rank by shipping 1.6 million watches. However, it was the only vendor among the top five to experience an annual decline in shipments.


Smartwatch Market Development Challenges

The year-over-year comparison is to the initial launch quarter of the Apple Watch, which is in many ways the same product offered in the most recent quarter with price reductions.

"Consumers have held off on smartwatch purchases since early 2016 in anticipation of a hardware refresh, and improvements in WatchOS are not expected until later this year, effectively stalling existing Apple Watch sales," said Jitesh Ubrani, senior research analyst at IDC.

IDC analysts believe that Apple still maintains a significant lead in the market, but a decline for them will lead to a decline in the entire market. Every vendor now faces similar challenges related to fashion and functionality, and though IDC expects improvement next year, growth in 2016 will likely be muted.

One of the omissions in the smartwatch market is the absence of traditional watchmaker brands. To date, only a small handful of legacy watchmakers have entered the smartwatch market, trailing far behind their technology brand counterparts.

Adapting to Mainstream User Expectations

This may be changing, as key vendors such as Casio and Fossil introduce their own new device. Established watchmakers are expected to drive the most important qualities of a smartwatch for everyone -- namely design, fit, and functionality; delivered at a reasonable price.

How the smartwatch market evolves from here will be a pivotal stage of market growth, according to the IDC assessment. Continued platform development, cellular connectivity, and an increasing number of useful software apps all point to a smartwatch market that will be constantly changing.

These improvements should appeal to the mainstream market. In fact, IDC does anticipate that the market could return to growth in 2017, driven by the evolving market requirements. Exactly when that rebound happens will depend on when smartwatch vendors invent compelling use cases for mainstream buyers.

Wednesday, July 27, 2016

Fleet Management Systems Adopt IoT and M2M Apps

Growing applications for Internet of Things (IoT) and Machine-to-Machine (M2M) technologies will transform commercial vehicle fleets. Moreover, the active fleet management systems already deployed in commercial vehicle fleets in North America was 5.8 million during the fourth quarter (Q4) of 2015, according to the latest market study by Berg Insight.

Increasing at a compound annual growth rate (CAGR) of 17 percent, the fleet management systems installed base in North America is expected to reach 12.7 million units by 2020.

In Latin America, the number of active fleet management systems is expected to increase from 2.3 million in Q4 2015, growing at a CAGR of 12.8 percent to reach 4.1 million in 2020.

Fleet Management Systems Market Development

The top fifteen providers of fleet management systems in the Americas now have a combined installed base of more than 4 million active units in the region, and the top five vendors account for 2.5 million units.

The leading solution providers now all have more than 400,000 active units on this market. The fast-growing fleet management industry has for several years been in a phase of strong consolidation, which shows no signs of slowing down in the near-term.

"Leading providers on a global basis have now surpassed half a million fleet management subscribers by far, and are continuing to grow at a high pace driven by organic growth in combination with selective M&A," said Rickard Andersson, senior analyst at Berg Insight.

Fleet Management Vendor Consolidation Trends

Notable transactions in 2015 include the merger of Teletrac and Navman Wireless to create a global telematics organization, as well as the combination of BSM Technologies and Webtech Wireless on the North American market.

Fleetmatics continued its international expansion, acquiring Ornicar in France and Visirun in Italy during the year. The first half of 2016 has also seen some high-profile vendor consolidation deals.

Most notably, Verizon Communications announced in June that it had signed an agreement to purchase Telogis, thereby extending its existing presence in the fleet management sector -- which also includes the Verizon Networkfleet business stemming from the acquisition of Hughes Telematics in 2012.

"The acquisition of Telogis propels Verizon to a leading position from a global perspective in terms of fleet management subscriber base," said Mr. Andersson. He adds that Berg Insight anticipates that at least one of the solution providers will have reached the milestone of 1 million fleet management units globally by 2018.

Tuesday, July 26, 2016

Post-Brexit: European Technology Market Outlook

Technology industry analysts have shared their initial view on the impact from the political and social unrest that's sweeping across Europe. In particular, concerns about the outcome of the United Kingdom (UK) European Union (EU) membership referendum has added to the region's volatility.

After 7 percent growth in 2015, European technology spending will remain flat at €707 billion this year and grow by just 0.8 percent next year, according to the Forrester Research midyear forecast.

Business and political uncertainties after the decision by UK citizens to leave the European Union (Brexit) on top of already slow economic growth have led Forrester to reduce its original projection for EU tech market growth for 2016 and 2017 by about 2 percent.

At a country level, UK tech spending will see the sharpest slowdown, growing by just 1.3 percent in pounds in 2016, with no growth in 2017 -- representing a drop of 4.2 percent and 5.3 percent, respectively, compared with Forrester’s pre-Brexit forecast.

The exceptions will be countries outside the Eurozone, with the Central European countries -- such as Poland, the Czech Republic, and Hungary -- and Nordic countries -- such as Sweden -- seeing technology sector spending growth of around 5 percent.

Other findings from the market study include:
  • The biggest downward swing in UK tech investment will be in financial services, followed by retail and manufacturing, especially in the automotive industry.
  • UK's public sector, as well as utilities, telecoms, and professional services will not be immediately affected by Brexit.
  • Software and tech consulting services will again have the best growth in 2016, at 1.5 percent and 1.4 percent, respectively.
  • Computer equipment will decline by 3.3 percent, with communications equipment down by 1.5 percent.
  • Tech outsourcing and telecom services will be in between, with 1.2 percent and 0.8 percent decreases, respectively.
  • Business technology (BT) purchases to win, serve, and retain customers will continue to grow faster than traditional information technology (IT) spending, but not by as much.
  • While in 2014 and 2015, BT spending increased by 9 percent and 13 percent -- several times more than 2 percent and 5 percent for IT -- BT growth in 2016 will be 2.7 percent, compared with a 1.3 percent decline in IT purchases.

Monday, July 25, 2016

SVOD Revenue Forecast to Reach $34.6 Billion by 2021

Several television broadcasters and pay-TV providers have attempted to match over-the-top (OTT) video by offering their own online services. Most notable is the move by HBO to offer a subscription service to their TV shows via HBO Now.

Revenues from subscription video on demand (SVOD) services, such as Netflix and Amazon, are set to more than double from $14.6 billion this year, to $34.6 billion in 2021. Netflix will now grow its U.S. subscriber base to be similar in size with leading traditional pay-TV service providers.


Ongoing SVOD Market Development

According to the latest market study by Juniper Research, SVOD providers will see substantial returns on their expansion and growth strategies, as more countries and markets move to this method of video consumption. And, as more consumers adopt the move away from the old linear, scheduled TV model.

While SVOD continues to draw customers away from traditional pay-TV providers, legacy networks are now seeking to diversify and adapt through progressive strategies, with services such as YouTube and Hulu seeking to offer some linear cable streaming as part of subscription packages in 2017.

The concept is to offer what the industry calls "skinny bundles" of content which are smaller packages, offered at a lower price via Internet delivered services.

Netflix saw rapid expansion in January 2016, launching in 130 new markets simultaneously, bringing its total coverage to 190 countries. Yet, according to the Juniper assessment, international subscriber growth lacks pace, as evidenced in its recent quarterly results.

New Challengers to the Netflix Dominance

Netflix’s expansion has resulted in price increases, but the beneficiaries may ultimately be the provider's rivals if the competitor price differential becomes too great. That being said, it would likely take a long time in the North American market, where typical pay-TV service prices are very high.

"Whilst Netflix has expanded its coverage globally, the test will be whether it can meet its original content production costs, as well as provide quality content to consumers," said Lauren Foye, analyst at Juniper Research.

It's believed that U.S. rival Hulu is now close to offering a somewhat similar amount of content as Netflix, and others are pushing other new business models --  such as Amazon’s monthly subscriptions to Prime video, and YouTube Red subscriptions for exclusive content.

Other key findings from the study include:
  • Total TV and video data usage will grow more than five-fold from 2016 to 2021, as uptake of 4K increases download sizes.
  • Combined 4K SVOD and TVOD (Transactional Video on Demand, i.e. Pay per View and Download to Own) revenues will grow to account for 13 percent of total OTT revenues by 2021.

Friday, July 22, 2016

Meta-Cloud: a Coexistence of Distinct Service Providers

CIOs have recognized that they must plan for a world where many cloud platforms coexist together, supporting the diverse needs of user groups within their midst. To some informed cloud service buyers, the notion of a one-size-fits-all public cloud offering now seems absurd.

Granted, a typical IT manager's role could be simpler if they only used one vendor for all use cases and associated cloud applications. But the savvy Line of Business leaders won't let that happen -- they'll continue to demand best-fit solutions. It's an important Hybrid IT infrastructure strategy.

IHS Markit interviewed the key decision makers at 158 North American organizations about the adoption of on-premises cloud architecture within the enterprise, purchase of off-premises cloud services now, and how they plan to evolve their use of off-premises cloud services over the next two years.

Cloud Computing Market Development Trends

Enterprise respondents to the cloud services survey plan to spend 17 percent of their IT budgets on off-premises cloud services by 2017 -- that's estimated to be an increase of 58 percent over 2015.

Moreover, survey respondents expect to increase or maintain adoption in all categories of cloud computing services through 2018 -- including infrastructure as a service (IaaS), cloud as a service (CaaS), platform as a service (PaaS) and software as a service (SaaS).


That said, here's the key revelation from this market study: survey respondents indicate they will likely use many different cloud service providers. On average, they anticipate using as many as eight distinct cloud service providers by 2018 -- driven primarily by the specialized needs of their internal business users.

The adoption of multiple cloud service providers is in-line with the IHS market outlook for off-premises public and private cloud computing services, which projects a move to a distributed architecture enabling a 'cloud of clouds' -- what they've referred to as a Meta-Cloud model.

Demand for a Cloud Coexistence Strategies

IHS analysts believe that the Meta-Cloud model will become increasingly important, as consuming off-premises cloud services from many different vendors will likely be a management challenge for most enterprise IT organizations.

According to the IHS assessment, there are significant opportunities for vendors that act as cloud service brokers. They'll provide a single connection to an enterprise with a service-level agreement (SLA) and single point of management by which the IT organization can access a variety of purpose-build cloud services.

With an average of 22 percent of physical servers, 17 percent of virtual machines and 12 percent of Linux containers expected to be in use within off-premises data centers by 2018, network equipment vendors must demonstrate how their equipment can be part of a cohesive hybrid cloud deployment -- where interoperability between network management, server virtualization and data center orchestration software is a critical factor for success.

Thursday, July 21, 2016

Cloud IaaS Service Revenue will Reach $43.6 Billion

Cloud computing services have experienced consistent growth over the last decade. Savvy IT vendors that transformed their portfolio have reaped the benefits of their strategic foresight. Others are still reacting to the diminished demand for their legacy product offerings.

Many CIOs now consider public cloud infrastructure as a service (IaaS) as a viable alternative to their on-premises IT infrastructure. A recent survey of over 6,000 IT organizations found that nearly two thirds of the respondents are either already using or planning to use public cloud IaaS by the end of 2016.

According to their latest worldwide market study, International Data Corporation (IDC) forecasts public cloud IaaS revenues to more than triple from $12.6 billion in 2015 to $43.6 billion in 2020 -- with a compound annual growth rate (CAGR) of 28.2 percent over the five-year forecast period.

Public IaaS Market Development Trends

"Public cloud services are increasingly being seen as an enabler of business agility and speed," said Deepak Mohan, research director at IDC. "This is bringing about a shift in IT infrastructure spending, with implications for the incumbent leaders in enterprise infrastructure technologies."

IDC believes growth of public cloud IaaS has also created new service opportunities around adoption and usage of public cloud resources. That being said, with changes at the infrastructure, architectural, and operational layers, public cloud IaaS is slowly transforming the enterprise IT value chain.

The public cloud IaaS market grew 51 percent in 2015. IDC expects this high growth to continue through 2016 and 2017 with a CAGR of more than 41 percent. However, the growth rate is expected to slow after 2017 as enterprises shift from cloud exploration to cloud optimization.

Furthermore, alternatives such as managed private cloud will grow in maturity and availability, providing IT organizations with more options as they plan their infrastructure evolution to support digital transformation projects.

Demand for Hybrid Cloud Infrastructure

Large enterprise leaders seek a flexible and adaptive business technology environment, therefore hybrid solutions that mix their existing on-premises IT infrastructure with public cloud infrastructure represents the optimal configuration.

In fact, hybrid cloud infrastructure adoption is already a common practice at many large enterprises across the globe, and IDC now predicts that 80 percent of IT organizations will be committed to embrace hybrid architectures by 2018.

Moreover, the dominance of the leading cloud service providers is expected to continue throughout the forecast period, as economies of scale and continued investment drive the cycle of adoption and growth.

Wednesday, July 20, 2016

Connected TVs are in 65 Percent of American Homes

According to the findings from a recent study, Connected TV devices are now in nearly two-thirds of all television households within the U.S. market. There are already more connected TV devices in U.S. households than there are pay-TV set-top boxes.

Leichtman Research Group (LRG) finds that 65 percent of American TV households have at least one television set connected to the Internet via a video game system, a smart TV set, a Blu-ray player, and/or a stand-alone device -- that's up from 44 percent in 2013, and 24 percent in 2010.

Connected TV Market Development Results

Among those with any connected TV devices, 74 percent have more than one device, with a mean of 3.3 per connected TV household. Those with a connected TV generally find them to be easy to use:

  • 70 percent of all with a connected TV agree (8-10 on a 1-10 scale) that streaming services like Netflix are easy to access via connected TV devices, while 12 percent disagree (1-3).

The LRG study also found that 77 percent of TV sets in pay-TV households have a pay-TV provider's set-top box, with a mean of 2.2 boxes per pay-TV household. Pay-TV subscribers tend to express little animosity toward set-top boxes:

  • Fully 20 percent with a pay-TV HD set-top box agree (8-10) that set-top boxes from TV companies are a waste of money, while 44 percent disagree (1-3).
  • 42 percent with a pay-TV HD set-top box agree (8-10) that set-top boxes from TV companies provide features that add value to the TV service, while 16 percent disagree (1-3).
  • 68 percent with 3 or more set-top boxes are very satisfied (8-10) with their pay-TV provider – compared to 54 percent with 1-2 set-top boxes.

Overall, there are more connected TV devices in U.S. households than there are pay-TV set-top boxes. Across all households (including those that do not have any of these), the mean number of connected TV devices per household is 2.1, while the mean number of pay-TV set-top boxes per household is 1.8.

These findings are based on a survey of 1,206 TV households throughout the U.S. market, and are part of a new LRG study.

Other findings from the LRG study include:

  • 83 percent of households with any type of connected TV device get a pay-TV service – similar to 81 percent with no connected TV devices.
  • 38 percent of adults with a pay-TV service watch video via a connected TV device at least weekly – compared to 48 percent of pay-TV non-subscribers.
  • 79 percent of all TV sets in US households are HDTVs – an increase from 34 percent of all TV sets in 2010, and 3 percent in 2004.
  • 33 percent of non-4K Ultra HDTV owners have seen one in use – up from 10 percent in 2014.
  • 25 percent of those who have seen a 4K HDTV in use are interested in getting one – compared to 9 percent of those who have not seen a 4K HDTV.

Tuesday, July 19, 2016

Global Digital Content Revenue will Exceed $180 Billion

As more digital content migrates to online platforms, the trend moves away from content ownership and towards content access. It also means that the device on which you pay for the content may not be the device where you primarily access that same content.

The value of digital content transactions paid for by telecom service provider billing is expected to reach $47 billion by 2020 -- that's more than four times 2015 results of just under $11.3 billion, according to the latest worldwide market study by Juniper Research.

Exploring Digital Content Payment Options

According to the study findings, Apple’s decision to test telecom carrier billing in Germany and Russia is likely to drive a substantial number of new deployments in the medium term.

The move will be essential if Apple is to monetize unbanked owners of refurbished mobile devices in emerging markets, who would otherwise be limited to paying for content via iTunes gift cards.

Mobile network service provider billing solutions could be a key means of monetizing content purchased within an array of environments, including connected cars and for in-flight infotainment.

However, the research found that the operator practice of setting daily or monthly carrier bill spend limits at a low level to minimize exposure to fraud or compensation claims was counterproductive.

"If you have a daily spend limit of $20 in place, consumers are severely constrained in the amount of content they can purchase, particularly given the fact that many content bundles – such as Clash of Clans gems bundles – are priced at close to this level," said Dr. Windsor Holden, head of forecasting and consultancy at Juniper Research.


Online Payment Market Development

Meanwhile, Juniper analysts believe that even though other online payment types -- such as PayPal -- were likely to experience significant growth, the majority of payments (69 percent by value in 2020) would continue to be made via bank debit and credit cards.

Juniper claimed that this would also remain the case for purchases made on mobile devices, with consumers increasingly using smartphones and media tablets to pay for higher-value content which is subsequently consumed on connected TVs or video game consoles.

Overall, Juniper Research estimates that digital content revenues will increase from just under $140 billion worldwide in 2015 to $180 billion in 2017.

Monday, July 18, 2016

Western Europe OTT Video will Reach $14.64B in 2021

Online video entertainment has disrupted most legacy media companies that refused to acknowledge the market opportunities beyond traditional pay-TV services. This shift has become a global phenomenon. The impact and implications are far-reaching.

Western European over-the-top (OTT) television and video revenues will more than double between 2015 and 2021. However, growth rates within each nation will vary considerably, according to findings from the latest market study by Digital TV Research.

"OTT adoption is already high in Scandinavia, the Netherlands and the UK, but it has been much more muted in other countries -- such as France, Spain and Portugal," said Simon Murray, principal analyst at Digital TV Research.

European OTT TV Market Development

OTT TV and video revenues in Western Europe will reach $14.64 billion in 2021 -- that's up from $6.40 billion in 2015. From the $8.25 billion in revenues to be added between 2015 and 2021, the UK will contribute $2.30 billion, Germany $1.34 billion, France $1.13 billion and Italy $0.99 billion. Moreover, the UK will remain the market leader.

Subscription video on-demand (SVOD) will become the region's largest OTT revenue source in 2018 before advertising video on-demand (AVOD) sites regains its crown in 2020. The AVOD sector has been boosted by the rapid expansion in mobile advertising.


AVOD will bring in $5.79 billion by 2021 – that's a $3 billion increase on 2015. The UK will supply $2,333 million of the 2021 advertising total, followed by Germany with $904 million.

SVOD revenues will total $5,632 million by 2021 – that's up from $2,098 million in 2015. Nearly $1 billion will be added in 2016 alone. The UK (up by nearly $800 million between 2015 and 2021 to $1,507 million) will remain the SVOD revenue leader – generating as much as second-placed Germany and third-placed France combined in 2021.

European OTT Video Market Upside

Digital TV Research analysts forecast 53.71 million SVOD subscriptions by 2021 -- that's up from an expected 31.43 million by end-2016. More than 8 million subscribers will be added in 2016 alone. Nearly a third (30.7 percent) of the region’s TV households will subscribe to a SVOD package by 2021 -- that's triple the 13.6 percent recorded at the end of 2015.

Sweden will have more SVOD subscribers than Spain in 2021, regardless of only having a quarter of the population. Despite this, the number of subscriptions will quadruple in France and Italy between 2015 and 2021 and will grow eight-fold in Spain.