Technology | Media | Telecommunications

Wednesday, January 17, 2018

Future of Fintech Platforms: Innovation and Disruption

The latest global fintech market study shows that the insurance segment will drive revenues for platform providers, which is the largest proportion of revenues in 2018. This is based on the vast potential for digital distribution within the traditional insurer industry.

That said, wealth management will also grow rapidly, based on the increasing popularity of intelligent software agents called 'robo-advisors'. As the underlying technology improves, roboadvisors will become increasingly autonomous.

Roboadvisor Market Development

The new study from Juniper Research found that roboadvisor platform revenues will reach $25 billion by 2022 -- that's up from an estimated $1.7 billion in 2017, as the automation of wealth management revolutionizes the way individuals invest.

Their research discovered that roboadvisors will make investments more compelling to high net worth individuals and lower income individuals, with average fees estimated as low as 0.6 percent of assets under management in 2022, with disruption from new players such as Moneybox and Nutmeg.

Roboadvisors are broadening the appeal of the wealth management market, with their delivery method via intuitive smartphone apps making the investment process far more convenient, offering a compelling reason for millennials to invest.


The Juniper study found that this will drive total assets under management by roboadvisors upwards twelve-fold, to $4.1 trillion in 2022, from an estimated $330 billion in 2017. Juniper predicted that roboadvisors will become increasingly more automated over time, as artificial intelligence and machine learning based approaches mature.

"The technologies powering roboadvisors will mature to such an extent that they move from their current human supervised role to being utilised in a fully automated way. This will be aided by track records of performance automated roboadvisor systems are establishing," said Nick Maynard, research analyst at Juniper Research.

Outlook for Fintech Innovation and Disruption

While new entrants are disrupting the market, traditional wealth management players are also adopting new technologies to evolve their business models.

Providers such as BlackRock and Aberdeen Asset Management have invested in roboadvisor start-ups, such as Scalable Capital, FutureAdvisor and Parmenion. The appeal of these technologies is clear to established players, as automated systems will enable significant cost reductions and therefore increase their overall quality of service and profitability.

Monday, January 15, 2018

Exploring Cloud IT Infrastructure Investment Trends

As 2017 came to a close, IT infrastructure vendors continued to respond to trends that favored Hybrid IT multi-cloud solutions. Most enterprise IT leaders invested in combinations of on-premises platforms and public cloud-based services. Meanwhile, the cloud hyperscale service providers still drive demand.

Vendor revenue from sales of infrastructure products (server, storage, and Ethernet switch) for cloud IT -- including public and private cloud -- grew 25.5 percent year-over-year in the third quarter of 2017 (3Q17) reaching $11.3 billion, according to the latest worldwide market study by International Data Corporation (IDC).

Cloud IT Infrastructure Market Development

Public cloud infrastructure revenue grew 32.3 percent year-over-year in 3Q17 to $7.7 billion and now represents 30.2 percent of total worldwide IT infrastructure spending -- that's up from 26.3 percent one year ago.

Private cloud revenue reached $3.6 billion for an annual increase of 13.1 percent. Moreover, total worldwide cloud IT infrastructure revenue is on pace to nearly double in 2017 when compared to 2013.

Traditional (non-cloud) IT infrastructure revenue grew 8 percent from a year ago, although it has been generally declining over the past several years; despite the declining trend, at $14.2 billion in 3Q17 traditional IT still represents 55.6 percent of total worldwide IT infrastructure spending.

Public cloud also represented 68 percent of the total cloud IT infrastructure revenue in 3Q17. The market with the highest growth in the public cloud infrastructure segment was Storage Platforms with revenue up 45.1 percent compared to the same quarter of the previous year, and making up 42 percent of the revenue in public cloud.

Compute Platforms and Ethernet Switch public cloud IT infrastructure revenues were up 24.8 percent and 23.2 percent, respectively. Compute Platforms represented 43.9 percent of public cloud IT infrastructure revenue. Private cloud infrastructure revenue was driven by the Storage Platforms growth of 16.1 percent year over year.


"2017 has been a strong year for public cloud IT infrastructure growth, accelerating throughout the year," said Kuba Stolarski, research director at IDC. "While hyperscaler providers are driving the lion's share of the growth, IDC is seeing strong growth in the lower tiers of public cloud and continued growth in private cloud on a worldwide scale."

Outlook for Regional Cloud Growth

Except for Latin America revenue, which grew 5 percent from a year ago, all other regions in the world grew their cloud IT Infrastructure revenue by double digits. The Asia-Pacific region (excluding Japan) and Central and Eastern Europe (CEE) saw the fastest growth rates at 50.1 percent and 35.3 percent, respectively.

Canada (22.5 percent) and Western Europe (24.6 percent) had annual growth in the twenties, while the U.S. (18.7 percent), Japan (17.5 percent), and Middle East & Africa (15.8 percent) had annual growth in the teens. With the outlook for cloud infrastructure investment continuing to experience growth, IDC and other analysts anticipate increased demand for Hybrid IT solutions.

Wednesday, January 10, 2018

Emotion AI Systems Will Transform Personal Devices

Artificial intelligence (AI) systems are already very sophisticated. Gartner predicts that by 2022, AI-enabled personal devices will know a lot more about that person's emotional state. Moreover, AI is a disruptive force that will reshape the way we interact with many personal devices.

"Emotion AI systems and affective computing are allowing everyday objects to detect, analyze, process and respond to people's emotional states and moods to provide better context and a more personalized experience," said Roberta Cozza, research director at Gartner. "To remain relevant, technology vendors must integrate AI into every aspect of their devices, or face marginalization."

Emotion AI Market Development

The current wave of emotion AI systems is being driven by the proliferation of virtual personal assistants (VPAs) and other AI-based technology for conversational systems.

As a second wave emerges, AI technology will add value to more and more customer experience scenarios, including educational software, video games, diagnostic software, athletic and health performance, and the autonomous car.

"Prototypes and commercial products already exist and adding emotional context by analyzing data points from facial expressions, voice intonation and behavioral patterns will significantly enhance the user experience," said Ms. Cozza.

Beyond smartphones and connected home devices, wearables and connected vehicles will collect, analyze and process users' emotional data via computer vision, audio or sensors capturing behavioral data to adapt or respond to a user's wants and needs.

Cloud-based AI technologies are driving compelling user experiences on a variety of connected devices. Cloud offerings from the big tech players are starting to proliferate due to their attractive cost model, easy-to-use integration and potential to create complex services.

A major catalyst for device vendors to use cloud AI services is the increased usage of VPAs and natural-language technologies, while the adoption of VPA-based, screenless devices such as Amazon Echo and Google Home is also on the rise, further increasing usage of cloud AI services.

Other Findings from the market study include:

By 2021, 10 percent of wearables users will have changed lifestyles, and thereby extend their life spans by an average of six months.

By 2020, 60 percent of personal technology device vendors will use third-party AI cloud services to enhance functionality and services.

Through 2022, security technology combining machine learning, biometrics and user behavior will reduce passwords to account for less than 10 percent of all digital authentications.

Thursday, January 04, 2018

Global Digital Transformation of Banking IT Systems

Many CIOs and CTOs in the global financial services sector will be working on significant new IT infrastructure projects in 2018. Digital transformation within the banking industry is about applying new business technology to break free from prior constraints, with the intent to enable the creation of a more appealing online financial services portfolio.

While most banking leaders worldwide acknowledge the need to transform their business model to compete with new industry players, many have yet to plan and execute a digital transformation strategy, according to the latest market study by International Data Corporation (IDC).

Key findings from the IDC study include:

  • All banks worldwide acknowledge the importance and complexity of transforming their businesses to compete in the new digital economy.
  • However, nearly 40 percent are still at the ad-hoc or opportunistic stages of maturity, meaning that they have not yet executed on a sustainable digital transformation strategy.
  • Fewer than 10 percent can claim that they are in a position to be leaders in innovation and adjust to, or create, significant disruptions in the market.
  • Transforming from the multitude of legacy technology and processes in the banking environment is not an easy task. The sluggish nature of organizational change makes the challenge even more onerous.
  • Those banks that are succeeding are the ones that recognize the need to embrace transformation at the highest levels of the organization and follow that up with a frank and accurate assessment of their business goals versus their technological and operational capabilities.

IDC recommends bank organizations must:

  • Assess their current level of strategic competency and maturity along the digital transformation journey.
  • Benchmark their own digital transformation maturity against the maturity level of their peers and business needs.
  • Uncover strategic maturity gaps and identify areas in need of improvement to achieve business transformation objectives.

"Banks no longer have a choice but to transform if they want to become more responsive to today's and tomorrow's markets," said Jerry Silva, director at IDC. "Those banks that have committed to digital transformation at the board and C-suite level are already creating disruptions that are taking the industry to business models beyond banking."

Savvy CIOs and CTOs are aware and informed about the Fintech start-up phenomenon, and are already learning the key attributes that make these new offerings so attractive to both retail and commercial banking customers that welcome and appreciate innovation.

Tuesday, January 02, 2018

Upside for Emerging Machine-to-Machine Applications

Mobile network service providers are upbeat about their new revenue sources in the future. The emerging Internet of Things (IoT) and Machine-to-Machine (M2M) technologies continue to gain momentum in the Global Networked Economy, as more organizations explore the application possibilities.

Berg Insight released their latest study findings about the market for cellular M2M terminals. About 4.9 million cellular M2M terminals were shipped globally during 2016 -- that's an increase of 28 percent from the previous year.

M2M Technology Market Development

Growing at a compound annual growth rate (CAGR) of 18.8 percent, Berg Insight believes that this number is expected to reach 13.7 million M2M terminals in 2022.

Berg Insight defines cellular terminals as standalone devices intended for connecting M2M applications to a cellular network. These include primarily general-purpose cellular routers, gateways and modems that are enclosed in a chassis and have at least one input or output port.

Note, trackers, telematics devices and other specialized devices are excluded from this market study. That said, North American and Asian vendors dominate the global cellular M2M terminal market.

Cradlepoint, Sierra Wireless and Digi International are the largest vendors in North America, while SIMCom is the main manufacturer on the Asian market. Combined, these four vendors generated close to $415 million in revenues from M2M terminal sales during 2016. This is equivalent to nearly 50 percent of the global market.

Other noteworthy vendors include CalAmp, Multitech Systems and Encore Networks in the U.S. market, Xiamen Four-Faith, Maestro Wireless and InHand Networks in Asia, Teltonika, HMS Networks, Advantech B+B SmartWorx, NetModule, Matrix Electrónica, Eurotech, Gemalto, Dr. Neuhaus and Option in Europe, and NetComm Wireless in Australia.

A large number of small and medium-sized vendors are active on the European market, while the North American market is dominated by a handful of major technology vendors, largely due to barriers in the form of mobile communications carrier certifications required for cellular devices in the region.

"Adoption of 4G LTE in cellular routers, gateways and modems have increased rapidly in recent time, due to increased focus on product life cycle costs and decommissioning of 2G networks," said Fredrik Stålbrand, IoT analyst at Berg Insight.

Outlook for M2M Application Growth

According to the Berg Insight assessment, two-thirds of the cellular M2M terminals sold globally during 2017 used 4G LTE as the main standard. LPWA technologies -- such as LTE Cat M1 and NB-IoT -- are expected to ease the transition from 2G to LTE networks further.

In 2017, introductions of cellular M2M terminals featuring LTE Cat M1 and NB-IoT technologies were made by Encore Networks, Maestro Wireless and MultiTech Systems and several vendors plan to launch new products with LPWA connectivity during 2018.

Monday, January 01, 2018

Converged Systems Revenue Reached $2.99B in 3Q17

Worldwide converged systems market revenue increased 10.8 percent year-over-year to $2.99 billion during the third quarter of 2017 (3Q17), according to the latest market study by International Data Corporation (IDC). The market consumed 1.96 exabytes of new storage capacity during the quarter, which was up 30 percent compared to the same period a year ago.

"The converged systems market expanded on multiple fronts, most notably within hyperconverged solutions," said Eric Sheppard, research director at IDC. "While hyperconvergence is not the sole source of market growth, it has undeniably driven an expansion of this market into new environments at a very rapid pace."

Converged Systems Market Development

IDC's converged systems market view offers three segments: certified reference systems and integrated infrastructure, integrated platforms, and hyperconverged systems. Certified reference systems and integrated infrastructure are pre-integrated, vendor-certified systems containing server hardware, disk storage systems, networking equipment, and basic element or systems management software.

Integrated platforms are integrated systems that are sold with additional pre-integrated packaged software and customized system engineering optimized to enable such functions as application development software, databases, testing, and integration tools.

Hyperconverged systems collapse core storage and compute functionality into a single, highly virtualized solution. A key characteristic of hyperconverged systems that differentiate these solutions from other integrated systems is their scale-out architecture and their ability to provide all compute and storage functions through the same x86 server-based resources.


During the third quarter of 2017, the certified reference systems and integrated infrastructure segment generated revenues of $1.44 billion, which represents a year-over-year increase of 1.5 percent and 48.3 percent of the total converged systems market value.

Dell Inc. was the largest supplier in this market segment, with $697.2 million in sales and a 48.3 percent share. Cisco/NetApp generated $485.5 million in sales, up 56.4 percent (Y/Y) and representing the second largest share of 33.6 percent.

Hyperconverged systems sales grew 68 percent year over year during the third quarter of 2017, generating $1 billion worth of sales. This amounted to 33.5 percent of the total converged systems market revenue.

Dell Inc. was the largest supplier in this market segment with $306.8 million in revenue and a 30.6 percent share. Nutanix generated $207.4 million in revenue with the second largest share of 20.7 percent.

Integrated platforms sales declined 19.8 percent year over year during the third quarter of 2017, generating $542.7 million worth of sales. This amounted to 18.2 percent of the total converged systems market value.

Oracle was the top-ranked supplier of integrated platforms during the quarter, generating revenues of $240.4 million and capturing a 45.8 percent share of the market segment.

Friday, December 29, 2017

Solid State Drive Revenue will Reach $33.6 Billion

Flash-based, solid-state storage demand has grown rapidly within the IT infrastructure sector, as more CIOs and CTOs adopt this technology. The outlook for the solid state drive (SSD) industry remains strong as units, revenue, and total capacity shipped are all expected to see robust growth.

According to the latest worldwide market study by International Data Corporation (IDC), SSD unit shipments will increase at a five-year compound annual growth rate (CAGR) of 15.1 percent. As a result, SSD vendor revenue is expected to reach $33.6 billion in 2021, growing at a CAGR of 14.8 percent.

SSD Storage Market Development

The key factors underlying the improved outlook for the SSD market are greater product availability and improved pricing dynamics as the industry transitions to 3D NAND Flash.

However, IDC believes the current NAND flash supply constraints will begin to diminish in 2018 and contribute to further price erosion in the overall SSD market.

In turn, lower SSD pricing beyond 2017 will drive greater SSD adoption in PCs and other client devices. IDC expects client SSD shipments into the PC and consumer electronics markets to see a 2016-2021 CAGR of 15.8 percent.

Meanwhile, enterprise demand for SSDs will remain strong throughout the forecast, as customers turn to flash-optimized systems for traditional storage needs as well as for server-attached solutions.

"SSDs continue on a path to become a more broadly used, ubiquitous storage technology across IT markets," said Jeff Janukowicz, vice president at IDC. "SSDs play an important role in making the digital transformation possible, a dynamic that IDC expects will continue to propel the adoption of SSDs and underpins the secular growth of the SSD market for both the client and enterprise segments."

In the client market, IDC expects higher SSD capacities at key price points to result in higher attach rates over time in new notebook and desktop PCs, as well as in detachable tablets or 2-in-1 tablets.

Outlook for SSD Adoption and Growth

Within the enterprise data center market, lower SSD prices -- on a per-gigabit basis -- will move SSD attach rates higher in servers, network storage arrays (all-flash arrays and hybrid flash arrays), and within hyperscale cloud service provider data centers.

In the commercial market, IDC expects to see increased adoption of SSDs in a variety of secondary markets and applications -- including the Internet of Things (IoT), where the high reliability, extreme flexibility in form factor and capacity, and operating ruggedness in harsh environments will prove to be beneficial.

Wednesday, December 27, 2017

Video Entertainment Original Content Creation Trends

Digital TV and online video has seen the battle between Over the Top (OTT) providers and traditional television networks pushed to the forefront. In order to differentiate themselves, and reduce the need to rely on expensive content partnerships, OTTs will produce more of their own entertainment content.

According to the latest worldwide market study by Juniper Research, Subscription Video on Demand (SVoD) services -- from leading providers such as Netflix and Amazon -- will drive a surge in OTT revenues to reach $120 billion in 2022, and that's up from $64 billion in 2017. In this environment, the traditional expensive bundle of pay-TV services will surely continue their decline.

Original Content Market Development

The upside market opportunity for the innovative low-cost video entertainment providers is significant. The in-depth market research also uncovered that over a quarter of global households will eventually subscribe to SVOD services by 2022.

The new research found that expenditure by OTTs on original content was increasing significantly. As an example, Juniper estimates that Netflix will spend over $6 billion during 2017-18, in contrast to the publicly funded BBC, which is investing a comparatively small sum of $1.4 billion.

All the leading SVOD players, including Netflix, are seeking to out-spend traditional video entertainment providers; attempting to deliver original content and reduce reliance on expensive back-catalogs.


"Success will hinge on whether these providers can continue to produce hits such as ‘Stranger Things’. As consumers become more fluid in their uptake and loyalty to video services, OTTs could just as easily see users switch off," said Lauren Foye, senior analyst at Juniper Research.

In addition, Juniper found that some OTTs will pursue sporting event rights, with Amazon likely to bid for rights to the Premier League in February 2018. The research argued that with such content owned by different providers, customers will have to choose from multiple competing subscription options.

Outlook for New OTT Market Innovation

That being said, the research identified the potential for traditional broadcasters to hold an advantage over OTT firms in the provision of local content. Some regional OTT services have launched, such as iFlix, but these do not provide the same granular level of local coverage that broadcasters can offer.

The delivery of media via Internet Protocol (IP) will have a benefit to broadcasters in driving new customers to their own OTT services -- such as the BBC's iPlayer -- accessed via the ‘Red Button+’ on connected TVs. Juniper forecasts that data usage will soar on these connected devices, approaching 800,000 Petabytes per year by 2022.

Tuesday, December 26, 2017

Virtual Assistant Apps Adopted by Telecom Providers

More telecom service providers will invest in emerging technologies that enable them to improve operational productivity via automation, and introduce new capabilities for their customers. Virtual assistant applications are emerging, as telcos start to deploy artificial intelligence (AI) and machine learning (ML).

While the telecom network operators are prioritizing these virtual assistants primarily to improve customer engagements and consequently reduce churn rates, they are also positioning themselves to compete directly with Amazon Alexa, Google Assistant, Apple Siri and Microsoft Cortana.

Telco Virtual Assistant Market Development

According to the latest worldwide market study by ABI Research, the virtual assistants will enable telecom service providers to save $1.2 billion on customer care management by 2022, resulting in a compound annual growth rate (CAGR) of 17 percent over the next five years.

"The recent introduction of virtual assistants in customer service signifies the level of urgency within telcos to start emphasizing the importance of customer relationships and customer care management, something they have been taking for granted for decades," said Sarju Vasavada, industry analyst at ABI Research.

Case in point, Vodafone released TOBi, after being fined £4.6 million by the UK regulator, Ofcom, for falsely charging more than 10 thousand mobile pay-as-you-go customers for top-up credit. They also had a record-breaking number of customer complaints, before the TOBi vitual assistant was deployed.

These virtual assistants now help mobile telecom service provider customers with a variety of issues -- ranging from basic account inquiries to SIM purchases, service troubleshooting, and device settings.

Several progressive telcos are already leveraging the AI and NLP technology market leaders -- such as IBM Watson, Nuance, LivePerson, and IPsoft -- or they're custom-building these software solutions in-house.

For example, Telefónica is developing their digital chatbot, Aura for 2018, and DT’s Tinka is already averaging 50 thousand customers in Austria every month. According to the ABI assessment, more telecom service providers are keen to introduce virtual assistant capabilities throughout their markets.

As a result, ABI Research now forecasts that AI investments by telecom network operators will reach $14 billion by 2022 -- that's a CAGR of 22.4 percent.

Outlook for Telco AI Technology Deployments

The benefits of early AI investments by leading telcos are beginning to accelerate other deployments, with Orange and SK Telecom both announcing the release of their multi-talented chatbots -- Djingo and Nugu -- respectively in early 2018.

"Telcos are slowly but steadily getting ready for virtual assistant prime-time. We are bullish on telcos making this next-generation service automation leap within the next five years," concludes Vasavada.

Friday, December 22, 2017

Ongoing Evolution of Mobile Messaging Applications

There has been a significant evolution in the range of use cases for Application to Person (A2P) messaging in recent years. Historically, A2P was used for alerts and as a billing mechanism for simple content and services -- for one-off downloads or actions, and for recurring payments.

The latter use case has declined markedly in the past 5 years, due to a combination of the transition to an app-based economy largely driven by card billing and by regulatory action against fraudsters.

A2P Messaging Market Development

The volume of A2P messaging is expected to increase by 20 percent over the next 5 years to more than 2.7 trillion by 2022 -- that's up from 2.1 trillion in 2017, according to the latest worldwide market study by Juniper Research.

The analyst claimed that this growth would be driven by an increase in automated marketing, payments and authentication messages. Note, A2P is defined as an automated SMS message sent from an enterprise to an end user.

The research uncovered that grey route traffic -- defined as A2P traffic veiled as P2P traffic -- will fall by 11 percent between 2017 and 2022. Operators’ efforts, in partnership with SMS firewall providers, in detecting grey routes will continue to be the driving force behind this reduction.

With total SMS traffic forecasts to exceed 30 billion messages per day in 2022, the market study found that Artificial Intelligence (AI) would be required to efficiently analyze the high level of SMS traffic.


"Operators are implementing these services to move as many as possible grey route messages to directly connected routes," said Sam Barker, senior analyst at Juniper Research.  "However, there will be enterprises who are unwilling to pay the additional fees for directly connected A2P services, and operators risk losing this business entirely."

In response to rising enterprise usage of over-the-top (OTT) applications, the research anticipates that telecom service providers will begin roll outs of Rich Communication Suite (RCS) services, combining the high level of reach of SMS messaging and the rich functionality of OTT applications.

Additionally, the research found this increase of enterprise messaging over OTT applications will subsequently create a new use case for A2P SMS traffic. User verification and One Time Passwords (OTPs) will require the ubiquitous nature of SMS services as a starting point.

Furthermore, according to the Juniper assessment, SMS will continue to be required as a fall back option against OTT applications.

Outlook for Regional A2P App Growth

There are significant differences between regions with regard to the usage of A2P. In the Far East & China, for example, the surge in A2P messaging generated is a direct result of OTT players’ success in China, which offer an array of commerce services (banking, P2P money transfer) which in turn utilize A2P SMS for validation and/or authentication.

Juniper has noticed similar patterns developing in South Korea and Japan, where Kakao and LINE have both released business platforms, aimed at service providers wishing to implement A2P OTT rather than SMS.