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Thursday, June 30, 2016

Converged Systems Transform Enterprise Data Centers

While much of the news about IT innovation focuses on public cloud computing, the on-premise data center is also being transformed by new technologies. CIOs have recognized that infrastructure complexity has inhibited their ability to rapidly provision resources for new workloads, and now they're adopting a variety of converged systems to overcome their legacy constraints.

According to the latest worldwide market study by International Data Corporation (IDC), the converged systems market increased revenue 11 percent year-over-year to $2.5 billion during the first quarter of 2016. The market generated 1,367 petabytes of new storage capacity shipments during the quarter, which was up 36.2 percent compared to the same period a year ago.

"End users within the mid-market and even in the outer edge of the enterprise data center continue to prioritize simplicity in all aspect of the user experience. This is at the heart of the rapid growth rate within hyper-converged systems." said Kevin Permenter, senior research analyst at IDC.

Going forward, IDC believes the IT vendors that can present the end user with a seamless and simple end-to-end experience will be well-positioned for further growth. However, those that do not adapt to the new business model will continue to experience market share erosion.


Converged Systems Market Segments

IDC distinguishes between three market segments -- Integrated Systems, Certified Reference Systems, and Hyperconverged Systems as follows:
  • Integrated systems are pre-integrated, vendor-certified systems containing server hardware, disk storage systems, networking equipment, and basic element/systems management software.
  • Like integrated systems, certified reference systems are pre-integrated, vendor-certified systems containing server hardware, disk storage systems, networking equipment, and basic element/systems management software.
  • Certified reference systems, however, are designed with systems from multiple technology vendors.
  • 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 ability to provide all compute and storage functions through the same server-based resources.
During the first quarter of 2016, the Integrated Systems market generated revenues of $1584.25 million, which represented a year-over-year increase of 1.8 percent and 62.8 percent of the total market value. EMC was the largest supplier of Integrated Systems with $403.90 million in sales, or 25.5 percent share of the market segment.

Certified Reference Systems sales rose 0.3 percent year over year during the first quarter of 2016, generating $567.95 million worth of sales. This amounted to 22.5 percent of the total market value. Cisco/NetApp was the top-ranked supplier of Certified Reference Systems in the quarter, generating revenues of $336.72 million and capturing a 46.86 percent share of the market segment.

Hyperconverged Systems sales grew by 148 percent year over year during the first quarter of 2016, generating $371.88 million worth of sales. This amounted to 14.7 percent of the total market value.

Wednesday, June 29, 2016

Cloud Services Disrupt the Videoconferencing Market

I recall when some of the first videoconferencing systems were installed in multinational enterprises across America, more than two decades ago. Since that time, there have been many new developments in video communication-related technologies and associated services.

The introduction of Telepresence was a significant advancement. However, the arrival of software app and web-based services -- such as Microsoft Skype and Google Hangouts -- have raised expectations for online collaboration ease-of-use and transformed how video meetings are conducted across the public Internet.

In the first quarter of 2016 (Q1 2016), video conferencing revenue declined 22 percent quarter-over-quarter to $701 million due to lower seasonal demand, according the the latest worldwide market study by IHS Technology.


Video Communication Market Development

Videoconferencing revenue is also trending down slightly on a year-over-year basis, primarily due to decreases in infrastructure sales. Demand for video conferencing endpoints is still growing, but the shift to cloud services is displacing a significant amount of infrastructure equipment revenue.

The backbone of the video conferencing market, the dedicated system segment continues to decline, falling 6 percent in the first quarter of 2016 (Q1 2016) from the year-ago quarter (Q1 2015). Although endpoint demand remains steady, infrastructure sales are plunging as alternative approaches such as embedded, virtual and cloud-based multipoint control units (MCUs) gain acceptance.

Two highlights in Q1 2016 were PBX-based video and immersive telepresence.

PBX-based video has proven popular because it offers organizations a cost-effective way to enjoy multimedia communication using infrastructure they already have. PBX-based video took a breather in 2015 due to a videophone portfolio refresh at Cisco, but as of Q1 2016 the segment is returning to year-over-year growth—primarily due to a pickup in software demand.

Immersive telepresence grew for the first time in 2015 since 2011, and the recovery is extending into 2016 with Q1 revenue increasing 19 percent year-over-year.

On a regional basis, North America was the bright spot in Q1 2016—up 12 percent year-over-year—while all other major geographic regions declined.

According to the IHS assessment, a flat outlook is forecast for the video conferencing market, with revenue of $3.2 billion by 2020 and a five-year (2015–2020) compound annual growth rate (CAGR) of zero percent.

Tuesday, June 28, 2016

American IoT Market Revenue will Reach $357 Billion

The progressive American companies have adopted the notion that there's real value in connecting their Things to the public Internet. International Data Corporation (IDC) forecasts that U.S. firms will invest more than $232 billion in the Internet of Things (IoT) hardware, software and services market in 2016.

Furthermore, IDC expects IoT revenues in the U.S. market will experience a compound annual growth rate (CAGR) of 16.1 percent over the 2015-2019 forecast period -- eventually reaching more than $357 billion in 2019.

According to the IDC assessment, the industries leading the way in U.S. IoT investments are Manufacturing and Transportation at $35.5 billion and $24.9 billion, respectively, in 2016.

U.S. IOT Market Development Momentum

However, cross-industry investment -- which represents use cases that are common to all industries -- will approach $31 billion this year. The IoT use cases receiving the greatest levels of investment from U.S. organizations across these three industry segments are:

Manufacturing Operations, which supports digitally-executed manufacturing, or how manufacturers use intelligent and interconnected I/O (input output) tools to enable the different components in the manufacturing field -- such as machine tools, robots, conveyor belts -- to autonomously exchange information, trigger actions and control each other independently.

Freight Monitoring, which uses radio frequency identification (RFID), global positioning system (GPS), GPRS, and GIS technologies to create an intelligent, Internet-connected transportation system. This system carries out the intelligent recognition, location, tracking and monitoring of freight and cargo through exchanging information and real-time communications via terrestrial wireless or satellite communication channels.

Smart Buildings, which utilize advanced automation and integration to measure, monitor, control, and optimize building operations and maintenance. The key concept is optimization – meaning the deployment of a set of integrated control systems capable of adapting in real time to both internal policies and external signals. These systems manage how building equipment operates to use energy in the most efficient and cost-effective way.

Looking across all U.S. industries, these three IoT use cases will receive the greatest levels of investment throughout the forecast period. And, the next three largest IoT use cases in terms of U.S. revenue will be Remote Health Management, Smart Grid (Electricity), and Smart Home.

Upside Opportunities for Exponential Growth

The IoT use cases that will experience the greatest revenue growth in the U.S. over the 2015-2019 forecast period are In-Store Contextualized Marketing, Connected Vehicles, and Insurance Telematics.

"A use case represents a detailed composition of a technology investment that is made to produce a set of end user benefits," said Marcus Torchia, research manager at IDC.

The long term opportunity for IoT vendors is helping to identify and create immediate and residual benefits for end users through their technologies. IDC analysts believe that there are already significant opportunities across many industries.

For example, in highly instrumented industries like manufacturing and transportation, large data sets are used to optimize operational processes and extend the life of high cost assets. In other sectors, such as healthcare and consumer, IoT technology is being used to produce benefits that improve quality of everyday life.

While Manufacturing and Transportation will lead the U.S. in terms of overall IoT investments, the Insurance, Retail, and Healthcare industries will see IoT spending levels increasing by 135 percent, 101 percent, and 96 percent, respectively, over the forecast period. In addition to driving some of the largest IoT investments, the Cross Industry segment will also see revenue growth of more than 100 percent through 2019.

Monday, June 27, 2016

Big Data Analytics Apps Transform IoT Operations

As more enterprises embrace the Internet of Things (IoT), we're seeing an increase in demand for analytics apps that can extract insight and meaning from sources of big data. Vendors are now busy identifying opportunities for software and professional services to assist buyers with their transformation projects.

According to the latest market study by Technology Business Research (TBR), 57 percent of analytics software customers in IT departments believe analytics adoption 'significantly' or 'very significantly' changed their internal operations and their relationships with lines of business (LOB) leaders.

Additionally, 28 percent of surveyed IT buyers reported a moderately significant impact.

Big Data Analytics Software Market Development

"IT and LOB decision makers play important roles in analytics purchasing and implementation," said Andrew Smith, software analyst at TBR.

However, the unique demands of IoT require organizational and operational changes to ensure the success of customer analytics implementation, and for IT organizations to effectively train others to apply analytics solutions in their day-to-day business activities.

TBR research found the top three IT operational pain points related to analytics adoption were:

  • Re-engineering of internal IT processes and workflows using data and insights. 
  • Training end users on how to utilize new analytics applications or practices.
  • Determining which analytics tools, platforms or software applications would best suit the organization’s needs, prior to purchase.

At least 70 percent of respondents reported being at least moderately likely to use professional services to help execute operational transformation -- highlighting the significant vendor opportunity created by analytics-driven upheaval in IT.

Impact of Analytics on Digital Transformation

TBR believes that analytics adoption changed the way that many IT departments already make decisions, organize themselves, and manage purchasing and implementation of digital transformation solutions.

According to the TBR assessment, as new waves of organizational change and business process re-engineering directly impact mainstream IT leaders, the savvy vendors with skilled and experienced professional services talent will benefit in the near term.

During the worldwide market study, TBR analyzed survey data of 178 analytics software and professional services buyers who identified their department as the IT organization.

Friday, June 24, 2016

VoLTE Service Revenue will Reach $6.3 Billion by 2020

Mobile communication technology is evolving. Voice over LTE (VoLTE) deployment is quickly ramping up, with improvements in network efficiency and spectrum reuse as the primary drivers. There are currently sixty-three VoLTE commercial networks in operation, according to the latest market study by IHS.

This is a net addition of 23 VoLTE networks to the existing 40 that were online at the end of December 2015. In each of the currently operational 63 VoLTE networks, existing subscribers become de facto VoLTE users when they upgrade their devices to LTE-capable ones.

As an example, the Verizon Advanced Calling service is a device-driven offering. Users do not sign up for Advanced Calling, but if they buy a device that supports VoLTE, then they are on the Verizon VoLTE network by default.

How VoLTE Services are Being Deployed

For the majority of those VoLTE networks, the service is marketed as a device -- such as a smartphone -- feature rather than something to which a user subscribes. Therefore, it appears that network upgrades will continue in the coming months and years, as the VoLTE ecosystem is now firmly in place.

Moreover, according to the IHS assessment, there are currently 500 commercial Long Term Evolution (LTE) networks in the world, and every single network will eventually support VoLTE -- that's why it's inevitable that all voice services will eventually migrate to LTE technology.

However, making VoLTE work perfectly remains a challenge, and service providers know they need to achieve a degree of LTE network ubiquity and then expand their IP multimedia subsystem (IMS) infrastructures to fully support VoLTE offerings.

But in the meantime, the VoLTE network operator frontrunners are enabling more VoLTE users.


Outlook for VoLTE Market Development

By 2020, worldwide VoLTE service revenue is projected to reach $6.3 billion, with almost half coming from North America, where average revenue per user (ARPU) is the highest in the world.

At that time, Asia-Pacific will have three times more VoLTE users than North America but revenue will be 13 percent lower.

Finally, as VoLTE deployments surge worldwide, the need for global network roaming agreements becomes greater. It's the next big technology transition for mobile network service providers, and it's already fueling the debate over preferences for local breakout (LBO) versus S8 home routing (S8HR) approaches.

Thursday, June 23, 2016

Digital Transformation: the DevOps Journey to Progress

More organizations across the globe are proactively making the move to embrace Digital Transformation methodologies. Why change now? Technology must be at the heart of every enterprise. It's time to "Go Digital, or Die," according to the latest worldwide market study by the Everest Group.

To become truly digital, enterprises must develop a holistic IT applications and infrastructure strategy, with DevOps as the pivotal enabler. According to Everest Group research conducted during Q1 2016, over three-fourths of enterprises believe in leveraging digital technologies to achieve competitive differentiation.

Digital Enterprise Market Development

"Enterprises that embrace digital adoption are using technology to create new business, not just enable it. For example, enterprises are discovering how IoT and mobility can dramatically improve user experiences, which is unlike the traditional role of technology for driving efficiencies in back-office operations," said Yugal Joshi, practice director at Everest Group.

"Digital enterprises are those that employ emerging technologies throughout the enterprise -- across internal and market-facing operations," continued Joshi. "This requires an integrated applications and operations strategy with DevOps as its pivotal element."

Everest Group also reports that though CIOs are keen to adopt DevOps principles, most organizations struggle with them and require guidance on their journey. But it hasn't always resulted in higher engagement with IT vendors and service providers, as organizations learn how to support this growing demand themselves.

Other key findings from the study include:

  • Enterprises have begun adopting Agile and DevOps principles by themselves. However, they are struggling with scaling up their pilot projects to an enterprise-wide adoption.
  • Many enterprises already have adopted Agile approaches in the application development and testing phases of the lifecycle and are now experimenting with ways to integrate the crucial operations phase to embark on a truly DevOps journey.
  • While in some cases enterprises lack executive leadership commitment to institute cultural change, in other cases, enterprises overemphasize technology without getting the pre-requisite peripherals in place.
  • The Application Services market grew by approximately 5 percent in 2015, higher than the overall IT services industry growth of 3 percent.
  • Demand for consulting services spiked in the last year, driven primarily by enterprise adoption of digital technologies.
  • Anti-incumbency is gaining traction among buyers as they are increasingly seeking newer vendor engagement constructs.
  • The Banking, Financial Services and Insurance (BFSI) segment led overall deal activity with 26 percent share. Healthcare and life sciences enterprises increased their spending proportion to 14 percent share.
  • Digital adoption will continue to witness increased traction, but the bulk of enterprise spending will be on traditional application services that take up the majority of legacy software application portfolios.
  • Application services will begin to take up a slightly larger share of the market as demand for digital technologies and connected systems will necessitate development of ecosystems across multiple channels.

Wednesday, June 22, 2016

Insurance Telematics App Adoption Driven by IoT Tech

Sensors in automobiles that produce data for analysis by insurance companies are a compelling use case for Internet of Things (IoT) technologies. The number of Insurance Telematics policies in force on the European market already reached 5.3 million in the fourth quarter of 2015, according to the latest worldwide market study by Berg Insight.

Increasing at a compound annual growth rate (CAGR) of 37.2 percent, that nascent market is expected to reach 25.8 million by 2020. In North America, the number of insurance telematics policies in force is expected to grow at a CAGR of 45.8 percent from 6.3 million in 4Q15 to reach 42.1 million by 2020.

Moreover, the European insurance telematics market is largely dominated by hardwired aftermarket black boxes, while self-install automotive on-board diagnostic (OBD) devices instead represent the vast majority of all active policies in North America.

Automotive Telematics Market Development

Several major U.S. providers of usage-based insurance (UBI) have recently shifted to solutions based on smartphones. Berg Insight now expects a rapid increase in the uptake of solutions based on smartphones and also embedded OEM telematics systems in all markets in the upcoming years.

The insurance telematics value chain spans multiple industries. Insurers with notable presence in the insurance telematics market include Progressive, UnipolSai, State Farm, Allstate, Generali, Allianz, Intact and Insure The Box.

Renowned telematics suppliers active in the insurance field for example include Octo Telematics, Vodafone Automotive and LexisNexis Risk Solutions. Intelligent Mechatronic Systems, Cambridge Mobile Telematics, Modus, Baseline Telematics, DriveFactor and The Floow are also notable players on the market.

Automotive OEMs are increasingly taking an active part in the ecosystem. Examples include General Motors, Ford, Renault-Nissan, BMW, Daimler and Fiat.

In addition, mobile network operators such as Vodafone, Telefónica, Verizon and Sprint are offering insurance telematics solutions, commonly working with telematics partners. The insurance telematics market is currently in a phase of strong growth in both North America and Europe.

"Canada, the U.S. and Italy in particular have seen a significant increase in the use of telematics-based auto insurance during 2015," said Jonas Wennermark, analyst at Berg Insight.

Insurance Telematics Market Outlook

He adds that the UK market is also one of the front-runners, and adoption is expected to increase in a number of additional countries. Telematics-based insurance has already been introduced in European countries including Spain, Austria, France, Switzerland, Germany, Denmark, Belgium and the Netherlands.

Differentiated telematics offerings are predicted for a broader range of segments, and insurers are increasingly expected to embrace usage-based pricing as well as claims-related insurance telematics and various other value-added services.

In North America, smartphone software app-based solutions are growing rapidly, whereas Europe still largely favors device-based solutions. We're following the key trends within this market and will continue to share details on the emerging market outlook.

Tuesday, June 21, 2016

Emerging GPS Technology Applications Move Indoors

Global positioning system (GPS) wireless technology has transformed terrestrial travel and navigation, but there are numerous other uses. Now these nascent technology applications and new use cases are emerging both inside and outside the home.

GPS personal tracking device shipments will more than double by 2021 with a 21 percent CAGR, as the industry shifts away from traditional markets, such as family and pet locator devices.

ABI Research predicts that non-traditional markets -- including elderly or health, corporate, and personal asset tracking -- will embrace ubiquitous indoor and outdoor location technology.

Indoor Location Market Development

"Traditional markets still attract attention, given the huge total available market, but they remain too fragmented, with no obvious sales and distribution channels," said Patrick Connolly, principal analyst at ABI Research.

As a result, a number of established companies in this space are being forced to consider new areas to find future market growth.

New healthcare applications in elderly, dementia, and remote patient monitoring, for instance, have great potential. ABI Research anticipates location-enabled health devices to break two million shipments by 2021.

When you consider the fact that average healthcare spending is increasing at a time when approximately 30 percent of U.S. hospitals report that they're losing money, there is an immediate need for technology to remove the inherent inefficiencies of this market.

Location Technology Application Trends

Meanwhile, the lone worker market shows significant acquisition activity, which is leading to an increase in pricing pressures as companies look to buy market share.

ABI Research finds this to be a dangerous strategy in a market that will not scale rapidly. But the technology is there to support more stringent legislation, and indoor location will open up new applications and services in corporate.

"We see stronger device shipments in corporate, industrial and personal asset tracking, with a combined total exceeding 25 million by 2021," concludes Connolly.

BLE beacons will open up these markets, but there are a host of other technologies emerging -- such as UWB, sensor fusion, magnet field, proprietary Wi-Fi and LPWAN. Moreover, ABI analysts believe that this combination of wireless technologies will spark more demand for outdoor technologies like GPS.

Monday, June 20, 2016

Hybrid IT Growth Creates Demand for Public Cloud

As cloud computing services attract increased adoption at many multinational companies across the globe, the procurement process is now being driven by senior executive leaders that seek to transform their enterprise into a digital business early-adopter.

According to the Technology Business Research (TBR) 1H16 cloud customer research program, the market for enterprise-grade cloud solutions is maturing and evolving with line-of-business (LOB) departments funding more cloud purchases than ever, therefore having more input into vendor and solution choice.

As this trend continues, cloud X-as-a-Service workload adoption -- public, private and hybrid cloud computing -- proliferates and professional services engagements morph into longer-term managed services deals from one-off systems integration transactions to help manage cloud sprawl.

Findings from the latest TBR research study show that cloud professional services have declined notably as a percentage of enterprise cloud budgets globally, as cloud workload adoption increases.

Cloud Services Market Development

"Over the past 12 months, the largest emerging opportunity in the cloud professional services market has centered on cloud brokerage and integration due to enterprises evolving their IT environments toward hybrid IT and multi-cloud, driving demand for automated tools and third-party services to optimize current assets," said Cassandra Mooshian, senior analyst at TBR.

TBR analysts believe that vendors will need to engage with LOB and IT department leaders to promote change management to help these departments work together as enterprises start to view public, private and hybrid cloud more strategically and collaborate more often on decisions and budget allocation.

Accordin to the TBR assessment, enterprise public cloud adoption continues to increase as hybrid IT growth pulls through public cloud as enterprises look to achieve more strategic objectives with their cloud purchases, creating broader opportunities for all cloud vendors.

Ongoing Cloud Services Market Research

TBR surveyed 4,047 enterprises across the U.S., the U.K., Germany, France, China and India to understand adoption rates, buying behaviors and vendor landscape of the overall cloud market. Of the total survey population, TBR asked 1,416 cloud purchasers questions regarding their preferences, planned purchases and desired steps for vendors to make.

From the data, TBR produced four reports: Private Cloud Customer Research, Hybrid Cloud Customer Research, Public Cloud Customer Research and Cloud Professional Services Customer Research. TBR conducts this research semi-annually. In September, TBR will publish the topical report "Open Source Adoption" with findings from the same population.

Friday, June 17, 2016

Wearable Device Market Fragmentation will Increase

Worldwide shipments of wearable devices are expected to reach 101.9 million units by the end of 2016, representing 29 percent growth over 2015. Wearable devices have a forecast compound annual growth rate (CAGR) of 20.3 percent, culminating in 213.6 million units shipped in 2020, according to the latest market study by International Data Corporation (IDC).

"Unlike the smartphone, which consolidated multiple technologies into one device, the wearables market is a collection of disparate devices," said Jitesh Ubrani, senior analyst at IDC. "Watches and bands are popular, but the market will clearly benefit from the emergence of additional form factors, like clothing and eyewear, that will deliver new capabilities and experiences."

IDC believes that eyewear has a clear focus on the enterprise as it stands to complement or replace existing computing devices -- particularly for workers in the field or on the factory floor. Meanwhile, clothing will take aim at the consumer, offering the ability to capture new forms of descriptive and prescriptive data.

Two other factors driving the wearables market development forward are wireless communication connectivity and software applications.

According to the IDC assessment, the wearables market presents a strong opportunity for software developers. Applications increase the value and utility of a wearable, and users want to see more than just their health and fitness results. News, weather, sports, social media, and Internet of Things (IoT) applications will all have a place on a wearable device.


Wearable Product Category Highlights

Watch: Popularized by devices like the Apple Watch, Moto 360, and others, this category is expected to increase from 41 percent of total wearables shipments in 2016 to 52.1 percent in 2020.

Wrist Bands: Through their simplicity, fitness-focused wrist bands have dominated the market thus far. Driven by low cost vendors Xiaomi and giants like Fitbit, this category will remain influential and accessible.

Eyewear: Google's Android platform is projected to drive this category. Although it will produce less than 10 percent of wearable device shipments by 2020, it will account for more than 40 percent of the total revenue of the wearables market due to the high prices.

Clothing: Traditional fashion and fitness brands are quickly partnering up with tech companies to deliver smarter clothing, bringing some much needed attention to this nascent category. It stands to capture 7.3 percent of the market by 2020 as consumers and athletes integrate fashion-tech into their daily lives.

Others: Lesser known form factors like clip-on devices, hearables, helmets, and more will account for 6.1 percent in 2016 and 3.3 percent in 2020. While IDC does not expect an immense growth in this category, it will evolve as numerous vendors cater to niche audiences with creative new devices and use cases.