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Tuesday, July 25, 2017

Public Cloud Services Revenue will Reach $266 Billion

The shift of IT workloads to hybrid cloud computing continues to grow, fueled in part by the rise of digital transformation projects. Worldwide spending on public cloud services and infrastructure is forecast to reach $266 billion in 2021, according to the latest market study by International Data Corporation (IDC).

Although spending growth will likely slow during 2016-2021, the market is still expected to achieve a five-year compound annual growth rate (CAGR) of 21 percent. Moreover, public cloud services spending will reach $128 billion in 2017 -- that's an increase of 25.4 percent over 2016.

Public Cloud Market Development

The United States will be the largest market for public cloud services accounting for more than 60 percent of worldwide revenues throughout the forecast, and total spending of $163 billion in 2021.

Western Europe and Asia-Pacific excluding Japan (APeJ) will be the second and third largest regions with 2021 spending levels of $52 billion and $25 billion, respectively. APeJ and Latin America will experience the fastest spending growth over the forecast period with CAGRs of 26.7 percent and 26.2 percent, respectively.

However, according to the IDC assessment, six of the eight regions are forecast to experience CAGRs greater than 20 percent over the next five years.

"In Western Europe, the public cloud market is going to more than double in the 2016-2021 time frame led by strong spending growth in Germany, which is also the largest national market, Italy, and Sweden," said Angela Vacca, senior research manager at IDC.

The U.S. industries that will see the fastest growth in public cloud services spending are professional services (21.5 percent CAGR), media (21 percent CAGR), retail, and telecom (each with a CAGR of 20.9 percent).

The U.S. industries that will spend the most on public cloud services are discrete manufacturing, professional services, and banking. Together, these three industries will account for nearly one third of all public cloud services spending in the United States in 2021.

In Asia-Pacific excluding Japan, banking, professional services, and telecom will deliver more than a third of the region's public cloud services spending in 2021 while the industries with the fastest spending growth will be professional services, personal and consumer services, and process manufacturing.

Software as a Service (SaaS) will remain the dominant cloud computing type, capturing two thirds of all public cloud spending in 2017 and nearly 60 percent in 2021.  Spending on Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) will grow at much faster rates than SaaS with five-year CAGRs of 30 percent and 29.7 percent, respectively.

Outlook for Enterprise Adoption Growth

In terms of company size, more than half of all public cloud spending will come from very large businesses (those with more than 1,000 employees) while medium-sized businesses (100-499 employees) will deliver about 20 percent of spending throughout the forecast.

Large businesses (500-999 employees) will see the fastest growth with a five-year CAGR of 22.8 percent. While purchase priorities vary somewhat depending on company size, the leading product categories include CRM and ERM applications in addition to server and storage hardware.

Monday, July 24, 2017

Disruption in the Worldwide Mobile Roaming Sector

Telecom network operator revenues from international mobile roaming are expected to experience an 11 percent decline in 2017, as service providers introduce ‘Roam Like at Home’ packages in key markets -- including Europe, North America and Asia-Pacific.

‘Roam Like at Home’ enables mobile users to utilize their monthly voice, data, and messaging allowance while roaming on other service provider networks, without incurring additional charges.

Implications for Mobile Service Providers

Juniper Research forecasts that the annual revenues, worth an estimated $54 billion in 2016, will decline to $48 billion in 2017 as revenues generated from increased usage in many markets fail to offset those lost by lower roaming charges in the EU countries.

"This decline in global revenues is due to a 33 percent fall in European roaming revenues, following the EU regulation to end roaming surcharges," said Nitin Bhas, head of research at Juniper Research.

While they expect roaming tariffs outside Europe to continue to be unregulated and to be significantly higher, operator focus will need to shift to innovative bundles and tailored pricing to preserve or grow revenues from travelers and immigrant workers.


The research found that mobile network operator revenues will likely begin to recover in 2018, following a significant increase in active roamers and data usage.

Following Britain’s decision to leave the EU, it is possible that UK mobile network operators may try to make up for the loss by increasing domestic service prices, especially since their margins have been falling at the rate of 1-2 percent over the last 5 years.

Alternatively, these mobile network operators could adopt 'Rest of the World' tariffs for mobile roamers in the UK.

Outlook for Mobile Roaming Revenues

Under such a scenario, the average roaming spend per active mobile roamer would double by the end of 2022 due to higher costs, reaching $150 per annum, compared to our current estimates of $75.

The Juniper Research study findings uncovered that while this is a possibility, it is highly unlikely given historical customer backlash to such events and further government regulatory interventions.

Friday, July 21, 2017

Cognitive System Users will Reach One Million by 2022

Large enterprises have an asset that many SMBs do not. They are in possession of massive quantities of historical and current data. In addition, the business case for employing cognitive systems to analyze that data is more compelling, when compared with smaller companies.

ABI Research predicts the number of businesses adopting artificial intelligence (AI) technologies worldwide will grow significantly, up from 7,000 this year to nearly 900,000 in 2022 -- that's a CAGR of 162 percent.

AI is now making significant strides in cloud processing, storage capacity, and machine learning algorithms to enable cognitive systems and robotics to surpass people in performing some key tasks in manufacturing and other industries.

AI and Machine Learning Market Development

Increasingly, businesses are applying these emerging technological advancements to deliver various forms of automation and innovation that will eventually equal or exceed human capabilities.

"Even though nearly one million businesses will adopt AI by 2022, it will not be a great fit for every company," says Jeff Orr, research director at ABI Research. "Many businesses will have to adapt their corporate governance policies to deal with the lack of a guaranteed outcome when implementing machine learning."

While most enterprises start using machine learning to analyze their existing business data for insights, the technologies have far-reaching application in specific industries -- ranging from reduction of false positives in fraud detection, to powering conversational interfaces for chatbots and virtual assistants.

While some of the world's largest and innovative enterprises -- such as American Express, Coca Cola, Netflix, PayPal, and Uber -- already deploy projects powered by machine learning, ABI Research finds that not all organizations will likely benefit from these cognitive system technologies.

According to the ABI assessment, progressive organizations that are comfortable with uncertainty in outcomes and measuring changes in key performance indicators (KPIs) will find the most to gain from enacting machine learning projects.

On the other hand, more traditional companies that focus only on ROI timetables will find emerging technologies -- including machine learning, cybersecurity, and IoT -- to be somewhat frustrating to implement and difficult to measure.

Outlook for Machine Learning Apps

Several SaaS solutions are available for machine learning and businesses looking to experiment will have many vendors to choose from in the near future.

Best practices include starting off with a pilot project, and requesting case studies about enterprises that have already gone through their first operational deployment.

"It is the companies that choose to ignore AI entirely that will quickly find themselves at a competitive disadvantage," concludes Orr.

Thursday, July 20, 2017

Worldwide Revenue for Robotics will Reach $230.7 Billion

New applications for robots are growing rapidly, as more industries adopt the technology. Worldwide purchases of robotics, including drones and robotics-related hardware, software and services, will total $97.2 billion in 2017 -- that's an increase of 17.9 percent over 2016, according to the latest market study by International Data Corporation (IDC).

IDC forecasts that overall robotics related spending will accelerate over a five-year period, reaching $230.7 billion in 2021 with a compound annual growth rate (CAGR) of 22.8 percent.

Robotics and AI Market Development

"The convergence of robotics and artificial intelligence or machine learning are driving the development of the next generation of intelligent robots for industrial, commercial, and consumer applications," said Dr. Jing Bing Zhang, research director at IDC.

Robots with innovative capabilities such as ease of use, self-diagnosis, zero downtime, learning and adaptation, and cognitive interaction are emerging, thereby driving wider adoption of robotics solutions to a wide variety of applications.

The Discrete Manufacturing and Process Manufacturing industries will continue to be the largest purchasers of robotics products and services with 2017 spending totals of $30.5 billion and $24.1 billion, respectively.

Combined, these two industries will account for more than half of all robotics spending throughout the forecast period. The Resource industries -- which include mining, oil & gas extraction, and agriculture -- will be the third largest robotics market in 2017 with global spending of nearly $9.0 billion.

The industries that will see the fastest spending growth over the 2016-2021 forecast period are Education (71.9 percent CAGR), Retail (51.3 percent CAGR), Construction (38.3 percent CAGR), Wholesale (37.2 percent CAGR), and Insurance (36.3 percent CAGR).

Technology advancements in mobile robots and collaborative robots are creating opportunities to deploy robots in new areas outside of the more traditional industrial manufacturing processes. The use cases that will capture the largest share of robotics spending are driven by their respective industries.

As the primary use case in the Discrete Manufacturing industry, assembly, welding and painting is forecast to receive nearly a quarter of all robotics spending worldwide throughout the forecast. Similarly, the primary use case in the Process Manufacturing industry (mixing) will capture more than 15 percent of all robotics spending.

Other robotics use cases that will drive spending include automated production – mining and pick and pack (Wholesale). The use cases that will see the fastest growth in robotics spending over the forecast period include break bulk (71.6 percent CAGR), educational assistance (68.3 percent CAGR), and delivery to customer (60.6 percent CAGR).

Outlook for Robotic Systems and Services

According to the IDC assessment, more than half of all robotics spending this year ($50.7 billion) and throughout the forecast will go to robotics systems, after-market robotics hardware, and systems hardware.

Services-related spending, which encompasses applications management, education & training, hardware deployment, systems integration, and consulting, will total more than $24 billion in 2017 while spending on command and control, specific robotics applications, and network infrastructure software will reach $15.2 billion.

Purchases of drones and after-market drone hardware will be nearly $7 billion this year and represent the two fastest growing categories of robotics spending throughout the forecast, followed by education and training.

Wednesday, July 19, 2017

Digital Transformation of In-Flight Entertainment Services

In-flight entertainment has been available on long-haul flights for several decades and increasingly, in an age where permanent Internet connectivity is becoming the norm, in-flight Wi-Fi is now becoming a standard service offering for airlines.

Digital transformation, developing communications technology, the promise of ancillary revenues for airlines and increasing demands from passengers to stay connected at all times are driving the deployment of new services across both large airlines and smaller low-cost carriers.

In-Flight Internet Access Market Development

According to the latest worldwide market study by Juniper Research, commercial aircraft adopting in-flight Wi-Fi services will reach 14,419 globally by 2022 -- that's up from an estimated 5,243 in 2017.

This will mean that over half of the global fleet of commercial passenger airplanes will offer these services in 2022, compared with just under a quarter this year. This increase will be driven by the impact of the bring your own device (BYOD) trend, despite increased security concerns from several governments, primarily the U.S. market, which has given rise to the ban of some electronic devices.

Juniper analysts have examined the top four disruptors of in-flight entertainment and connectivity.


The new research found that in-flight wireless streaming is increasingly being offered as an in-flight entertainment (IFE) option, based on a lower installation cost and weight savings, when compared with the traditional passenger airplane seat-back entertainment systems.

Indeed, with many vendors offering combined wireless streaming and Wi-Fi connectivity services, Juniper predicted that wireless streaming will replace seat-back in-flight entertainment on most short haul flights, with seat-back IFE being increasingly reserved for longer flights with premium carriers.

With BYOD, and thus consumer adoption encouraged by wireless services, monthly in-flight entertainment revenues are forecast to rise by 30 percent on average per aircraft over the forecast period.

Outlook for New Global Applications

Furthermore, as a result of the Malaysian Airlines MH370 disaster report findings, flight tracking is increasingly coming to the fore of operational offerings from vendors, in line with regulatory pressures to adopt global tracking systems.

The Juniper Research analysis highlighted additional benefits to tracking, such as improved punctuality leading to increased revenues. Juniper anticipates that these systems will therefore become standard equipment in the near future.

Tuesday, July 18, 2017

Next-Gen Digital Business Growth Fuels IT Investments

Digital transformation projects drive requirements for new business technology investment. Worldwide IT spending is projected to total $3.5 trillion in 2017 -- that's a 2.4 percent increase from 2016, according to the latest market study by Gartner. That growth is up from the previous quarter's forecast of 1.4 percent.

"Digital business is having a profound effect on the way business is done and how it is supported," said John-David Lovelock, vice president at Gartner. "The impact of digital business is giving rise to new categories; for example, the convergence of software plus services plus intellectual property.

Digital Business Market Development

These next-generation offerings are fueled by business and technology platforms that will be the driver for new categories of spending. Industry-specific disruptive technologies include the Internet of Things (IoT) in manufacturing, blockchain in financial services, and smart machines in retail.

According to the Gartner assessment, the focus is on how technology is disrupting and enabling business growth momentum. CEOs and others in the C-suite continue to influence the strategy.

The worldwide enterprise software market is forecast to grow 7.6 percent in 2017 -- that's up from 5.3 percent growth in 2016. As software apps allow more organizations to derive revenue from digital business channels, there will be a stronger need to automate and release new functionality.

"With the increased adoption of SaaS-based enterprise applications, there also comes an increase in acceptance of IT operations management (ITOM) tools that are also delivered from the cloud," said Mr. Lovelock. "These cloud-based tools allow infrastructure and operations (I&O) organizations to more rapidly add functionality and adopt newer technologies to help them manage faster application release cycles."

According to Gartner, if the I&O team does not monitor and track the rapidly changing environment, it risks infrastructure and application service degradation, which ultimately impacts the end-user experience and can have financial as well as brand repercussions.

How Convergence Drives Vendor Revenues

IT spending increased in 2016, but only two of the top ten IT vendors posted organic revenue growth. With revenue sources still tied to the convergence of social, mobility, cloud and information, some vendors will fare better in 2017 due to strength in mobile phone sales.

Worldwide spending on devices is projected to grow 3.8 percent in 2017, to reach $654 billion. This is up from the previous quarter's forecast of 1.7 percent. Mobile phone growth will be driven by increased average selling prices for premium phones in mature markets.

However, the troubled media tablet market continues to decline, as replacement cycles remain extended.

Monday, July 17, 2017

Worldwide IT Spending will Reach $2.1 Trillion in 2017

As more enterprise CIOs and CTOs increase their planned investment in digital business transformation projects, vendors will witness improved demand in 2017. Worldwide IT spending is forecast to increase by 4.5 percent in constant currency terms -- that's a significant improvement over 2016 growth of 2.5 percent, according to the latest market study by International Data Corporation (IDC).

Total IT spending this year will reach $2.1 trillion. It's forecast to increase by another 4 percent in 2018. Including telecom services, which will increase by just over 2 percent in constant currency terms this year, the overall information and communications technology (ICT) market is anticipated to reach $3.5 trillion.

IT Infrastructure Market Development

According to the IDC assessment, the most growth in 2017 will originate from infrastructure hardware, enterprise software, and mobile devices. Public cloud service providers will accelerate their data center investments. Total server spending will increase by 4 percent this year, and 5 percent in 2018.

Enterprise spending on server and storage infrastructure will also increase during the second half of 2017, driven in part by vendor product refresh cycles.

Meanwhile, demand for Infrastructure as a Service (IaaS) will remain robust, with spending set to exceed $25 billion this year and rising to more than $50 billion by 2020.

Last year saw a significant slowdown in the mobile smartphone market, with price competition affecting many markets. Stronger growth is expected in the second half of 2017, as vendors launch significant new products, while penetration grows in key emerging markets, such as China.


That being said, overall smartphone spending is anticipated to increase by 7 percent this year, reaching as much as $439 billion -- again, that's a significant improvement on the 1 percent growth in 2016.

"Cloud and mobile are still the big drivers for IT spending, despite the attention devoted to new technologies like augmented reality, artificial intelligence, and robotics," said Stephen Minton, vice president at IDC.

The IDC analysts say that new technologies will drive a larger share of market growth in the next 5-10 years, but the short term will also see a resurgence of growth in markets tied to cloud services, mobility, and big data.

Software spending will increase by 7 percent in 2017 to reach more than $471 billion in constant currency, driven by continued enterprise investment in big data and analytics alongside ongoing adoption of Software-as-a-Service (SaaS) and other key growth segments.

Meanwhile, IT services spending will post growth of 3 percent this year, led by project-oriented services. In the telecommunication sector, growth will still be driven by fixed and mobile data services, while voice revenues will likely continue to decline.

Outlook for ICT Growth Opportunities

"While overall market momentum is set to improve, some technologies will continue to drag on industry growth in the near term," said Minton.

IDC analysts believe that high-end servers are expected to post another year of double-digit declines, while hard-copy peripheral spending will fall for the second year in a row.

Furthermore, overall media tablet spending will also decline once again, despite improving sales of hybrid and detachable models, while sales of traditional PCs and external storage systems will be flat.

This year will also see slowing growth for enterprise networking equipment and traditional outsourcing services. For vendors still relying on legacy technologies for their revenue and growth, IDC predicts that the market will remain very challenging.

Wednesday, July 12, 2017

Exploring the Top Drivers of Cloud Computing Adoption

More CIOs and CTOs are choosing to architect and deploy hybrid multi-cloud computing environments in 2017. The trend is being driven by growing demand to support digital transformation projects that are led by the C-suite.

Newly released results from the CloudView Survey 2017 reveal the top drivers of cloud adoption -- include improving agility and security, as well as standardizing IT infrastructure.

Cloud Computing Market Development

As multi-cloud environments and hybrid cloud become more prevalent, the survey revealed that 87 percent of cloud users have adopted some capabilities for a hybrid cloud strategy -- that's an increase of 17 percent compared to 2016, according to the latest market study by International Data Corporation (IDC).

"Beyond adoption and maturity, a series of questions on 'why are' or 'why aren't' respondents moving more workloads to the cloud makes up a key part of the study," said Benjamin McGrath, senior research analyst at IDC.


Additional findings from the study include:

  • 56 percent of users run more than one type of cloud deployment
  • 40 percent of cloud users are "Cloud First" organizations

"When we look at the shift in IT spend over the next 12-24 months to more of a mix of multiple types of cloud deployments, we see each type of organization take a different journey," added McGrath.

The study gathers data on the journey to cloud and how it differs by vertical – and micro-vertical – by country, by company size, company age, and by job title.

What industry-specific projects are moving to the cloud? What are end-users looking for from their vendors in each country? How will all that change over time?

CloudView 2017 encompasses thousands of surveys from line-of-business cloud buyers and IT operations staff on cloud adoption rates, trends, and attitudes.

Survey respondents are from more than 6,000 organizations worldwide, all of whom are current users of cloud services.

To gain a complete picture of potential cloud customers along the journey, data is also collected from respondents at organizations who are not currently utilizing cloud.

Friday, July 07, 2017

Cloud IT Infrastructure Revenue Reaches $8B in 1Q17

As enterprise CIOs and CTOs rebalance their IT budgets to accommodate new digital business transformation projects, the shift in infrastructure investment continues to evolve. Demand for hybrid cloud scenarios are apparently driving much of the new IT investment.

IT vendor revenue from sales of infrastructure products -- such as server, storage, and Ethernet switch -- for cloud computing, including public and private cloud, grew 14.9 percent year-over-year in the first quarter of 2017 (1Q17) reaching $8 billion, according to the latest worldwide market study by International Data Corporation (IDC).

Cloud IT infrastructure sales as a share of overall worldwide IT spending climbed to 39 percent in 1Q17 -- that's considered a significant increase from the 33.9 percent a year ago.

Cloud IT Infrastructure Market Development

Revenue from infrastructure sales to private cloud grew by 6 percent to $3.1 billion, and to public cloud by 21.7 percent to $4.8 billion. In comparison, revenue in the traditional (non-cloud) IT infrastructure segment decreased by 8 percent year-over-year in the first quarter of 2017.

Private cloud infrastructure growth was led by Ethernet switch at 15.5 percent year-over-year growth, followed by storage (excluding double counting with servers) at 10 percent and server at 2.1 percent.

Public cloud growth was led by storage, which after heavy declines in 1Q16 grew 49.5 percent year-over-year in 1Q17, followed by Ethernet switch at 22.7 percent and server at 8.7 percent. In traditional IT deployments, server declined the most (9.3 percent year-over-year), with Ethernet switch and storage declining 4.4 percent and 6.1 percent, respectively.

"After a weak performance during 2016, storage purchases for cloud IT environments had a strong rebound in the first quarter, driving the overall growth in this segment," said Natalya Yezhkova, research director at IDC.

Overall, the first quarter set a strong beginning of the year for the cloud IT infrastructure market. With positive dynamics in purchasing activity by hyperscale service providers across all technology segments, IDC expects a strong year ahead for the fastest growing public cloud segment.

And, according to the IDC assessment, as end users continue to embrace the benefits of private cloud infrastructures, spending in this segment will also expand.

Cloud IT Infrastructure Regional Growth

From a regional perspective, vendor revenue from cloud IT infrastructure sales grew fastest in Canada at 59.1 percent year-over-year in 1Q17 off a small base (overall cloud IT infrastructure market in Canada was just under $100 million in 1Q17).

This was growth followed by Asia-Pacific (excluding Japan) at 18.7 percent, Japan at 15.3 percent, the United States at 15.1 percent, Middle East & Africa at 13.2 percent, Western Europe at 8.9 percent, Latin America at 7.8 percent, and the Central and Eastern Europe at 7.2 percent.

Thursday, July 06, 2017

More Hybrid Cloud Supply Chain Management Solutions

Many CIOs will expand eCommerce projects in 2017, and beyond. As a result, the supply chain management (SCM) market will exceed $13 billion in total software revenue by the end of 2017 -- that's up by 11 percent from 2016, according to the latest market study by Gartner.

Worldwide enterprise SCM vendor deployments are likely to exceed $19 billion by 2021, as software as a service (SaaS) enables new cloud-based revenue opportunities.

"Between 2017 and 2021, Gartner forecasts nearly $6 billion in total software revenue will be added to the SCM market," said Chad Eschinger, managing vice president at Gartner. "Digitalization is increasing demand for agility and forcing new business models, which is boosting spending in the SCM market."

Supply Chain Management Market Development

Gartner analysts believe that SCM vendors are already differentiating themselves from competitors by incorporating digital business transformation technologies -- such as mobility, machine learning, in-memory technologies, multi-enterprise visibility and the Internet of Things (IoT), into their offerings.

To remain competitive in this environment, end-user organizations are seeking to discover and exploit value in the huge amounts of data generated throughout their global network of business partners and other connections that make up a modern supply chain.

Moreover, the move to SaaS delivery shifts costs from capital expenditure (capex) to operational expenditure (opex), which makes investment in SCM technology more attractive to smaller companies across the globe, thereby expanding the market and increasing total spending on these technologies.

The SCM market forecast is made up of three core categories: supply chain planning (SCP), supply chain execution (SCE) and procurement. Adoption and associated revenue for SaaS are moving through the market at different rates, with procurement leading the move to cloud services, while SCP is trailing.

Overall, SaaS revenue growth is driven by a combination of factors: vendors moving to cloud-first deployment models, and end-user organizations becoming more accepting of cloud security and appreciating the capabilities and innovation of leading-edge SaaS solutions.

Outlook for SCM Cloud-Based Deployments

By 2021, SaaS deployments are forecast to account for more than 35 percent of total SCM spending. That being said, sales of on-premises software licenses will decline to less than 20 percent of total spending.

Furthermore, hybrid SCM environments with coexisting cloud and on-premises applications are becoming more commonplace, with information hubs and supplier networks dominating the move to public cloud services.