Technology | Media | Telecommunications

Friday, February 12, 2016

Mobile Service Provider Market Development Challenge

The vast majority of American mobile phone users already have a smartphone, many are using second or third-generation devices with a large display and ample storage for their needs. So, what's missing in this scenario? Enough new customers to fuel ongoing demand for profitable mobile data services.

comScore reported the key trends in the U.S. smartphone industry for December, 2015. Apple ranked as the top smartphone manufacturer with 42.9 percent OEM market share, while Google Android led as the number one smartphone platform with 53.3 percent platform market share.

Facebook continues to be ranked as the top individual smartphone software application, with Google maintaining the most apps on a typical user's device. That being said, mobile network service providers are now seeking upside opportunities for growth. Clearly, it's a significant market development challenge.

Smartphone OEM Market Share

197.4 million people in the U.S. market owned smartphones (79.3 percent mobile market penetration) during the three months ending in December, 2015.

Apple ranked as the top OEM with 42.9 percent of U.S. smartphone subscribers. Samsung ranked second with 28.4 percent market share (up 0.8 percentage points from September).

The leaders are followed by LG with 9.9 percent (up 0.5 percentage points), Motorola with 5.3 percent (up 0.5 percentage points) and HTC with 3.3 percent.

Smartphone Platform Market Share

Android ranked as the top smartphone platform in December with 53.3 percent market share (up 1 percentage point from September), followed by Apple with 42.9 percent, Microsoft with 2.9 percent and BlackBerry with 0.9 percent.

Top Smartphone Software Applications

Facebook ranked as the top smartphone app, reaching 76.8 percent of the software app audience, followed by Facebook Messenger (62.5 percent), YouTube (61.3 percent) and Google Play (51.9 percent).

Thursday, February 11, 2016

Worldwide IT Spending will Reach $2.8 Trillion by 2019

Business technology is a strategic investment for most CEOs that seek a lasting competitive edge in the marketplace. As a result, worldwide IT spending is forecast to grow from $2.46 trillion in 2015 to more than $2.8 trillion by 2019, according to the latest market study by International Data Corporation (IDC).

North America will provide the largest share of global IT spending throughout the 2015-2019 forecast period. This key market is predicted to pass the $1 trillion mark in 2017. Europe, the Middle East, and Africa (EMEA) will be the second largest region, followed closely by the Asia-Pacific region.

Latin America will be the fastest growing region with a compound annual growth rate (CAGR) of 4.3 percent while IT spending in North America will grow at a 3.8 percent CAGR. Asia-Pacific and EMEA will both grow more slowly than the overall market, which is forecast to have a CAGR of 3.3 percent.

"With the global economy entering a new and uncertain phase, IT spending will be heavily influenced by economic cycles and wild cards over the next five years," said Stephen Minton, vice president at IDC.

Exploring Future IT Investment Trends

Today, in many industries, business leaders will turn to IT solutions -- including cloud computing, big data analytics and infrastructure optimization -- to help them prosper within the stormy global networked economy. IDC believes that the savvy IT vendors will be targeting strategic pockets of growth and opportunity, amidst this volatile environment.

From an industry perspective, the largest IT expenditures will be found in the discrete manufacturing, banking, and telecommunications verticals with each delivering more than 8 percent of all spending throughout the forecast period. These three industries will be followed by process manufacturing, federal government, and professional services.

The fastest growing vertical industry over the 2015-2019 forecast period will be healthcare, with a five-year CAGR of 5.5 percent. Banking and insurance are tied with media and the resource industries for the industries with the second fastest-growing IT spending -- each with a five-year CAGR of 4.6 percent.

In terms of company size, over 40 percent of overall IT spending will come from very large businesses, while the small office category will provide roughly one quarter of all IT spending throughout the forecast period.

According to the IDC assessment, medium and large business will see the fastest growth in IT spending during the forecast period, with CAGRs of 4.4 percent and 4.8 percent, respectively.

More Focus on Software and Business Outcomes

"To truly capitalize on this opportunity, vendors would be well served to not only listen to their strategic client's feedback but also to respond and react accordingly. Knowing the client's industry is table stakes. In order to become more embedded in their customers' businesses and make a significant impact, the conversations between vendor and client must change to be process and outcome focused," said Jessica Goepfert, program director at IDC.

Software spending will be the fastest growing technology market segment with a 6.7 percent CAGR, led by healthcare and financial services investments, followed by business services at 6.2 percent with strong spending growth from media and resource industries. In contrast, IDC believes that hardware and IT services spending will grow at rates slower than the overall market.

Within the software segment, applications that facilitate enterprise and IT operations, such as enterprise resource management and operations & manufacturing applications, will receive the greatest share of software spending. The fastest growing software categories will be network software, collaborative applications, and data access, analytics & delivery applications.

Hardware will remain the largest market segment overall with roughly 40 percent of all IT expenditures going to devices, infrastructure, and telecom hardware throughout the forecast period. Telecom hardware, including smartphones, will represent more than half of all hardware spending through the forecast while PCs will remain an important category of IT spending despite a five-year CAGR of -1.6 percent.

Spending on enterprise infrastructure will be driven by solid growth in the server and storage segments with CAGRs of 2.6 percent and 3.2 percent, respectively. Regarding the vertical industry outlook, IDC says that healthcare and telecommunication firms will represent the strongest opportunities.

Wednesday, February 10, 2016

Exploring the Evolution of Cloud 2.0 Market Scenarios

Most industry analysts agree, cloud computing applications have gained new momentum in the global networked economy because they serve a purpose that Line of Business leaders demand -- enabling the rapid deployment of compelling business models that are made possible via the adoption of digital transformation.

According to the latest worldwide market assessment by Technology Business Research (TBR), 2016 will mark a turning point in cloud computing adoption. Moreover, the market won't be dominated -- in market share or in the minds of customers -- by IT vendors delivering only stand-alone public cloud services.

Customer ability, skill and desire to use public, private and hybrid cloud options will accelerate the adoption of more complex, heterogeneous and integrated cloud computing use cases. This changing customer behavior, combined with mature services from IT vendors, will result in a 'Cloud 2.0' scenarios during 2016.

TBR believes that progressive CIOs already see value in the public, private and hybrid cloud service options, but they often encounter significant organizational obstacles to adoption. However, the combination of pre-sales consulting and cloud managed services will enable more customers to overcome these hurdles.

Summary of TBR Cloud Market Predictions for 2016

A major trend in 2015 was vendors exiting the public cloud space and partnering to deliver value around the large public cloud offerings from Amazon Web Services, Microsoft and Google.

Public cloud service provider M&A will continue in 2016. Vendors exiting the public cloud space will focus on enabling and supporting broader hybrid IT and digital transformation capabilities. Those that focus on how the technology can improve business efficiency will likely be most successful.

The number of public cloud IaaS vendors will shrink in 2016, but their presence in the global market will expand. Vendors such as Alibaba and smaller European providers will likely capitalize on more country-specific data sovereignty regulations.

Pure-play public cloud vendors -- such as Salesforce.com -- are winning in North America, but they face more competition abroad with more traditional and local IT vendors. As a result, they may have to expand their delivery ecosystem with local channel partners.

The public cloud computing market will continue to expand. With nearly all types of business including cloud initiatives in their planning, and the growing levels of cloud knowledge, TBR expects growth to remain steady at about 20 percent year-to-year for the next few years.

New growth will be driven by CIOs leveraging public cloud for a growing number of workloads within large companies. Startups have used cloud services for a decade, but one enterprise customer's cloud spend is often equivalent to the demand from numerous startups.

The hosted private cloud market is key to the overall cloud landscape, but growth will continue to be somewhat muted. Despite some of the largest traditional IT companies focusing on private options for cloud delivery, TBR doesn't expect any of them to control more than 10 percent of the market in 2016.

IBM is clearly the largest hosted private cloud vendor, but to date no single vendor can claim a clear
leadership position. From an enterprise customer perspective, CIOs are struggling to figure out the right use cases for private cloud, and then select the right solutions that are based on their particular requirements.

TBR concludes that the growth in hosted private cloud will be generated by a combination of cloud service providers, systems integrators and more localized IT industry players. Collectively, they provide cloud infrastructure with the consulting, guidance and value-add services that will enable customers to achieve their desired business outcomes.

Tuesday, February 09, 2016

How Telematics Services will Use Transportation Data

Converged devices, such as media tablets, are driving the telematics market with global shipments forecast to reach more than 5 million units by 2020, according to an ABI Research study. Moreover, the introduction of these devices creates the emergence of new business model opportunities and more data applications.

The key advantages of utilizing converged devices, such as tablets in commercial vehicles, include the ability to employ automated vehicle inspection in rental car fleets, signature capture for delivery truck fleets, as well as aggregating crowdsourced data and generating customer community feedback.

"The adoption of converged devices opens the door for entire application ecosystems and the emergence of dedicated commercial telematics application marketplaces," said Dominique Bonte, vice president at ABI Research.

Case in point: telematics service providers (TSPs) will accumulate crowdsourced data as a means to provide drivers with updated information on rest stops, traffic jams, road works, and other driving-related information in near real-time.

Emerging Applications for Telematics Data

The telematics information exchange goes beyond smartphones and tablets, which will further develop the market for the emerging Internet of Things (IoT) apps. Smart wearables offer consumer vehicle OEMs the opportunity to combine biometric and diagnostic data onto the same form factor.

Typical vehicle data viewed on smart watches include fuel consumption, driving behavior, and trip-related metrics. Apple recently partnered with Telogis to introduce telematics applications for gamification, enabling drivers to compare their driving performance, truck-specific navigation, and compliance to its iOS platform.

According to the ABI assessment, this type of app illustrates the growing importance of converged devices for improving travel safety and productivity, a realization that the mobile communications industry will adopt.

Plug-and-play On-Board Diagnostics (OBD) dongles are gaining momentum. It is currently the most affordable solution to offer basic features, such as tracking, diagnostics, and driver behavior monitoring.

Geotab, a commercial vehicle fleet management and asset tracking vendor, is a leader in the OBD-based hardware space and is currently applying on-board diagnostics to offer plug-and-play solutions to small and medium fleets.

In another example, Novatel Wireless recently acquired DigiCore with the goal of creating a vertically integrated technology company covering telematics modules and professional services that are targeting fleet management, usage-based insurance, asset tracking and monitoring markets.

Monday, February 08, 2016

Transition in Mobility Product Operating System Software

Demand for mobile devices also drives the associated software upside potential. Recent estimates show that 1.74 billion smartphones, media tablets, two-in-one PCs and notebooks shipped in 2015 -- that's a year-on-year increase of 5 percent, according to the the latest worldwide market study by Canalys.

Growth was driven by two-in-ones and smartphones, while tablets and notebooks declined. According to the Canalys analyst assessment, Microsoft has experienced the greatest challenge from the pivotal shift to mobility. Its share of the total mobility market was just 12 percent, against Google (Alphabet) at 70 percent and Apple at 17 percent.

Shipments of mobility products running the Linux-based operating system (OS) increased by over 200 percent. This was primarily driven by YunOS shipments, which became the third largest smartphone platform in China within the fourth quarter of 2015. In the notebook PC space, there are similar shifts in the OS landscape.

Open Source OS Gains Market Share

Chromebook shipments were up 22 percent annually in 2015, and the number of notebook PCs shipping without Microsoft Windows is increasing. Opting for an alternative open source OS, such as Ubuntu, can significantly reduce the cost of a notebook PC. This is an attractive proposition for low-income consumers.

The consumer electronics industry is also grappling with other shifts in dynamics. Google Android grew only 6 percent as tablets went into a decline, denting the 10 percent growth from its smartphones alone, which was driven by Alphabet’s vast base of ODMs. But despite Apple also suffering heavy declines in tablets, iOS share grew by 10 percent and OS X notebooks by 7 percent.


"The tablet market declined throughout 2015 as replacement cycles lengthened. Tablet vendors need to get people excited about the category once again. A good start would be to make these products more versatile. Apple is now emphasizing productivity on tablets, an area where Microsoft arguably leads and Android trails," said Tim Coulling, senior analyst at Canalys.

Apple has gained share with the iPad Pro, which outsold Microsoft’s Surface in Q4. However, there is work to be done to maintain this momentum, and numerous trade-offs must be made when trying to use the iPad Pro as a notebook PC replacement -- which the Microsoft Surface does very well.

How Mobile Cloud Apps Impact Demand

That being said, Microsoft grew shipments year on year for two-in-ones and tablets, but this was offset by the declining notebook PC market and a change in attitude toward its acquired smartphone business.

Smartphones running Windows fell by 20 percent as Microsoft shifted focus from devices to services during 2015. The future for Windows 10 Mobile is now in question. Canalys believes that Microsoft needs to attract high-profile OEMs and generate consumer demand.

"Creating a premium Surface Phone might generate some buzz about the platform, but it will be risky and repeating what it has achieved in the tablet space will be tough," added Coulling. "It must get OEMs to buy into a platform in decline as well as convince consumers to switch from an iPhone or high-end Android smartphone."

Friday, February 05, 2016

Exploring the Demand for Hyperconverged Infrastructure

More enterprises are opting for the convenience and lower-costs of next-generation computing platforms that enable them to scale their IT capabilities rapidly. Frequently referred to as web-scale of hyper-scale solutions, these integrated systems deliver cloud-like economics within enterprise data centers.

Hyper-convergence is a type of IT infrastructure with a software-centric architecture that tightly integrates compute, object storage, networking and virtualization resources -- typically in a commodity x86-based hardware platform -- which are supported by a single vendor.

Upcoming data center refresh projects are driving 2016 enterprise investments in servers and converged infrastructure, according to the latest comprehensive market study by 451 Research.

Hyperconverged Infrastructure Market Development

Among enterprises in the study, 60 percent plan to increase spending on servers, and 79 percent plan to spend more on converged infrastructure in 2016.

Spending on hyperconverged infrastructure will be particularly strong in 2016 with 86 percent of respondents planning to increase spend and over 32 percent planning a major server and storage refresh project.

According to their latest "Voice of the Enterprise: Servers and Converged Infrastructure" market study, which surveyed over 780 enterprises in North America and Europe, vendors will not benefit equally from
spending allocations in 2016.

Cisco is expected to gain the most with 70 percent of its customers planning to increase spending allocations on its server portfolio. HP, IBM and Oracle had customers that were likely to cut spending, than those planning to spend more.

Budgets are strong for the majority of converged infrastructure vendors. The newly formed EMC Converged Platforms Division, formerly VCE, leads in budget increases -- 78 percent of its customers plan to increase budgets in 2016 with 32 percent in the above $2 million spending bracket.

“We see a sea change in the industry with Dell’s acquisition of EMC/VCE, and Nutanix filing for IPO,” said Nikolay Yamakawa, senior analyst at 451 Research.

Key Drivers for Increased Market Adoption

The 451 Research analysts believe that these shifts in emerging hybrid cloud computing environments are placing a spotlight on converged infrastructure solutions and providing IT buyers with more options.

Converged infrastructure vendors most commonly get into enterprise environments through a technology refresh project, especially a server refresh. Decision-making authority on converged infrastructure is most often shared by general infrastructure staff and server staff.

But the ultimate procurement decision to adopt this technology rests with the chief technology officer (CTO) or the chief information officer (CIO), while management is most often delegated to cross-functional groups.

“To ensure success, vendors need to communicate with all converged infrastructure stakeholders in a target organization and provide training early in the process to help with customer on-boarding,” added Yamakawa.

Thursday, February 04, 2016

Upside Growth for Public Cloud-Based Email Services

Software as a Service (SaaS) applications continue to lead the ongoing enterprise migration to cloud-based service offerings. Given the recent trends, corporate email is a SaaS application that's likely to experience significant new growth during 2016.

The cloud email market is still in the early stages of adoption with 13 percent of identified publicly listed companies globally using one of the two main cloud email vendors, according to the latest worldwide market study by Gartner.

Gartner found that 8.5 percent of public companies use cloud email from Microsoft's Office 365 service, while 4.7 percent use Google Apps for Work. The remaining 87 percent of companies surveyed have on-premises, hybrid, hosted or private cloud email managed by smaller vendors.

These findings are based on an automated examination of a large number of publicly available email routing records. Gartner used the email server addresses in the domain records of nearly 40,000 public companies globally, to find out which ones point to cloud email services from Google or Microsoft.

Rapid Adoption of Cloud Email Solutions

"Although it is still early days for cloud email adoption, both Microsoft and Google have achieved significant traction among enterprises of different sizes, industries and geographies," said Nikos Drakos, research vice president at Gartner.

Companies considering cloud email should question assumptions that public cloud email is not appropriate in their region, size or industry. Gartner believes their findings suggest that many varied organizations are already using cloud email, and the number is growing rapidly.

Among organizations using cloud email from Google and Microsoft, Microsoft is ahead in most industries, particularly in regulated industries including utilities, energy and aerospace. Google is ahead in industry segments with more competition and less regulation, such as software publishing, retail, advertising, media, education, consumer products, food and beverage, and travel.

"Among public companies using cloud-based email, Microsoft is more popular with larger organizations and has more than an 80 percent share of companies using cloud email with revenue above $10 billion," said Jeffrey Mann, research vice president at Gartner. "Google's popularity is better among smaller companies, approaching a 50 percent share of companies with revenue less than $50 million."

In some industries — such as travel and hospitality, professional services and consumer products — the highest usage levels are among the companies with the biggest revenue. More than a third of companies in these industries with revenue above $10 billion use cloud email from one of these two vendors.

Wednesday, February 03, 2016

Enterprise Mobile Cloud Apps Gain Momentum in 2016

As average price for smartphones continue to fall, enterprise workers across the world -- particularly those in emerging markets -- are seeking to improve their productivity via Mobile Cloud applications while away from their office.

This additionally signals an advantage for mobile network operators, whose handset data plan revenues from the enterprise segment can expect to exceed $200 billion in 2020, according to the latest global market study by ABI Research.

"The importance of smartphones to the enterprise worker cannot be underestimated," says Dan Shey, managing director and vice president at ABI Research.

ABI believes that network operator services need to focus on driving the most value from the smartphone to the enterprise user, such as assisting in choosing the right devices and applications, and offering services to manage device content and functionality.

Outlook for Enterprise Mobility Apps

Looking ahead, operators also need to help businesses leverage the smartphone and their voice and data connectivity services as a key component in their Internet of Things (IoT) solutions.

Voice services are still an important revenue component for mobile operators. As such, these services must continue to provide consistent and quality network performance domestically while offering increasingly simplified, cost-effective access to voice and data services when traveling internationally.

And security is also a critical element to enterprise smartphone usability. Operators can play a crucial role in supporting security application needs while also offering enterprise workers guidance toward smartphone usage and security best practices.

According to ABI's data analysis, North America leads in total mobile enterprise revenues across voice, messaging, handset data plans, mobile broadband, business-to-employee applications and enterprise mobility management services. However, the Asia-Pacific region will overtake North America in 2017 to become the biggest market for enterprise mobility revenues.

"Enterprise is becoming more connected, across both people and machines," concludes Shey.

Mobile communication service provider smartphone strategies must evolve to support the myriad of new software applications, and growth opportunities that will stem from the billions of connections in the Internet of Things.

According to the ABI assessment, the partnerships that AT&T, Verizon, Tele2 and Vodafone created with major ICT suppliers are all a step in the right direction toward building integrated solutions that can leverage smartphone applications and services.

Tuesday, February 02, 2016

Smart TVs Top List for OTT Video Streaming Devices

Why are traditional pay-TV services being disrupted by alternative lower-cost video entertainment services? Perhaps it's due to the apparent ease-of-use in searching for something to watch. Or, maybe it's the variety of video consumption options, as well as the huge depth of available television series and movie content.

Whatever the primary reason, and despite the widespread availability of inexpensive ancillary online video streaming devices, 32 percent of over-the-top (OTT) TV Users still prefer having the native connectivity of a Smart TV set.

This finding is according to data from the latest TDG market study, a survey of 2,000 U.S. adult broadband users -- 60 percent of which use an OTT video streaming service on their home television set.

Streaming Online Video Device Preference 

When asked which TV streaming platform they prefer, 32 percent of OTT TV Users selected their smart TV. Interestingly, this is pretty much equal to the penetration of smart TVs in general within this market.


Game consoles followed second, selected by 25 percent of OTT TV Users, while Internet set-top boxes were preferred by 17 percent of survey respondents. Streaming video sticks and Blu-ray players were selected by just 10 percent of OTT TV Users.

Why the Consumer User Experience Matters

Why do smart TVs top the list of preferred devices for OTT video viewing? According to Michael Greeson, director of research at TDG, this likely boils down to the device user experience.

Greeson says "With smart TVs, viewers are not required to manually switch inputs from the TV to another device or pick up a different remote controls in order to access their favorite streaming apps and programs."

Monday, February 01, 2016

Analysis of Average Monthly Spending on SVOD Services

Video entertainment viewing in the typical American household has evolved. Gone are the days where broadcast television gained the lion's share of consumer attention. Meanwhile, legacy pay-TV services have struggled to keep pace with shifting customer preferences and numerous alternative lower-cost offerings.

Average monthly spending on subscription video-on-demand (SVOD) services among U.S. broadband households increased from $3.71 per month in 2012 to $6.19 per month in 2015, according to the latest market study by Parks Associates.

Parks examined new business models emerging from the increasing consumption of over-the-top (OTT) content in the American video entertainment market -- including new experiments in content windowing.

How the OTT Trend Disrupted the Market

"Multiple content players have held onto traditional content windowing strategies for years, but OTT technologies and emerging business models have finally forced these companies to experiment with new windowing strategies,” said Glenn Hower, research analyst at Parks Associates.

Their analysts believe that new models for movies include day-and-date availability, as with the movie 'Beasts of No Nation', where it was released for streaming the same day as in the theater.

For streaming TV shows like the Netflix Studios series 'Jessica Jones' or the Amazon Studios series 'Transparent', viewers can watch full seasons all at once, satisfying people's desire to free themselves from traditional linear broadcast TV constraints.


According to the Parks assessment, consumers have quickly adopted these new viewing habits as part of their OTT monthly subscriptions.

Broadband Household Spending on Video 

A typical price point for a subscription service is $7-$10, but several niche services are available for under $5, according to Hower.

U.S. broadband households on average spend less than $1 per month buying and less than $1 per month renting digital video, indicating they purchase less than one digital video a year and rent between one and four videos per year.

"The subscription model clearly dominates in the U.S., which could create a disconnect in value propositions between consumers and content providers, who might seek out revenues from more lucrative transactional services over low-margin SVOD services," Hower concluded.

Currently they are exploiting multiple digital distribution outlets to monetize current and library TV content, including authenticated catch-up players, third-party aggregators, and direct-to-consumer subscription services.

There are also bidding wars for premium library TV content, with Netflix paying a reported $118 million for the 'Friends' TV series and Hulu paying a reported $160 million for the 'Seinfeld' series.