Technology | Media | Telecommunications

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.

Thursday, June 16, 2016

CIOs are Seeking Optimal Enterprise Storage Solutions

The exponential growth of data within the typical enterprise presents a huge challenge for CIOs that must seek new ways to fund and deploy comprehensive storage solutions. Enterprise IT organizations are embracing a range of Flash-optimized architectures as they continue to transform their storage infrastructures, according to the latest market study by 451 Research.

Overall, almost 90 percent of these organizations now have some form of Flash-based storage installed in their data centers, while "all Flash" approaches are becoming increasingly standard to support transactional applications.

Meanwhile, more enterprise IT leaders are assessing the merits of creating an optimal hybrid storage solution, where object storage platforms are deployed for warm or cold data in active archive applications. These lower-cost solutions can free-up IT budget that was otherwise allocated for legacy SAN and NAS upgrades.

Quest for Unified Storage Transformation

"Organizations of all sizes are looking to transform their storage infrastructures to drive both improved performance and efficiency, and Flash-based approaches are at the heart of this transformation," said Simon Robinson, vice president at 451 Research.

While all-Flash approaches have gained substantial momentum in recent years and will continue to grow in popularity, it's also clear that many prospective buyers still view these solutions as cost-prohibitive.

451 Research analysts expect that these barriers may erode over time, but most enterprise decision-makers will continue to use a blend of Flash and HDD-based storage technologies for the foreseeable future.

Moreover, the ongoing challenge for many IT leaders is making the informed determination of an optimal mix of storage technologies -- given their particular set of diverse workload requirements. This is a scenario where a vendor's infrastructure audit tools and skilled storage architecture consultants can recommend optimized best-fit configurations.

Key insights from the enterprise storage study include:

  • The most common method for deploying data center Flash is as a tier in a hybrid SAN array, with just over half (51 percent) of organizations citing this implementation method as in use today, and a further 29 percent planning to deploy Flash as a tier in the next two years.
  • However, All-Flash Array (AFA) adoption is growing most rapidly, with 27 percent of enterprises having deployed this technology already, and a further 28 percent planning to deploy an AFA within the next two years.
  • Three-quarters of AFA deployments support multiple applications, with only a quarter supporting single applications. The top two use cases for AFA deployments are databases and virtual desktop infrastructure (VDI), while data analytics is expected to be a top two use case within two years.
  • Data-optimization efficiencies such as deduplication and compression are in use by a majority of organizations that have deployed Flash; most respondents – 59 percent – said they gained between 2x and 5x space savings from using these technologies.
  • The traditional storage vendors, led by EMC, dominate the AFA market today, though smaller specialists such as Pure Storage are still proving popular; a quarter of respondents say they are considering buying Pure Storage in 2016.
  • A sizeable minority of organizations – 19 percent – is aggressively embracing Flash-based storage to the extent that these organizations have already – or will over the next two years – entirely replaced HDD technology for SAN-based storage workloads.
  • However, high cost was highlighted as the largest single barrier to broader AFA adoption, with 51 percent saying AFAs are too expensive. A further 47 percent said their existing storage performance was sufficient as a reason for not purchasing an AFA.

Wednesday, June 15, 2016

Mobile Internet Use Drives More Network Expansions

Mobile internet applications have grown exponentially over the last decade, especially within urban areas around the globe. Mobile network service providers have started to deploy small cell wireless communications technology to support the growing demand.

Outdoor small cell deployments were off to a slow start, but are now showing signs that they will grow significantly over the next several years, according to the latest worldwide market study by IHS Technology.

Infrastructure investment is driven mostly by the mobile network operator common need to enhance saturated macro-cellular networks, and improve the mobile broadband experience by adding capacity through dense low power node deployments.

Mobile Internet Market Development

IHS has forecast that the global outdoor small cell backhaul market will reach $2.2 billion in 2020, with a five-year (2016–2020) compound annual growth rate (CAGR) of 80 percent.

Mobile network operators are currently testing and field trialing many outdoor small cell and backhaul options in dense urban areas to choose technologies, products and vendors, as well as to develop operational procedures.

The issues of urban deployment are gradually being resolved, and more mobile network operators are now starting to make their initial deployments.

And although most deployments to date have been in urban and metro areas, there are also applications in rural areas: Vodafone and other operators are using small cells for outdoor coverage in remote areas, where the backhaul is not difficult and usually via the wireline network.

The major growth in outdoor small cell deployments is predicted to begin in 2017, with steady expansion through 2020 as deployments proliferate. Consequently, a cumulative $6.4 billion will be invested worldwide on outdoor small cell backhaul equipment between 2016 and 2020.


Other highlights from small cell backhaul study:

  • For the full-year 2015, the global outdoor small cell backhaul equipment market totaled $117 million.
  • Wireless (microwave) solutions account for the bulk of small cell backhaul revenue.
  • Of the individual technologies, point-to-point (P2P) microwave and Ethernet fiber were the small cell backhaul revenue leaders in 2015.
  • 42,600 outdoor small cell backhaul connections were deployed in 2015, rising to 878,000 in 2020.

Tuesday, June 14, 2016

SDN and NFV Lead Open Technology Transformation

The traditional carrier networking equipment sector has been awaiting a major transition, as telecom service providers sought a way to free themselves from the constraints of proprietary platforms. Open source software-defined networking (SDN) and network functions virtualization (NFV) hold the key to progress.

According to the latest worldwide study by Technology Business Research (TBR), the NFV and SDN market will grow at a 116 percent CAGR from 2015 through 2021 to reach nearly $158 billion. Early adopters, such as AT&T, began to ramp up their investment in 2015 as open digital transformation became a top strategic priority.

"A growing group of Tier 1 operators is leading the charge in implementing NFV and SDN. This group is driving a significant amount of development in the NFV and SDN ecosystem and is pushing the vendor community to rapidly adapt to this new architectural approach to networks," said Chris Antlitz, senior analyst at TBR.

SDN and NFV Application Development

TBR analysts predict that NFV- and SDN-related infrastructure spend volume is forecast to grow significantly in 2017, at which time use cases will be more defined and the cost benefits of using open technologies will be more apparent.

According to the TBR assessment, this proof-positive experience will prompt the holdout telecom service providers to adopt SDN and NFV, thereby pursuing their own open technology transformation -- primarily to avoid being left behind.

Most of the investment in NFV and SDN will stem from redistribution of legacy infrastructure capex as network operators implement virtualized environments and decommission their legacy telecom infrastructure.

There will also be some external opex spend incurred as network operators lean on vendors for maintenance, professional and managed services to support, integrate and operate these new software-mediated environments.

Network operators are testing NFV and SDN by transitioning domains that are relatively easy to convert -- such as customer premise equipment (CPE), routing and switching, optical transport, EPC and IMS. Some of the more challenging domains -- such as the wireless and fixed access layers -- will be among the last to be virtualized.

Open Source Telecom Market Development

On average, TBR believes that network operators in the U.S. and Europe will drive three-quarters of NFV and SDN spending each year through most of the forecast period, with APAC operators projected to ramp up their investment in 2019.

Though most Japan-, South Korea- and China-based network operators are implementing NFV and SDN, spend will be eclipsed by what select operators -- namely AT&T, Verizon, CenturyLink, BT, DT, Orange, Vodafone and Telefonica -- invest in in the U.S. and European markets.

CALA- and MEA-based operators will be laggards in NFV and SDN, with major transformations coming after evolution in most other regions of the world is already underway. America Movil, Telefonica, Etisalat and MTN are the exceptions in these developing regions.

Monday, June 13, 2016

Mobile Streaming Media Encryption Drives Disruption

Reports of the doubling in audio and video related mobile network traffic within 2015 highlights the fact that the demand for multimedia entertainment on smartphones and media tablets continues to grow.

Meanwhile, revelations of Internet spying by governments, and content vendors worried about the quality of the consumer experience, are driving the mobile communications industry toward end-to-end encryption of more data traffic.

According to the latest worldwide market study by ABI Research, apps enabled with content encryption eliminated nearly 60 percent of the traditional video and audio optimization market in 2015.

Streaming Media Market Development

Moving forward, telecom operators and vendors need to make significant operational moves to protect network performance and create a competitive advantage with streaming media entertainment.

"With encryption here to stay, network operators need new tools to manage mobile broadband traffic," said Joe Hoffman, vice president at ABI Research. "We expect 85 percent of traffic to be encrypted. But that leaves 15 percent that can be optimized, and that is a significant network load."

In the months ahead, telecommunication service providers and their vendors now face the challenge of coping with relentless demand for mobile data traffic without the proper tools to manage it.

This obstacle coupled with the increased use of difficult-to-manage protocols, such as UDP, and inflexible data services could hinder network operators if they do not find ways to reboot their traffic management strategies.

 Streaming Media Market in Transition

ABI analysts suggest that all affected parties should take proactive steps to address the IP traffic demand. Leading telecom infrastructure vendors all have traffic management solutions to keep network operations steady, and next-generation solutions that perform with encrypted streaming media are coming.

Besides, non-traditional vendors have a significant opportunity. ABI believes that telecom network operators should also consider new flexible solutions -- such as the "IP Traffic Manager" from Openwave Mobility, or the "Fairshare Traffic Management" from Sandvine -- to successfully manage the next-generation data traffic.

While content encryption clearly disrupted the data optimization market, it does not mean the end of vendor opportunities. According to the ABI assessment, the exponential growth of online digital  media traffic will make even the residual optimization attractive to vendors that survive this huge market transition.