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Thursday, December 14, 2017

More Industry Cloud Services Gain Momentum in 2017

Worldwide spending on industry cloud services in the finance sector -- such as banking, insurance, securities and investment services -- is expected to reach $3.2 billion in 2017, according to the latest market study by International Data Corporation (IDC).

Furthermore, IDC expects the amount to more than double in 2021, amassing total worldwide spending of $7.2 billion.

Industry Cloud Market Development

The manufacturing industry (both discrete and process combined) was a larger spender on industry cloud though, relative to its finance counterpart. This industry is expected to spend $4.2 billion in 2017 and achieve year-over-year growth of 23 percent in 2018. Similar to the finance industry, the manufacturing industry is also set to double its 2017 spending in 2021, reaching a total of $9.2 billion.

However, IDC forecasts healthcare providers across the world will spend a total of $8.9 billion in adopting industry cloud solutions during 2017. This industry is expected to increase spending by 20 percent year-over-year in 2018 on industry cloud solutions -- by 2021, that's a staggering $17.6 billion.


On a geographic basis, the United States leads by a very large margin in terms of industry cloud adoption across the three aforementioned industries combined. It's expected to reach 73 percent of worldwide spend in 2017, followed by Western Europe at 12 percent.

The U.S. is also forecast to grow 20 percent year-over-year in 2018 while the other regions are expected to achieve 27 percent annual growth during the same period. The three industries are expected to spend a total of $330 million on industry cloud solutions in China in 2018, representing very strong growth of 39 percent year-over-year.

"The industry cloud market is young, yet growing fast, with double-digit growth expected to continue for at least the next five to ten years. Dozens of new industry collaborative clouds are emerging each year, helping to foster digital transformation, streamline industry value chains, and ultimately drive innovation, while most software vendors are also shifting their portfolios to focus more heavily on designing industry cloud solutions," said Eric Newmark, program vice president at IDC.

Outlook for Vertical Industry Cloud Growth

Healthcare continues to lead the charge from a vertical standpoint, but many industries have picked up momentum, including manufacturing, financial services, and even government.

Though the market's tipping point is still a few years away, IDC believes the industry cloud market represents one of the largest vertical growth opportunities for technology and professional services firms through 2025.

According to the IDC assessment, IT vendors who become strategic suppliers to a successful industry cloud win the business of not just that one organization, but of that customer's entire digital ecosystem.

Monday, December 11, 2017

Internet of Things Revenue will Reach $1.1 Trillion

Worldwide spending on the Internet of Things (IoT) is forecast to reach $772.5 billion in 2018 -- that's an increase of 14.6 percent over the $674 billion that will be spent in 2017, according to the latest global market study by International Data Corporation (IDC).

Moreover, overall worldwide IoT-related revenue will sustain a compound annual growth rate (CAGR) of 14.4 percent throughout the 2017-2021 forecast period, surpassing the $1 trillion mark in 2020 and reaching $1.1 trillion in 2021.

IoT Technology Market Development

IoT hardware will be the largest technology category in 2018 with $239 billion going largely toward modules and sensors, along with some spending on infrastructure and security. IDC reports that services will be the second largest technology category, followed by software and connectivity.

Software spending will be led by application software along with analytics software, IoT platforms, and security software. Software will also be the fastest growing technology segment with a five-year CAGR of 16.1 percent.

Furthermore, services spending will also grow at a faster rate than overall spending with a CAGR of 15.1 percent and will nearly equal hardware spending by the end of the forecast.

"By 2021, more than 55 percent of spending on IoT projects will be for software and services," said Carrie MacGillivray, vice president at IDC. "Software creates the foundation upon which IoT applications and use cases can be realized. However, it is the services that help bring all the technology elements together to create a comprehensive solution that will benefit organizations and help them achieve a quicker time to value."

The industries that are expected to spend the most on IoT solutions in 2018 are manufacturing ($189 billion), transportation ($85 billion), and utilities ($73 billion). IoT spending among manufacturers will be largely focused on solutions that support manufacturing operations and production asset management.

In transportation, two thirds of IoT spending will go toward freight monitoring, followed by fleet management. IoT spending in the utilities industry will be dominated by smart grids for electricity, gas, and water.

Cross-Industry IoT spending, which represent use cases common to all industries -- such as connected vehicles and smart buildings -- will be nearly $92 billion in 2018 and rank among the top areas of spending throughout the five-year forecast.

Outlook for Consumer IoT Apps

Consumer IoT spending will reach $62 billion in 2018, making it the fourth largest industry segment. The leading consumer use cases will be related to the smart home, including home automation, security, and smart appliances.

According to the IDC assessment, smart appliances will experience strong spending growth over the five-year forecast period and will help to make consumer the fastest growing industry segment with an overall CAGR of 21 percent.

Friday, December 08, 2017

Upside for Overall Cloud IT will Reach $554B in 2021

If you want to appreciate the full extent of the cloud computing phenomena, then you need to comprehend the ongoing impact to the IT ecosystem. It's been fueled by a disruptive series of innovations that have enabled software developers to accelerate the speed of digital transformation.

The cloud delivery and consumption model has revolutionized the entire IT industry. But the cloud opportunity extends well beyond the public cloud -- which makes up less than half of all cloud-related spending today -- and includes private and hybrid clouds, as well as managed cloud services, cloud-related professional services, and hardware and software infrastructure for building clouds.

Cloud Computing Market Development

In its first forecast of the 'whole cloud' opportunity, International Data Corporation (IDC) estimates that worldwide whole cloud revenues will reach $554 billion in 2021 -- that's more than double those of 2016.

"The most obvious takeaway from this forecast is that the shift to the cloud consumption model -- in all its forms -- is a mass movement, and will continue to be such over the forecast period," said Frank Gens, senior vice president and chief analyst at IDC.

The past few years have produced a steady stream of innovative new services introduced by the major public cloud service providers, including blockchain services, IoT back-end data services, encryption services, serverless computing services, and even new computing hardware services.

IDC expects the pace of innovation on public clouds to continue and, more likely, to accelerate. Similarly, IDC expects to see a steady expansion of enterprise workloads on the cloud as cloud service providers and their partners focus on new deployment scenarios for these workloads.

Despite lingering concerns about security, vendor and technology lock-in, and interoperability, IDC believes that cloud computing will continue to dominate and transform enterprise computing for years to come.

Key highlights from the IDC forecast include:

In 2016, public cloud services accounted for 41 percent of all cloud-related spending. By 2021, this figure will increase to 48 percent. And, when spending on hardware and software that enables public cloud services, and managed and professional services around the cloud are included, these figures rise to 65 percent and 68 percent, respectively.

Spending on managed and professional services around cloud adoption are, collectively, the second largest opportunity in the whole cloud market, accounting for 31 percent of all cloud-related spending in 2016 and 2021.

The hyperscale datacenters operated by cloud service providers are dramatically altering the market for infrastructure hardware and software. By 2021, cloud service providers will account for 76 percent of cloud-related infrastructure hardware and software spending.

Monday, December 04, 2017

Why Hyperscale Cloud Providers Lead the Server Market

IT Vendor revenue in the worldwide server market increased 19.9 percent year-over-year to reach $17 billion in the third quarter of 2017 (3Q17), according to the latest market study by International Data Corporation (IDC).

While demand from cloud computing service providers has driven overall market performance in the past, other areas of the server market are beginning to show growth. Worldwide server shipments increased 11.1 percent year-over-year to 2.67 million units in 3Q17.

Server Systems Market Development

Volume server revenue increased by 19.3 percent to $14.2 billion, while midrange server revenue grew 26.9 percent to $1.4 billion.

High-end systems grew 19.4 percent to $1.3 billion, benefiting from the IBM z14 launch this quarter. That said, IDC expects continued long-term secular declines in high-end system revenue, with short periods of growth related to major platform refreshes.

"Hyperscalers continued driving volume demand in the third quarter, with Amazon again leading the charge, as Google and Facebook also began ramping up their server deployments again," said Kuba Stolarski, research director at IDC.

While Original Design Manufacturers (ODMs) have largely been the beneficiaries of hyperscaler server demand, some OEMs have now begun to experience significant growth related to the enterprise segment.

Dell grew its server business by 37.9 percent, relying on the strong synergy between its server team and the storage team incorporated from the EMC acquisition. HPE has been pivoting away from hyperscaler business and focusing on the enterprise, hurting year-over-year comparisons in the short term, but showing strength in the enterprise.

China has become a strong market for enterprise growth, as evidenced by Dell growing 42.3 percent year-over-year to $433 million, and HPE/New H3C Group growing 49.6 percent to $421 million. In addition, IBM has demonstrated that the enterprise still has space for non-x86 systems, growing the newly refreshed system z business by 63.8 percent year-over-year to $673 million.

HPE/New H3C Group remained first in the worldwide server market with 19.5 percent market share in 3Q17, as revenue decreased 1.1 percent year-over-year to $3.3 billion. HPE's share and year-over-year growth rate includes revenues from the H3C joint venture in China that began in May of 2016; thus, the reported HPE/New H3C Group combines server revenue for both companies globally.

Dell maintained the second position in the worldwide server market with 18.1 percent of vendor revenue for the quarter and 37.9 percent year-over-year growth to $3.1 billion. IBM and Cisco were statistically tied for the third market position.

IBM had 6.4 percent share, with revenue growing 26.5 percent year-over-year to $1.1 billion. Cisco had 5.8 percent share, with revenue increasing 6.9 percent to $992 million.

Lenovo was ranked fifth with 5.1 percent share and revenue declining 12.6 percent to $861 million. The ODM Direct group of vendors grew revenue by 45.3 percent to $4.1 billion. HPE and Dell were in a statistical tie for first place in unit share, each with 18.8 percent.

Friday, December 01, 2017

Medical Data Apps Drive Demand for Cloud Services

The healthcare sector was slow to adopt new technologies, including cloud services, according to the latest worldwide market study by Frost & Sullivan. That's about to change. Industry-wide demand to use health data to improve system efficiency, deliver value-based care and enable productive collaborations is driving new investment in cloud solutions.

At the heart of these innovations is a clear shift in healthcare provider attitude toward hybrid IT trends, with key decision makers now convinced that cloud computing environments could be more secure than on-premise infrastructure -- especially in terms of data back-up and disaster recovery.

Healthcare Enterprise Market Development

Frost & Sullivan finds that the global market for healthcare cloud computing -- revenue generated by cloud computing services offered to providers -- will be worth almost $10 billion by 2021, primarily driven by the need to store the exponentially increasing volume of healthcare data.

Their latest research analyses key growth opportunities, business models, challenges, drivers, and industry-specific solutions being introduced using cloud platforms. Market participants, buyer behavior, and customer expectations are also assessed.

"One major industry game-changer will be real-world data. The volume of unstructured medical and health data that is generated outside of clinical settings is growing exponentially, while the need for such data sets is even direr among providers, pharmaceuticals, medical technology vendors, governments, and university researchers, said Natasha Gulati, digital health research manager at Frost & Sullivan.

Furthermore, hospitals, physician practices, and other facets of the continuum of care will rapidly adopt cloud platforms to improve data and application access, enhance interoperability, and manage, store, and archive a wide range of health data for the enterprise. Applications that leverage patient information that is collated from and analysed at multiple points of care are an important growth opportunity.

Outlook for Cloud Apps in Healthcare Sector

"An increasing number of providers are opting to 'build versus buy' when it comes to their organizational applications. In the past few years there have been significant investments in internal apps that integrate with EHRs, with the United States taking the lead in this area," noted Gulati.

Platform as a Service (PaaS) offers greater control over custom apps developed by providers compared to Software as a Service (SaaS), while it reduces the costs as well as data location and ownership concerns associated with Infrastructure as a Service (IaaS).

According to the Frost & Sullivan assessment, increasing demand for mobile apps, from both clinical staff and patients, further fuels the need for custom software application development.

Wednesday, November 29, 2017

Vendors Remove Complexity to Win the Multi-Cloud War

Why are savvy CIOs and CTOs so focused on Hybrid IT infrastructure solutions? More enterprises are moving to hybrid and multi-cloud environments. According to the latest worldwide market study by 451 Research, the cloud services market will reach $53.3 billion in 2021, that up from $28.1 billion this year.

The latest global survey found that cloud service adoption is now mainstream, with 90 percent of organizations surveyed using some type of cloud service. Moreover, analysts expect 60 percent of workloads to be running in some form of hosted cloud service by 2019 -- that's up from 45 percent today.

Cloud Services Market Development

This represents an ongoing pivot from DIY owned and operated on-premises IT, to a combination that includes cloud or hosted third-party IT services. 451 Research finds that the future of IT is multi-cloud and hybrid with 69 percent of survey respondents planning to have some type of diverse environment by 2019.

That being said, the growth in multi-cloud and hybrid cloud will make optimizing and analyzing cloud expenditure increasingly difficult. That's why multi-cloud brokerage and service management capabilities are as important as assessing the individual cloud service cost components.


"Cloud buyers have access to more capabilities than ever before, but the result is greater complexity. It is a nightmare for enterprises to calculate the cost of computing using a single cloud provider, let alone comparing providers or planning a multi-cloud strategy," said Dr. Owen Rogers, research director at 451 Research.

Flexibility has become the new pricing battleground over the past three months. 451 Research analysts believe there will be a market opportunity for cloud vendors that can resolve this complexity, giving enterprise users simple and low-cost prices -- similar to how consumer energy suppliers abstract away the complexity of global energy markets.

Outlook for Cloud Services Growth

The latest market data finds that the cloud computing as a service market is expected to grow by 27 percent to $28.1 billion in 2017, when compared to 2016. With a five-year CAGR of 19 percent, cloud computing as a service will reach $53.3 billion in 2021. Plus, the overall outlook is very bright.

451 Research noted that infrastructure as a service (IaaS) will account for 57 percent of cloud computing as a service revenue in 2017. Their analysts forecast that ISaaS will see the fastest growth through 2021 with a 21 percent CAGR, while Integration PaaS will be the fastest growth sector within the PaaS marketplace with a five-year CAGR of 27 percent.

Monday, November 27, 2017

Commercial Training Apps for Virtual Reality Systems

More CTOs are being tasked to assess the commercial applications of augmented and virtual reality technologies. These systems are increasingly being applied, due to their ability to provide immersive training environments, accurately simulate dangerous situations, and avoid costly travel and equipment-related expenses.

In many cases, consumer electronics Virtual Reality (VR) headsets, controllers, and tracking systems can be used in commercial settings with few modifications. That being said, it's likely that ruggedized versions of these products will be introduced for these situations.

Commercial VR Market Development

According to the ABI assessment, industries with high-risk working environments -- such as energy, industrial and manufacturing or construction -- are currently the early adopters of enterprise VR training applications.

Technician training in industries such as the energy sector can be perilous, mainly due to the nature of the job where technicians work on offshore rigs, or in the utility sector where technicians work with power distribution systems.

"In heavy industries, VR training prevents risks associated with training hazards such as safety of trainees in the dangerous work place or accidental damage of equipment. It can save time and money for the companies by providing realistic hands on experience to trainees without any work downtime," said Khin Sandi Lynn, analyst at ABI Research.

Aviation and Maritime are other, more well-known, areas that also use virtual reality training programs for simulated training. Virtual reality can also provide immersive experiences which has an important role in keeping trainees, across all industries, engaged in their training.

ABI reports that companies which deploy VR based training programs have experienced a time savings up to 80 percent. Moreover, the effectiveness of VR based training is already recognized by retail and marketing businesses.

In fact, one of the world's largest retailers, Walmart, has deployed VR technology to train its staff. Based upon the result of their pilot project, Walmart is planning to deploy the technology in its 200 training centers by the end of 2017.

Outlook for Commercial VR Apps

Although VR training applications are still at the early stage of deployments, they have strong potential in the entire enterprise training space; tourism, sales and marketing, and athlete training are just some of the segments where VR training applications will expand.

ABI Research expects that the enterprise VR training market will grow concurrently with the continued advancements in VR headsets, controllers, motion trackers and associated software applications. ABI Research forecasts that the enterprise VR training market will generate $216 million in 2018 and grow to $6.3 billion by 2022 -- that's at CAGR 140 percent in the next five years.

Wednesday, November 22, 2017

Digital Ticketing Users will Reach 1.8 Billion by 2020

Digital ticketing will continue to be a high growth market. A mobile ticketing user is someone who either purchases and/or stores a ticket using their mobile handset for later redemption. In contrast, an online ticketing user is likely someone who purchases a ticket online via an Internet connected device, thereby replacing the prior conventional ticket purchase process.

There's been substantial new growth in mobile and online ticketing, partly as a result of growing user adoption and usage momentum. While in some markets ticketing is a new service offering and users have simply never had this functionality open to them previously, in other markets these services are mature and well established.

Digital Ticketing Market Development

Online ticketing now accounts for majority of ticketing transactions in many markets across the globe, including both developed and developing countries. That said, mobile ticketing is fast becoming a popular method for transit fare collection and online bookings.

According to the latest worldwide market study by Juniper Research, mobile and wearable ticket purchases will exceed 14 billion by 2018, accounting for 54 percent of total digital ticket sales across transport and events sectors.

Moreover, Juniper estimated that the total number of transactions via mobile devices will exceed PC-based ticket sales for the first time in 2017 -- driven primarily by metro and air ticket purchases.


The Juniper study found that globally, metro, bus and airline app ticketing is the most established in terms of deployment and user adoption, followed by events ticketing. By 2020, Juniper forecasts that the number of digital ticketing users across all platforms will exceed 1.8 billion, with mobile NFC accounting for 215 million unique users.

The majority of mobile ticketing deployments -- especially in markets such as North America -- continues to be dominated by app-based ticketing services, using visual or QR-code authentication. However, mobile contactless ticketing is fast becoming the de-facto mode of payment for metro and bus ticketing in selected cities, especially within Europe.

Juniper also found that with the increased integration of chatbots, ticketing providers can offer a wealth of services directly to consumers via their dedicated app. "While the potential opportunities for consumers are clear, the use of chatbots also aids ticketing providers, providing insight into user preferences and demands," said Nitin Bhas, head of research at Juniper Research.

Outlook for Digital Ticketing Chatbots

However, chatbots in ticketing will be primarily restricted to informational services such as tickets and seats availability, public transport arrivals or timetable inquiries, with the majority of consumers saying that they're wary of conducting actual financial transactions.

According to the Juniper assessment, this consumer resistance is likely to diminish over the next 5 years with ticketing transactions conducted via messaging-based chatbots reaching $6 billion by 2022.

Tuesday, November 21, 2017

How Digital Transformation will Advance China's Economy

The global networked economy thrives on new ideas and innovation. Across the globe, more nations are making technology-centered strategies the focal point of their economic development. Amid ongoing digital transformation, the world is entering the era of the digital economy, a trend that is very evident in China.

Against this backdrop, the definition of the Four New Concepts, namely "new era, new balance, new way of thinking, and new grand goals" was proposed at the 19th National Congress of the Communist Party of China held in October 2017, outlining the direction for China's future economic development.

Five key terms were also mentioned in the report: "Cultural Revitalization, Digital Transformation, Innovation-driven Development, Globalization, and People's Well-being," serving as guidelines to the development of China’s digital economy for the years to come.

China's Digital Transformation Agenda

IDC predicts that in the next 3 to 4 years, a digital economy will reshape the economic landscape of China -- and the world as a whole -- transforming the way enterprises operate. Furthermore, innovations empowered by new technologies will play a pivotal role in the transformation.

"Industry users and ICT vendors will work collaboratively to strategize and architect new digital transformation platforms, build new trustworthy ecosystems, deliver new customer experiences, and enjoy new-era growth with digitally enhanced offerings, operations, and relationships," said Kitty Fok, IDC China Managing Director.

IDC forecasts that China’s economy will continue to see steady growth in 2018 at 6.5 percent GDP growth rate. Cultural Revitalization will stimulate the music, film, games, animation and knowledge sharing industries.


Digital Transformation will spur technological advances in information technology, intelligent manufacturing, biological medicine, energy, environmental protection, and the marine and aerospace sectors.

Innovation-driven Development will accelerate the growth in smart industrial parks, smart cities and associated technological services. Globalization will witness the advancement of the Belt and Road Initiative and Free Trade Zones. People’s Well-being will drive progress in energy saving and environmental protection, health care, recreation, and tourism.

China's broader ICT markets, especially those related to the 4 third-platform technologies and the 6 innovation-accelerators, have been growing faster than China’s GDP growth. IDC predicts that, in 2018, China’s broader ICT market will grow 7.1 percent, the third-platform market will grow 5.5 percent, and the innovation accelerator market will grow 13.5 percent.

Outlook for Digital Economy Growth in China

"Key aspects of the digital economy and its success, will rely on how business gathers, manages and monetizes data, how consumers are engaged at large scale, and how digital transformation platform is built with a good balance of both open API ecosystems versus core intellectual properties," said Lianfeng Wu , Vice President and Chief Analyst of IDC China.

According to the IDC assessment, industry users and ICT vendors should stay current on the fundamental technology enablers for a digital economy, and apply them into the core of their business operations and cultures, in order to accelerate their transformation into digital native enterprises. This is essential to achieving an all-round transformation and gaining first mover advantage in the era of the digital economy.

Friday, November 17, 2017

IT Spending in EMEA will Reach $1 Trillion by 2018

Information technology (IT) investment within the Europe, Middle East and Africa (EMEA) region is on track to further growth.  IT spending in EMEA is forecast to reach $1 trillion in 2018 -- that's an increase of 4.9 percent from 2017, according to the latest market study by by Gartner.

In 2017, however, all categories of traditional IT spending in EMEA under-performed the global averages. According to the Gartner assessment, currency effects played a significant part in the weakness during 2017, and will also contribute to the forecast shortfall in 2018.

EMEA IT Sector Market Development

"The UK has EMEA’s largest IT market and its decline of 3.1 percent in 2017 impacts the forecast heavily," said John-David Lovelock, research vice president at Gartner. "Weak Sterling and political uncertainty since Brexit are reducing UK IT spending in 2017, while other major IT markets in EMEA grew steadily."

Another significant currency effect is the rapid appreciation of the Euro against the U.S. Dollar -- it provides an incentive for Eurozone countries to defer IT spending to 2018 where possible, in anticipation of even lower prices in U.S. Dollars.

However, there is more to the recovery in 2018 than just currency effects. Strong demand within the enterprise software and IT services categories across EMEA hint at significant shifts in IT spending patterns.

The Gartner forecast highlights that businesses are broadly reducing spending on owning IT hardware, and increasing spending on consuming IT as-a-service (ITaaS). In the total IT forecast the business trends are masked somewhat by consumer spending, but when we look at enterprise-only spending the new dynamics between the categories are much clearer.

EMEA enterprise IT spending in 2017 was weaker than the overall IT spending forecast, declining 1.4 percent. The only category predicted to show enterprise spending growth in 2017 is the enterprise software market at 3.2 percent.

"In 2017, we're seeing a pause in EMEA enterprise spending due to the switch to as-a-service offerings gaining momentum," said Mr. Lovelock. "Among the spending rebounds in 2018, however, we expect lagging markets."

In 2018, total enterprise spending in EMEA will likely grow by 2.8 percent. All categories of enterprise IT spending will return to growth in 2018, but only IT services and software will grow strongly at 4 percent and 7.6 percent, respectively. Enterprise spending on devices and communications services continue to fall behind in 2018, growing at 2 percent or lower, thus failing to recoup the losses of 2017.

Outlook for EMEA IT Spending Growth

Gartner’s recent public cloud forecast further underlines this change in spending as businesses increasingly adopt cloud models for efficiency and agility. In doing so, they also shift their IT spending toward operational expenditure (opex) service-based models.

Gartner believes that the move to cloud services and opex spending on IT should serve to stabilize the growth in overall IT spending in EMEA in 2018 and beyond. They expect spending will spread out more evenly with fewer spikes of capital investment on hardware.

In both enterprise and overall IT spending forecasts, worldwide and in EMEA, Gartner now forecasts IT spending from 2019 through 2021 will remain close to a 3 percent growth rate each year.