Technology | Media | Telecommunications

Friday, July 10, 2020

Open Innovation Upside Potential for Telecom Services

A creative Open Innovation strategy promotes a mindset for collaboration that is counter to the 'closed silo' approach of most legacy organizations. That said, the benefits of increased openness are apparent. Open technology ecosystems have driven ongoing cooperation in the Global Networked Economy.

Open source software (OSS), and to a lesser degree open source hardware, serves as the foundation of IT infrastructure worldwide. It enables many eCommerce platforms and innovative over the top (OTT) service providers to bring new offerings to market quickly.

OSS is gradually driving the innovation agenda for communications service providers (CSPs), and by extension, it is now challenging the dominance of proprietary solutions in the telecommunications sector.

Telco Open Innovation Market Development

OSS holds the potential to play a key role in telco cloud deployments, a market that will potentially grow to $29 billion by 2025, according to the latest worldwide market study by ABI Research.

According to the ABI assessment, telecom service providers that want to compete with OTT service providers and hyperscale companies may have to implement the same technologies and agile business processes to innovate more rapidly.

OSS and cloud computing technologies enable operational nimbleness, but it's unclear if telecom service providers can seize the digital growth potential. Telecom companies are typically constrained by standard bodies that have long cycle times to next-generation technologies. On the other hand, open source is characterized by an agile approach.

"Though CSPs are at different timeslots in their digitalization journey, they should collectively propel the open source agenda forward. A close collaboration between standard bodies and open source communities is a step in that direction," said Don Alusha, senior analyst at ABI Research.

Furthermore, a key consideration for OSS success is the means of monetization. There are two main models that vendors can potentially use to commercialize OSS. Namely, there is a customer support model. And, the alternative where the core of the product is open source software. However, some vendors add proprietary features and capabilities on top of the open code.

Red Hat pioneered the customer support model, and it remains the leading IT vendor commercializing OSS using that option. Other companies such as Cloudera and Hortonworks have successfully embraced underlying OSS to offer enterprise-grade modules under a commercial license.

In telecoms, the adoption of OSS is already underway among CSPs and it could be in the mainstream by 2025. For example, CSPs like Orange and Bell Canada have created internal open source groups in a bid to become more well versed in interacting with community-developed software.

To that end, CSPs no longer hold reservations in adopting OSS but are now considering ways to include it in their network operations and commercial undertakings. In fact, the industry at large stands to benefit from OSS innovation with the introduction of IT and cloud solutions.

But, unlike the general-purpose IT infrastructure domain, telecom infrastructure is characterized by stringent performance, reliability and security requirements that require telco-specific arrangements.

Outlook for Open Source ApplicationS in Telecoms

Commercial models notwithstanding, telco system vendors can potentially leverage OSS to realize performance and scalability as they transition their products to more cloud-native equivalents.

At present, OSS serves as an enablement technology for these vendors, rather than a catalyst to build a new business case for OSS. But eventual diffusion of 5G may drive vendors to invest significantly in open source projects to develop carrier-grade products and services in the next five years.

"When that takes place, telecom vendors will need to channel time and investment to establish a presence in open source communities," Alusha concludes.

Monday, July 06, 2020

Data and Analytics Enable IT Recovery and Reinvention

Data and analytics technology will help to accelerate renewal, drive innovation and rebuild society over the next three to five years. Savvy digital business leaders will leverage their ongoing IT investment that enables recovery and reinvention.

Gartner has identified the key data and analytics trends that can help forward-looking CIOs and CTOs navigate their essential digital transformation and prepare for a post-pandemic marketplace.

"To innovate their way beyond a post-COVID-19 world, data and analytics leaders require an ever-increasing velocity and scale of analysis in terms of processing and access to succeed in the face of unprecedented market shifts," said Rita Sallam, vice president at Gartner.

Business leaders should examine the following trends to accelerate adoption:

Smarter, Faster, More Responsible AI

By the end of 2024, 75 percent of organizations will shift from piloting to operationalizing artificial intelligence (AI), driving a five times increase in streaming data and analytics infrastructures.

During the pandemic, machine learning (ML), optimization and natural language processing (NLP) are providing vital insights and predictions about the spread of the virus and the effectiveness and impact of counter-measures.

Other AI techniques -- such as reinforcement learning and distributed learning -- are creating more adaptable and flexible systems to handle complex business situations. For example, agent-based systems that model and simulate complex systems.

The Decline of the Dashboard

Dynamic data stories with more automated and consumerized experiences will replace visual, point-and-click authoring and exploration. As a result, the amount of time IT users spend utilizing predefined dashboards will decline.

The shift to dynamic data stories that leverage for example augmented analytics or NLP, means that the most relevant insights will stream to each user based on their context, role, or use.

The Rise of Decision Intelligence

By 2023, more than 33 percent of large organizations will have analysts practicing decision intelligence, including decision modeling. Decision intelligence brings together several disciplines, including decision management and decision support.

It provides a framework to help data and analytics leaders design, model, align, execute, monitor or tune decision models and processes in the context of business outcomes and behavior.

Exploring X Analytics

Gartner coined the term “X analytics” to be an umbrella term, where X is the data variable for a range of different structured and unstructured content such as text analytics, video analytics, audio analytics, etc.

AI has been critical in combing through thousands of research papers, news sources, social media posts and clinical trial data to help medical and public health experts predict the pandemic spread, capacity-plan, find new treatments and identify vulnerable populations.

X analytics combined with AI and other techniques such as graph analytics will play a key role in identifying, predicting and planning for natural disasters and other crises in the future.

Augmented Data Management

Augmented data management uses ML and AI techniques to optimize and improve operations. It also converts metadata from being used in auditing, lineage and reporting to powering dynamic systems.

Augmented data management products can examine large samples of operational data, including actual queries, performance data and schemas.

Using the existing usage and workload data, an augmented engine can tune operations and optimize configuration, security and performance.

Public Cloud Enables Innovation

By 2022, public cloud services will be essential for 90 percent of data and analytics innovation. As data and analytics moves to the cloud, data and analytics leaders still struggle to align the right services to the right use cases, which leads to unnecessary increased governance and integration overhead.

The question for data and analytics is moving from how much a given service costs to how it can meet the workload’s performance requirements beyond the list price. Data and analytics leaders need to prioritize workloads that can exploit cloud computing capabilities and focus on cost optimization when moving to a public cloud.

Data and Analytics Worlds Collide

Data and analytics capabilities have traditionally been considered distinct entities and managed accordingly. Vendors offering end-to-end workflows enabled by augmented analytics blur the distinction between the two markets.

The collision of data and analytics will increase interaction and collaboration between historically separate data and analytics roles. This impacts the technologies and capabilities provided, plus the people and processes that support and use them.

The spectrum of roles will extend from traditional data and analytics admins to information explorers and citizen developers.

More Data Marketplaces and Exchanges

By 2022, 35 percent of large organizations will be either sellers or buyers of data via formal online data marketplaces -- that's up from 25 percent in 2020. Data marketplaces and exchanges provide single platforms to consolidate third-party data offerings and reduce costs for third-party data.

Blockchain in Data and Analytics

Blockchain technologies address two challenges in data and analytics. First, blockchain provides the full lineage of assets and transactions. Second, blockchain provides transparency for complex networks of participants.

Outside of limited bitcoin and smart contract use cases, ledger database management systems (DBMSs) will provide a better option for single-enterprise auditing of data sources. By 2021, Gartner estimates that most allowed blockchain uses will be replaced by ledger DBMS products.

How Relationships Form the Foundation of Data and Analytics Value

By 2023, graph technologies will facilitate rapid contextualization for decision making in 30 percent of organizations worldwide. Graph analytics is a set of analytic techniques that allows for the exploration of relationships between entities of interest such as organizations, people and transactions.

According to the Gartner assessment, it helps IT leaders find unknown relationships in data, and review data not easily analyzed with traditional analytics solutions.

Friday, July 03, 2020

Digital Twin Apps in Industrial Markets Gain Momentum

The concept of a Digital Twin is important within the industrial sector, as stakeholders throughout the supply chain ecosystem seek to harness technology to increase efficiency. Digital Twins are also essential elements of the evolving Internet of Things (IoT) platforms market.

Examples of these virtual connected objects include connected cars, airplane turbines, smart cities, and commercial buildings. The objects are usually first created and modeled via computer-aided-design (CAD) software, which is used by engineers in the early stages of product development.

Digital Twin Market Development

IT innovations, such as Big Data analysis, machine learning, artificial intelligence (AI), software analytics and cloud solutions -- as well as the growing demand for sensors to capture and process data -- have been significant drivers for the adoption of Digital Twin use cases.

According to the latest worldwide market study by Juniper Research, the forecast total global spending on Digital Twins will reach $12.7 billion by 2021 -- that's an increase of 17 percent from $10.8 billion in 2019.

So, what exactly are those industrial applications? Digital Twins are a digital representation of physical assets that utilize IoT data; enabling use cases such as predictive maintenance when combined with AI.


Furthermore, despite the negative impact of the COVID-19 pandemic on overall IT investments, Juniper is anticipating a mere 1 percent drop in Digital Twins solutions spending during 2020.

Investment in Digital Twins is driven by valuable efficiency gains, which are increasingly essential in uncertain times. The market study identified that under these circumstances, return on investment is still achievable, primarily due to extensive links Digital Twins have to the wider IoT ecosystem.

The new research also identified that Digital Twins are not generally standalone products, and must be implemented as part of a wider Industrial IoT strategy. While IoT sensors generate enormous amounts of data in the industrial setting, interpreting this data and putting it into operation requires a collaborative approach based on open platforms.

"Digital Twins are only as valuable as the quality of data that enters the platform. As such, the most successful vendors in the market will be those that use partnerships to pair existing platform ecosystems with innovative Digital Twins solutions," said Nick Maynard, lead analyst at Juniper Research.

Outlook for Digital Twin Applications Growth

According to the Juniper analyst assessment, manufacturing will be the single biggest sector for Digital Twins deployment -- accounting for 34 percent of total spending in 2021, followed by energy and utilities at 18 percent.

Juniper forecasts that the North American market will dominate spending -- accounting for 67 percent of manufacturing IT investment in 2021. The study findings show that the U.S. market has had successful partnerships in the IoT ecosystem driving adoption, which is an approach that can be replicated in other markets.

Monday, June 29, 2020

Open IT Hardware: A Hyperscale Public Cloud Advantage

Open IT solutions are gaining momentum. Most savvy CIOs and CTOs already have plans to increase their applications for open-source software projects. While that software is an established component of on-premises enterprise data centers, the untapped opportunity is open IT hardware infrastructure.

Worldwide revenue from the Open Compute Project (OCP) infrastructure market will reach $33.8 billion in 2024, according to the latest global market study by International Data Corporation (IDC).

While year-over-year growth will slow slightly in 2020 due to capital preservation strategies during the COVID-19 pandemic, the market for OCP compute and storage infrastructure is forecast to see a compound annual growth rate (CAGR) of 16.6 percent over the 2020-2024 forecast period.

Open IT Hardware Market Development

The IDC forecast assumes a rapid improvement for this market in 2021-22, fueled by a robust economic recovery worldwide. However, a prolonged crisis and economic uncertainty could delay the market's recovery well past 2021, although investments in and by public cloud service providers may dominate infrastructure investments when they occur during this period.

The Open Compute Project (OCP) was established in 2011 as an open IT community focused on designing hardware technology to efficiently support the growing demands on compute infrastructure at midsize to large data center operators -- also known collectively as the hyperscalers.

Open Compute standards are now supported by market leaders such as Facebook, Microsoft, LinkedIn, Alibaba, Baidu, Tencent, and Rackspace. The OCP encourages infrastructure suppliers, hyperscalers, cloud service providers, systems integrators, and components vendors to collaborate on new innovations, specifications, and initiatives across several key categories.

"By opening and sharing the innovations and designs within the community, IDC believes that OCP will be one of the most important indicators of data center infrastructure innovation and development, especially among hyperscalers and cloud service providers," said Sebastian Lagana, research manager at IDC.

According to the IDC assessment, the compute segment will remain the primary driver of overall OCP infrastructure revenue for the coming five years, accounting for roughly 83 percent of the total market. Despite being a much larger portion of the market, the compute segment will achieve a CAGR comparable to storage through 2024.

Open IT hardware compute and storage segments:

Compute: Spend on computing platforms (i.e., servers including accelerators and interconnects) is estimated to grow at a five-year CAGR of 16.2 percent and reach $28.07 billion. This segment includes externally attached accelerator trays also known as JBOGs (GPUs) and JBOFs (FPGAs).

Storage: Spend on storage (i.e., server-based platforms and externally attached platforms and systems) is estimated to grow at a five-year CAGR of 18.5 percent and reach $5.73 billion. Externally attached platforms are also known as JBOFs (Flash) and JBODs (HDDs) and do not contain a controller. Externally attached systems are built using storage controllers.

"IDC projects massive growth in the amount of data generated, transmitted and stored worldwide. Much of this data will flow in and out of the cloud and get stored in hyperscale cloud data centers, thereby driving demand for infrastructure," said Kuba Stolarski, research director at IDC.

IDC analysts believe that OCP Board Member purchases make up the bulk of the OCP infrastructure market and are poised to grow at a 14.8 percent CAGR through 2024, when they will account for just under 75 percent of the total market.

Conversely, non-member IT infrastructure investment is projected to increase at a five-year CAGR of 23.2 percent and will expand its share of the OCP infrastructure market by just over 600 basis points during that period.

Outlook for Open IT Hardware Market Growth

In terms of end-user type, hyperscalers account for the largest portion of the market at just over 78 percent in 2019 and are projected to expand spending at a 14.2 percent CAGR through 2024, although this will result in erosion of total share.

That said, non-hyperscaler purchases will expand 23.8 percent over the same period, increasing the OCP group's market share by approximately 650 basis points from 2019 to 2024.

Other noteworthy open IT hardware ecosystems include the Open Power Foundation and the RISC-V Foundation. All these open projects are examples of collaboration between forward-looking organizations that have partnered on a common cause to enable the development and implementation of open IT infrastructure standards.

Friday, June 26, 2020

Data Management Analytics Spend will Reach $19.8B

More CIOs and CTOs are seeking actionable insight from the new technologies that are driving digital transformation within the industrial and manufacturing sectors. Manufacturing plants generate mountains of data throughout the day, every day. That data is a valuable asset.

Traditionally, data has been noted on paper or analyzed in spreadsheets. However, today it can be collected automatically via sensors and analyzed with tools that far exceed spreadsheet capabilities.

According to the latest worldwide market study by ABI Research, manufacturers and industrial companies will be spending $19.8 billion on data management, data analytics, and associated professional services by 2026.

Data Management and Analytics Market Development

"For many manufacturers, there is an appreciation that operational decisions need to be based on empirical evidence rather than guesswork. The challenges are not necessarily capturing and analyzing data, rather what to analyze in the first place," said Michael Larner, principal analyst at ABI Research.

According to the ABI assessment, the findings need to have a meaningful impact on operations and so manufacturers need to take a step back and devise precise objectives for data analytics projects.

Manufacturers should engage suppliers to help them prioritize activities and shape projects. For example, is the priority to increase production, reduce waste, improve quality, or to fully understand whether a piece of machinery needs to be serviced?

Predictive maintenance of manufacturing systems is critical for avoiding production downtime and improved employee safety on the factory floor. At the same time, video inspection software typically captures defects with a greater degree of accuracy than the human eye.

As the use cases expand, the IT supplier ecosystem evolves to meet them. For example, Bright Wolf, InVMA, and Dploy Solutions marry technological and consulting expertise to help their respective clients achieve digital transformation from a business perspective.

Davra looks to ensure manufacturers are using clean data, Relimetrics focuses on video inspections, Altair on analytics capabilities to support digital twins, and Senseye on predictive maintenance.

Moreover, the advancements in Artificial Intelligence (AI) and machine learning mean that IT suppliers can no longer merely report on captured data, they must also predict outcomes and suggest recommended actions for their customers.

Outlook for Data Analytics Use Case Growth

The orientation for action makes for compelling value propositions, and when combined with data visualization platforms embed data in many different roles. The advent of no-code and low-code platforms don't require IT staff to be data scientists to utilize software analytics in their roles.

"While manufacturers have spent decades refining their physical production lines, today they need to expend effort in optimizing their processes for collecting and analyzing data. But data should not be collected just for the sake of it," Larner concludes.

Clearly, there is a growing need for data analytics professional services within the industrial and manufacturing sectors. Business and IT leaders would greatly benefit from information and guidance that would enable operation teams to discover and apply the lessons learned by similar organizations.

Monday, June 22, 2020

New Mobile Messaging Payment Growth Opportunities

Mobile messaging is evolving. Traditional services include offerings such as carrier SMS, as well as over-the-top software app-based services. Now new offerings based on the Rich Communication Services (RCS) messaging standard, and in-application AI chatbots, may disrupt that legacy market.

RCS is a next-generation mobile messaging standard supported by mobile network operators that enable media-rich content and payment services. Juniper Research has forecast that total revenues from RCS traffic in North America will reach $712.8 million during 2020.

North America will drive 28 percent of total messaging revenue in 2020 -- due in part to the adoption of RCS messaging, and the supporting efforts of the Cross Carrier Messaging Initiative (CCMI) which is a joint venture between AT&T, Sprint, T-Mobile and Verizon.

While CCMI will initially focus on U.S. market deployment, the technology developed by the joint venture will eventually be available in the broader worldwide mobile communications market.

Mobile Messaging Services Market Development

The latest worldwide market study by Juniper Research identified integrated payment services in instant messaging applications as key to continuing this growth beyond the COVID-19 pandemic.

Juniper has forecast that instant messaging software app developers will likely partner with payment gateways to offer new capabilities in apps and increase the overall consumer value proposition.

The research analysts anticipate that partnerships with retailers will be crucial to growing an instant messaging payments ecosystem. The addition of payment capabilities in the app will enable retailers to extend their omnichannel strategies into the mobile messaging space.


Juniper also forecasts that retailers will capitalize on the established user base of instant messaging applications, such as WhatsApp, Facebook Messenger and WeChat, as an additional retail channel.

According to the Juniper assessment, retailers will then provide value-added services beyond simple messaging alerts, such as payment authentication and processing. That's the upside growth potential.

Juniper analysts also forecast that the number of RCS-enabled smartphones will grow by 45 percent from 2019 to 2020, with over 740 million smartphones using RCS services by the end of 2020.

However, despite this growth in mobile messaging service user adoption, it warned that RCS-enabled smartphones would only be 16 percent of all smartphones globally in 2020.

Outlook for Mobile Messaging Applications Growth

Given that the Juniper analyst findings estimated that 84 percent of smartphones will use mobile instant messaging applications in 2020, they believe that stakeholders cannot wait for RCS to reach high saturation levels to engage with mobile payments.

The research, therefore, recommended that vendors should leverage this massive addressable market as an immediate priority. That being said, let's not forget that the mobile network operators in the U.S. market were slow to adopt SMS, relative to their peers in the European and Asia-Pacific markets.

Therefore, we'll have to wait and see how mobile service providers in the North American market embrace new messaging initiatives. These messaging services will surely require new marketing investment to ensure their commercial success.

Friday, June 19, 2020

Cloud-Based Conferencing Revenue will Reach $4.1B

Even the most reluctant CEOs have discovered that supporting their remote workers was less disruptive than they anticipated. Moreover, productivity often increased as jubilant workers were freed from the noise and other distractions at their employer's poorly designed open-plan offices.

Short audio or video conference meet-ups have replaced the typical 1-hour long mind-numbing in-person meetings that were common at many enterprises prior to the pandemic. Legacy business leaders that were not previously Agile converts have now embraced these online collaboration tools. It's amazing.

Conferencing Solutions Market Development

Global end-user investment on cloud-based web conferencing solutions will grow 24.3 percent in 2020, according to the latest worldwide market study by Gartner.

Global workplace restrictions spurred by the coronavirus pandemic will expand the cloud conferencing user base throughout 2020, but growth may actually taper off in 2021 as the lasting effects of a remote workforce render conferencing services commonplace.

End-user spending on cloud-based conferencing is projected to reach $4.1 billion in 2020 -- that's up from $3.3 billion in 2019. It is the second-fastest-growing category in the unified communications (UC) market, behind spending on cloud-based telephony, which is forecast to reach $16.8 billion in 2020.

According to the Gartner assessment, overall UC market end-user spending is projected to decline by 2.7 percent in 2020 and return to growth in 2021, as cloud telephony initiatives regain momentum.

"Cloud collaboration investments will buoy the UC market downturn as remote work initiatives spurred by the COVID-19 outbreak drive conferencing adoption and market growth," said Megan Fernandez, senior principal analyst at Gartner.

Gartner now predicts that by 2024, in-person meetings will account for just 25 percent of enterprise meetings, a drop from 60 percent prior to the pandemic, driven by remote work and changing workforce demographics.

As a result, there is a higher demand for convenient access to videoconferencing and other collaboration tools. Cloud-based conferencing service providers will support the increased adoption with new offerings that further advance user productivity.

In 2020, new premises-based telephony investments will likely drop sharply as existing installed telephony system life spans are stretched and investment priorities shift to the cloud providers.

"Cloud telephony adoption will experience a 'push and pull' from competing market pressures," said Ms. Fernandez. "Overall, the market will be negatively impacted by organizations that were planning near-term premises to cloud migrations but are now extending legacy life spans instead."

However, cloud-based telephony will experience a boost once its benefits are recognized, namely the ease at which it can accommodate a changing workforce, update and extend existing features, and integrate with adjacent applications.

Outlook for Conferencing Service Applications Growth

The cloud-based telephony market is projected to grow by 8.9 percent in 2020 and 17.8 percent in 2021 as the transition to online communication gains new momentum.

"As a result of workers employing remote work practices in response to COVID-19 office closures, there will be some long-term shifts in conferencing solution usage patterns. Policies established to enable remote work and experience gained with conferencing service usage during the outbreak is anticipated to have a lasting impact on collaboration adoption," said Ms. Fernandez.

The traditional C-suite must realize, you can't go back to the old way of doing things. Change is inevitable. This progress is unstoppable. Embrace the 'next normal' and move on.

Monday, June 15, 2020

Digital Transformation Investment Drives Ongoing Growth

Many senior executives are resolute in their commitment to increasing business technology investments. The C-suite continues to support the strategic projects that CIOs and CTOs are championing within their organization. Cloud and edge computing are still gaining momentum.

Spending on the digital transformation (DX) of business practices, products, and organizations will continue at a solid pace despite the challenges presented by the COVID-19 pandemic, according to the latest worldwide market study by International Data Corporation (IDC).

Global spending on DX technologies and services is forecast to grow by 10.4 percent in 2020 to $1.3 trillion. While this is slower growth than the 17.9 percent in 2019, it remains one of the few bright spots in a year characterized by dramatic reductions in overall IT spending.

Digital Transformation Market Development

"COVID-19 has upended the global economy, with direct negative implications on the way businesses invest in IT," said Craig Simpson, senior research manager at IDC. "DX technology investment has not gone unscathed, but so far it has been affected to a lesser extent since many large-scale DX projects underway or planned are instrumental to broader strategic business initiatives."

A case in point: compared to IDC's pre-COVID-19 forecast, the five-year growth rate for DX spending has declined by less than two percentage points. However, the industries with the slowest year-over-year growth in DX spending are the ones experiencing the greatest impact from the economic downturn caused by the pandemic.

Personal and consumer services, which includes hotels, theme parks, casinos, and movie theaters, will only see an increase of 5.3 percent in its DX spending this year -- that's down from 18.4 percent growth in 2019.

Similarly, discrete manufacturing, the industry with the largest DX spending amount, will only grow 6.6 percent this year -- that's down from 14.5 percent growth in 2019.

In contrast, the industries expected to see the strongest growth in DX spending in 2020 are construction (16.3 percent) and healthcare (15.7 percent), both of which will see spending grow more slowly than last year.

According to the IDC assessment, COVID-19 has wiped off almost $500 billion of worldwide DX technology investment between 2020-2023 from their pre-COVID-19 forecast. Yet despite these losses, pockets of growth opportunities exist across most industries when diving deep into specific use cases that solve significant business challenges.

A few examples include RPA-based claims processing in insurance, digital visualization in education, omnichannel commerce platforms in telecommunications, and clinical trial operational excellence in process manufacturing.

The DX use cases – discretely funded efforts that support a particular program objective – that will receive the most spending this year include autonomic operations ($51 billion), robotics manufacturing ($47 billion), and root cause ($35 billion), all of which will be driven by the manufacturing sector.

Outlook for Digital Transformation Investment Growth

The DX use cases that will see the greatest year-over-year growth in spending are virtualized labs and digital visualization in the education sector, robotic process automation-based claims processing in insurance, and augmented design management in the professional services industry. Of the 278 DX use cases identified by IDC, only nine will see a decline in spending this year.

The United States will remain the largest geographic market for DX spending, delivering roughly one-third of the worldwide total in 2020. Western Europe will be the second-largest region for DX spending, following closely by China. These two regions will also deliver the strongest year-over-year growth in DX spending at 13.6 percent for China and 12.8 percent for Western Europe.

Friday, June 12, 2020

New 5G Edge Applications in Media and Entertainment

Mobile communication service providers have started to build out fifth-generation (5G) wireless network infrastructure. There are many use cases for this new technology. What benefits will 5G bring to the media and entertainment industry? One example: 5G will empower cloud-based entertainment on the go.

While 2019 has seen the first deployments of 5G in the consumer domain, 2020 will be the year of large scale commercial 5G rollouts across the globe. As a result of this network investment, 5G generated revenues for cloud-based entertainment services are forecast to rise rapidly.

According to the latest worldwide market study by ABI Research, 5G alone will contribute revenues of almost $1.9 billion to cloud gaming -- accounting for 42 percent of overall cloud gaming revenues, as well as $67.5 billion in cloud video -- accounting for 31 percent of cloud video revenues by 2024.

5G Edge Computing Market Development

"These numbers underline the growing demand for cloud-based entertainment services," said Leo Gergs, research analyst at ABI Research. "As an important enabler for these new entertainment services, 5G will be critical for the telco industry to unlock these immense revenue opportunities and turn them into commercial reality."

The current situation around countries imposing social distancing to fight and delay the outbreak of COVID-19 is exacerbating the demand for cloud-based entertainment as well as remote video applications, such as remote education services or videoconference and meeting platforms.

Besides, mobile network operators across the globe are already experiencing a surge of internet traffic by an average of 15 percent -- and up to 30 percent in European countries such as Spain and Italy.

Measures like school closings are providing a bump to video gaming and over-the-top streaming markets, with platforms like YouTube and Netflix reporting an increase in network traffic of 15 percent and 16 percent, respectively.

Due to current 'social distancing' policies, most of these services will likely be consumed at home, using either mobile or landline broadband, and in some cases fixed wireless access. Therefore, 5G will be an important enabler to transport these immersive digital media user experiences outside.

According to the ABI assessment, to truly succeed in the digital media domain, mobile network operators and IT infrastructure vendors need to target the emerging Enterprise use cases within the media and entertainment sector.

Gergs says, "If there is one lesson to learn from South Korean operators LGU+ or SK Telecom, it is the fact that revenues from the Consumer domain alone will not be enough to pay off capital investment for 5G network deployment."

That is why the global telecommunications service providers need to go beyond their market development comfort zone and target new digital media enterprise use cases.

To address these new media enterprise use cases, telecom infrastructure vendors and network operators will need to fully embrace a service-based monetizing strategy and depart from a traditional CAPEX intensive business model.

Outlook for 5G Applications in Media and Entertainment

This scenario should acknowledge that hyperscale cloud providers such as Amazon Web Services (via their Wavelength offering) will likely advance further into the media and entertainment domain to offer edge computing capabilities or individual network functions as-a-service.

"If the telco ecosystem does not successfully target media enterprise use cases, web-scale companies will take over the domain and push the telco industry to the side," Gergs concludes.

In contrast, I believe that more strategic partnerships will emerge between mobile service providers and hyperscale cloud providers. There are significant new opportunities for AWS Local Zones to extend compute, storage, database, or other select services closer to end-customers at the network edge. I anticipate that the Verizon and AWS partnership will set the stage for others to follow.

Monday, June 08, 2020

How Open Banking will Enable Disruptive New Services

Banking relationships are important to financial service providers. Traditionally, a banking relationship could reasonably be expected to last a customer's lifetime. However, the introduction of online and mobile banking has fundamentally altered expectations, disrupting the legacy banking business model.

Measures to increase competition and make switching accounts easier have eroded friction, while the commoditization of services in the U.S. market has led to reductions in profit margins. Moreover, following the introduction of open technologies, APIs have begun to be a disruptive force in banking.

APIs enable different systems to share data and initiate transactions, which can simplify the creation of new financial service offerings. This has helped to facilitate the Open Banking phenomenon.

Open Banking Market Development

According to the latest worldwide market study by Juniper Research, the total number of Open Banking users -- who share data via Open Banking APIs to access new services -- will double between 2019 and 2021; reaching 40 million in 2021, that's up from 18 million in 2019.

The market study found that the ongoing COVID-19 pandemic is increasing the need for customers to aggregate accounts and gain insight into their financial health, thereby boosting momentum in Open Banking adoption.

This extraordinary growth is being driven by Europe, where the regulator-led approach to Open Banking has created a standardized market, with low barriers to entry. This contrasts with markets like the U.S., where a lack of central regulatory intervention is limiting the growth potential.


Juniper analysts identified that Open Banking can be both a threat and an opportunity for traditional financial service institutions. While Open Banking exposes user information and access to potential competitors, this threat is equal to all service providers in the market.

As such, Juniper recommends that the savvy established banks create innovative Open Banking services that provide user benefits and attract customers from their less innovative competitors.

"Banks must embrace Open Banking as a chance to capitalize on their ongoing digital transformation journeys and introduce innovative services enabled by Open APIs, or risk losing out to more digitally-agile competition," said Nick Maynard, lead analyst at Juniper Research.

Outlook for Open Banking Applications Growth

Juniper analysts have identified that digital payments will be critical to the emerging Open Banking ecosystem -- accounting for over $9 billion in transaction value by 2024. However, payments within this ecosystem are at an early stage.

The study uncovered that eCommerce is dominated by payment card networks, but there is potential for this role to be eroded over time by 'direct from account' payments. According to the Juniper assessment, card networks should offer Open Banking-enabled payment services to offset the risk of future disruption.

That said, it's unclear if traditional financial service organizations can be agile and keep up with the more nimble new fintech providers that have no legacy systems or business models to transform. Only time will tell, so we'll have to wait and see how this emerging market continues to evolve.