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Posts from the ‘IDC’ Category

Sep 3

Enterprise Software as a Service Market Forecast: The Future is Already Here – It’s Just Not Evenly Distributed

The prescient quote by William Gibson aptly describes the worldwide Software as a Service (SaaS) market today, especially in the enterprise.

Global adoption and growth of SaaS within enterprises is unevenly distributed yet growing rapidly.  One of the primary catalysts moving this forward are Amazon Web Services, Google, Microsoft, Salesforce and other platform providers lowering the barriers to creating new applications, continually investing in security technologies, and streamlining rapid prototyping, testing, and release of SaaS applications.

This week Salesforce showed how extensive the momentum is in their global base of developers during Dreamforce ’11.  The Developer Zone had the most innovation per square foot of any venue at this conference.  Insights gained from visiting the sessions at Dreamforce, speaking with Force evangelists and tech staff, and also with attendees form the basis of the following analysis and insights.  On Friday of last week Gartner also released the report, Forecast: Software as a Service, All Regions, 2010-2015 by Sharon A. Mertz, Chad Eschinger, Tom Eid, Yanna Dharmasthira, Chris Pang, Laurie F. Wurster, Tsuyoshi Ebina, Hai Hong Swinehart, which validated several of the trends seen in the Developer Zone at Dreamforce ’11.

Forecasting the Growth of SaaS in the Enterprise, 2015

In speaking with developers, vendors and after reviewing the Gartner report, here are several insights gained that illustrate how SaaS adoption will vary by region over the next four years:

  • APIs are getting more adept at managing multi-party transactions across all platforms.  Marc Benioff and Chuck Phillips alluded to this when Infor announced Inforce this week at Dreamforce.  It was also evident in how partners in the Developer Zone were demonstrating frameworks for supporting more advanced enterprise software application development.  These included supply chain management, the ability to manage complex project plans more effectively using apps based on these APIs, and greater control over collaboration development.  Gartner published their total software revenue forecast for SaaS delivery, 2007 – 2015 back in June, and a table from that analysis is shown below.  Their forecast reflects in large part depth of REST APIs which are part of Web Services.   This table is from the report, Forecast: Software as a Service, Worldwide, 2010-2015, 1H11 Update, 22 June 2011, ID:G00213816, Sharon A. Mertz, Chad Eschinger, Tom Eid, Chris Pang, Laurie F. Wurster.
  • Graphical interface flexibility, usability options, localization, and local language support dominate EMEA concerns about SaaS.  In Dreamforce sessions attended and in the Gartner report, it’s clear Salesforce is struggling to make localization work more effectively via their programming platforms and tools in EMEA.  This came out during many of the discussions in the Developer Zone as well.  All platform providers are facing this challenge, yet the pace of new API enhancements shows significant potential.  As a result the forecast for SaaS revenue in Western Europe is forecasted to be $2.66B in 2011 growing to $4.8B in 2015, achieving a compound annual growth rate (CAGR) of 17% according to Gartner.
  • Total Cost of Ownership (TCO) is aggressively pushed by Salesforce in the U.S. yet is most effective in EMEA.  This became evident in discussions and presentations, and also was validated by the recent Gartner report.  Salesforce also has extensive TCO calculators on its Force developer sites for the U.S. yet ironically they are finding they are most effective in EMEA sales cycles.
  • Based on my informal poll 20% of iPad-to-Salesforce account demos failed at Dreamforce.    Dozens of companies were hyping their iPad clients at Dreamforce, yet I found nearly one in five failed to deliver reliable performance. While the sample is hardly scientific, it does show that the iPad to Salesforce integration so heavily hyped by so many vendors is still nascent.  It’s as if these companies invested so much on iPad clients they ran out of time to make the back-end integrations work reliably.  Gartner found that lack of integration is the single greatest inhibitor to SaaS growth in North America.
  • Ease of speed and deployment, limited capital expense, and lower TCO are the most critical factors driving SaaS growth in U.S. enterprises today.  This became evident from listening to customer testimonials during the many vendor sessions in Moscone West, in addition to discussions with developers.  The impact of these factors is also evident in the total software revenue forecast for SaaS delivery within enterprise application software markets by region, 2008 – 2015.   This is from the Gartner report, Forecast: Software as a Service, All Regions, 2010-2015. Sharon A. Mertz, Chad Eschinger, Tom Eid, Yanna Dharmasthira, Chris Pang, Laurie F. Wurster, Tsuyoshi Ebina, Hai Hong Swinehart.

  • CRM continues to dominate SaaS usage across all enterprise applications, closely followed by Web conferencing and e-learning in North America and Northern Europe.  Both North America and Northern Europe have comparable adoption trends regarding these SaaS applications, with Western and Southern Europe lagging in terms of adoption and spending.
  • Asia/Pacific continues to be the most fragmented of all regions when it comes to SaaS adoption in the enterprise.  Countries with greater stability of their Internet infrastructures including Australia, Hong Kong, Singapore and South Korea are experiencing greater SaaS growth, and also contributing to Salesforce’s success in these regions.  Salesforce has 14.5% CRM share in this region, third behind SAP and Oracle. Emerging countries are the most rapid adopters of SaaS-based accounting, e-mail and collaboration-based apps.
  • China, India and Malaysia are experiencing the most rapid adoption of SaaS-based enterprise applications in the Asia/Pacific region.  WiPro’s decision to invest so heavily in Dreamforce as a promotional event is a case in point.  The Developer Zone had  several companies from this region offering their programming and system integration services as well.

Bottom line: SaaS adoption continues to accelerate globally across enterprise software, growing from $12B in 2011 to $21B in 2015, achieving a 16.3% CAGR annually. Platform providers are knocking down the barriers to market growth by using events including Dreamforce to educate, entertain and enable developers to quickly turn concepts into applications.

Aug 13

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SaaS-based Analytics and Business Intelligence Market Update, August 2011

Challenging, uncertain economic times accelerate sales cycles and lead to more closed deals for business intelligence software providers.  Companies get an urgency to reduce costs and risks, relying on the insights gained from these applications.

There’s an interesting dichotomy starting to emerge in how experts and analysts define just how these markets will mature however.  Both agree that economic uncertainty are growth catalysts yet they diverge on adoption rates, roadblocks, and which analytics and BI technology will dominate in the years ahead.

This week I read Balancing Custom And Packaged Apps In Your Application Portfolio Strategy by George Lawrie, Mike Gilpin and Adam Knoll from Forrester and the latest Hype Cycle of Business Intelligence, 2011 by a collection of Gartner authors led by Andreas Bitterer.  I’ve summarized the key points of each below.

Forrester Sees SaaS Applications Overtaking Custom Application Development

Forrester sees SaaS-based applications starting to replace in-house custom application development, gathering momentum through 2013.  Gartner, with their Hype Cycle for Business Intelligence, 2011 just released this week, shows BI platforms having greater near-term benefit than SaaS-based analytics and BI.  Custom application development projects are going to face continued pressure to keep up with business requirements that SaaS applications are proving able to handle more effectively and economically than ever before.

In-house development makes more sense for specific analytics and reporting requirements,  yet will continually be eroded by SaaS-based applications that can meet most requirements at a lower cost.  Forrester has in the past said SaaS-based adoption of analytics applications in general and predictive applications specifically would be very slow due to data integration challenges.  This study points to a potential shift in their mindset, as the data shows SaaS-based analytics beginning to replace custom in-house developed applications.

Here are the key take-aways from the report:

  • Analytics processes are supported 79% of the time with custom application development.  Procure-to-pay (33%) and record-to-report (33%) are the second-most supported.  Multiple responses were allowed in the survey.
  • When asked which process areas they are automating with SaaS, analytics (33%), record-to-report (18%), order-to-cash  (15%), and purchase-to-pay (12%) were the most common responses.  There was a small sample size on the Forrester report and the most startling insight was how quickly respondent companies plan to migrate from custom application development to SaaS-based analytics and BI.
  • Nearly 50% of the respondents to the Forrester survey have between five and 19 SaaS-based applications today with 18% expecting to have 35 or more by 2013.  In addition 63% of respondents expect to deploy between five and 34 SaaS-based applications by 2013, a significant shift in just two years.
  • 36% of survey respondents say their  SaaS applications run completely standalone.  Another 36% mention they use a combination of on-premises Master Data Management (MDM) and process integration tools.  Ironically only 3% are deploying their applications on cloud-based MDM or process integration-based platforms.

Gartner’s Hype Cycle for Business Intelligence, 2011

Unlike the hype cycle for cloud computing, this hype cycle has fewer technology categories (25), a narrative firmly grounded in business process and strategy, and more practical and pragmatic insights versus just theoretical.  At 50 pages it’s  quick read and while there are many excellent points made, I have summarized the key take-aways pertaining to the highest hype points and SaaS adoption below:

  • Mobile Business Intelligence (BI) is the latest entry to the Hype Cycle for Business Intelligence based on the massive hype around analyzing locational and application data.  The hype surrounding the Apple iPad Series, Google Android and other tablet and smartphone platforms has made this one of the most hyped areas of the last year according to the analysis.
  • Consumerization, Decision Support, analysis of non-traditional data and “Big Data” are the areas of the greatest innovation today.  The hype cycle points to search, mobile, visualization and data discovery being the catalyst of Consumerization.  Predictive analytics, which is on the Slope of Enlightenment on this latest hype cycle, is critical to decision support.  The non-traditional and “Big Data” area of innovation is further supported by content, text analytics, in-memory DBMSs and columnar DBMSs.
  • SaaS-based Business Intelligence is at the apex of the Peak of Inflated Expectations yet will continue to have low adoption rates.  Gartner believes that the  lack of trust in third parties managing confidential data, and the inertia and fear many companies have in moving to a new architecture are slowing adoption.  This is in contrast to the survey Forrester released this week showing analytics being one of the most popular SaaS-based applications planned by 2013 in their base of respondents.
  • Gartner sees SaaS-based Business Intelligence of the most value to midsize and smaller organizations who lack IT staff yet have very specific, targeted information needs.  Website analytics, social media monitoring, dashboards, predictive analytics and Excel as a BI front-end all apply.  Both Forrester and Gartner agree on this point and see this type of custom development going away quickly internally.
  • There is a massive amount of hype surrounding in-memory computing, particularly from SAP at its Sapphire conferences .  Gartner believes that SAP’s vision of in-memory computing exceeds  in-memory analytics to include analytical and transactional processing.  As a result, In-Memory Database Management Systems are at the Peak of Inflated Expectations.


Source: Hype Cycle for Business Intelligence, 2011, Published 12 August 2011 | ID:G00216086 By Andreas Bitterer.  Gartner, Inc.

What Both Agree On

Forrester’s survey shows SaaS eventually replacing custom application development while Gartner’s Hype Cycle for Business Intelligence shows the practical, pragmatic technologies including dashboards, predictive analytics combined with the more complex Business Activity Monitoring (BAM), Business Intelligence Platforms, and Data-Mining Workbenches delivering the most value.  Despite these differences, both agree on the following:

  • The overall market for BI, Analytics and Performance Management continues to grow at between 8 to 12% per year depending on the forecast used.  The following forecast is from the report  Market Trends: Business Intelligence, Worldwide, 2011-2014, 7 June 2011 | ID:G00213483 by Dan Sommer and James Richardson.
Source: Market Trends: Business Intelligence, Worldwide, 2011-2014, 7 June 2011 | ID:G00213483 by Dan Sommer and James Richardson
  • 2011 continues to see large, strategic deals for analytics and BI closing more rapidly than they have in the past.
  • SaaS-based analytics and BI continues to gain a greater share of spending in midsize and smaller companies.  Both also agree that the proliferation of smaller SaaS-based analytics and Bi vendors concentrating on a specific niche have successfully displaced in-house custom development of competitive applications.  Trust in the smaller vendor, their track record, customer references and financial viability are what are winning deals for SaaS-based analytics and BI software providers today.
  • The market transition from build to buy is now in full force as budgets become available again.  This is key assumption of both analyses and means that smaller, more niche-oriented SaaS-based analytics and BI vendors stand a chance to get new reference accounts and grow, despite a challenging economy.

Jun 18

Roundup of Cloud Computing and Software-as-a-Service (SaaS) Forecasts, June 2011

The gap is beginning to close between the value SaaS-based applications have the potential to deliver and what customers are achieving.

While SaaS-based software vendors are making major strides in integration, reliability, system performance and usability, it is the enterprise buyer’s skepticism and high standards forcing the market to move forward.  The latest series of market forecasts and surveys reflect greater use of actual customer results and a quickening pace of progress.

Performance-Driven Cultures and SaaS Adoption

Measuring business outcomes using industry standard and company-specific metrics typifies companies getting the best results.  A lack of clarity or confusion around strategy based goals leads to low adoption and eventual abandonment of SaaS initiates.  Sales and sales operations VPs are winning the debates against home-grown or internal system development based on speed of deployment, usability and integrated analytics of SaaS applications.  Based on the surveys and research completed this year, the best SaaS implementations are designed on a firm foundation of measurable results including quantifying risk.

Performance-driven cultures have a higher success rate with SaaS pilots, are more thorough in defining their own infrastructure (IaaS) and platforms (PaaS), and also know what success looks like from a metrics-driven standpoint.   The graphic, Performance-Driven Culture: The Metrics Continuum, shown to the left, was originally published in Gartner’s Predicts 2011: Enterprise Architecture Shifting Focus to Business Value Outcomes Report, November, 11, 2010 Philip Allega, et.al supports this point.  Please click on the graphic to expand it for easier reading.

Hype is Prolonging the Peak of Inflated Expectations

The bottom line is all really matters is measurable, repeatable performance when enterprises evaluate their SaaS strategies.  Many marketing, sales, sales operations and service VPs must defend their choice of SaaS over legacy system upgrades or internal system development.  Resistance to change and complacency in IT is slowly killing many companies who must step up and keep pace with their customers to survive. People are betting their jobs on this technology.  Many in marketing, sales and service want to know how to improve and measure business strategy performance.  That’s one of the main inflexion points in SaaS marketing today.

 The reality for enterprise users is that nothing gets purchased, no matter how wonderful the claims, unless there are strong metrics that link them back to business performance.  That’s what is deflating hype in this market faster than any other factor.  You can download the Gartner Hype Cycle for Cloud Computing 2010 from the link (no opt-in).  Please click on the graphic to download the Gartner Hype Cycle for Cloud Computing 2010.

Here are short summaries of the latest cloud computing and SaaS forecasts published recently:

  • Gartner is forecasting enterprise-based spending for Software-as-a-Service (SaaS) applications  will grow at a 16.3% compound annual growth rate through 2015. SaaS will grow at nearly double the pace of licensed enterprise applications during the forecast period.  Licensed applications will grow at a n 8.5% CAGR during the same period. The following  table, Total Software Revenue Forecast for SaaS Delivery Within the Enterprise Application Software Markets, 2007-2015 (Millions of U.S. Dollars) compares enterprise software spending by application category for the forecast period. Source: http://my.gartner.com/portal/server.pt?open=512&objID=260&mode=2&PageID=3460702&id=1728009&ref=

     Total Software Revenue Forecast for SaaS Delivery Within the Enterprise Application Software Markets, 2007-2015  (Millions of U.S. Dollars) 

     

  • The Asia-Pacific (APAC) Software as a Service (SaaS) market is expected to grow from $390M in 2008 to $4.3B in 2015, at an estimated CAGR of 41.0% from 2008 to 2015. The appeal and reach of software as a service (SaaS) continue to grow rapidly among enterprises in Asia Pacific. Australia & New Zealand (ANZ) is the largest regional SaaS market in Asia Pacific. SAAS is gaining momentum in ANZ because of the markets resemblance to the North American market with better broadband penetration, availability of applications getting delivered in SaaS mode and overall greater adoption of IT in general. Source: http://professional.wsj.com/article/TPMTPW000020110214e72e002k2.html
  • Cloud middleware systems markets at $1.5B in 2010 are forecast to reach $4.3B, worldwide by 2017.  Cloud computing middleware represents the base for development of all cloud computing infrastructure as it supports systems integration and systems self-provisioning.  Market leaders are predicted to be Akamai, IBM, Google, Microsoft, and Oracle. Source: http://wintergreenresearch.com/
  • Infonetics Research forecasts the overall managed security services market, including CPE, SaaS, and cloud services, to reach just under $17B by 2015.  SaaS and cloud-based security services are expected to make up close to half of the overall managed security services market opportunity by 2015 Worldwide SaaS revenue is forecast to grow dramatically over the next few years, with a compound annual growth rate (CAGR) of 23% from 2010 to 2015.  Source: WSJ Journal 
  • Cloud service adoption is up 61% from 2010 and 45% of multinational corporations (MNCs) already use cloud sourcing for at least some elements of key IT services.  Cable & Wireless and Ovum partnered to create this white paper, full of excellent insights and research data: http://www.cw.com/assets/content/pdfs/resource/ovum-cloud-wp.pdf
  • 60 percent of companies worldwide said cloud computing is a top IT priority for the next year, the sentiment is even higher in the C-suite with three in four (75 percent) C-level executives reporting cloud computing as top of mind.  According to an Avanade Research and Insights’ Global Survey: Has Cloud Computing Matured? Third Annual Report, June 2011, there is also significant purchasing of cloud services without the IT department’s knowledge, with nearly 20% of all purchases never reviewed with the CIO. Source: Avanade Research Report  
  • By 2014, cloud computing services will grow to a $45B industry a year (IDC) and SaaS to grow at 21% CAGR to touch $17.6B.  Microsoft recently published the following presentation, Grow Your Business with Cloud – Are You Ready?  You can download a copy of the presentation by clicking on the presentation to the right.
  • The global cloud computing market is expected to grow from $37.8B in 2010 to $121.1 B in 2015 at a  CAGR of 26.2% from 2010 to 2015 according to Yankee Group. SaaS is the largest segment of the cloud computing services market, accounting  as it did for 73% of the market’s revenues in 2010. The IaaS and PaaS markets are still at a nascent stage and  currently hold a small share of the Cloud computing services market. However, these are expected to witness  moderate growth due to their flexibility and cost effectiveness.Source: CSS Corp. Analysis.
  • Project and Portfolio Management (PPM) software emerged in 2009 as a fast-growing market for SaaS, with a compound annual growth rate (CAGR) of more than 40% projected for the next five years according to Gartner. PPM software consumption environments are changing radically, with hosted and SaaS options — as a result, most traditional on-premises vendors are forced to provide SaaS alternatives to counter new entrants and SaaS-only PPM vendors.  Source:  Competitive Landscape: SaaS Project and Portfolio Management Software, Worldwide, 2011 published 6 April 2011.

Jun 12

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Gartner Search Analytics Shows Spike in Platform as a Service (PaaS) Inquiries in 2011

Trends of search terms from user accounts and topics of their inquiries form the catalyst of research agendas in many IT advisory firms.  At Gartner these two factors and others like them are commonly regarded as leading indicators of future IT spending.

Gartner has been delivering short analyses of these subject areas to clients in the form of reports, with the latest being Search Analytics Trends: Platform as a Service published on June 9, 2011.  This report covers user search activity from April, 2009 to March, 2011. For purposes of the report, Platform-as-a-Service (PaaS) is defined as cloud application infrastructure services delivered as a service.  Gartner makes the point that PaaS includes no traditional software license and is expensed on a metered or utility basis.  Presented below is the time series of searches by month from the report.

A few key take-aways emerge from the report, and they are presented below:

  • Cloud Middleware Services including Platform-as-a-Service (PaaS) are still unknown to many Gartner IT user clients.  As a result this area is seen with skepticism by many of their clients.  In studies of PaaS adoption from other analysts at Gartner and Forrester, it is evident that internal software development will make or break the credibility of PaaS initiatives for the long-term.
  • When Gartner IT users search for PaaS on the website and throughout online research, the four most common secondary terms are IaaS and SaaS (7.05%), Magic Quadrant (6.12%) and cloud (5.72%).  Clearly Gartner IT user clients are looking to define their own technology stack in this area and looking for a framework of reference of where PaaS fits into their own IT plans and architectures.  The competitive intensity across the analyst community will most likely go up as a result of the uncertainty many IT buyers have over PaaS.
  • The top three vendors that Gartner IT users search for are Microsoft (18%), Amazon (13%) and Tata (11%).  Additional vendors include IBM (11%), Salesforce.com (11%), SAP (7%), Google and Oracle (4%).

Bottom line: The key to PaaS adoption in larger enterprises, many of which are IT user clients of Gartner, is how successfully Independent Software Vendors (ISVs) clarify their value proposition and how their apps add value to the platform layer.

Jan 1

Google Insights Cloud Computing
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Roundup of Cloud Computing Forecasts and Market Estimates, 2011

During the last four months of 2010 the pace of published forecasts on cloud computing, IaaS, PaaS and SaaS forecasts quickened, yielding an eclectic and at times conflicting view of this emerging market. From the daily Google Alerts, RSS feeds, e-mail subscriptions and offers to buy research reports on cloud computing received, the pace is being matched by the variety of research being completed.


I did a quick review of the term “cloud computing” on Google Insights for Search, which produced the following graphic.  Google Insights for Search is an excellent analytical tool, as it will render a forecast based on previous results and show geographic concentrations.  Please click on the image to expand it for easier viewing.

Cloud Computing Was Gartner’s Most Popular Inquiry Topic Last Year

Gartner analyst Ben Pring sums it all up when he writes in the report, The Influence of Cloud in Outsourcing, 2010-2011 that cloud computing was the #1 area of inquiry for the advisory firm in 2010. The Google Insights analysis and the proliferation of reports underscore that point.

Before reviewing all these forecasts, it’s good to also take a look at the latest Gartner Hype Cycle for Cloud Computing, 2010.  Back in October 2010, Intel started offering it on their website for free.  You can get a copy of the Gartner Hype Cycle for Cloud Computing, 2010 by clicking here.

2011: When Cloud Computing Customer Results Became King

You can debate which area of the hype cycle the industry is on, yet after reviewing all these forecasts and projections the urgent need for real-world results is clear. As 2011 begins, any software company who has measurable results from customers, not just projections, of their cloud and SaaS-based strategies will be much further ahead of the mainstream.

Hopefully this year the research firms will cite more users than ever before an anchor these forecasts, as varied as they are, back to customer results.  That said, the energy and intensity going into forecasting the cloud computing and SaaS markets is impressive.

Here is the roundup of cloud computing forecasts and predictions for 2011:

  • Experton Group is forecasting that the German cloud computing market is forecast to grow from EUR 1.14 billion in 2010 to EUR 8.2 billion in 2015. This is equal to average annual growth of 48 percent. In 2015, cloud computing will account for around 10 percent of total IT expenditure in Germany. Around half of revenue in 2015 will be generated from cloud services, with a third coming from investment in cloud infrastructure, mainly data centres. The use of so-called ‘private clouds’ by businesses will account for EUR 2.6 billion in revenues by 2015, up from EUR 400 million in 2010. Source: http://professional.wsj.com/article/TPDMEUR00020101007e6a700061.html
  • Gartner analysts write in the report Predicts 2011: New Relationships Will Change BI and Analytics, that by 2013, 33% of business intelligence functionality will be consumed via handheld devices, and 15% of BI deployments will combine BI, collaboration and social software into decision-making environments. By 2014, 30% of analytic applications will use in-memory functions to add scale and computational speed. In addition, 30% of analytic applications will use proactive, predictive and forecasting capabilities and 40% of spending on business analytics will go to system integrators, not software vendors.  All of this is predicated on the security and scalability of cloud-based analytics.
    Source:  Predicts 2011: New Relationships Will Change BI and Analytics
  • TechMarketView predicts the value of the UK cloud computing market will more than double between now and 2014 from £2.4bn to £6.1bn according to the study UK Software and IT Services Market Forecast published in December by the firm.
  • MarketsandMarkets.com in their report, Cloud Computing Market – Global Forecast (2010 -2015) predicts that the global cloud computing market is expected to grow from $37.8 billion in 2010 to $121.1 billion in 2015 at a CAGR of 26.2% from 2010 to 2015. SaaS is the largest contributor in the cloud computing services market, accounting for 73% of the market’s revenues 2010. Source: http://www.marketsandmarkets.com/Market-Reports/cloud-computing-234.html
  • Renub Research has made the following predictions in their latest report titled Cloud Computing – SaaS, PaaS, IaaS Market, Mobile Cloud Computing, M&A, Investments, and Future Forecast, Worldwide.Here are the key take-aways from the summary sent to me of the study:
    • Worldwide Cloud Computing market is growing at a rapid rate and it is expected to cross $25 Billion by the end of 2013
    • Renub predicts the Platform as a Service (PaaS) market size will reach US$ 400 Million by the year 2013
    • Renub also predicts that Infrastructure as a Service (IaaS) market will increase at a CAGR value of 52.53% for the period spanning 2010 – 2013
    • US Federal IT budget devoted to Cloud Computing Spending will reach nearly US$ 1 Billion by 2014

Source: http://www.reportlinker.com/p0293136/Cloud-Computing-SaaS-PaaS-IaaS-Market-Mobile-Cloud-Computing-M-A-Investments-and-Future-Forecast-Worldwide.html

You can also find additional market forecasts in my post from July 19, 2010 titled Sizing the Cloud Computing Market and IDC Predicts SaaS Will Re-Order Software Landscape by 2012.

Happy New Year and I hope you find these links useful.  I’ve been tracking this activity a while and thought this would be a good time to publish the list.

Best Regards

Louis

Dec 14

IDC’s 2011 Predictions for the Cloud

Frank Gens, Senior Vice President & Chief Analyst for IDC, shares insights from his firm’s predictions for 2011 and beyond in the areas of cloud computing, Platform-as-a-Service (PaaS), public and private cloud services.

Here are a few of the many take-aways in this 5 minute video:

  • Public cloud services adoption will grow at over five times the rate of the IT industry to $29B in 2011, up 30% from 2010 reaching $55B by 2014.   E-mail and collaboration will be the foundation, and entirely new application segments will drive incremental growth.
  • Private cloud services will grow to $13B in 2011, growing much faster than public cloud.  IDC predicts that Salesforce.com and Google will partner with infrastructure providers to create private cloud appliances of their public cloud offerings.
  • 15% of industry revenue and 30% of industry growth will be from public and private cloud services in 2011.
  • Cloud management systems and solutions will embrace public and private clouds and will see Accenture, Cisco, CA, IBM, Microsoft, Oracle and others enter this market with enterprise-ready solutions in the next year.
  • On-premise applications will go through a transformation of supporting private cloud integration, providing enterprise accounts with the option of migrating to the cloud if they choose to.
  • The term “cloud computing” as a buzzword will be gone by 2012, as these technologies are expected to become ubiquitous.

Nov 24

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Cloud Computing’s Impact on the Channel

IDC’s Chris Ilg, Director of Market Research, Infrastructure, Channels and Alliance discusses the impact the cloud will have on the channel moving forward.

Key points Chris makes during this video include the following:

  • Resellers see private clouds as a great opportunity for value-added services and many are making the shift away from selling purely hardware as a result.
  • Public Cloud Services providers are actively recruiting resellers as there is a land grab for market share right now.
  • Professional Services is the greatest profit opportunity, with the reseller being the trusted advisor to move applications into the cloud and provide legacy system integration.
  • Resellers need to move away from hardware and software margins now to stay financially viable; IDC surveys show a short runway to the move to services before a reseller shakeout begins.
  • Converged architectures and convergent infrastructures are acting to disintermediate resellers in the short term according to IDC.
  • Emerging opportunities for resellers today include unified communications and collaboration, mobile computing including tablets, security services and consulting, and digital signage.
  • Distributors need to get beyond their traditional role of pick, pack, and ship operations and become knowledge leaders for the channel, delivering strategic services in the process.  Providing guidance to resellers on how to make the transition to cloud services is critical.
  • Vendor partner programs can be confusing and difficult to navigate.  Distributors need to be the leaders on these programs, especially on certifications and specializations on behalf of resellers.
  • Solutions Distributor is a term being used more and more as these businesses seek to differentiate from their traditional logistics and pick, pack and ship operations. Ingram Micro and Tech Data investing in advanced technologies divisions that set the foundation for services selling by resellers are cases in point.  The goal of these divisions is to call at high levels in enterprises and sell services and programs that can scale across an entire business instead of just selling hardware or software.
  • M&A activity is picking up in distribution to attain global reach and set the foundation for future Cloud Services selling.

Nov 18

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Analyzing SaaS Revenue Forecasts and Market Growth by Segment

A recent report published by Standard & Poor’s Equity Research Services on the computer software industry makes for interesting reading.

Zaineb Bokhari, Application Software Analyst authored the 47-page report.  He has shown how the software industry is going through a fundamental restructuring due to the impact of SaaS, open source, and the many variations in licensing programs.

His analysis also shows how these factors taken together form a powerful catalyst of long-term disruption to business models.  At one point, the study predicts the end of perpetual licensing due to the time-to-value contributions of SaaS-based applications.  The report is available for download to Equity Research Services clients, including many college and university online libraries that have Standard & Poor’s subscriptions.

Here are the key take-aways from reading this report:

  • IDC expects the market for global packaged software to grow at a compound annual growth rate (CAGR) of 5.8% from 2009 to 2014. Over the same period, IDC projects software-as-a-service will grow at a 25.3% CAGR.

  • Standard & Poor’s reports that the SaaS category is still dwarfed by traditional packaged software, which IDC sized at $272 billion in 2009 (versus $13.1 billion for SaaS).
  • According to IDC’s forecasts, the size of the SaaS will rise from just under 5% of the size of the packaged software market in 2009 to more than 11% by 2014.
  • Standard & Poor’s expects corporate spending on enterprise software and related maintenance to grow in the low to mid-single-digit range (i.e., 3%–6%) in 2010, with some segments expanding at above-average levels.
  • Overall revenues from SaaS delivery models reached $13.1 billion in 2009, a growth rate of 34.2% from 2008 according to IDC. IDC expects this revenue to rise to $40.5 billion by 2014, a compound annual growth rate (CAGR) of 25.3%. This is dwarfed by the $272 billion that IDC believes was spent globally on software in 2009.
  • Application development and deployment is projected to have the most rapid growth of all segments, attaining a 39.2% CAGR from 2009 – 2014. Please see the table below, Worldwide Software-as-a-Service Revenues Forecast by Segment for a year-by-year breakout of this category.
  • Infrastructure software is forecasted to grow at a 27.4% CAGR through 2014, totaling 11,345 instances by 2014 according to IDC.  The year-by-year breakouts are also included in the following table.
  • Applications are expected to have 20.4% CAGR through 2014 based in units and attain a 50.8% market share of all SaaS segments by 2014.

Bottom line: Enterprise software pricing models must change to stay in step with customers’ expectations of more value for their maintenance and licensing fees. The evolving economics of cloud and SaaS-based application deployment are in the process of permanently re-ordering enterprise software.

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Nov 1

Cloud Computing in Businesses – Insights from Financial Times Report

Despite much of the hype around cloud computing and its promised ability to transform businesses, an article in Financial Times, Cloud computing in businesses shows how these technologies are redefining tax services’ business models.  The report published today provides insights into how ADP Tax Services Division can now profitably sell tax services to medium-sized companies for the first time.

Accessing New Markets With a Standardized Business Model

Standardizing their tax services and delivering them over cloud-based architectures has allowed ADP to entire markets that were not accessible before.  Previously, ADP  relied on a professional services model based on billable hours.  While very profitable in larger businesses, the billable hours model could never scale into the medium business market ADP sees as critical to their growth.

The report also discusses how IBM is revamping its cloud strategy and includes analysis of cloud adoption by Frank Gens of International Data Corporation (IDC).

Bottom line: What’s insightful about this report is that it concentrates on which business processes can be streamlined first and made more effective using cloud technologies.

Link:  http://www.ft.com/cms/s/0/c87b9e88-e53c-11df-8e0d-00144feabdc0.html?ftcamp=rss

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Jul 26

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IDC Predicts SaaS Will Re-Order Software Landscape by 2012

Bottom line: The economics of enterprise software are about to go through a major shift, forcing software vendors to be more focused on how to deliver value at the business strategy level than ever before.

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