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Roundup Of Internet of Things Forecasts And Market Estimates, 2015

  • Internet of things forecastCisco predicts the global IoT market will be $14.4T by 2022.
  • IC Insights predicts revenue from Industrial Internet IoT spending will increase from $6.4B in 2012 to $12.4B in 2015.
  • IoT in manufacturing market size is estimated to grow from $4.11B in 2015 to $13.49B by 2020, attaining a CAGR of 26.9%.

With the potential to streamline and deliver greater time and cost savings to a broad spectrum of enterprise tasks, opportunities for Internet of Things (IoT) adoption are proliferating. It’s encouraging to see so many industry-leading manufacturers, service providers, software and systems developers getting down to the hard work of making the vision IoT investments pay off.

Forecasting methodologies shifted in 2015 from the purely theoretical to being more anchored in early adoption performance gains. Gil Press wrote an excellent post on this topic Internet of Things By The Numbers: Market Estimates And Forecasts which continues to be a useful reference for market data and insights, as does his recent post, Internet Of Things (IoT) News Roundup: Onwards And Upwards To 30 Billion Connected Things.

Key takeaways from the collection of IoT forecasts and market estimates include the following:

ABI Research market estimates; Internet of Things market forecast

1`4 4 Trillion IoT Internet of Things market forecast

green graphic IoT Internet of Things market forecast

software BI; Internet of Things market forecast

  • IC Insights predicts revenue from Industrial Internet of Things spending will increase from $6.4B in 2012 to $12.4B in 2015, attaining a 17.98% CAGR. IC Insights predicts the Industrial Internet will lead all five categories of its forecast, with Connected Cities being the second-most lucrative, attaining a 13.16% CAGR in the forecast period. The research firm segments the industry into five IoT market categories: connected homes, connected vehicles, wearable systems, industrial Internet, and connected cities. Source: IC Insights Raises Growth Forecast for IoT.

revenue for IoT systems; Internet of Things market forecast

  • Manufacturing (27%), retail trade (11%), information services (9%), and finance and insurance (9%) are the four industries that comprise more than half the total value of the projected $14.4T market. The remaining 14 industries range between 7% percent and 1%. The following graphic based on Cisco’s analysis of the IoT market potential by industry and degree of impact. Cisco predicts Smart Factories will contribute $1.95T of the total value at stake by 2022. Source: Embracing the Internet of Everything To Capture Your Share of $14.4 Trillion, white paper published by Cisco.

top four industries IoT; Internet of Things market forecast

  • Intel Capital, Qualcomm Ventures, Foundry Group, Kleiner Perkins Caufield & Byers (KPCB), Andreessen Horowitz, Khosla Ventures, True Ventures and Cisco Investments are the leading IoT investors this year. Intel Capital is investing in a broad base of IoT-related technologies, encompassing 3D body-scanning and biometric sensors, wearable sand IoT infrastructure startups. Source: The Most Active VCs In The Internet Of Things And Their Investments In One Infographic. 

mot active IoT investors; Internet of Things market forecast

  • Vodafone’s latest Machine-to-Machine (M2M) study found that 37% of enterprises have projects targeted to go live in 2017. Vodafone defines M2M as technologies that connect machines, devices, and objects to the Internet, turning them into ‘intelligent’ assets that can communicate. M2M enables the Internet of Things. The following graphics compare M2M adoption trends from 2013 and 2015 and by industry. Source: 2015 Vodafone M2M Barometer Report (free, opt-in reqd., 36 pp.).

adoption of M2M 2013 2015; Internet of Things market forecast

adoption of M2M by industry; Internet of Things market forecast

growth iot; Internet of Things market forecast

  • New connections to the Internet of Things (IoT) will grow from about 1.7B in 2015 to nearly 3.1B in 2019. IoT applications will also fuel strong sales growth in optoelectronics, sensors/actuators, and discrete semiconductors, which are projected to reach $11.6B in 2019, attaining a CAGR of 26% during the forecast period. Source:  IC Insights Internet of Things Market to Nearly Double by 2019.

New Connections Internet of Things; Internet of Things market forecast

Internet of things forecast Microsoft; Internet of Things market forecast

McKinsey Institute Internet of Things; Internet of Things market forecast

  • IDC predicts that by 2018, 40% of the top 100 discrete manufacturers will rely on connected products to provide product as a service. 55% of discrete manufacturers are researching, piloting, or in production with IoT initiatives. By 2017, 50% of manufacturers will explore the viability of micrologistics networks to enable the promise of accelerated delivery for select products and customers. 65% of companies with more than ten plants will enable workers on the factory floor to make better business decisions through investments in operational intelligence. Source: IDC Manufacturing Insights Report courtesy of Cognizant, Transforming Manufacturing with the Internet of Things May 2015

 

Five Key Take-Aways From North Bridge’s Future Of Cloud Computing Survey, 2015  

  • bostonSaaS is the most pervasive cloud technology used today with a presence in 77.3% of all organizations, an increase of 9% since 2014.
  • IT is moving significant processing to the cloud with 85.9% of web content management, 82.7% of communications, 80% of app development and 78.9% of disaster recovery now cloud-based.
  • Seeking simple and clear relationships, over 50% of enterprises opt for online purchasing or direct to provider purchasing of cloud services. Online buying is projected to increase over the next two years up to 56%.
  • Vendor leadership/consolidation continues to take hold with 75% of enterprises using fewer than ten

These and many other insights are from North Bridge Growth Equity and Venture Partners’ Future of Cloud Computing Survey published on December 15th. North Bridge and Wikibon collaborated on the study, interviewing 952 companies across 38 different nations, with 65% being from the vendor community and 35% of enterprises evaluating and using cloud technologies in their operations  The slide deck is accessible on SlideShare here:

Key takeaways from the study include the following:

  1. Wikibon forecasts the SaaS is worth $53B market today and will grow at an 18% Compound Annual Growth Rate (CAGR) from 2014 to 2026. By 2026, the SaaS market will be worth $298.4B according to the Wikibon forecast. The fastest growing cloud technology segment is Platform-as-a-Service (PaaS), which is valued at $2.3B today, growing at a CAGR of 38% from 2014 to 2026.  Infrastructure-as-a-Service (IaaS) has a market value of $25B and is growing at a 19% CAGR in the forecast period.  Please see the graphic from the report below and a table from Wikibon’s excellent study, Public Cloud Market Forecast 2015-2026 by Ralph Finos published in August.

SaaS Graphic from North Bridge study

 

Public Cloud Vendor Revenue Projection

  1. Cloud-based applications are becoming more engrained in core business processes across enterprises. The study found that enterprises are migrating significant processing, systems of engagement and systems of insight to the cloud beyond adoption levels of the past.  81.3% of sales and marketing, 79.9% of business analytics, 79.1% of customer service and 73.5% of HR & Payroll activities have transitioned to the cloud. The impact on HR is particularly noteworthy as in 2011; it was the third least likely sector to be disrupted by cloud computing.
  1. 78% of enterprises expect their SaaS investments to deliver a positive Return on Investment (ROI) in less than three months. 58% of those enterprises who have invested in Platform-as-a-Service (PaaS) expect a positive ROI in less than three months.
  1. Top inhibitors to cloud adoption are security (45.2%), regulatory/compliance (36%), privacy (28.7%), lock-in (25.8%) and complexity (23.1%). Concerns regarding interoperability and reliability have fallen off significantly since 2011 (15.7% and 9.9% respectively in 2015).
  1. Total private financing for cloud and SaaS startup has increased 4X over the last five years. North Bridge and Wikibon found that average deal size rose 1.8X in the same period. The following graphic provides an overview of cloud and SaaS finance trends from 2010 to present.

cloud and saas financing

 

5 Insights & Predictions On Disruptive Tech From KPMG’s 2015 Global Innovation Survey

  • cloud computing survey 215% of U.S. tech leaders see biotech/digital health/healthcare IT as the most disruptive consumer-driven technology in the next three years.
  • 13% of U.S. tech leaders predict data and analytics will be the most disruptive enterprise technology in three years.
  • Global tech leaders predict cloud computing (11%), mobile platforms and apps (9%), Internet of Things (IoT)/machine-to-machine (M2M) (9%) and data and analytics (9%) will be the most disruptive technologies over the next three years.

These and many other insights are from the fourth annual 2015 Global Technology Innovation Survey released via webcast by KPMG last month. KPMG surveyed 832 technology industry business leaders globally, with the majority of being C-level executives (87%). Respondents were selected from a broad spectrum of businesses including tech industry startups, mid- and large-scale enterprises, angel investors and venture capital firms. For an in-depth explanation of the survey methodology, please see slides 6 and 7 of the webinar presentation. The goals of the survey include spotting disruptive technologies, identifying tech innovation barriers and opportunities, and tracking emerging tech innovation hubs.

The five insights and predictions from the report include the following:

  • Global tech leaders predict cloud computing (11%), mobile platforms and apps (9%), Internet of Things (IoT)/M2M (9%) and data and analytics (9%) will be the most disruptive technologies over the next three years.  U.S. tech leaders predict biotech/digital health/healthcare IT (15%), data and analytics (14%) and cloud computing (14%) will be the three most disruptive technologies over the next three years.  Chinese tech leaders predict artificial intelligence/cognitive computing (15%) will be the most disruptive technology impacting the global business-to-consumer (B2C) marketplace.

tech driving consumer technologies

  • The three most disruptive technologies predicted to drive business transformation in enterprises over the next three years in the U.S. include cloud computing (13%), data and analytics (13%), and cyber security (10%). Japanese tech leaders predict artificial intelligence/cognitive computing will have the greatest effect (23%), and 14% of Chinese tech leaders predict the Internet of Things/M2M (14%) will have the greatest impact on business transformation in their country.  The following table compares global tech leader’s predictions of which technologies will disrupt enterprises the most and drive business transformation over the next three years.

business transformation

  • Improving business efficiencies/higher productivity, and faster innovation cycles (both 20%) are top benefits tech leaders globally are pursuing with IoT strategies. The point was made on the webinar that in Asia, consumers are driving greater adoption of IoT-based devices to a richer contextual customer experience. Greatest challenges globally to adopting IoT is technology complexity (22%), lack of experience in the new technology or business model (16%), and both displacement of the existing tech roadmap and security (both 13%).       

IoT in the enteprrise

  • Analytics are most often adopted to gain faster innovation cycles (25%), improved business efficiencies and higher productivity (17%) and more effective R&D (13%).  The greatest challenges are technology complexity (20%) and lack of experience in the new technology or business model (19%),

data and analytics KPMG Survey

  • Tech leaders predict the greatest potential revenue growth for IoT in the next three years is in consumer and retail markets (22%).  IoT/M2M is also expected to see significant revenue growth in technology industries (13%), aerospace and defense (10%), and education (9%).  The following graphic compares tech leader’s predictions of the industries with the greatest potential revenue growth (or monetization potential) in the next three years.

Emerging Tech IoT monetization

 

Sources:

Tech Innovation Global Webcast presenting the findings of KPMG’s 2015 Global Technology Innovation Survey

KPMG Survey: Top Disruptive Consumer Tech – AI In China, Healthtech In U.S., 3-D Printing In EMEA

 

Salesforce On The State Of Analytics, 2015

  • analytics predictions 2015Between 2015 and 2020, the number of data sources analyzed by enterprises will jump 83%.
  • 9 out of 10 enterprise leaders believe analytics is absolutely essential or very important to their overall business strategies and operational outcomes.
  • 54% of marketers say marketing analytics is absolutely critical or very important to creating a cohesive customer journey.
  • High performing enterprises are 5.4x more likely than underperformers to primarily use analytics tools to gain strategic insights from Big Data.

These and many other interesting insights are from the 2015 State of Analytics study from Salesforce Research. Salesforce conducted the study in mid-2015, generating 2,091 responses from business leaders from enterprises (not limited to Salesforce customers). Geographies included in the study include the U.S., Canada, Brazil, U.K., France, Germany, Japan, and Australia.  While Salesforce is a leading provider of analytics, the report strives to deliver useful insights beyond just endorsing their product direction.

10 insights and predictions on the state of analytics include the following:

  • Between 2015 and 2020, the number of data sources analyzed will jump 83%. Salesforce Research found that the number of data sources actively analyzed by businesses has grown just 20% in the last five years. This is projected to accelerate rapidly, attaining a compound annual growth rate of 120% in the 10-year forecast period. High performing enterprises will be relying on a projected 50 different data sources by 2020, leading all performance categories tracked in the study.

data explosion

  • Relying on manual processes to get all the data in one view (53%) is one of the greatest challenges enterprises face today. Additional factors driving enterprises to integrate more data sources into their analytics applications include finding that too much data is left unanalyzed (53%), spending too much time updating spreadsheets (52%), and analysis is performance by business analysts, not end users of the data (50%).  All of these factors and those shown in the graphic below form the catalyst that is driving greater legacy, 3rd party and broader enterprise data integration into analytics applications.

lack of automation

  • 9 out of 10 enterprise leaders believe analytics is absolutely essential or very important to their overall business strategies and operational outcomes. In addition, 84% of high performers are projecting that the importance of analytics will increase substantially or somewhat in the next two years. 65% of all business leaders surveyed are predicting that the importance of analytics will increase substantially or somewhat in the next two years.

analytics is critical to driving business strategy

  • High performing enterprises are 4.6x more likely than underperformers to agree that data is driving their business decisions. In addition, 60% of high performing enterprises’ leaders agree with the statement that their organizations have moved beyond numbers keeping score to data driving business decisions. Salesforce Research also found that 43% of high performers rely on empirical data, developing hypotheses and then experimenting and observing the outcomes before making a decision.

data drives decisions

  • Driving operational efficiencies and facilitating growth (both 37%) are the two areas enterprises are initially focused on with analytics today.  Once analytics apps are delivering insights and are part of daily workflows, enterprises expand their use into optimizing operational processes (35%), identifying new revenue streams (33%) and predicting customer behavior (32%). The following graphic provides a comparison of the top ten use cases.

analytics every corner

  • High performance enterprises consistently analyze more than 17 different kinds of data across their analytics apps.  In contrast, underperforming organizations only analyze 10 different data sources, and moderate performers, 15. The following graphic provides an overview of the top ten most-used sources of data.

companies track a wide variety of data

  • High performers are 3.5x more likely than underperformers to extensively use mobile reporting tools to analyze data wherever they are. 55% of high performing enterprises are more likely to be extensively using mobile reporting tools to analyze data.  The following graphic compares mobile analytics adoption across high, medium and low performing enterprises.

top teams tap mobile analytics

  • Speed of deployment (68%), ease of use for business users (65%) and self-service and data discovery tools (61%) are the three top three priorities leaders place on selecting new analytics apps.  Mobile capabilities to explore and share data (56%) and cloud deployment (54%) are the fourth and fifth factors leaders mentioned.  The following graphic compares the decision factors that go into selecting an analytics app.

decision factor analytics app

  • Industries who have the greater analytics adoption today (over 50% of users active on apps and tools) include high tech (36%) and financial services (32%). Automotive (30%) and media & communications (30%) also have attained significant adoption.

adoption

  • High performing enterprises are 5.4x more likely than underperformers to primarily use analytics tools to gain strategic insights from Big Data. Leaders in high performance enterprises see the value of Big Data (76%) to a much greater extent than their lower performing counterparts (14%).   High performing enterprises are 3.1x more likely than underperformers to be confident in ability to manage data from internal systems, customers, and third parties.

Key Take-Aways From The 2015 Pacific Crest SaaS Survey

  • Cloud Computing M&A40% of SaaS companies are using Amazon Web Services (AWS) to deliver their apps today.
  • Median subscription gross margins for SaaS companies in 2015 are 78%.
  • Overall, SaaS companies are projecting median revenue growth of 46% in 2015.
  • Channel sales and inside sales strategies delivered the highest revenue growth rates in 2014.
  • Companies in the $5M – $7.5M range achieved 70% revenue growth in 2014, surpassing the median 36% growth rate last year.

These and many other insights are from the 2015 Pacific Crest SaaS Survey published by David Skok of Matrix Partners in collaboration with Pacific Crest Securities. You can download a free copy of Part I of the study here (PDF, opt-in, 72 pp). 305 SaaS companies were interviewed, 31% from international locations and 69% from North America.  David Skok and Pacific Crest Securities will publish Part 2 of the results in the near future. SaaS Metrics 2.0 – Detailed Definitions provides a useful reference for many of the SaaS metrics mentioned in the study.

This year’s survey attracted an eclectic base of respondents, with median revenues of $4M a year, with 133 companies reporting less than $5M, and 57 over $25M. Annual Contract Value (ACV) across all respondents is $21K, with 17% of respondents reporting ACVs over $100K.  Please see pages 3 & 4 of the study for a description of the methodology. Key take-aways from the study include the following:

  • SaaS GAAP revenue growth is accelerating in 2014 and is projected to increase further in 2015 from 44% to 46%. Median revenue growth in 2014 for all survey respondents was 44%, with the aggregate projected growth for 2015 reaching 46%. When SaaS companies with less than $2.5M in revenues are excluded, median GAAP growth was 35% in 2014 and is expected to reach that same level in 2015.

grow SaaS Revenue

 

  • SaaS companies with mixed customer strategies are growing at 57% a year.  Excluding respondent companies with less than $2.5M in revenues, a mixed customer strategy dominates all others. Concentrating on enterprises and small & medium businesses (SMBs) both drove 33% revenue growth of respondent companies this year.

median growth rate as a function of customer

 

  • 40% of SaaS companies are using Amazon Web Services (AWS) to deliver their apps today. AWS is projected to increase to 44% three years from now, with Microsoft Azure increasing from 3% today to 6% in 3 years.

SaaS Delivered

 

  • 41% of all SaaS companies surveyed rely primarily on field sales.  Factoring out the companies with less than $2.5M in revenue, field sales accounts for 32%.

primary mode of distribution

 

  • Field sales dominates as the most effective sales strategy when median deal sizes are $50K or more. In contrast, inside sales dominates $5K to $15K deal sizes, and the Internet dominates deal sizes less than $1K.  The following graphic provides insights into the primary mode of sales by median initial contract size.

mode by initial contract size

 

  • 16% of new Average Contract Value (ACV) sales is from upsells, with the largest companies being the most effective at this selling strategy. One of the strongest catalysts of a SaaS companies’ growth is the ability to upsell customers to a higher ACV, generating significantly greater gross margin in the process. SaaS companies with revenues between $40M to $75M increase their ACV by 32% using upsells. Larger SaaS companies with over $75M in sales generate 28% additional ACV with upsell strategies.

ACV Value

 

  • The highest growth SaaS companies are relying on upsells to fuel higher ACV.  There is a significant difference between the highest and lowest growth SaaS companies when it comes to upsell expertise and execution.  The following graphic provides an overview by 2014 GAAP revenue category of percent of ACV attributable to upsells.

fast upsell

 

  • 60% are driving revenues with “Try Before You Buy” strategies, with 30% generating the majority of their revenues using this approach.  On contrast, only 30% of companies generate revenues and ACV from freemium.

freemium

The Hottest Cloud-based Marketing Startups of 2015

  • What's Hot in CRM, 2012 Apttus, Booker, Lattice Engines, Segment and Tubular Labs are the five hottest cloud-based marketing startups of 2015.
  • 13 of the hottest 34 cloud-based marketing startups are from the Bay Area, followed by Los Angeles with 3, and Bangalore and New York, both with 2.
  • 14 are in Pre Series A, 7 in A-Stage, 5 in B-Stage and 3 in C-Stage funding rounds.

These and other insights are from a quick analysis completed today using Mattermark Pro, in response to reader requests for more research on marketing startups.

Mattermark uses a combination of artificial intelligence and data quality analysis to provide insights into over 1 million private companies, over 470,000 with employee data, and over 100,000 funding events. In the interest of full disclosure I’m not today and have never done any consulting work of any kind with Mattermark.

Finding The Hottest Cloud-based Marketing Startups

To find the hottest cloud-based marketing startups, an initial query requesting startups competing in the cloud computing and marketing industries was completed. Next, advanced query tools in Mattermark Pro were used to filter out all startups that had exited as indicated by their stage status in Mattermark’s data. This filtered out startups who had been acquired, completed an IPO or had exited through other means. The table below is the result of an analysis completed today with Mattermark data.  You can download the table here in Microsoft Excel format.

hottest cloud-based marketing startups

The Mattermark Growth Score shown in the table below and downloadable Excel file is a measure of how quickly a company is gaining traction at a given point in time. It incorporates the Mindshare Score (web traffic, social traction) as well as business growth metrics (e.g. employee count over time, funding). The underlying assumption is that companies who see growth across these signals are shipping product and talking to customers, and are more likely to continue to grow as a result. This score is not meant to provide guidance on which startup to invest in.  Rather it’s a measure of momentum across the metrics and KPIs that Mattermark measures.

Businesses Adopting Big Data, Cloud & Mobility Grow 53% Faster Than Peers

  • London sykline duskOrchestrating big data, cloud and mobility strategies leads to 53% greater growth than peers not adopting these technologies.
  • 73% of midmarket companies say the complexity of their stored data requires big data analytics apps and tools to better gain insights from.
  • 41% of midmarket companies are using big data to better target marketing efforts.
  •  54% of midmarket companies’ security budgets are invested in security plans versus reacting to threats.

These and many other insights are from Dell’s second annual Global Technology Adoption Index (GTAI 2015) released last week in collaboration with TNS Research. The Global Technology Adoption Index surveyed IT and business decision makers of mid-market organizations across 11 countries, interviewing 2,900 IT and business decision makers representing businesses with 100 to 4,999 employees.

The purpose of the index is to understand how business users perceive, plan for and utilize four key technologies: cloud, mobility, security and big data. Dell released the first wave of its results this week and will be publishing several additional chapters throughout 2016. You can download Chapter 1 of the study here (PDF, no opt-in, 18 pp.).

Key take-aways from the study include the following:

  • Orchestrating big data, cloud and mobility strategies leads to 53% greater growth than peers not adopting these technologies. Midmarket organizations adopting big data alone have the potential to grow 50% more than comparable organizations. Effective use of Bring Your Own Device (BYOD) mobility strategies has the potential to increase growth by 53% over laggards or late adopters..

orchestrating tech for greater growth

  • 73% of North American organizations believe the volume and complexity of their data requires big data analytics apps and tools.  This is up from 54% in 2014, indicating midmarket organizations are concentrating on how to get more value from the massive data stores many have accumulated.  This same group of organizations believe they are getting more value out of big data this year (69%) compared to last year (64%).  Top outcomes of using big data include better targeting of marketing efforts (41%), optimization of ad spending (37%), and optimization of social media marketing (37%).

top outcomes

  • 54% of an organization’s security budget is invested in security plans versus reacting to threats. Dell & TNS Research discovered that midmarket organizations both in North America and Western Europe are relying on security to enable new devices or drive competitive advantage.  In North America, taking a more strategic approach to security has increased from 25% in 2014 to 35% today.  In Western Europe, the percentage of companies taking a more strategic view of security has increased from 26% in 2014 to 30% this year.

security strategic

  • IT infrastructure costs to support big data initiatives (29%) and costs related to securing the data (28%) are the two greatest barriers to big data adoption. For cloud adoption, costs and security are the two biggest barriers in midmarket organizations as is shown in the graphic below.

security costs

  • Cloud use by midmarket companies in France increased 12% in the last twelve months, leading all nations in the survey.  Of the 11 countries surveyed, France had the greatest increase in cloud adoption within midmarket companies.  French businesses increased their adoption of cloud applications and platforms from 70% in 2014 to 82% in 2015.

Sources: Dell Study Reveals Companies Investing in Cloud, Mobility, Security and Big Data Are Growing More Than 50 Percent Faster Than Laggards. October 13, 2015

 

2015 Big Data Market Update

big data market udpate

  • 42.6% of all big data apps developed for manufacturing are being created by enterprises today.
  • 38.2% of all big data and advanced analytics apps in use today are in customer-facing departments including marketing, sales, and customer service.
  • 33.2% of all big data and advanced analytics developers are concentrating on the software & computing industry.
  • 19.2% of big data app developers say quality of data is the biggest problem they consistently face when building new apps.

These and other insights are from the recently published report Big Data and Advanced Analytics Survey 2015, Volume I by Evans Data Corporation. The survey is based on 444 in-depth interviews with developers who are currently working with analytics and databases and are both currently working on and planning big data and advanced analytics projects. The survey’s results provide a strategic view of the attitudes, adoption patterns and intentions of developers in relation to big data and analytics. You can more on the methodology of the report here.

Key take-aways from the report include the following:

  • Software & computing (18%), financial (11.6%), manufacturing (10.9%) and retail (9.8%) industries have the highest percentage of programmers creating big data and analytics applications today.  Additional industries where big data app development is active and growing include entertainment (7.7%), telecommunications (7.5%), utilities & energy (6.6%) and healthcare (4.6%). The following graphic provides an overview of the industries addressed.

industries addressed

  • Capturing more information than traditional database practices (22.60%), capturing and analyzing unstructured data (21.10%) and the potential for visualizing or analyzing data differently (20.70%) are the three top use cases driving app development today.  Evans Data found that capturing more information than traditional database practices allow increased 6% since last year, making it the top use case in 2015. The following graphic provides the distribution of responses by use cases from the developers surveyed.

top three use cases

  • Total size of the data being processed (40.8%), complex, unstructured nature of the data (38.1%) and the need for real-time data analysis (17.7%) are the top three factors driving big data adoption over traditional database solutions.  Evans Data found that the size and complexity of structured and unstructured data is the catalyst that gets enterprises moving on the journey to big data adoption. The ability to gain greater insights into their data with descriptive, predictive and contextually-driven analytics is the fuel that keeps big data adoption moving forward in all companies.

reasons to move to big data

  • 33.2% of all big data and advanced analytics developers are concentrating on the software & computing industry. Of these developers, 36.7% are working in organizations of 101 to 1,000 employees, 32.9% are in enterprises of 1,000+ employees, and 30.1% are in organizations of 100 employees or less. 42.6% of all big data software development in manufacturing begins in enterprises (1K+ employees).

Industries being targeted by big data by company size

 

  • Enterprises competing in the software & computing industry (17.5%), manufacturing (15.8%) and financial industry (14%) are investing the heaviest in big data and analytics app development. Overall, 32% of big data and analytics projects are custom-designed and produced by system integrators and value-added resellers (SI, VAR). 70% of big data and advanced analytics apps for manufacturing are created by enterprise and system integrator/value-added reseller (SI/VAR) development teams.  The following graphic provides an overview of industries targeted by big data, segmented by developer segment.

industries being targeted by big data by developer segment

 

  • Sales and customer data (9.6%), IT-based data analysis (9.4%), informatics (8.7%) and financial transactions (8.4%) are the most common big data sets app developers are working with today.  In addition marketing, system management, production and shop floor data, and web & social media-generated data are also included.  Evans Data found that informatics data sets grew the fastest in the last six months, and scientific computing is now competing with transaction processing systems as a dominant data set developers rely on to create new apps.

kinds of information that feed your company's data stores

  • Marketing departments have quickly become the most common users of big data and advanced analytics apps (14.4%) followed by IT (13.3%) and Research & Development (13%). Evans Data asked developers which departments in their organizations are putting big data and advanced analytics apps to use, regardless of where they were created.  38.2% of all big data use in organizations today are in customer-facing departments including marketing, sales, and customer service.

departments using analytics and big data

  • Availability of relevant tools (10.9%), storage costs (10.2%) and siloed business, IT, and analytics/data science teams (10.0%) are the top three barriers developers face in building new apps. It’s interesting to note that compliance and having to transition from legacy systems did not score higher in the survey, as these two areas are inordinately more complex in more regulated, older industries.  For big data and advanced analytics to accelerate across manufacturing and financial industries, compliance and legacy systems integration barriers will need to first be addressed.

three barriers

  • Quality of data (19.2%), relevance of data being acquired (13.5%), volume of data being processed (12.6%) and ability to adequately visualize big data (11.7%) are the four biggest problem areas faced by big data developers today.  Additional problem areas include the volume of data in storage (10.5%), ability to gain insight from big data (10.1%) and the high rate of data acquisition (7.6%).  The remainder of problem areas are shown in the graphic below.   

biggest problem

  • Providing real-time correlation and anomaly detection of diverse security data (29.9%) and high-speed querying of security intelligence data (28.1%) are the two most critical areas vendors can assist developers with today. Big data and analytics app developers are looking to vendors to also provide more effective security algorithms for various use case scenarios (17.6%), flexible big data analytics across structured and unstructured data (14.2%) and more useful graphical front-end tools for visualizing and exploring big data (5.1%).

vendor provide

 

Gartner Top 10 Strategic Technology Trends For 2016

2016 Gartner technology trends graphicGartner announced their top 10 strategic technology trends for 2016 at the Gartner Symposium/ITxpo held October 4 – 8th in Orlando. David Cearley, Vice President and Gartner Fellow, presented the company’s Top Ten Strategic Technology Trends for 2016You can find the video here.

Key take-aways from his presentation and the trends announced are provided below:

  • Enterprise 3D-printing shipments will attain a 64.1% Compound Annual Growth Rate (CAGR) through 2019. David Cearley mentioned during his keynote that jet engines are being 3D printed today.  He gave the example to illustrate that 3D printing will continue to gain adoption in more demanding manufacturing environments including aerospace, automotive, energy, medical devices and military-based markets and industries.
  • Emergence of an entirely new class of business models based on smart machine technologies, advanced analytics and big data. Combining machine learning, continued adoption of Internet of Things (IoT) sensors and supporting data models, and advanced intelligence to interpret and act on the data, Gartner’s predictions set the stage of an entirely new class of business models. Manufacturing-as-a-Service and paying only for the production time used in a factory are within reach for more companies than before based on these predictions.
  • The device mesh will expand to include IoT-based devices that scale well beyond the enterprise. Gartner is predicting that in the next three years traditional computing and communication devices, including desktop and mobile devices will increasingly be augmented by wearable devices, home electronics including appliances with sensors, transportation-based sensors and data collection devices, and environmental devices all capable of capturing data in real-time.
  • A digital mesh will continue to proliferate, aligning apps and devices to individuals’ specific roles and tasks.  Gartner sees this digital mesh as an expanding series of devices, services, platforms, informational networks and individuals that integrate together and provide contextual intelligence and enabling greater collaboration. The proliferation of the digital mesh will lead to more ambient, contextually intelligent and intuitive app design over time Gartner predicts.
  • The next twelve months will also see the proliferation of algorithm-based businesses enabling automated background tasks including smart machines. Gartner’s technology trends for 2016 set a solid foundation for the growth of globally-based smart factories and production centers. Acumatica, Plex Systems and other Cloud ERP providers are ideally positioned for this trend, having proven their ability to provide manufacturing intelligence from the shop floor to the top floor. In addition to cloud platforms, these algorithm-based businesses will need to support unstructured data analysis including latent semantic indexing (LSI), data taxonomy and classification algorithms to ensure data fidelity and scalability, and more robust analytics and predictive modeling systems.
  • Combining algorithms, analytics, data architectures and smart machines have the potential to revolutionize manufacturing quickly. General Electric’s Predix platform, IBM’s IoT Foundation and several other cloud-based IoT platforms are already making progress on transforming the vision of algorithm-based smart machine production strategies into a reality for manufacturers globally.
  • Gartner sees a new IT reality taking shape. Adaptive security, advanced systems, Internet of Things (IoT), mesh app & service architectures are the catalysts of the new nature of IT that Gartner is predicting.

A graphic illustrating the top 10 strategic trends is show below:

top ten technology trends 2016

Sources:

Gartner Identifies the Top 10 Strategic Technology Trends for 2016.  Press Release Announcement, October 6, 2015.

Video replay of the keynote: The Top 10 Strategic Technology Trends for 2016

Roundup Of Cloud Computing Forecasts And Market Estimates Q3 Update, 2015

  • cloud computing forecastThe global SaaS market is projected to grow from $49B in 2015 to $67B in 2018, attaining a CAGR of 8.14%.
  • Global spending on Infrastructure-as-a-Service (IaaS) is expected to reach $16.5B this year, an increase of 32.8% from 2014.
  • Cloud applications will account for 90% of worldwide mobile data traffic by 2019, compared to 81% at the end of last year.

These and other insights are from recent cloud computing forecasts and market estimates published by research and advisory consultancies including International Data Corporation (IDC), Forrester, Gartner, Ovum, Wikibon and others.

While the methodologies differ significantly, the findings from a recent Economist Intelligence Unit study provide the galvanizing thread across this diverse set of data.  The Economist found that the most mature enterprises are now turning to cloud strategies as a strategic platform for growing customer demand and expanding sales channels. The study found low-maturity or lagging cloud adopters focus on costs more than growth.

Key take-aways from the round-up are provided below:

cloud mobile data

  • 57% of IT architects and tech professionals are running apps on the Amazon Web Services (AWS) platform today.  Rightscale’s 2015 State of the Cloud Report found that AWS adoption is over 4X greater than Microsoft Azure IaaS and 5X that of Rackspace Public Cloud.  Rightscale found that AWS, Microsoft Azure IaaS, Azure PaaS, Rackspace Public Cloud and VMWare vCloud Air are the top five public cloud platforms used in enterprises today. Source: RightScale 2015 State Of The Cloud Report

Public Cloud Usage

paas market trends

PaaS Market Share

  • Goldman Sachs is forecasting the cloud infrastructure and platform market will grow at a 19.62% CAGR from 2015 to 2018, reaching $43B by 2018. Their recent market analysis also forecasts that the global market for cloud infrastructure and platforms will grow from $21B this year to $43B by the end of the forecast period.  Source:  How Big Can The Amazon Web Services Business Grow In The Future?

goldman sachs cloud computing

IaaS Market Window

cloud maturity

hosted private cloud computing adoption

  • 46% of surveyed firms in the European Union (EU) are using advanced cloud services relating to financial and accounting software applications, customer relationship management or to the use of computing power to run business applications. In 2014, almost twice as many firms used public cloud servers (12%) versus private cloud servers (7%). The following graphic illustrates the degree of dependence on cloud computing, by economic activity, EU-28, 2014. Source: Eurostat Statistics Explained.  Cloud computing – statistics on the use by enterprises.

degree of dependence

  • 64% of Small & Medium Businesses (SMBs) are already using cloud-based apps, with average adoption being 3 apps.  78% of businesses indicate that they are considering purchasing new solutions in the next 2-3 years creating the potential to move the average number of applications used to 7, with 88% consuming at least one service.  Source: The small business revolution: trends in SMB cloud adoption.

cool infographic

  • Worldwide spending on enterprise application software will grow 7.5% to reach $149.9B in 2015, increasing to more than $201B in 2019 with accelerating cloud adoption driving new software sales. Gartner’s analysis of enterprise software spending shows that alternative consumption models to traditional on-premises licenses are accounting for more than 50% of new software implementations; these include SaaS, hosted license, on-premises subscriptions and open source.  Gartner also predicts that by 2020, about a quarter of organizations in emerging regions will run their core CRM systems in the cloud, up from around 10 percent in 2012. Source: Gartner Says Modernization and Digital Transformation Projects Are Behind Growth in Enterprise Application Software Market.

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