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Roundup Of Analytics, Big Data & Business Intelligence Forecasts And Market Estimates, 2014

NYC SkylineFrom manufacturers looking to gain greater insights into streamlining production, reducing time-to-market and increasing product quality to financial services firms seeking to upsell clients, analytics is now essential for any business looking to stay competitive.  Marketing is going through its own transformation, away from traditional tactics to analytics- and data-driven strategies that deliver measurable results.

Analytics and the insights they deliver are changing competitive dynamics daily by delivering greater acuity and focus.  The high level of interest and hype surrounding analytics, Big Data and business intelligence (BI) is leading to a proliferation of market projections and forecasts, each providing a different perspective of these markets.

Presented below is a roundup of recent forecasts and market estimates:

  • The Advanced and Predictive Analytics (APA) software market is projected from grow from $2.2B in 2013 to $3.4B in 2018, attaining a 9.9% CAGR in the forecast period.  The top 3 vendors in 2013 based on worldwide revenue were SAS ($768.3M, 35.4% market share), IBM ($370.3M, 17.1% market share) and Microsoft ($64.9M, 3% market share).  IDC commented that simplified APA tools that provide less flexibility than standalone statistical models tools yet have more intuitive graphical user interfaces and easier-to-use features are fueling business analysts’ adoption.  Source: http://www.idc.com/getdoc.jsp?containerId=249054
  • A.T. Kearney forecasts global spending on Big Data hardware, software and services will grow at a CAGR of 30% through 2018, reaching a total market size of $114B.  The average business expects to spend $8M on big data-related initiatives this year. Source: Beyond Big: The Analytically Powered Organization.
  • Cloud-based Business Intelligence (BI) is projected to grow from $.75B in 2013 to $2.94B in 2018, attaining a CAGR of 31%.  Redwood Capital’s recent Sector Report on Business Intelligence  (free, no opt in) provides a thorough analysis of the current and future direction of BI.  Redwood Capital segments the BI market into traditional, mobile, cloud and social business intelligence.   The following two charts from the Sector Report on Business Intelligence  illustrate how Redwood Capital sees the progression of the BI market through 2018.

redwood capital global intelligence market size

  • Enterprises getting the most value out of analytics and BI have leaders that concentrate more on collaboration, instilling confidence in their teams, and creating an active analytics community, while laggards focus on technology alone.  A.T. Kearney and Carnegie Mellon University recently surveyed 430 companies around the world, representing a wide range of geographies and industries, for the inaugural Leadership Excellence in Analytic Practices (LEAP) study.  You can find the study here.  The following is a graphic from the study comparing the characteristics of leaders and laggards’ strategies for building a culture of analytics excellence.

leaders and laggards2

  • The worldwide market for Big Data related hardware, software and professional services is projected to reach $30B in 2014.  Signals and System Telecom forecasts the market will attain a Compound Annual Growth Rate (CAGR) of 17% over the next 6 years.  Signals and Systems Telecom’s report forecasts Big Data will be a $76B market by 2020.  Source: http://www.researchandmarkets.com/research/s2t239/the_big_data
  • Big Data is projected to be a $28.5B market in 2014, growing to $50.1B in 2015 according to Wikkbon.  Their report, Big Data Vendor Revenue and Market Forecast 2013-2017 is outstanding in its accuracy and depth of analysis.  The following is a graphic from the study, illustrating Wikibon’s Big Data market forecast broken down by market component through 2017.

Big Data Wikibon

  • SAPIBMSASMicrosoftOracle, Information Builders, MicroStrategy, and Actuate are market leaders in BI according to Forrester’s latest Wave analysis of BI platforms.  Their report, The Forrester Wave™: Enterprise Business Intelligence Platforms, Q4 2013 (free PDF, no opt in, courtesy of SAS) provides a thorough analysis of 11 different BI software providers using the research firm’s 72-criteria evaluation methodology.
  • Amazon Web Services, Cloudera, Hortonworks, IBM, MapR Technologies, Pivotal Software, and Teradata are Big Data Hadoop market leaders according to Forrester’s latest Wave analysis of Hadoop Solutions.  Their report, The Forrester Wave™: Big Data Hadoop Solutions, Q1 2014 (free PDF, no opt in, courtesy of MapR Technologies) provides a thorough analysis of nine different Big Data Hadoop software providers using the research firm’s 32-criteria evaluation methodology.
  • IDC forecasts the server market for high performance data analysis (HPDA) will grow at a 23.5% compound annual growth rate (CAGR) reaching $2.7B by 2018.  In the same series of studies IDC forecasts the related storage market will expand to $1.6B also in 2018. HPDA is the term IDC created to describe the formative market for big data workloads using HPC. Source: http://www.idc.com/getdoc.jsp?containerId=prUS24938714
  • Global Big Data technology and services revenue will grow from $14.26B in 2014 to $23.76B in 2016, attaining a compound annual growth rate of 18.55%.  These figures and a complete market analysis are available in IDC’s Worldwide Big Data Technology and Services 2012 – 2016 Forecast.  You can download the full report here (free, no opt-in): Worldwide Big Data Technology and Services 2012 – 2016 Forecast.

big data analytics by market size

  • Financial Services firms are projected to spend $6.4B in Big Data-related hardware, software and services in 2015, growing at a CAGR of 22% through 2020.  Software and internet-related companies are projected to spend $2.8B in 2015, growing at a CAGR of 26% through 2020.  These and other market forecasts and projections can be found in Bain & Company’s Insights Analysis, Big Data: The Organizational Challenge.  An infographic of their research results are shown below.

Big-Data-infographic-Bain & Company

potential payback of big data initiatives

The Best Cloud Computing Companies And CEOs To Work For In 2014

Job Growth2014 continues to be a year marked by the accelerating hiring cycles across nearly all cloud computing companies.

Signing bonuses of $3K to $5K for senior engineers and system design specialists are becoming common, and the cycles from screening to interviews to offers is shortening.  The job market in the cloud computing industry is leaning in favor of applicants who have a strong IT background in systems integration, legacy IT expertise, business analysis and in many positions, programming as well.

One of the most common questions and requests I receive from readers is who the best companies are to work for.  I’ve put together the following analysis based on the latest Computer Reseller News list The 100 Coolest Cloud Computing Vendors Of 2014.  

Using the CRN list as a baseline to compare the Glassdoor.com scores of the (%) of employees who would recommend this company to a friend and (%) of employees who approve of the CEO, the following analysis was completed.  You can find the original data here .  There are many companies listed on the CRN list that don’t have than many or any entries on Glassdoor and they were excluded from the rankings below.  You can find companies excluded here. If the image below is not visible in your browser, you can view the rankings here.

results

The highest rated CEOs on Glassdoor as of February 23rd include the following:

  • Jeremy Roche of FinancialForce.com (100%)
  • Robert Reid, Intacct (100%)
  • Randy Bias, Cloudscaling (100%)
  • Sridhar Vembu, Zoho (98%)
  • James M. Whitehurst, Red Hat (96%)
  • Larry Page, Google (95%)
  • Christian Chabot, Tableau Software (95%)
  • Aneel Bhusri, Workday (94%)
  • Bill McDermott & Jim Hagemann Snabe, SAP (93%)
  • Marc Benioff, Salesforce (93%)
  • David Friend, Carbonite (93%)

Best- And Worst-Performing Cloud Computing Stocks Feb. 10th To Feb. 14th And Year-to-Date

cloud computing forecast update 2012The five highest performing cloud computing stocks year-to-date in the Cloud Computing Index are Akamai (NASDAQ: AKAM), F5 Networks (NASDAQ: FFIV), Juniper Networks (NYSE:JNPR), Fusion-IO (NYSE:FIO), Qualys (NASDAQ:QYLS) and Workday (NYSE:WDAY).  A $10K investment in Akamai on January 2nd of this year is worth $12,901 and $10K invested in F5 Networks is worth $12,509 as of market close yesterday.   IBM, Microsoft, Oracle and SAP share prices are included for comparison.

best performing YTD Feb 14

Akamai delivered better-than-respected results for their latest fiscal quarter and year, gaining $436M in revenues for fiscal Q4 and $1.578B for fiscal year.  Media Deliver Solutions revenue increased 19% year over year to $207.5M in revenue.  On their latest earnings call earlier this month, Akamai also says that traffic for gaming, social media, software and video downloads all continue to accelerate.  Support and Service revenues grew 36% year over year, reaching $36.3M in fiscal Q4, and Performance And Security revenue reached $192.2M, increasing 18% year over year.  Adjusted EBITDA for fiscal Q4 was $192M.

The following graphic compares how $10,000 invested on January 2nd of this year in the highest performing cloud computing stocks, in addition to IBM, Microsoft, Oracle and SAP are valued today.

total dollar value 10K feb 14 2014

Please see the full Cloud Computing Index for market caps, average volumes, 52-week high and low share prices, Earnings per Share, Price/Earnings Ratio, and Beta.  I am using the Google Finance Portfolio option to track the performance of these stocks.  For information on how this index was created, see the description at the end of this post.  I do not hold equity positions or work for any of the companies mentioned in this blog post or included in the Cloud Computing Index and this post is not meant to provide investment advice.  It is simply a glimpse into the performance of these company’s stock prices over time.  The following is this week’s Cloud Computing Index.

Cloud Computing Stock Index February 14

Best Performing Cloud Computing Stocks, February 10th to February 14th, 2014

Capturebest performing for the week feb 14

Worst Performing Cloud Computing Stocks, February 10th to February 14th, 2014

worst performing for the week feb 14

Best Performing Cloud Computing Stocks In 2014

best performing YTD Feb 14

Worst Performing Cloud Computing Stocks In 2014

worst performing YTD Feb 14

Comparing Cumulative Stock Performance Performance of the Cloud Computing Index over the last year is compared to NetSuite, Salesforce, IBM, Oracle and SAP is below. This index has been up 27.58% over the last year, with NetSuite (NYSE:N) up 63.84%, Salesforce (NYSE:CRM) up 43.50%, IBM (NYSE:IBM) down 8.59%, Oracle (NYSE:ORCL) up 9.10% and SAP (NYSE:SAP) up .14%. Please click on the graphic to expand for easier reading.

trending

Specifics on the Cloud Computing Stock Index I used The Cloud Times 100 as the basis of the index, selecting twenty companies all of which are publically traded.  The latest edition of the Cloud Computing Index is shown here.  The filter applied to these companies is that 50% or more of their revenues are generated from cloud-based applications, infrastructure and services

Top 12 Sites For Free Cloud Computing & Enterprise Software Research

campusOne of the most common questions I get from students is where they can find free cloud computing and enterprise software research.

Few if any of my students work for companies who have subscriptions with the top analyst firms however.  A small group of students are working on a start-up on the side and want to absorb as much market data as they can.

Many of my former students are also in IT management roles, and when they become interested in a specific cloud computing or enterprise topic over time, they write me and ask if I have any data on their subject of interest.  I keep the following list updated from them too.   To serve all these students I’ve been adding to the list shown below for a number of years. None of these companies are current or past clients and I hold no equity positions in any of them.

The requests are so prevalent in global competitive strategy courses I distribute this list at the beginning of the semester with the following disclaimers.

  • Many of the cloud computing and enterprise software companies pay to have white papers written and research done.  Writing white papers and doing research for an enterprise software vendor client is a very lucrative business for many industry analyst firms.  Ethical industry analysts will often insist that a disclaimer be included in the white paper and on the website stating that they and their firms were hired to write the paper or do the research and publish the report.
  • The reports are intellectual property of the firms publishing them.  Enterprise software vendors often pay tens of thousands of dollars at a minimum for reprint rights and the right to provide them on their websites.  I advise my students to seek out the copyright and quote policies of the research firm of interest if they plan on re-using the graphics in any published materials or in their blog posts.  One for example, the Gartner Copyright and Quote Policy is shown here.
  • Pay attention to the methodologies used in each report and realize they change over time.  This is especially the case with the  Gartner Magic Quadrant and MarketScopes. Gartner has been very active this year in refining the Magic Quadrant methodology for example.

The following are the list of cloud computing and enterprise software vendor sites that offer free downloads of cloud computing and enterprise software research:

  • Amazon Web Services – Amazon has purchased re-print rights to the Gartner Magic Quadrant for Cloud Infrastructure as a Service written by Lydia Leong, Douglas Toombs, Bob Gill, Gregor Petri, Tiny Haynes published on August, 19, 2013 in addition to the latest reports from Forrester on enterprise public cloud platforms and enterprise cloud databases. Link:    https://aws.amazon.com/resources/analyst-reports/
  • BMC Software – Many free reports from Gartner, Forrester, The 451 Group and other research firms covering advanced performance analytics (APA), cloud computing, IT Service Management and long-term technology trends. Link: http://www.bmc.com/industry-analysts/reports/
  • Computer Associates – An extensive collection of cloud computing and enterprise software research organized into the following categories: cloud; data management; energy and sustainability management; IT automation; IT security; IT service management; mainframe; project and portfolio management; service assurance and virtual organizations.  CA requires opt-in on the latest research as they use this site as part of their lead generation strategy.  Link: http://www.ca.com/us/collateral/industry-analyst-reports.aspx
  • Cisco Systems -  Data Center and Virtualization; includes the latest Current Analysis, Forrester, Gartner, IDC, Lippis and Yankee Group research reports covering Big Data, blade servers, cloud computing, Hadoop, unified data centers and many other topics.  Be sure to click across the Computing, Network, Orchestration/Automation,  and Network Services tabs to find additional research:   Link: http://www.cisco.com/en/US/solutions/ns340/ns857/ns156/ns1094/analyst_reports.html
  • Hewlett-Packard – HP has invested primarily in networking-related analyst research including the latest studies and market frameworks from Forrester, Gartner, IDC and Infonetics Research.  Link: http://h17007.www1.hp.com/us/en/networking/ar/index.aspx#.Uhp-ERufg-J
  • Intel – Organized around the topic of designing a data center for the cloud, Intel is providing a series of research studies, reports, white papers and videos that provide insights into virtualization, networking, mobility and Intel-based servers running cloud architectures.  Link:  http://www.intel.com/content/www/us/en/cloud-computing/cloud-computing-analyst-reports.html
  • Microsoft – Balancing the need to support their enterprise applications today and create demand for cloud-based initiatives now and in the future, Microsoft’s series of analyst reports reflect their evolving business model.  Microsoft has licensed the latest research from Enterprise Strategy Group (ESDG), Forrester, Gartner, IDC, Ovum, Yankee Group and others listed on this site. Link: https://www.microsoft.com/en-us/news/itanalyst/
  • Oracle - The most comprehensive collection of industry analyst research online for any enterprise software vendor, Oracle has hundreds of research reports available for viewing under their reprint licenses for free, and also for download.  The reports are organized into corporate, infrastructure, systems, services, solutions, industries, enterprise applications and regions.     Link: http://www.oracle.com/us/corporate/analystreports/index.html
  • Progress Software – Extensive collection of research from Bloor, Forrester, Gartner, IDC, Tabb Group, Ovum and other research firms are available for download from this site. Link:  http://www.progress.com/en/inthenews/analyst-reports.html
  • SAS – The most extensive and well-organized online collection of analyst research on analytics and business intelligence (BI) available, SAS makes research available from fifteen analyst firms across six industries on this area of their website.  You can find the SAS Analyst Viewpoints section of their website here: http://www.sas.com/news/analysts/
  • Symantec – Provides downloadable analyst reports in the areas of risk and compliance, endpoint security and management, information and identity protection, messaging security, backup and archiving, storage and availability management, services and emerging trends.  ESG, Info-Tech Research Group, Forrester, Gartner and IDC reports are on this page for download. Link: http://www.symantec.com/about/industryanalysts/analystreports.jsp
  • Teradata – Extensive collection of industry analysis and research organized into the sections of Active Data Warehousing, Active Enterprise Intelligence, Enterprise Data Warehousing, Teradata Analytical Ecosystem and Teradata Integration Analytics.  The latest market frameworks from Gartner, Forrester, IDC and other research firms are available for download.  Link:   http://www.teradata.com/analyst-reports/

2013 ERP Market Share Update: SAP Solidifies Market Leadership

SAP Headquarters, Building 1

SAP Headquarters, Building 1 Source: Wikipedia

During 2012 the Enterprise Resource Planning (ERP) market experienced sluggish growth of just 2.2%, yet Software-as-a-Service (SaaS), financial management and Human Capital Management (HCM) applications showed potential for breakout growth.

Through the challenging times of the previous year however, SAP still retained worldwide market share leadership.  These and other insights were recently published in the recent report, Market Share Analysis: ERP Software Worldwide, 2012 authored by Chris Pang, Yanna Dharmasthira, Chad Eschinger, Koji Motoyoshi and Kenneth F. Brant.

Key Take-Aways

  • Overall market growth of just 2.2% and the top ten vendors owning 64% of the worldwide ERP market is leading Gartner to predict further consolidation of the industry.
  • SAP had just over $6B in total ERP software revenue in 2012, leading the worldwide market with 24.6% market share.  Oracle had $3.12B and Sage, $1.5B in software revenues for 2012.  Oracle’s market share was 12.8%, and Sage, 6.3%. The following graphic shows worldwide ERP market share for 2012.

ERP Market Share 2012 Stats

  • Infor achieved 49.5% revenue growth in 2012, increasing their 2011 sales from $1B in 2011 to $1.5B in 2012.  Their market share increased from 4.2% in 2011 to 6.2% in 2012.
  • Microsoft achieved 4.2% revenue growth  in 2012, increasing revenue from $1B in 2011 to $1.1B in 2012.  The majority of these sales are for the Microsoft Dynamics AX ERP system.
  • The fastest growing ERP vendors  in 2012 include Workday, Cornerstone OnDemand, WorkForce Software, Ventyx and NetSuite.
  • Workday grew 114.7% in 2012, increasing revenue from $88.6M in 2011 to $190.3M in 2012.
  • Cornerstone OnDemand grew 61.5% in 2012, increasing revenue from $58.4M in 2011 to $94.3 in 2012.
  • WorkForce Software grew 39.8% in 2012, increasing revenue from $11.8M in 2011 to $16.5M in 2012.
  • NetSuite grew 34% in 2012, increasing revenue from $139.7M in 2011 to $187.1M in 2012.
  • SaaS-based ERP revenues are projected to grow from 12% worldwide in 2013 to 17% in 2017.  The following graphic from the report Gartner’s Market Trends: SaaS’s Varied Levels of Cannibalization to On-Premises Applications published: 29 October 2012 shows this progression.  You can find a research roundup at the previous post SaaS Adoption Accelerates, Goes Global in the Enterprise, which provides additional insights into which factors are driving SaaS adoption.

SaaS Revenue Market Sizing

Bottom line:  SAP’s continued market dominance depends on how well the company orchestrates it core ERP strategy with the following areas: BusinessObjects 4.0, its highly regarded analytics suite; social application adoption (StreamWorks and SuccessFactors Jam); the many Cloud-based initiatives they have including SuccessFactors and BusinessbyDesign; mobility platform wins;  and major wins with their SAP Sybase DBMS and HANA architectures.

2013 ERP Prediction: The Customer Takes Control

From the obvious to the outrageous, enterprise software predictions often span a wide spectrum at the beginning of every year.

In enterprise software in general and ERP specifically, there are many safe harbors to dock predictions in, from broad industry consolidation to Oracle buying more companies.  Or the inexorable advances of cloud computing and SaaS platforms in ERP today, which is often cited in enterprise software predictions.

Too often predictions gravitate too much towards theoretical economics, overly-simplified industry dynamics and technologies, leaving out the most critical element: customers as people, not just transactions.  So instead of repeating what many other industry analysts, observers and pundits have said, I am predicting only the customer side of ERP advances in the next twelve months.

The following are my predictions for ERP systems and enterprise computing in 2013:

  • The accelerating, chaotic pace of change driven by customers will force the majority of Fortune 500 companies to reconsider and refine their ERP and enterprise computing strategies.  Social, mobile and cloud computing are combining to provide customers with more acuity and articulation of what their preferences, needs and wants are.  The majority of ERP systems installed today aren’t designed for managing the growing variation and pace of change in customer requirements and needs.  In the next twelve months this trend will force the majority of Fortune 500 companies to re-evaluate their current ERP systems when it becomes clear their existing enterprise systems are getting in the way of attracting new customers and holding onto existing ones.
  • Highest-performing CIOs will rejuvenate monolithic, dated ERP systems and make them agile and customer-focused, while at the same time excelling at change management.  There are CIOs who can handle these challenging tasks, and the future belongs to those who can fluidly move between them quickly.  In twelve months, a group of CIOs will emerge that are doing this, delivering significant gains to gross margins and profitability in their companies as a result.  They’re the emerging class of rock stars in IT and enterprise computing.
  • Quality ratings of ERP systems by internal customers will become commonplace, including 360-degree feedback on ERP performance.  This is overdue in many companies and it takes a courageous CIO and senior management staff to value feedback on how their ERP systems are performing.  In the most courageous companies, within twelve months the results of these internal surveys will be posted on bulletin boards in IT and throughout IT services departments.  For some companies this will be first time IT staff members have a clear sense of just what internal customers need, how they are being served, and what needs to be done to improve business performance.
  • ERP systems built on a strong foundation of personas, or clear definition of customers and their roles, will overtake those built just on features alone.  This is already happening and it will accelerate as featured-based ERP systems prove too difficult to be modified to reflect the fast-changing nature of personas and roles in organizations.  The quickest way to determine if a given ERP system launching in the next twelve months will succeed or not is asking what personas it is based on and why.
  • Customers push speed and responsiveness from a “nice to have” to a “must have” as advances in mobility platforms and integration make real-time possible.  If there is one unifying need across the personas of customers an ERP system serves, it is the need to improve responsiveness and speed. The same holds true within enterprises today as well. It would be fascinating to look at the data latency differences between market leaders versus laggards in the airline industry for example.  Customers will push accuracy, speed and precision of response up on the enterprise computing agenda of many companies this year. Speed is the new feature.
  • What were once considered ERP-based operations bottlenecks will be shown  to be lack of customer insight.  Take for example the very rapid product lifecycles in retailing.  At first glance slower sales are attributed to not having the right mix of products in stores, which is a classic supply chain problem.  Yet customer-driven ERP systems will tell retailers a different story, showing how product selection, even suppliers, are no longer pertinent to their customers’ preferences and needs.  More customer-centric ERP systems will help retailers overcome costly and difficult to recover from bottlenecks in their operations.

 Bottom line: Enterprises clinging to monolithic, inflexible ERP systems need to re-evaluate how their enterprise computing strategies are serving their customers before their competitors do.

Cloud Computing and Enterprise Software Forecast Update, 2012

The latest round of cloud computing and enterprise software forecasts reflect the growing influence of analytics, legacy systems integration, mobility and security on IT buyer’s decisions.

Bain & Company and Gartner have moved beyond aggregate forecasts, and are beginning to forecast by cloud and SaaS adoption stage.  SAP is using the Bain adoption model in their vertical market presentations today.

Despite the predictions of the demise of enterprise software, forecasts and sales cycles I’ve been involved with indicate market growth.  Mobility and cloud computing are the catalysts of rejuvenation in many enterprise application areas, and are accelerating sales cycles.  Presented in this roundup are market sizes, forecasts and compound annual growth rates (CAGRS) for ten enterprise software segments.

Key take-aways from the latest cloud computing and enterprise software forecasts are provided below:

  • Public and private cloud computing will be strong catalysts of server growth through 2015.  IDC reports that $5.2B in worldwide server revenue was generated in 2011 or 885,000 units sold.  IDC is forecasting a $9.4B global market by 2015, resulting in 1.8 million servers sold. Source:  IDC Worldwide Enterprise Server Cloud Computing 2011–2015 http://www.idc.com/getdoc.jsp?containerId=228916 
  • IDC reports that enterprise cloud application revenues reached $22.9B in 2011 and is projected reach $67.3B by 2016, attaining a CAGR of 24%.  IDC also predicts that by 2106, $1 of every $5 will be spent on cloud-based software and infrastructure. Report, Worldwide SaaS and Cloud Software 2012–2016 Forecast and 2011 Vendor Shares, Link: http://www.idc.com/getdoc.jsp?containerId=236184
  • 11% of companies are transformational, early adopters of cloud computing, attaining 44% adoption (as defined by % of MIPS) in 2010, growing to 49% in 2013.  This same segment will reduce their reliance on traditional, on-premise software from 34% to 30% in the same period according to Bain & Company’s cloud computing survey results shown below.  SAP is using this adopter-based model in their vertical market presentations, an example of which is shown here.

  • The global Platform-as-a-Service (PaaS) market is growing from $900M in 2011 to $2.9B in 2016, achieving a 26.6% CAGR.  At this projected rate, PaaS will generate an average of $360M a year in revenue between 2011 and 2016.  Gartner projects that the largest segments will be Application Platform Services (aPaaS) which generated 35% of total PaaS spending in 2011, followed by cloud application lifecycle services (12.5).    Source: Market Trends: Platform as a Service, Worldwide, 2012-2016, 2H12 Update Published: 5 October 2012 ID:G00239236.

  • The three most popular net-new SaaS solutions deployed are CRM (49%), Enterprise Content Management (ECM) (37%) and Digital Content Creation (35%).  The three most-replaced on-premise applications are Supply Chain Management (SCM) (35%), Web Conferencing, teaming platforms and social software suites (34%) and Project & Portfolio Management (PPM (33%). The following graphic shows the full distribution of responses. Source: User Survey Analysis: Using Cloud Services for Mission-Critical Applications Published: 28 September 2012

  •  In 2011, the worldwide enterprise application software market generated $115.1B in revenue, and is projected to grow to $157.6B by 2016, attaining a 6.5% CAGR in the forecast period. Gartner reports that 38% of worldwide enterprise software revenue is from maintenance and technical support; 17% from subscription payments; and 56% from ongoing revenue including new purchases.  An analysis of the ten enterprise software markets and their relative size and growth are shown in the figure below along with a table showing relative rates of growth from 2011 to 2016. Source: Forecast: Enterprise Software Markets, Worldwide, 2011-2016, 3Q12 Update Published: 12 September 2012 ID:G00234766

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.

SAP Using Humor To Sell SaaS In Latest Business ByDesign Video

In July, SAP bravely broke ranks with the “big is better and ERP is VERY serious business ” messaging the company had seemingly been frozen in for years with a break-out marketing video they produced with Epipheo Studios.  If you have not checked out Ephipheo, be sure to.  They are doing excellent work across a range of clients.

Earlier this week SAP released their second Epipheo Studios video of the year, SAP Business ByDesign — SaaS Made Simple!

This video attacks the perception many small businesses have of ERP systems being large, unresponsive, complex, difficult to use, and costly.  All of this is done with self-deprecating humor, while showing how Business ByDesign can scale to the needs of a small, quickly growing business.  It is very well done and worth checking out.

SAP On How SaaS Can Tame the ERP Beast for Small Business

So when the following video came out with its relaxed, casual narration voice, devoid of vendor-speak and the torrent of acronyms the majority of ERP marketing videos have, many took notice. With over 6,400 views on YouTube as of today (July 30th) the message is resonating. The self-deprecating humor about ERP systems is hilarious.

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