Four years ago, in October 2013, 451 Research reported that OpenStack cloud revenues were approximately $600 million in 2013. In April 2016, 451 Research reported that 2015 OpenStack ecosystem revenues came in at $1.2 billion, with a forecast to grow to $3.37 billion by 2018.
Now in November 2017, 451 Research is out with it latest OpenStack market sizing report, estimating 2017 OpenStack ecosystem revenue at $2.6 billion. Looking forward, 451 Research is forecasting that OpenStack market revenues will reach $6.7 billion by 2021
Corporate departments outside of the IT department, globally, are forecast to spend $609bn in 2017:
A new update to the Worldwide Semiannual IT Spending Guide: Line of Business from the International Data Corporation (IDC) forecasts worldwide corporate IT spending funded by non-IT business units will reach $609 billion in 2017, an increase of 5.9% over 2016. The Spending Guide, which quantifies the purchasing power of line of business (LoB) technology buyers by providing a detailed examination of where the funding for a variety of IT purchases originates, also forecasts LoB spending to achieve a compound annual growth rate (CAGR) of 5.9% over the 2015-2020 forecast period. In comparison, technology spending by IT buyers is forecast to have a five-year CAGR of 2.3%. By 2020, IDC expects LoB technology spending to be nearly equal to that of the IT organization.
Meanwhile, all in, global IT spend was estimated at $2.4tn in 2016, but that includes telco and consumer tech. And, this demographic breakdown for enterprise IT spend:
In terms of company size, more than 45% of all IT spending worldwide will come from very large businesses (more than 1,000 employees) while the small office category (the 70-plus million small businesses with 1-9 employees) will provide roughly one quarter of all IT spending throughout the forecast period. Medium (100-499 employees) and large (500-999 employees) business will see the fastest growth in IT spending, each with a CAGR of 4.4%.
Sources: Technology Purchases from Line of Business Budgets Forecast to Grow Faster Than Purchases Funded by the IT Organization, According to IDC, March 2017 and Worldwide IT Spending Forecast to Reach $2.7 Trillion in 2020 Led by Financial Services, Manufacturing, and Healthcare, According to IDC, Aug 2016.
As for Oracle, the enterprise software vendor wants to use Apiary’s technology set to make its existing API Integration Cloud more robust. Oracle’s API product focuses primarily on services that help companies monetize and analyze APIs. Apiary provides more of a front-end platform for designing, creating and governing APIs. From Natalie Gagliordi f at ZDnet
- $8.55M in funding, over three rounds
- Founded April, 2011.
Apigee was acquired, by Google, last year for $625m. Of course, they were public with (let’s hazard a guess) many, many more customers and revenue: $92.03m in FY2016, to be exact.
Back in September 2015, Carl Lehmann at 451 Research said they had 33 employees (up from 22 in Dec 2014) and estimated their revenue at $2-3m. Carl says, now, it’s “likely below $5m in annual revenue.”
What Apiary does
Apiary’s promise is to be quick and easy when it comes to managing the full life-cycle of API design. As their CEO, Jakub Nesetril, put it when I interviewed him in 2015:
It all starts with that first meeting when you’re thinking about building an API and you’re either kind of, you know, you’re inside meeting room ideating on a white board and then taking a photo of it and sending it to a co-worker, or summarizing it down into an email and sending it down to somebody else, saying hey, I just thought would could build something like this. That white board should be. And, if you do that it becomes, you know, we do a lot to try to make it super simple. We have a language that is like really, really simple for developers to write and we can write down a quick API in five minutes. It’s marked down, it’s like very organic, it’s very simple for developers.
What it creates for you, is creates this kind of common space, common language kind of when you talk about it that’s machine readable, human writable so it’s super simple but it’s also machine writable, and machine readable. The important aspect of it is that we take your white board, we take your … we build a language that we have API blue prints. It’s a… We take that API blueprint and we immediately create a API prototype, the moment you hit your first button. So, from day one when you’ve proposed your first API idea, your first resource you know, your first data structure. You have an API that’s sitting out there on the internet, somebody can query it and guess what, if they decide that the API is broken, that they would like to have a different resource, they would like to change the of a certain data structure, they would like add to it, whatever. They can go in, edit that out, click the save button and boom the API prototype is updated immediately.
Load in some enterprise governance and access controls, and you have something nice and useful. See him explaining more in this 2013 InfoQ interview.
Carl at 451 summarized the meat of what they do back in that 2015 report:
Apiary structures its API lifecycle management platform into five phases. The design phase includes the means to ensure API design consistency using a style guide, a collaborative editor and an approval process. The prototype phase includes productivity capabilities such as auto-generated code and a feedback loop for quality assurance. The implementation phase enables agile-inspired and test-driven development practices, helps deploy server code, and provides for framework integration. The delivery phase includes tools for automated documentation, offers code samples, guides the release of final client code, and offers SDKs. The feedback phase includes debugging, support and usage metrics.
The Money – grabbing part of the $3bn pie
Forrester threw out some API management market-sizing back in June of 2015 (there’s likely something more up-to-date behind their paywall):
We predict US companies alone will spend nearly $3 billion on API management over the next five years. Annual spend will quadruple by the end of the decade, from $140 million in 2014 to $660 million in 2020. International sales will take the global market over the billion dollar mark.
With Oracle’s foot-print in all of enterprise applications and IT (they own Java and share much of the JEE market with IBM), there’s likely some genuine synergies to be had. That is, Oracle could be in a position to boost Apiary sales way above what the tiny company could do on its own.
To be clear, as pointed out above, Apiary doesn’t do all that Apigee does. Apiary is just for the development/design time part of APIs, also providing documentation.
That’s helpful for sure, but I’d guess most of Forrester’s $3bn estimation is likely in actually running and managing APIs. And, in fact, it’s probably more realistic to put Apiary in the development tools/ALM TAM, which is probably in the low, single digit billions. That said, I’m guessing Forrester would put Apiary in their API management bucket; after all, it has “API” in it!
New OpenStack market-sizing and -forecast from old pals at 451:
- Al & Jay say $1.8bn in 2016, going to $5.4bn in 2020.
- Public cloud dominates now, but is expected to switch – “[public cloud providers are] 49% of total OpenStack revenue in 2015. However, we expect OpenStack private cloud service provider revenue to exceed public cloud providers by 2019.”
How they bucket-ize:
451 Research’s Market Monitor focuses on 56 vendors that provide direct OpenStack offerings, including products, services and turnkey offerings around OpenStack deployment and management, different distributions of OpenStack, service providers and training services. Although we do consider some vendors with integrated hardware, systems and software offerings based on OpenStack, our market-sizing estimate does not include hardware-centric revenue, nor does it include revenue from indirect third-party vendors, such as those in storage or software-defined networking.
IDC’s IaaS forecast is out, tragically, I don’t have access to it. However, here’s some highlights from the press release:
- Public IaaS is in wide use “A recent survey of over 6,000 IT organizations found that nearly two thirds of the respondents are either already using or planning to use public cloud IaaS by the end of 2016.”
- Public IaaS is a large, fast growing market – the overall IaaS market is forecast to grow from $12.6bn in 2015 to $43.6bn in 2020, a CAGR of 28.2%.
- Yup, fast growing – growth from 2014 to 2015 was 51%
- People use more than one IaaS, and probably “cloud” – “[H]ybrid cloud infrastructure is already a common pattern at several large enterprises and IDC predicts that 80% of IT organizations will be committed to hybrid architectures by 2018″ – notice they say “large enterprises,” which suggests a cut of the data by company size: last I recall, IDC defined “large enterprise” as 2,500+ people, which may or may not be the case here.
- A few cloud providers dominate – Amazon is still king, and there’s an fat-head of marketshare: “In 2015, 56% of the revenue and 59% of the absolute growth went to the top 10 IaaS vendors.”
Contrast that 60% IaaS usage with the 45% use in a recent Morgan Stanley CIO survey. I don’t think that’s a huge difference, but it does show the fiddliness of these kinds of surveys. To be fair, the Morgan Stanley survey has public IaaS usage at ~90% by 2019. I’d trust IDC a lot more, esp. with 6,000 surveyed vs. 100.
Also, while I can’t verify this: I’d assume this public IaaS is not to the exclusion of private cloud/on-premises. To be sure, some, or even much, of it must be public cloud gobbling up on-premises usage and revenue. However, I wouldn’t take it as a zero-sum game between the two.
$2.3T estimated for global IT spend in 2016, with the US seeing the most growth, 1% in Western Europe, and growth slowdowns in India and China.
“Worldwide PC shipments totaled 70.7 million units in 3Q15, up 8.6% sequentially but down 11.1% from the previous year.”
Source: PCs: 3Q15 Update from IDC
“Worldwide shipments of these devices are expected to reach 2.4 billion units in 2015, a drop of one percent from 2014, according to the market watcher.”
“IDC predicts the cloud computing market to reach about $70 billion this year and the number of new cloud-based solutions to triple within the next four to five years….the biggest cloud computing verticals worldwide will be discrete manufacturing, banking, professional services, process manufacturing, and retail. IDC expects the five verticals to represent 45 percent of the market’s total spend.”
At first they was like:
The re-forecast indicates global expenditure will shrink 1.3 per cent on 2014 to $3.66tn, which is way off last year’s prediction of 3.9 per cent growth, later revised to a more modest rise of 2.4 per cent in January.
Then they was like:
Removing the currency effect [of the “strong dollar”] reveals a different story Lovelock said: the market would be growing closer to 3.1 per cent.
Yeah. Good luck figuring that out. So, people are still buying more IT globally, right?