🗂 Link: VMware plan elevates Kubernetes to star enterprise status

A swag at how many new apps will be created to run on kubernetes cloud stuff. I assume this is actually existing, modernized apps and net-new ones despite the wording:

VMware says that from 2018 to 2023 – with new tools/platforms, more developers, agile methods, and lots of code reuse – 500 million new logical apps will be created serving the needs of many application types and spanning all types of environments.

Source: VMware plan elevates Kubernetes to star enterprise status

🗂 Link: Spending on Customer Experience Technologies Will Reach $641 Billion in 2022, According to New IDC Spending Guide

Worldwide spending on customer experience (CX) technologies will total $508 billion in 2019, an increase of 7.9% over 2018, according to the inaugural Worldwide Semiannual Customer Experience Spending Guide from International Data Corporation (IDC). As companies focus on meeting the expectations of customers and providing a differentiated customer experience, IDC expects CX spending to achieve a compound annual growth rate (CAGR) of 8.2% over the 2018-2022 forecast period, reaching $641 billion in 2022.

Source: Spending on Customer Experience Technologies Will Reach $641 Billion in 2022, According to New IDC Spending Guide

🗂 Link: Application Development Research Predicts Low-Code Tooling Takeover

“By 2024, three-quarters of large enterprises will be using at least four low-code development tools for both IT application development and citizen development initiatives,” the report said. “By 2024, low-code application development will be responsible for more than 65 percent of application development activity.”

Source: Application Development Research Predicts Low-Code Tooling Takeover

Link: Gartner: IT spending to hit $3.7 trillion thanks to record 6.2% growth in 2018

“This is the highest annual growth rate that Gartner has forecast since 2007 and would be a sign of a new cycle of IT growth,” said John-David Lovelock, a research vice president at Gartner. “However, spending on IT around the world is growing at expected levels and is in line with expected global economic growth. Through 2018 and 2019, the U.S. dollar is expected to trend stronger while enduring tremendous volatility due to the uncertain political environment, the North American Free Trade Agreement renegotiation and the potential for trade wars.”
Original source: Gartner: IT spending to hit $3.7 trillion thanks to record 6.2% growth in 2018

Link: Worldwide Spending on Security Solutions Forecast to Reach $91 Billion in 2018, According to a New IDC Spending Guide

“Worldwide spending on security-related hardware, software, and services is forecast to reach $91.4 billion in 2018, an increase of 10.2% over the amount spent in 2017.” Also, a breakdown of spending per industry and type of security product.
Original source: Worldwide Spending on Security Solutions Forecast to Reach $91 Billion in 2018, According to a New IDC Spending Guide

Link: Worldwide SMB IT Spending to Pass $600 Billion in 2018, Driven by Mid-Market Demand for Software and Services, According to IDC

For companies under 1,000 people, IDC “forecasts total IT spending by small and medium-size businesses (SMBs) to be nearly $602 billion in 2018, an increase of 4.9% over 2017. With a compound annual growth rate (CAGR) of 4.7% for the 2016-2021 forecast period, spending by businesses with fewer than 1,000 employees on IT hardware, software, and services, including business services, is expected to reach $684 billion on in 2021.”
Original source: Worldwide SMB IT Spending to Pass $600 Billion in 2018, Driven by Mid-Market Demand for Software and Services, According to IDC

Link: Ordering from voice tubes

“Purchases made through devices such as Google Home and Amazon’s Echo are projected to leap from $2 billion to $40 billion by 2022 as technology improves, U.S. consumers become more comfortable and the speakers become nearly as commonplace in homes as a flat-screen TV, according to a new study from OC&C Strategy Consultants.”

More:

“Shoppers are more apt to buy cheaper items, such as phone charger cables, via voice. The average online basket was $661 for online purchases of electronics, compared with $239 for voice orders, OC&C said. “
Original source: Ordering from voice tubes

OpenStack Continues to Grow Both Public and Private Cloud Deployments

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

Source: OpenStack Continues to Grow Both Public and Private Cloud Deployments

Spending from outside of the IT department

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.

Oracle acquiring Apiary, API design for the $660m (in 2020) API market

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

From CrunchBase:

  • $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!

As more background, we talked about the API management market back back when the Apigee acquisition was announced both on Software Defined Talk and Pivotal Conversations.

Link

OpenStack-related business models to exceed $4bn by 2019, 451 Research

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.

Source: OpenStack-related business models to exceed $4bn by 2019

60% of enterprises using or planning to use public IaaS by the end of 2016, IDC

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.

Source: Enterprise Adoption Driving Strong Growth of Public Cloud Infrastructure as a Service, According to IDC – prUS41599716

IDC: Industry-specific solutions to drive public cloud computing

“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.”

IDC: Industry-specific solutions to drive public cloud computing

Currency markets screwing up global IT spending

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?

Currency markets screwing up global IT spending

US SMB Spending

“Spending on information technology by the almost 6.5 million small and medium-sized businesses [1-999 employees] in the United States will approach $161.1 billion in 2015, accounting for over one-quarter of overall global SMB IT spending”

Details on spending totals are provided for key hardware, software, and services technology areas: PCs and peripherals, systems and storage, telecommunications equipment, packaged software, and IT services.

From IDC

Tech companies planning on M&A

According to 451 Research, more than half of corporate acquirers (58%) indicated that they expected their own company to pick up the pace of deal making in 2015. That was the highest forecast by strategic buyers in the tech M&A marketplace in a half-decade. Likewise, tech investment bankers are bullish for this year, with M&A pipelines fuller than they’ve been in years. More than three-quarters (77%) of investment banking survey respondents indicated that the aggregate value of tech transactions they are currently working on is higher than it was a year ago. That stood as the second-highest assessment in the past half-dozen years of the 451 Research Survey.

From the M&A team at 451.

Tech companies planning on M&A

The answer, Sacconaghi thinks, is a bunch of things: CEOs and their CIOs don’t believe in IT value as much today as they used to, even though they do still believe in it; factors such as commoditization have led to deflation in IT prices; customers are hesitant because various new ‘architectures” such as cloud computing, CIOs are stuck evaluating new stuff a lot; and spending has lagged the recovery in corporate profits post-recession.

$4.2T in G20 Internet spend by 2016, says BCG and friends

Internet-based economic activity is expected to reach $4.2 trillion in the G-20 nations by 2016, or more than 5 percent of GDP, and this does not include a whole universe of pursuits not captured in GDP figures. The digital economy is growing at 10 percent a year, significantly faster than the economy as a whole. About 2.5 billion people are connected to the Internet today, a third of the world’s population; there are projected to be about 4 billion users by 2020, or more than half the global population.

$4.2T in G20 Internet spend by 2016, says BCG and friends

The IT growth is from new shit, IDC says

According to IDC, the 5 percent IT growth it sees for 2014 is comprised of two elements: Stagnant legacy infrastructure growth (0.7 percent) and a high third-platform infrastructure growth (15 percent). Just to bring the point home, IDC asserts that a full 29 percent of 2014 IT spending and 89 percent of all IT growth spending will be in the third platform; of the latter, a full 50 percent represents cannibalization of traditional markets.

The IT growth is from new shit, IDC says

By 2019, 67 percent of software programmers will primarily be developing in the cloud, up from 18 percent today, predicted Evans Research.

Evans prediction in the tail-end of this piece on IBM going SaaS

Press Pass: PaaS in 2014 (Pun!)

Paul Krill asked a few questions about the future of PaaS last month for an omnibus appdev article of his (it’s a nice round up!). Here’s the only slightly edited full reply I sent him:

Q: Does 451 Group see 2013 as a banner year for PaaS? If so, why?

PaaS has always had the issue of being “big next year.” The nature of PaaS has shifted around so many times that it’s little wonder it’s yet to achieve escape velocity. To my mind, PaaS has come to mean “integrated middle-ware and services developers use to run cloud applications,” and in that sense I think PaaS will have an interesting year in 2014. The tools and practices behind DevOps are reaching mainstream, and the fast rise of things like Docker and mainstream hocking of Cloud Foundry are all encouraging. I still think PaaS needs to evolve to something close to that looser middle-ware-as-a-service definition than the clearly defined and contained platforms we’ve seen in years past. One thing is for sure: developers are going to keep writing application destined to live on the cloud to support web and mobile apps. It’s unclear if they’ll chose classic ideas of PaaSes (Heroku, etc.) over assembling their own middle-ware stacks with the help of things like Chef, Puppet, and Docker.

Everything I hear from the buy side of the market indicates that they’re hungry for better ways of developing and delivering cloud applications (whether to support classic web apps, mobile, or analytics applications). To me, this means a big uptick in spending in the middle-ware and developer categories, or the PaaS part of the cloud market. Companies like Pivotal Labs are premised on this opportunity, and numerous other vendors seem convinced as well.

Q: From Forbes: “Platform-as-a-Service (PaaS) will attain a 41% CAGR through 2016, generating 24% of total cloud revenues. 71% of PaaS revenues will be generated by vendors over $75M in sales according to the study.” Does 451 still stand by these numbers?

As Greg Zwackman put it in Paul’s article:

Analysts at 451 Research also see improved prospects for PaaS. “For 2013, we are projecting well over 50 percent growth over 2012,” says 451 analyst Greg Zwakman. The research firm expects PaaS usage to grow 41 percent each year through 2016, to account for 24 percent of total cloud revenues.

My reply: I believe this segment of the market will grow fast and be a large part of spend. It’s clear that deploying custom written software is a large part of what cloud is used for, and developers are always looking for better mouse-traps. Also, included in these numbers if I’m right, are ALM (Application Life-cycle Management) and supporting services and tools. From what I can tell, developers are eager to move to cloud-hosted versions of these tools, and vendors like IBM are starting to respond as well.

Q: How does 451 define PaaS?

Here’s the official definition: “A PaaS is a cloud-enabled development platform designed to let developers interact with code and create running applications, without maintaining or operating the runtime.”

And the longer definition:

“PaaS is defined as a remotely hosted framework that supports the building, deployment and ongoing management of applications throughout their life-cycle (development, testing, deployment, runtime, hosting and delivery). PaaS provides the computing environment on top of the infrastructure where multiple applications share a single plat- form for development and deployment. It also provides all the tools necessary to build and deploy applications and services via a Web browser, and offers user-friendly functionality streamlining workflow collaboration and speeding up production and time to market. Included in this category are vendors that provide the entire stack of PaaS functionality and partner with third parties (i.e., hosters) for the infrastructure component, as well as those vendors that provide the infrastructure themselves. Cloud computing components of the PaaS marketplace we track include: PaaS From SaaS, Stand-Alone PaaS and Application Life-cycle Management as a Service (ALMaaS). Within the ALMaaS space, we categorize vendors in two sub-sectors: Pre-Production & Testing and Integration as a Service.”

Q: What’s next for PaaS in 2014?

This year the PaaS market needs to decide if the Cloud Foundry approach (a very loose, buffet of services that interlock together, reminiscent of J2EE vs. the more clearly defined approach you’d get on AppExchange or even Heroku) is the winner. Also, how something like Docker fits in, and by extension the idea of using Chef, Puppet, AnsibleWorks, and Salt instead of a PaaS are important. Put another way: do developers want to build their own stacks and control the configurations of them, or do they want to deploy into a more clearly defined “app server,” to use a Java analogy.

Press Pass: PaaS in 2014 (Pun!)

Unix cash-cowing

As recently as Q4 2010, Unix server revenue was 25.6 percent of the worldwide market, with Linux at 17 percent, according to IDC. By the first quarter of 2012, Linux commanded 20.7 percent of worldwide server revenue compared to Unix’s 18.3 percent. And in IDC’s most recent report covering Q2 2013, Linux was up to 23.2 percent of all revenue with $2.8 billion, while Unix fell 21 percent year over year to $1.8 billion. Unix’s Q2 server revenue of 15.1 percent was its lowest ever reported by IDC. (Windows servers account for nearly 50 percent of revenue, while IBM’s mainframes took nearly 10 percent.)

Unix cash-cowing

Webvan was 19 years too early

BCG expects big things:

We expect the global online grocery market to reach $100 billion by 2018…. [W]e believe that grocers in most markets can establish profitable, substantial online businesses with positive returns on investment and healthy margins within a period of a few years.

Webvan was 19 years too early