Containers are mostly just for large enterprises

Here, you see a shift in intentions to use containers, a pretty large one: less people are planning to use them. To me, containers are mostly useful for custom written software, not business application workloads.

So, several years ago, containers seemed like a cheaper VMware strategy where you just generically throw your apps in and reduce costs.

But, that doesn’t really work. Apps have to be container friendly, plus, you know, you have to manage your new container orchestration thing – figure out kubernetes. Even that has only been a thing (an option a generic IT team would know about and find viable enough to consider) for about the past year.

(I mean, maybe, if you soften the idea that kubernetes is a platform for building platforms and just think of it as a platform for running apps, that is, a platform. I don’t know what the fuck is going on in that definitional-wrangling space.)

These companies, I’d theorize, then, had the wrong assumptions, investigated container usage, and realized it wasn’t what they were expecting.

Containers are for running custom written software. If you don’t want to do that, they’re probably not useful to you.

As an important side-note, let’s assume use here means penetration, which is to say, respondents use at least one, or as few as, container. That means overall usage could be a tiny percentage of their total workloads – or big. We have no way of know how many containers they use. Not a big deal if you’re interested, as here, in y/y trends, that is, growth. That’s what investors want to see.

Equally important and enlightening here, as always, is to look at the demographics:

I don’t know what the the n is, the total number of respondents. There’s a good chunk that of what I’d fall “enterprise”: 10,000+ employees, and lots from finance. Let’s say around half? Spending wise, education usually doesn’t spend much (or write that much custom software?), and “Technology” typically less. Tech companies usually don’t buy shit and DIY it choosing to spend on their own people instead of vendors – they are, after all, technology companies, they think.

Also, it’s worth weighting this all by how few insurance and retail companies are in the respondent base: they have tons of custom written software, the stuff you’d put in containers.

So, you’ve really got two very different surveys and conclusions going on here, split by two different markets: those who write and run their own software (mostly large organizations) and those who don’t (mostly smaller organizations).

You see the general conclusion in the footnote: 10,000+ people companies (who have a good chance of writing and running their own software) already use containers and plan on using more.

Anyhow, half of respondents are small and mid-sized companies, plus those tech companies that don’t spend. So, spending wise, selling containers is probably mostly a large enterprise play cause that’s where they get used and paid for. They rest of the companies, likely, want SaaS and security.

Check out the rest of the report. It covers much, much more that the container neck of the woods.

Link: Here are five hidden trends in corporate America’s travel and expenses as online services take over

Spending in the $1.4 trillion business travel market, of the non-travel type:

“Starbucks is clearly not just for coffee, according to corporate expense receipts. On average, employees spent $13.21 per visit to Starbucks in 2017, up nearly 40 percent since 2013. That means people are buying more than just coffee, which costs about $4, depending on your order. Certify CEO Bob Neveu credits spending on Starbucks’ increasing variety of food options, in addition to rising prices, for the increase.”
Original source: Here are five hidden trends in corporate America’s travel and expenses as online services take over

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: Largest insurers plan biggest IT budget increases

“Thirty-six percent of those reported premium over $1 billion per year; those companies also said they planned to increase IT budgets by about 11% on average. Carriers between $500 million and $1 billion in premium plan an average increase of 5%.”
Original source: Largest insurers plan biggest IT budget increases

Link: Driven by AI, blockchain and IoT, IT spending could hit $3.7 trillion in 2018 – SiliconANGLE

Gartner says: “businesses will spend nearly $3.7 trillion on information technology hardware, software and services in 2018, up 4.5 percent [y/y]”
Original source: Driven by AI, blockchain and IoT, IT spending could hit $3.7 trillion in 2018 – SiliconANGLE

Link: Green light for IT spending in 2018

“fully 50% of the 872 respondents said their company is giving a ‘green light’ for IT spending. That was the highest reading since 2007, and 13 basis points higher than the average survey response for the month of November for the previous five years”
Original source: Green light for IT spending in 2018

Telcos becoming cloud providers doesn’t seem to work

Since the late 2000’s, one of the cloud strategy theories was that existing telcos and network providers could become public cloud providers. Many, if not all have tried and/or trying. Thus far, it’s been a rocky road: few synergies seem to be sleeping on the ground, ready to roused up to go fight the giants, or, at least, carve out niche spaces. As summarized in a 451 report on CenturyLink:

That’s the idea that a connectivity provider should be better positioned to take advantage of cloud computing infrastructure because it controls the means of access to those resources, leading to a natural synergy. So far, none of the major carriers has managed to make that work, hampered by scale, traditional mindsets in network operations, and sales. Companies like AT&T, Verizon, Orange, BT and other global carriers got started on similar telco transformation efforts many years ago with varying degrees of success, and with major detours toward trying to out-Amazon Amazon in the IaaS space with network-focused cloud services. Instead vendors like Amazon Web Services and others have all but run away with the managed infrastructure and cloud markets, which are slated to reach a combined $100bn by 2020, according to 451 Research’s Market Monitor.

Furthermore, from another report on Verizon:

Verizon is not the first company of its kind to move away from infrastructure services in this way. Rackspace, at the time the world’s largest independently managed infrastructure and cloud provider, pivoted away from selling basic cloud infrastructure (and spinning off its low-cost web-hosting operations, Cloud Sites, to LiquidWeb), taking a more services-led approach. UK-based Colt Technology Services canceled its Managed Cloud offering (the go-to-market brand for its IT Services’ €80m revenue business) in 2016, selling it to German IT services company Getronics. Other IT vendors such as Hewlett Packard Enterprise (HPE) have chosen to keep out of the commodified public cloud service market, choosing instead to focus on hybrid and third-party services.

That said, there’s plenty of work – and spending – to be done to keep the tubes flowing and (eventually) costs optimized, e.g.:

[CenturyLink] has spent $700m on upgrades and improvements in its network, partly to serve NFV needs but also to address rates of failure in service delivery, repair times and other customer satisfaction areas.

And, for Verizon, there’s always money in the banana stand:

Focusing its efforts on managed networking services, managed security and professional services is a smart move for Verizon, given the lower costs, higher margins and double-digit growth rates of these sectors…. Managed security services and managed network services (in the ‘other’ category) – are expected to grow at 16.3% and 21.5% respectively during the same time.

We’ll see if one of the telco’s whacks it out, but the market window seems, if not painted shut, pretty firmly slid closed.

Print media doesn’t translate well to online, still – a travel magazine case study

After all these years, print media still struggles versus the Internet. This long piece on how the travel magazine industry has been suffering covers many great topics. I suspect much of the analysis is the same for all of print media.

One of the problems is the new set of demands on writers in that field:

There is the pain point of figuring out an internal work flow that functions across platforms. Journalists, writers, and content creators often have specialized skillsets, so asking one to write a story, create a listicle, take photos, and film compelling videos about a trip is a major challenge.

“We just started working more efficiently that way and it really, it’s painful to integrate digital and print,” said Guzmán. “The plays are different, the workloads are different, the story ideation is different. In doing this, there’s this huge cultural shift that is exciting and difficult.”

And, then, even after suffering through all that “cultural shift,” the results are often disappointing:

“The iPad was just going to be this Jesus of magazines and I never really quite believed that because I knew how challenging it was was to rejigger the content to fit that format,” said Frank, who oversaw Travel + Leisure’s digital strategy in the early 2010s. “Having just gone through the process of signing up and downloading a magazine, it took forever and was buggy and it just wasn’t necessarily a great solution. I was never really bought the gospel that the tablet was going to be our savior. But we did it. I mean, we created a great app and it was beautiful. It won awards, but that was knowing what the usership was is a little disheartening.”

And, as ever, there’s the tense line between blaming “most reader are dumb” and “rivals are evil” when it comes to what’s to blame:

“I could have written the greatest travel story ever known, and it would not have gotten on the cover of the traffic oriented site because a Swedish bikini teen saved a kitten from a tree; which is going to be more popular?”

Let them watch cats.

Still, as the article opens up with, it’s the old Curse of Web 2.0 – former readers, now just travelers – writing the useful content in the form of reviews on TripAdvisor and such:

“In general, people don’t read a review and make a decision,” said Barbara Messing, chief marketing officer of TripAdvisor. “Consumers will read six to eight reviews. They might dig in a certain characteristic that they are interested in, maybe they really are interested in what the quality of the beach is, or maybe they are really interested in whether it’s kid friendly or not kid friendly. In general, people will hone in on the characteristics of something that’s most important to them, find that answer on TripAdvisor, get that most recent insights, check out the photos, check the forums, and really be able to make an informed decision of whether something is right for them. I think that the notion that people could rely on the wisdom of the crowd and the wisdom of individuals to their detriment, I just think that’s false, and I don’t think the reality is that is going to happen.”

There’s also some M&A history of trading various assets like Lonely Planet, Zagat, and Frommer’s back and forth as different management figures out what to do with them.

As ever, I’m no expert on the media industry. It seems like the core issue is that “the Internet” is so much more efficient at the Job to be Done for travel (as outlined by the TripAdvisor exec above) that the cost structure and business process from print magazines is not only inefficient, but unneeded. Those magazines are now over-serving (and thus, over-spending) with a worse product. 

While the quality of TripAdvisor (and Yelp, for example) reviews is infinitely worse than glossy magazines, since there’s an infinite amount of more crappy reviews, with the occasional helpful ones…it sort of more than evens out in favor of Sweedish bikini cat rescuers. Plus, digital advertising has so much more spend (and overall, industry profit, if only by sheer volume if not margin) – it must be because it’s better at making the advertisers money and because it creates a larger market:

Link

Building out the IoT backend at Ford

Predicting data storage requirements of 200PB by 2021 – growing from today’s 13PB – Ford chief exec Mark Fields said in a canned statement that the new bit barn “will increase the ability of Ford’s global data insights and analytics team to transform the customer experience, enable new mobility products and services, and help Ford operate more efficiently.”

Link

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.

Snapchat spending $400m/yr. on Google Cloud

The biz has also just signed a deal to spend $400m a year on Google’s cloud hosting over the next five years – that’s $2bn in total for the Gmail giant.

That’s an amazing chunk of spend for a hats on cats business. Hopefully, Ben Thompson’s theories that Snapchat is the new TV pan out.

Link

TrumpTech: $450bn in annual fed spend in limbo

There is a lot of uncertainty in the air,” said one consultant close to the Office of Management and Budget’s IT efficiency initiatives who asked not to be identified. “The whole IT industry and federal IT operations are in a wait-and-see holding pattern,” he said, anticipating official word on key federal IT initiatives and leadership positions.

In my amateur analysis of Trump’s effect on IT spend, it seems like there’s three options:

  1. More of the same with big contractors and vendors, just wrapped up in myths of change.
  2. Complete shut down of everything with respect to growth; they just stop spending and let government IT age.
  3. Start working with new government contractors and doing things differently; the “Space X” option.

Who knows what’ll happen?

Link

TrumpTech: If the rocket scientists can do it cheaper, surely IT can too

Boeing and Lockheed were already worried about their costs long before the election. If I were the United Space Alliance, I would be even more terrified of the danger of losing government business now. And those of us in federal IT need to realize that our time may be around the corner.

As we discussed in the 2017 predictions show last month, the Trump adminstration is clearly not reliable in it’s agenda or principals for any reliable, let alone logical, predictions. Cutting spending in favor of “non-traditional” options, though, seems like something they’d goof into.

Link

2% increase in IT budgets predicted

The big takeaway is that small increases in IT budgets are the new normal. Unlike previous recoveries, we have not seen a large jump in IT spending over the past five years. So if a CIO is only seeing a two or three percent increase this year, he or she should understand that is pretty much in line with other companies.

See more guidance charts on IT priorities, n=190.

Link

Link: IDC: Federal government seeing cloud spending push

“In addition, the government plans to increase PaaS spending from $227.1 million in FY15 to $231.3 million [in FY16].”

We’re still in a phase where categorization causes weird slices of spend like this, but there you have it. More figures on “cloud” spending in the piece.

Source: IDC: Federal government seeing cloud spending push