As IoT hype deflates, customers and vendors are abandoning expectations for big IoT transformation

HAMPTON, N.H. (Jan. 31, 2018) — Technology Business Research, Inc.’s (TBR) 1Q18 Commercial IoT Market Landscape finds that customers and vendors are overwhelmingly abandoning expectations for big Internet of Things (IoT) transformation projects to refocus on incremental adoption of smaller, tactical IoT tools. Customers are evolving to understand IoT as two interconnected techniques: connected operations for their industry-specific operational needs and connected business tools for their horizontal business functions. In addition to serving both IoT techniques, vendors will focus on delivering user-friendly components and prepackaged IoT applications and services that help customers eliminate IoT sprawl and get their work done.

IoT is creating a sea change in how technology can drive business. Although IoT will ultimately drive large percentages of IT vendor revenue, IoT-driven revenue will increase only at a moderate rate for many years. This challenges vendors to refine their IoT go-to-market strategies to be as efficient as possible. Vendors must master a huge and diverse partner ecosystem, demonstrate the value of their products and services in multi-vendor solutions, and become customer-standard vendors for IoT components. Some examples of this shift in 2017 include:

  • SAP’s Leonardo Live in November 2017 featured very little about the technology, instead focusing more on the business outcomes that can be achieved with various implementations of innovative technologies such as IoT and machine learning. Customer stories and general discussions on business disruption and transformation replaced the traditional product announcements and demonstrations. This fundamental change from SAP’s other events shows that SAP is evolving to guide customers through their own transformations.
  • GE Digital, to leverage Predix to pave the way to positive changes for end customers, refocused around the prepackaging of industrial IoT (IIoT) applications to enable customers to build their own system of systems in 2H17. This makes the company’s ecosystem — built around its experience developing software for operating vertical-specific machinery along with its partnerships with fellow industrials and IT-oriented vendors such as Microsoft — its differentiator. GE’s new ecosystem is vital as very few customers will commit to transformation in one sweeping change. Instead, customers are likely to follow a series of steps toward their specific goals.
  • IBM evolved its IoT message during 2017. Instead of emphasizing IoT-based business transformation, operational efficiency gets top billing. The company now encourages customers to “start small” and is partitioning all of its offerings; with SaaS, it is easy for customers to choose the modules they need. Pricing is designed to allow customers to “pay as they benefit.”

TBR’s key findings include:

  • IoT hype will give way to a focus on providing businesses the tools to get work done in 2018.
  • IT will act as the helmsman as businesses navigate the new waters of IoT.
  • The success of artificial intelligence (AI) is governed by the degree to which it is democratized.
  • IoT is maturing as a technique, but its underlying technological foundation is still solidifying.
  • The emerging divergence of connected operations and horizontal business functions delivers continued opportunity to specialized vendors.
  • 5G will be an evolution, not a revolution.
  • The “distributed core” is emerging.

The 1Q18 Commercial IoT Market Landscape looks at technologies and trends of the commercial IoT market. In addition, TBR catalogs 336 customer deals and analyzes them by vertical and use case, uncovering use trends, identifying opportunity, examining maturity, and discussing drivers and inhibitors.

For additional information about this research or to arrange a one-on-one analyst briefing, please contact Dan Demers at +1 603.929.1166 or [email protected].

 

ABOUT TBR

Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, and telecom vendors and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in a format that is uniquely tailored to clients’ needs. Our analysts are available to address client-specific issues further or information needs on an inquiry or proprietary consulting basis.

TBR has been empowering corporate decision makers since 1996. For more information please visit www.tbri.com.

 

Higher demand for cloud- and software-mediated network solutions drove stronger revenue among leading enterprise NIS suppliers

HAMPTON, N.H. (Jan. 11, 2018) — According to Technology Business Research, Inc.’s (TBR) 3Q17 Network Infrastructure Services Benchmark, migration to cloud- and software-mediated network infrastructure accelerated, spurring low-single-digit growth among benchmarked network infrastructure services (NIS) suppliers, including growth in all benchmarked services subsegments.

“The enterprise network is evolving as large enterprises, in particular, build cloud architectures to connect and control distributed branch locations more efficiently,” said TBR Analyst Patrick Filkins. “To align with this shift, NIS suppliers are driving engagements around professional services. Services-led suppliers, such as IBM and Accenture, are well positioned as vendor-agnostic NIS providers able to integrate and manage multi-vendor, multi-tenant architectures.”

Additionally, demand for professional services is spurring product-led suppliers, such as Cisco and Juniper Networks, to hire new talent for cloud- and SDN-related network rollouts and systems integration. This targeted investment in new headcount among product-centric suppliers will remain limited, though, as these companies will continue to rely on maintenance services to generate the bulk of NIS-related revenue.

TBR’s Network Infrastructure Services Benchmark provides quarterly analysis of network suppliers’ performance in the deployment, maintenance, professional services and managed services markets. Suppliers covered include Accenture, Avaya, Cisco, Dell EMC, Fujitsu, HPE, Huawei, IBM, Juniper Networks and Microsoft.

For additional information about this research or to arrange a one-on-one analyst briefing, please contact Dan Demers at +1 603.929.1166 or [email protected].

 

ABOUT TBR

Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, and telecom vendors and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in a format that is uniquely tailored to clients’ needs. Our analysts are available to address client-specific issues further or information needs on an inquiry or proprietary consulting basis.

TBR has been empowering corporate decision makers since 1996. For more information please visit www.tbri.com.

 

HITS vendors met a throng of sector-specific and external headwinds to round out 2017

HAMPTON, N.H. (Jan. 10, 2018) Healthcare IT services (HITS) trailing 12-month revenue continued to slow in 3Q17, falling to 3.8% in 3Q17 from 5.4% in 2Q17. The ongoing trend of decelerating sales growth owes largely to a dearth of strategic acquisitions by the HITS companies tracked by Technology Business Research, Inc. (TBR), turbulence in the U.S. payer market being drawn out by U.S. legislative inaction on proposed reforms to the Affordable Care Act (ACA), and a series of natural disasters in North America during 3Q17 that impacted provider IT spending patterns.

“The ongoing absence of a legislative resolution to the ACA-reform process continues to generate significant downward pressure on sales in the health insurance sector,” said Senior Analyst John Caucis, TBR’s public sector and healthcare lead. “The M&A-generated tailwind on HITS revenue growth through 2016 has all but dissipated, save for Allscripts’ acquisition of McKesson Enterprise Information Solutions and a handful of smaller-scale acquisitions by Allscripts’ HITS counterparts. Compounding the impact of weak health payer IT spending on overall HITS growth were the natural disasters that occurred in 3Q17: hurricanes Harvey, Irma and Maria, which impacted the Caribbean and the U.S., as well as a pair of earthquakes in Mexico.”

The final participant tally from the open-enrollment period that ran until Dec. 15, 2017 (8.8 million enrollees, down from 9.2 million in 2016), suggests the current lull in payer IT spending may persist, though a growing number of HITS vendors believe the IT investment trough among health insurers has been reached. Aside from the current solution focus on analytics, population health management and revenue cycle management, opportunities for HITS solutions, as well as advisory services, will emerge in 2018 in ambulatory and post-acute care, behavioral health, and employer services.

For additional information about this research or to arrange a one-on-one analyst briefing, please contact Dan Demers at +1 603.758.1803 or [email protected].

 

ABOUT TBR

Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, and telecom vendors and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in a format that is uniquely tailored to clients’ needs. Our analysts are available to address client-specific issues further or information needs on an inquiry or proprietary consulting basis.

TBR has been empowering corporate decision makers since 1996. For more information please visit www.tbri.com.

Public sector market starts 2018 on a positive growth trajectory

Insights from TBR’s 3Q17 Public Sector IT Services Benchmark

The public sector is undergoing a significant period of disruption as government customers seek to take advantage of innovative commercial technology. This shift in attitude toward IT modernization creates myriad challenges and new opportunities for the vendors that win in the fight for talent, embed security across offerings and understand emerging pricing models and nontraditional procurement methods aimed at speeding up government technology acquisition. TBR’s Public Sector IT Services Benchmark provides a pulse check on these pain points and serves as a scorecard to understand which vendors are making the right investments to capitalize on the transformation of public sector services contracting.

Equipment vendors continue to struggle with lower sales volume, while IT services and software-centric companies enjoy growth, thanks to digital

HAMPTON, N.H. (Jan. 5, 2018) — According to Technology Business Research, Inc.’s (TBR) 3Q17 Telecom Infrastructure Services Benchmark, leading vendors are making significant strategy changes and retrenching around their core competencies to weather subdued communication service provider (CSP) spend.

“Leading vendors are realizing they must transform themselves before they can effectively help their customers transform,” said TBR Telecom Senior Analyst Chris Antlitz. “New technologies and processes, particularly in the areas of cloud, artificial intelligence, cognitive analytics, automation and DevOps, promise significant agility, better outcomes and cost savings, and vendors must not only offer solutions that leverage these technologies to their customers but also adopt and employ these technologies internally to be credible, differentiate and remain competitive.”

Tier 1 network solution providers (NSPs) are going back to their product-led roots and doubling down on partnerships. Huawei, Ericsson and Nokia are all transitioning back to being product-led, which is an about-face from their prior strategy of being services-led. This strategy shift indicates that product-centric vendors have realized that the optimal go-to-market model is to stick to their core businesses and core competencies as much as possible and augment capabilities with partnerships.

TBR believes this strategy shift means NSPs will increase emphasis on product-attached services, which is their main telecom infrastructure services (TIS) profit pool, particularly maintenance services. This retrenchment by NSPs will also enable IT services companies to have a clearer path to capitalize on digital opportunities.

TBR’s Telecom Infrastructure Services Benchmark provides quarterly analysis of the deployment, maintenance, professional services and managed services markets for network and IT suppliers. Suppliers covered include Accenture, Amdocs, Atos, Capgemini, CGI, China Communications Services, Ciena, Cisco, CommScope, CSG International, Ericsson, Fujitsu, Hewlett Packard Enterprise, Huawei, IBM, Infosys, Juniper Networks, NEC, Nokia, Oracle, Samsung, SAP, Tata Consultancy Services, Tech Mahindra, Wipro and ZTE.

For additional information about this research or to arrange a one-on-one analyst briefing, please contact Dan Demers at +1 603.929.1166 or [email protected].

 

ABOUT TBR

Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, and telecom vendors and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in a format that is uniquely tailored to clients’ needs. Our analysts are available to address client-specific issues further or information needs on an inquiry or proprietary consulting basis.

TBR has been empowering corporate decision makers since 1996. For more information please visit www.tbri.com.