COVID-19 changes everything: What’s next for devices and IoT?

In pandemic recovery, IoT will contribute to organizations’ resilience, while PC sales will suffer from saturation

The COVID-19 outbreak has had two effects on pre-existing trends: In many cases, such as the migration to remote working, it has accelerated them, and in others, like the deployment of voice solutions in workplace environments, it has interrupted them. Where trends are accelerated, we can expect a slowdown or temporary rebound as the economy recovers from the impacts of the pandemic, followed by a resumption of the trend. Where trends are interrupted, resumption will often be delayed until later in the recovery, when there is less uncertainty.

Under these circumstances, it is worthwhile to look back at last year’s predictions:

  • There will be less talk of IoT, as it will be increasingly viewed as one technique among many for delivering digital transformation.

This trend was accelerated by the pandemic, as organizations focused on operating in the crisis and preparing for greater uncertainty during and following the recovery. In a sense, once IoT was better understood by customer organizations, including IT, operational technology (OT) and business management, it no longer required special attention. The focus shifted from the enabling technology, IoT, to the problems to be solved using all techniques including IoT.

  • AI in IoT will increasingly be encapsulated in specific functions like recognition and detection.

This trend was also accelerated by the pandemic, as organizations focused on point solutions that included IoT and strategic solutions that incorporated data from all sources, including from IoT. At the edge, AI is aimed at improving operations by increasing efficiency and reducing errors as well as recognizing things like anomalies and patterns that imply a need for service. IoT-generated data contributes to AI-enabled business analysis, but that is as part of a larger body of data, including data from other sources, and is typically done either in the cloud or in on-premises data centers.

  • Conversational user interfaces, based on voice or typed communication, will play an increasing role in business solutions.

Many natural language processing (NLP) projects have been deferred or slowed due to pandemic constraints as well as organizations diverting attention and dollars to more pressing needs or to husbanding resources for a more uncertain future. A minority of NLP projects, especially ones already in use, have been accelerated because they reduce dependency on human operators. While conversational solutions remain in the digital transformation tool kit, TBR believes NLP will remain a lower priority for the first stages of recovery, as organizations look to solutions that increase resilience and transparency.

This focus on digital transformation for resilience and transparency, giving organizations the flexibility to adapt to changing conditions in the pandemic recovery and economic unpredictability, is, TBR believes, the next phase in the evolution of commercial IoT. At the same time, the PC industry faces a saturation-driven reduction in demand following a pandemic-driven surge in 2020.

2021 Devices & Commercial IoT Predictions

  • The emergence of the chief data officer role will increase organizational clarity, accelerating IoT adoption
  • Packaged solutions and components will become more important
  • Despite enjoying an increase in TAM, PC vendors suffer from market saturation, a weak global economy and demand for resale units

Technology Business Research 2021 Predictions is a special series examining market trends and business changes in key markets. Covered segments include cloud & software, telecom, devices & commercial IoT, data center, and services & digital.

Technology Business Research announces 2021 Predictions webinar schedule

Technology Business Research, Inc. (TBR) announces the schedule for its 2021 Predictions webinar series. 2021 Predictions is a special series examining market trends and business changes in key markets. Covered segments include telecom, cloud, devices & commercial IoT, data center, and services & digital.

Jan. 6            COVID-19 changes everything: What’s next for devices and IoT?

Jan. 13         2021 will bring more demand, more partnerships and more industry innovation to cloud

Jan. 20         Hybrid, ecosystems and industry clouds shape the future for consulting, IT services and digital transformation

Jan. 27         CSPs face brave new world in 2021

Feb. 3           COVID-19 necessitates data center investments, becoming a catalyst for digital transformation

TBR webinars are held typically each Wednesday at 1 p.m. EDT and include a 15-minute Q&A following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

Microsoft Teams in crosshairs as Salesforce announces acquisition of Slack to bolster its Customer 360 vision

Slack fits within Salesforce’s historical growth strategy

Salesforce (NYSE: CRM) has increasingly relied on inorganic growth to accelerate top-line revenue performance, such as its acquisitions of MuleSoft in 2018 for $6.5 billion and Tableau in 2019 for $15.7 billion. The addition of Slack (NYSE: WORK) would allow Salesforce to augment its robust, customer-focused products, including Sales and Service clouds, with Slack’s internal collaboration and communication platform, which contains a robust ecosystem of third-party integrations. Speaking about the acquisition during Salesforce’s 3Q20 earnings call, CEO Marc Benioff stated, “More than 90% of Slack’s enterprise customers are also Salesforce customers, but we also see how much further they can go.”

How much further Slack’s clients can go on their deployments will be contingent on Salesforce’s ability to articulate the value of the Customer 360 vision to the acquired clients. Execution of this portfolio strategy will be critical to complementing Salesforce’s inorganic growth by driving demand of existing front-office suites like Sales and Service clouds, in addition to broadening the company’s presence beyond the front-office with recent product launches like middle- and back-office-focused suite Revenue Cloud.

Integrating Slack’s value proposition with existing go-to-market efforts

The acquisition of Slack would bolster Salesforce’s Customer 360 portfolio strategy by adding a robust collaboration product at the center of the platform. This tactic mirrors recent investments by Microsoft (Nasdaq: MSFT) around Teams, such as tighter integrations with products like Dynamics 365, which, combined with enterprise needs as a result of the pandemic, accelerated Teams’ daily active user growth by a reported 53% from April to October. Further, the acquisition will increase the competitiveness of Slack in larger-scale multiproduct engagements, a dynamic the company struggled with in the past, given its lack of portfolio breadth compared to Microsoft. This is evidenced by Slack’s July filing of an antitrust lawsuit against Microsoft in the European Union, citing unfair market competition as the company frequently included Teams as a free trial within multiproduct bundles, such as Microsoft 365.

With this in mind, TBR believes the planned acquisition’s success will be contingent on Salesforce’s ability to integrate Slack’s value proposition as an internal collaboration into its customer-focused suites, thus allowing Salesforce to generate cross-sale opportunities within the acquired install base. For instance, Salesforce used investments around Work.com, a platform the company released in May in response to the pandemic, to create revenue opportunities from support for remote workforces. Specifically, Salesforce launched updates in September around employee engagement and productivity, including Employee Workspace, which provides users with a central hub to access and manage resources like learning platforms, payroll systems and collaboration applications, providing a clear path for integration with the capabilities that will be acquired from Slack. Aligning Slack capabilities with products like Work.com could help Salesforce differentiate Slack and use it to strengthen the Customer 360 portfolio strategy with clients.

After a week of market speculation, Salesforce confirmed ahead of its 3Q20 earnings call the company’s intent to acquire Slack for $27.7 billion, which would be the largest acquisition in the company’s history. The deal, which is expected to close in 2Q21, will be funded by a combination of new debt and cash on hand. The planned acquisition would inject an estimated $600 million in revenue in 2021, supporting Salesforce’s 2021 revenue guidance of approximately $25.45 billion to $25.55 billion, representing a yearly growth of about 21%.

2021 will bring more demand, more partnerships and more industry innovation to cloud

Join TBR’s Cloud & Software team, Allan Krans, Nicki Catchpole, Evan Woollacott and Catie Merrill, for an exclusive review of our predictions for cloud in 2021, including the lingering impact of COVID-19 on vendors and customers and how they will handle challenges in the coming year. The team will also discuss how cloud demand will not only remain elevated but also take different forms as vendors offer more industry customization and hybrid capabilities.

Don’t miss:

  • How uncertainty will accelerate cloud adoption in 2021
  • How industry clouds will become the norm
  • How partnership models will support accelerated cloud demand
  • How containers will challenge the traditional virtualization model

Mark your calendars for Jan. 13, 2021 at 1 p.m. EST,
and REGISTER to reserve your space.

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

COVID-19 pandemic forces telecom industry to go all in on digital transformation

CSPs face brave new world; government stimulate market

The COVID-19 pandemic is expected to persist through at least 2021 as vaccines and other virus mitigation efforts take time to make their way through societies globally. In the meantime, the global economy remains in a state of suspended animation following unprecedented injections of fiscal and monetary stimulus by governments across numerous countries, which total over $20 trillion (or 23% of global GDP in 2019). The amount of stimulus is expected to continue growing steadily through 2021 and potentially beyond as governments aim to fully offset the impact of the pandemic on their economies as well as build a foundation for sustainable economic growth.

After weathering the first phase of the pandemic in 2020 relatively well, communication service providers (CSPs) will enter 2021 facing a brave new world and many tough decisions. The unrelenting virus is forcing economies and societies to fully embrace digital transformation as they adjust to the new normal, and it is forcing CSPs worldwide to take a hard, holistic look at their operational, business and growth models, and to adjust and accelerate their digital transformation road maps accordingly.

Fortunately for the telecom industry, a significant and growing portion of government stimulus is being earmarked to enable the ICT sector to accelerate infrastructure and ecosystem development. CSPs and their suppliers will be key beneficiaries of the trillions of dollars and other support mechanisms (e.g., tax breaks, low or no interest rate financing) governments will directly and indirectly inject into the ICT sector and broader economy for these purposes. This stimulus will help CSPs ease their capex and opex burdens as they migrate to the new network architecture and will ensure they have the capital necessary to keep their businesses going and their debt obligations satisfied.

2021 telecom predictions

  • Government stimulus powers ICT investment
  • Governments will increasingly democratize spectrum to ensure a vibrant 5G ecosystem
  • CSPs accelerate 5G SA road maps

Technology Business Research 2021 Predictions is a special series examining market trends and business changes in key markets. Covered segments include cloud & software, telecom, devices & commercial IoT, data center, and services & digital.

COVID-19 necessitates data center investments, becoming a catalyst for digital transformation

COVID-19 shifts data center market demands as customers leverage the cloud to meet swift transformation needs

In 2020 IT decision makers around the world moved into highly reactive and tactical modes to mitigate COVID-19’s impact on their businesses, and data centers had to be provisioned rapidly for remote activities across all elements of the business stack, including IT. Although businesses’ initial response to the COVID-19 pandemic boosted certain on-premises provisioning, it also delayed large, services-laden transformation engagements. Economic uncertainty and uneven industry sector impact also saw some IT instances pivot to cash conservation. IT infrastructure vendors held strong against the murky IT backdrop, although some business shifted to ODMs more aligned to serving exascale cloud companies at the expense of more traditional or legacy technologies.

TBR believes this trend will continue through 2021. COVID-19 accelerated existing macro trends toward cloud-delivered technologies leveraging automation to strip away person-to-person contact from commerce. AI and machine learning (ML) will pull infrastructure along and push infrastructure deployments further to the edge.

Hyperconverged infrastructure (HCI) is the multifunctional building block for a lot of IT instances. HCI can sit at the ever-growing edge or in departmental or branch office data centers, and it can be used for modular scaling of private cloud deployments whether on premises or in colocation facilities. HCI growth, coupled with further cloud migration, pressures legacy and more traditional IT infrastructure. 

AI growth persists. Definition increases as emerging technologies become applicable to general use. Vendors and customers alike seek AI automation to strip labor’s hollow calories from all elements of business commerce and IT support. All these aspirations hinge on tight data governance rules and human compliance with those rules when putting data into the automation engine. That tight wrapper for consistent, shared information flows can be achieved through blockchain, described by EY Blockchain Head Paul Brody as the ERP equivalent for multienterprise business networks. 

This vision of the digital world also acknowledges the need for a new data engine to analyze the data and derive new insights to advance all elements of human existence. Quantum computing will be that new engine, and its performance will be to classical computing what the jet plane was to propeller airplanes. TBR expects 2021 to be a year with significant discoveries that push quantum computing further down the path to economic advantage. If deep scientific thought and “what if” analysis happen only when the world’s greatest minds can pursue their natural inquisitiveness, then it could be that COVID-19 generates the requisite science necessary for quantum computing to shift from discovery to emerging commercial application.

2021 data center predictions

  • Investments in 1H20 to modernize IT to meet COVID-19 requirements will lead to reduced data center hardware spend in 2021
  • Quantum computing advancements will persist, leading to an increase in M&A activity to consolidate capabilities
  • COVID-19 increases the presence of HCI in modern data centers

Technology Business Research 2021 Predictions is a special series examining market trends and business changes in key markets. Covered segments include cloud & software, telecom, devices & commercial IoT, data center, and services & digital.

COVID-19 changes everything: What’s next for devices and IoT?

The COVID-19 crisis has accelerated some trends and slowed others. In IoT, the emphasis has shifted to a more strategic approach to achieve greater resilience and transparency, while projects largely aimed at increasing operational efficiency have be put on the backburner. At the same time, the crisis has accelerated a maturation in customer organizations that makes it easier to build IoT into digital transformation strategies. In devices, especially in PCs, the 2020 surge in consumer demand will be followed, TBR believes, by market saturation, reducing revenue and driving down margins.

Don’t miss:

  • The new division of labor in IoT customer organizations     
  • Specialized packages and bundles simplify vendors’ go-to-market strategies
  • How the increased PC total addressable market will affect the near-term PC market

Mark your calendars for Wednesday, Jan. 6, at 1 p.m. EST,
and REGISTER to reserve your space.

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

Hybrid, ecosystems and industry clouds shape the future for consulting, IT services and digital transformation

Join Patrick M. Heffernan and members of TBR’s Professional Services and Digital Transformation teams as they explore three developing trends: the evolution of hybrid consulting, new ways of partnering across a changing IT services ecosystem and the return of industry clouds. Additionally, the teams will review 2020 performance and strategies of key players in the market and predict the impact of these trends in 2021.

Don’t miss:

  • How the consulting business model has finally begun shifting to accommodate a post-pandemic world, with face-to-face selling and delivery replaced by a hybrid engagement experience
  • Why maturing emerging technologies necessitate more complex ecosystems, pressuring all the players in the IT services space to partner differently
  • After the death of digital in 2020 and as cloud providers begin reintroducing industry clouds, how professional services vendors will partner to accelerate previously lethargic cloud adoption, even as they ward off encroachment by those same cloud vendors into services opportunities

Mark your calendars for Wednesday, Jan. 20, at 1 p.m. EST,
and REGISTER to reserve your space.

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

CSPs face brave new world in 2021

The COVID-19 pandemic is expected to persist through at least 2021 as vaccines and other virus mitigation efforts take time to make their way through societies globally. In the meantime, the global economy remains in a state of suspended animation following unprecedented injections of fiscal and monetary stimulus by governments across numerous countries, which when aggregated to date, amount to over $20 trillion (or 23% of global GDP in 2019). The amount of stimulus is expected to continue, growing steadily through 2021 and potentially beyond, as governments aim to fully offset the impact of the pandemic on their economies as well as build a foundation for sustainable economic growth.

After weathering the first phase of the pandemic in 2020 relatively well, communication service providers (CSPs) will enter 2021 facing a brave new world and many tough decisions to make. The unrelenting pandemic is forcing economies and societies to fully embrace digital transformation as they adjust to the new normal and forcing CSPs worldwide to take a hard, holistic look at their operational model, business model and growth model and to adjust and accelerate their digital transformation road maps accordingly.

Join Principal Analyst Chris Antlitz for an in-depth, exclusive review of TBR’s 2021 Telecom Predictions, in which he discusses how the telecom industry is adapting to the post-pandemic world.

Don’t miss:

  • How government stimulus will fuel growth in the ICT sector and support the telecom industry
  • Why spectrum democratization is happening
  • Why CSPs are accelerating their 5G SA road maps

Mark your calendars for Wednesday, Jan. 27, 2021, at 1 p.m. EST,
and REGISTER to reserve your space.

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].