HAMPTON, N.H. (April 20, 2018) — Combined Cloud as a Service revenue for telecom operators in Technology Business Research Inc.’s (TBR) 4Q17 Carrier Cloud Benchmark rose 15.7% year-to-year in 4Q17 due to strategic acquisitions and alliances, investments in new data centers, and portfolio expansion in growth segments such as SaaS and hybrid cloud. Cloud revenue growth is being limited, however, due to pricing pressures and growing demand for solutions from webscale cloud providers such as Amazon Web Services (AWS). Carriers are cognizant of these trends and are becoming more focused on supporting hybrid and multi-cloud environments by launching new orchestration platforms.

“All benchmarked companies sustained year-to-year Cloud as a Service revenue growth in 4Q17 as significant opportunity remains for carriers to target businesses seeking greater cost savings, scalability and efficiency by migrating traditional infrastructure and applications to the cloud,” said Steve Vachon, an analyst in TBR’s Telecom Practice. “Though cloud revenue growth is being limited by pricing pressures from webscale providers, carriers are relying on the value proposition and convenience offered by the bundling of their cloud solutions with other network offerings, such as SD-WAN, security and mobility services, to attract customers.”

Operators are revamping their go-to-market strategies to counter disruption from webscale providers such as AWS, Google and Microsoft. Competition will intensify over the next several years as webscales seek to play a larger role within the European and Asian cloud markets by investing in additional data centers in those regions. Amid demand for solutions from webscales in the cloud market, most carriers are offering access to these companies to complement their existing cloud portfolios and to support hybrid and multi-cloud environments. Carriers are also integrating webscale cloud platforms to enhance adjacent portfolio segments such as Internet of Things and unified communications.

TBR’s Telecom Practice provides semiannual analysis of Cloud as a Service revenue in key segment splits and regions for the top global carrier cloud operators in its Carrier Cloud Benchmark. Operators covered include Bharti Airtel, BT, CenturyLink, China Telecom, Deutsche Telekom, Korea Telecom, NTT, Orange, Singtel, Telefonica and Vodafone.

HAMPTON, N.H. (March 2, 2018) — According to Technology Business Research, Inc.’s (TBR) 1Q18 Webscale ICT Market Landscape, Super 7 webscale ICT capex will grow at a 19.5% CAGR to over $63 billion in 2022 as these companies continue to invest in network capacity to support traffic growth, and data center builds and expansions to support their cloud businesses. Microsoft and Alphabet are leveraging strong ICT capex spend to help Azure and Google Cloud close the market share gap with Amazon Web Services (AWS).

Additionally, the Super 7 are developing machine learning (ML) and artificial intelligence (AI) features that will become table stakes for cloud providers, though development is not capex-intensive. Cloud providers are investing in AI and ML to differentiate their core solutions, but the market for these technologies is nascent.

“AWS is the leading IaaS provider by revenue, but Microsoft Azure and Google Cloud are growing revenue faster than the incumbent due to years of data center investment across geographies. Microsoft is closing the gap quickly and will challenge AWS in the short term, while Google, which was later to the market, is more of a long-term threat,” said Michael Soper, a senior analyst at TBR. “Beyond data centers, webscale companies are making undersea cable investments to support cloud and video traffic growth. Alphabet, Amazon, Facebook and Microsoft will continue to build these networks to carry traffic across oceans and typically partner with each other as they do so.”

After significant ramp-up in network infrastructure and services spending among the Super 7 in 2017, incumbent vendors will likely experience volatility in the webscale market in 2018. Vendors are coping with a lower level of loyalty from webscale companies, when compared to their traditional customers, as they leverage contract manufacturers and/or their own design teams for new infrastructure. The success of ODMs such as Quanta, Arista, SuperMicro and Celestica, along with new efforts to capitalize on the webscale market from IT services providers, will further fragment the supplier landscape.

TBR’s Webscale ICT Market Landscape tracks the ICT-related initiatives of the seven largest webscale companies in the world, known as the Super 7, which includes Alibaba, Alphabet, Amazon, Baidu, Facebook, Microsoft and Tencent. The report provides a market assessment, deep dives into company strategies and analyzes capex trends, particularly as they pertain to ICT. Vendors are also covered from the perspective of relative opportunities with webscale companies as customers.

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.