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TBR launches new Cloud Customer Research reports covering infrastructure and applications adoption

Recognizing that a more mature cloud market needs deeper customer insight, Technology Business Research, Inc. (TBR) is launching two new programs: Cloud Applications Customer Research and Cloud Infrastructure Customer Research. While the vendor landscape is solidified from a leadership perspective, customer behavior has become even more difficult to decipher. TBR’s new programs will help subscribers to plan and take action to win more cloud business.

Many of the simple workloads, such as development & test, CRM and productivity, have moved to the cloud, but exactly what services will move next and how remain difficult questions to answer. TBR’s Cloud Customer Research reports address these new market realities, providing direct feedback on leading and emerging vendors and focusing the analysis on specific workloads in both the applications and infrastructure domains.

Insight provided through in-depth customer interviews allows subscribers to understand the nuance involved with customers’ cloud usage and leverage that information to directly influence their positions in the market. The result of the research is clear identification of market size, leading vendor share, vendor perception, vendor strengths and weaknesses, and case studies on workload adoption.

The two new Cloud Customer Research streams deliver insight that can be used internally to plan business strategies and field guides that can be used externally to initiate and close more competitive deals. While the two research streams will cover different markets (applications and infrastructure), they have a similar structure: analyzing market opportunity, customer behavior, vendor position and perception; offering engagement scenarios and field guides; and providing interview excerpts. TBR will conduct 400 surveys and 100 interviews annually as part of this program and will publish the two reports in September and March.

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].

 

TBR launches Alibaba Cloud vendor report amid changes in public cloud PaaS & IaaS markets

As Alibaba Cloud continues to prove itself as a relevant public cloud PaaS and IaaS challenger, Technology Business Research, Inc. (TBR) is launching a new report focused on the vendor to provide subscribers with ongoing insights into the business’ performance. As Alibaba’s cloud business progressively moves beyond the company’s traditional China and Southeast Asia presence to compete more directly with the leading public cloud PaaS and IaaS vendors TBR covers regularly, it has become relevant to include Alibaba Cloud in our vendor coverage.

Alibaba has proved its public cloud legitimacy by capitalizing on the highly restrictive cloud services market in China. With more than one-third of the top 500 Chinese companies as customers and two-thirds of China-based unicorn startups running on Alibaba Cloud services, the business has demonstrated that it has a broad appeal as it looks to translate local success to new geographies. Although Alibaba Cloud has successfully expanded from China to the broader Asia market, its transformation to a truly global provider faces greater barriers.

Western vendors dominate global public cloud mindshare and are adapting their strategies to specific geographic needs to rapidly expand their own international presence. As such, Alibaba Cloud has begun to innovate around regional needs and high-value artificial intelligence and Internet of Things cloud services to drive higher-margin and more differentiated workloads to its platform.

Alibaba aims to challenge more globally dominant public cloud vendors, such as Amazon Web Services (AWS), Microsoft Azure, IBM Cloud and Google Cloud, to cement its position among these leaders. In October 2017 Alibaba Cloud President Simon Hu claimed that the business was “on track” to overtake AWS as the global leader in cloud by 2019.

This is undoubtedly an exaggeration, as Alibaba’s cloud business only generated 8% the volume of revenue that still-growing AWS generated in 2017, but the statement affirms Alibaba’s commitment to scaling its cloud business. TBR estimates that Alibaba Cloud will not overtake AWS, but as shown in Figure 1, that it will grow fast enough to close the gap between itself and AWS and Microsoft. Amid global growth efforts, Alibaba’s dominance of the Chinese cloud market will remain a key driver of its overall performance.

TBR will initially publish the Alibaba Cloud report semiannually, following the company’s first- and third-quarter earnings. 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.

Carriers are focused on supporting hybrid and multicloud environments as more customers integrate solutions from multiple providers

HAMPTON, N.H. (July 18, 2018) — According to Technology Business Research, Inc.’s (TBR) Carrier Cloud Market Forecast 2017-2022, total Cloud as a Service revenue from the telecom market rose an estimated 13.5% year-to-year to $6.5 billion in 2017, driven by portfolio and geographic expansion. However, TBR projects revenue growth will decelerate to an 8.8% CAGR through 2022 as webscale providers become more dominant in the market. Though carriers have launched new native public cloud platforms over the past several years, such as Orange’s Flexible Engine and Deutsche Telekom’s Open Telekom Cloud, these offerings have not been able to slow customer demand for webscale solutions from providers such as Amazon Web Services, Microsoft and Google that are becoming staple services for businesses.

“Carrier cloud providers will emphasize hybrid and multicloud solutions over the next five years as customers look for integrated suites and ties to existing network and IT assets,” said TBR Analyst Steve Vachon. “Carriers are focused on fostering deeper interoperability and accessibility to webscale solutions to support hybrid and multicloud environments and bolster revenue from value-added services as well as from network platforms such as SD-WAN and IP-VPN.”

TBR’s market forecast also examines how carriers are integrating emerging technologies to enhance their cloud portfolios. Total other cloud (which includes SaaS, PaaS and BPaaS) revenue from the telecom market increased an estimated 16.2% year-to-year to $2.2 billion in 2017, driven by the adoption of services including unified communications, CRM and office productivity solutions. These workloads will become more deeply integrated with artificial intelligence and analytics capabilities over the next several years, which will create new cross-selling opportunities for carriers. Carriers are also integrating NFV and SDN technologies to enhance their enterprise solutions, enabling operators to offer a more agile cloud portfolio that can be delivered with greater quality of service to customers on demand.

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.

Hybrid, multicloud, reunited partners featured in TBR’s upcoming cloud & software research

Going into the second half of 2018, TBR’s Cloud and Software Practice anticipates providing additional research around a few issues that have been top of mind among TBR’s clients and our analysts. The common theme across the three issues highlighted in this report is the growing focus on how cloud and software are jointly being used to deliver real solutions for customers. Highlights of the research center on how establishing hybrid capabilities is a primary challenge for enterprises and a growth driver for vendors, from the initial design and integration through to the ongoing management and optimization of the increasingly complex environments. Additionally, offering multicloud is the first priority for customers and creates opportunities for vendors other than category leaders such as Amazon Web Services (AWS) and Salesforce. Lastly, partnerships that were previously threatened by cloud are now realigning for new opportunities created by on-premises hybrid delivery and solution bundling. Look for more insight into these topics in our upcoming research.

Hybrid enablement is an increasingly critical predictor of vendor success
There is no question that cloud and software solutions are being increasingly deployed into hybrid environments and have been for some time now. The real customer pain point in regard to a truly hybrid environment — one or more cloud assets integrated with one or more on-premises assets for the seamless flow and sharing of data — is around enabling each of the solutions to fit into the environment and integrate with the others for optimal utilization.

Cloud and software vendors alike are investing to capitalize on this growing opportunity around empowering enterprise IT departments to integrate sprawling environments on their own, with the help of automated tools and platforms. Salesforce’s acquisition of MuleSoft is one of the more noteworthy examples as it has vast implications for both Salesforce and the market. This is because MuleSoft offers licenses alongside its subscription offerings despite Salesforce’s “No software” mantra, and because many organizations utilize one or more of Salesforce’s cloud offerings, which will soon feature and/or be integrated with Salesforce Integration Cloud, a solution that will be based on MuleSoft’s well-known Integration Platform as a Service (iPaaS).

Software vendors are making similar investments, such as Red Hat announcing its own iPaaS — Fuse Online — and VMware’s continued updates to the vRealize cloud management suite. Additionally, many continue to expand their partnerships with cloud vendors and systems integrators to improve their hybrid technology and hybrid enablement portfolios, increasingly going to market with a software-led services approach.
Cloud brokerage and hybrid integration pure plays continue to generate buzz as well, providing attractive solutions for enterprise IT departments struggling to keep pace with integrations, orchestration and skill sets. We expect some of these vendors to be acquired over the next couple of years as cloud and software vendors look to quickly build out their hybrid integration and enablement tool sets.

Consolidation around leading PaaS & IaaS vendors does not reduce competition
The public cloud IaaS market, substantially made up of businesses that complement scalable infrastructure with general purpose PaaS, has consolidated around the four leading U.S.-based cloud vendors — AWS, Microsoft, IBM and Google — and one international vendor, Alibaba, which has been successful in the highly exclusive Chinese market and is diligently focused on effectively competing with these U.S.-based vendors on an international stage.

Among the insights gleaned from TBR’s upcoming Cloud Infrastructure & Platforms Customer Research, it is becoming evident that even in discrete use cases and niche industries, the general-purpose nature of these vendors has enabled them to be considered across needs. Many customers agree that there is a delicate equilibrium yet to be found in first balancing on-premises and cloud deployments, and then balancing vendor lock-in concerns, usage volume discounts, vendor specializations and multivendor environment complexity. TBR will closely watch and assess how each vendor overcomes its perceived downfalls and positions itself to help customers best weigh the benefits and drawbacks of increasing cloud adoption.

In particular, customers almost universally recognize Google Cloud as the third option behind AWS and Microsoft Azure, citing TensorFlow as a key technology that will drive Google’s growth into a more prominent cloud vendor, but in the same breath identify that Google’s enterprise vision has not matured from “talk the talk,” particularly outside of the executive office of Google Cloud CEO Diane Greene. Meanwhile, Azure has become a viable alternative to AWS for many customers that note general ubiquity in each vendor’s ability to support various enterprise needs. TBR expects the closeness in AWS and Azure functionality, strained by the maturation of Google’s enterprise vision and Alibaba’s increasingly competitive entry into Western markets, will cause the converging market to grow quickly around this competition.

Partnerships are being both stressed and created as the cloud market evolves
The increased focus on cloud delivery methods has certainly stressed many long-held partnerships between traditional hardware, software and service vendors. The model of solution creation, distribution, installation and support was one that had multiple participants in the traditional model but became more focused on the cloud provider in the transition to cloud. Cloud is also an opportunity for new or nascent vendors to take share in markets such as business applications, where SAP and Oracle have been dominant. SaaS vendors fill portfolio gaps and augment vendor offerings for verticalized use cases, enabling legacy players such as Microsoft and SAP to adapt and compete with born-on-the-cloud providers. An example of this shift in vendor landscapes comes with the release of Dynamics 365 Business Central, which will help Microsoft gain footing over SAP in the SMB space for business applications and provide new opportunity for Microsoft’s SaaS partners. However, as each vendor expands its cloud portfolio, its respective ecosystem will be required to adapt. SAP’s acquisition of CallidusCloud will improve the vendor’s position in the cloud front-office space, but it also places SAP in direct competition with its ecosystem of Configure, Price, Quote (CPQ) providers. Now more than ever, the market will see vendor shares susceptible to ongoing changes as the market for core business applications remains relatively immature for cloud.

Hardware and services partners were previously hard hit in the transition to cloud but will have more opportunities with a growing mix of public and private cloud options becoming available. Microsoft will continue to leverage hardware and services partners to deliver and implement its hosted private cloud, Azure Stack, which has already doubled its geographical reach in recent months. This new opportunity for longstanding hardware partners such as Dell EMC and Hewlett Packard Enterprise to collaborate in delivering Microsoft’s Azure Stack offering does little to offset the erosion those vendors have seen as Microsoft built out its own Azure public cloud offerings, reducing customer demand for hardware.

Note: TBR provides extensive, sustained coverage of the strategies and select performance metrics of all the vendors mentioned above, as well as their competitors and key technology partners. Contact the authors for additional details.

By Allan Krans, Practice Manager and Principal Analyst; Cassandra Mooshian, Senior Analyst; Meaghan McGrath, Senior Analyst; and Jack McElwee, Research Analyst