Seeking Alpha

David H. Deans'  Instablog

David H. Deans
Send Message
Technology, Media, Telecom analyst, consultant, columnist @dhdeans
My company:
GeoActive Group
My blog:
Transmedia Newswire
View David H. Deans' Instablogs on:
  • IoT 2014: Tiny Sensors, Open APIs And Hybrid Clouds

    Throughout 2013 most senior executives have been exposed to the key emerging business technology trends. During 2014, you're going to see and hear a lot more about the Internet of Things (IoT) -- and the impact will reach just about every industry and all the major markets within the Global Networked Economy.

    Let's consider the forward-looking outlook, from a leading industry analyst. International Data Corporation (IDC) recently offered their predictions for the coming year.

    "The 3rd Platform's impact was felt throughout the ICT industry in 2013 as a high-profile CEO lost his job, a major IT player went private, numerous vendors endured cash cow stagnation, and billion-dollar bets were placed on new technologies," said Frank Gens, Senior Vice President and Chief Analyst at IDC.

    In 2014, IDC believes that we'll see big investments to scale up cloud services, mobile internet, big data capabilities, and efforts to attract the independent developers who will create the solutions driving the next two decades of IT spending. Therefore, collaborative development will be a paramount ingredient of successful strategies.

    A Summary IDC Predictions for 2014

    Worldwide IT spending will grow 5 percent year-over-year to $2.1 trillion in 2014. Sales of smartphones and tablets will continue at the same pace -- while outlays for servers, storage, networks, software, and services will fare better than in 2013.

    Meanwhile, the PC market will remain under stress, with worldwide revenues down -6 percent year-over-year. Emerging markets will return to double-digit growth of 10 percent, driving nearly $740 billion or 35 percent of worldwide IT revenues and, for the first time, more than 60 percent of worldwide IT spending growth.

    In the BRIC countries, IT spending will grow by 13 percent year-over-year, led by an economic recovery in China. Furthermore, China's IT spending growth will match that of the United States, even though the Chinese market is only one third the size of the U.S. market. Elsewhere, emerging market growth will be uneven.

    Regarding the cloud phenomenon, value will start to migrate up the stack -- from infrastructure as a service (IaaS) to platform as a service (PaaS) and from generic PaaS to data-optimized PaaS. The latter will be most evident as Amazon Web Services rolls out many platform-as-a-service offerings for developers and higher value services for businesses.

    This hybrid cloud trend will force incumbent IT suppliers to urgently reconfigure themselves to fight for a position in the evolving marketplace. Joining them will be Google, which will realize that it's at risk of being marginalized in a market where it should be vying for leadership.

    The mobile device onslaught will continue in 2014 with sales of media tablets growing by 18 percent and smartphones by 12 percent. The Android community will maintain its volume advantage. But Apple will hold on to its higher average selling price and an established ecosystem of software apps.

    Google Play (Android) app downloads and revenues will be making dramatic gains and the app ecosystem value gap will be significantly narrowed in 2014. And, Microsoft will likely try to double mobile developer interest in Windows.

    Cloud spending, including cloud services and the technology to enable these services, will surge by 25 percent in 2014 -- reaching over $100 billion. IDC expects to see a dramatic increase in the number of data centers as cloud players race to achieve global scale.

    This will be accompanied by a similar expansion in the variety of workload-specialized cloud infrastructure services, leading to new forms of differentiation among cloud service providers. Moreover, there will be competition for developers that can create the best cloud-based applications and solutions.

    Spending on big data technologies and services will grow by 30 percent in 2014, surpassing $14 billion as demand for big data analytics skills continues to outstrip supply. Here the race will be on to develop data-optimized cloud platforms, capable of leveraging high volumes of data and/or real-time data streams.

    Social technologies will become increasingly integrated into existing enterprise applications over the next 12-18 months. In addition to being a strategic component in virtually all customer engagement and marketing strategies, data from social applications will feed the product and service development process.

    As cloud-dedicated data centers grow in number and importance, the market for server, storage, and networking components will increasingly be driven by cloud service providers, who have traditionally favored highly componentized and commoditized designs.

    IDC predicts that most of these industry platform players will not reinvent the cloud underpinnings they need, but will build on top Amazon, Microsoft, IBM, Salesforce, and other platforms. In 2014, it will be critically important for these IT leaders to find these emerging industry platform players and win their business.

    Finally, growth will continue to expand beyond smartphones, tablets, and PCs in 2014 to the Internet of Things. IDC expects to see new industry partnerships to emerge as traditional IT vendors accelerate their partnerships with global telecom service providers and semiconductor vendors.

    This kind of creative collaboration and coordination will be necessary to reach the 30 billion autonomously connected end points and $8.9 trillion in revenues that IDC believes the IoT will generate by 2020 -- as the trend unites tiny sensors, open APIs and hybrid cloud services.

    Jan 11 4:22 PM | Link | Comment!
  • Remaining Upside Opportunities For Pay-TV Services

    The legacy pay-TV services market can now be divided into two distinct groups. First, those regions where the market is fully saturated and customer churn is the primary activity. Second, the developing nations where local pay-TV providers can still find new customers willing and able to pay for their offerings.

    According to the latest market study by ABI Research, the global pay-TV market added nearly 47 million new customers in 2012 -- reaching a total of 864 million subscribers.

    "The growth in satellite, cable, and IPTV markets was strong, although digital terrestrial TV growth was flat in 2012. We expect that the pay-TV market will continue to grow in 2013 to reach 907 million subscribers," said Jake Saunders, VP and practice director at ABI Research.

    The worldwide IPTV subscriber base has been increasing over the past few years. In 2013, the global IPTV subscriber base is expected to add over 9 million subscribers to reach 79.3 million.

    More than half of the net addition of new subscribers will be from the Asia-Pacific region -- China alone is expected to add more than 3 million pay-TV subscribers.

    The cable TV market will remain strong, especially due to the growth in Asian and Pacific markets, such as China and India. Across the globe, cable TV will maintain the largest market share of the overall pay-TV market in 2013.

    However, the continued growth of lower cost IPTV service offerings will cause the cable TV market share to decline to 65.4 percent in 2013 from 66.2 percent in 2012.

    So, where are the remaining untapped upside opportunities?

    At present, only 33 percent of worldwide pay-TV subscribers are using High Definition (NYSE:HD) TV services. HDTV penetration is the highest in North America (84 percent), followed by Western Europe (76 percent) -- these are the saturated markets.

    HD adoption is one area of upside growth potential for the legacy pay-TV sector. The addition of an attractively priced OTT-like video-on-demand (NASDAQ:VOD) steaming service is another potential opportunity.

    As many of the countries in different regions are trying to switch over to digital TV transmission, the number of HD channels and packages offered by the pay-TV operators will likely increase.

    Worldwide HD service adoption is expected to grow at a slow but consistent pace. ABI has forecast that 38 percent of global pay-TV subscribers will be using some HDTV services in 2013.

    I believe that the big unknown is the ongoing introduction of video streaming services into the saturated pay-TV markets. Will the incumbent pay-TV service providers move more aggressively into this space, or will they continue to move cautiously?

    The fear of revenue cannibalization will immobilize some service providers from expanding beyond their traditional offerings, while others will boldly seek a solution to those challenges and embrace the apparent trend towards IP-based fully on-demand multi-screen video entertainment.

    Dec 25 1:16 PM | Link | Comment!
  • Technology, Media and Telecommunications (TMT) Outlook 2011
    Informa Telecoms & Media recently revealed the top ten anticipated trends during 2011 -- for the telecoms and media sectors -- at its annual Industry Outlook event in London, England.

    "We have identified the key trends across our research areas that we think will shape the converging global telecoms and media markets over the next 12 months. In addition, our annual industry survey gave us some insight into how the industry feels about the issues most likely to dominate the landscape in 2011," says Mark Newman, Chief Research Officer.

    1. Operators choose a smartphone platform strategy
    The popularity of smartphone devices has led mobile operators, developers and handset manufacturers alike to re-focus on this device. Operators are trying to decide whether to build their own platforms or accept that the Internet and OS players will dominate. The outcome of this decision will determine who are the winners and losers.

    2. Democratization of mobile smartphones
    In 2010, smartphone adoption in the lower price tiers grew data revenues from a broader user base -- this trend will accelerate in 2011. Some vendors will further reduce the cost of smartphones, to create devices for the mass-market -- a strategy that is welcomed by the mobile operators. Informa expects 342 million smartphones to be sold worldwide in 2011 -- equating to 27 percent of total handsets sold.

    3. Strategic partnerships between operators and Internet players
    The successful mobile operators will be those that have strategic partnerships with key Internet players, and not the ones who want to block these companies from accessing their customers. While operators look to develop these relationships, they too are being forced to partner with each other.

    4. Operators to focus on vertical markets
    Operators have considered the mobile enterprise opportunity for many years. In 2011, their focus is machine-to-machine (M2M) rather than voice and SMS. The healthcare sector is where they're still in the early stages of learning the best opportunities. They will need to do the same for each vertical sector, to decide where to develop applications.

    5. Web 2.0 will provide opportunities for growth
    Mobile operators must harness IM and social networking to increase the use of their traditional messaging services, and to generate additional revenues. Mobile operators will need to maintain a primary role in how their subscribers access IM and social apps. This means implementing network-based address book services -- which will be the starting point.

    6. Operators must catch up in the superfast broadband race
    So far, leaders of superfast broadband have been the cable operators -- telecoms operators must move in 2011. Those with fiber need to be assertive -- to convince consumers and service providers to adopt their new networks. Low prices and attractive bundles, rather than speeds, will be vital. Operators will likely also rekindle their interest in low-cost VDSL.

    7. The battle for the connected home continues
    Connected TVs will overtake games consoles as the dominant in-home device, at least in terms of units sold. It's unclear how many people will use the online video services. By the end of 2011, Informa believes that we'll know whether over-the top services are game-changers for the pay-TV industry.

    8. Cable TV declines in Western Europe
    Operators struggle to convert European cable homes from analog to digital, and they're competing to upsell their subscribers to service bundles -- triple-play or quad-play. Informa predicts that the number of Western European cable TV subscribers will fall from 51 million in 2006 to 48 million in 2015 -- or from 31 percent of households to 26 percent.

    9. LTE spectrum fragmentation will undermine its global potential
    LTE's adaptability may undermine its global potential. The failure to identify globally harmonized spectrum for next-generation 4G services means that LTE is being required to provide operators with multiple options -- in terms of channel size and spectrum band, as well as a choice between FDD and TDD modes.

    10. Network rationalization continues
    2010 was a year of network rationalization -- 2011 looks to be no different. When it's unsustainable for small carriers to deploy new networks, market consolidation will follow, and so too will network rationalization. Informa expects more network sharing -- as carriers come under increasing pressure to universalize their networks and reach the underserved.

    More...
    Jan 03 12:43 PM | Link | Comment!
Full index of posts »
Latest Followers

StockTalks

More »
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.