Refinance And Refocus: Verizon, CenturyLink and Windstream Enter 2016 With Leaner Strategies

Sophia Vargas

While mergers and acquisitions have proliferated in the colocation industry - each positioned to increase geographic coverage or higher order capabilities – in the last 6 months, a new trend has emerged: strategic divestitures, most prominently observed in the telecommunications space. Following the complete cycle, in 2010 and 2011, Centurylink, Verizon and Windstream made strategic acquisitions to increase their data center services portfolios, acquiring Savvis, Terremark and Hosting Solutions respectively. 5 years later, each firm has announced its intent to sell of some or all of these assets. 

So, what went wrong?

While telcos had arguably given birth to colocation, the fact remains that network and carrier providers have had troubling competing against pure play colocation and data center service providers like Equinix and Digital Realty. In the past, telecom providers described colocation and data center services as a way to enrich existing customer contracts. In an interesting twist, these new intended divestitures have been presented as a way to refinance core assets, focus on what drives their business, and move away from standardized services with high overhead and lower margins.  While vendors may keep their skeletons in the closet, I had some speculation as to what might be fueling these decisions:

-          Buyers want carrier density and diversity.  Even though all of these facilities support multiple connections into other carriers, customers tend to evaluate facilities by connectivity options instead of looking for carriers to provide data center capacity on top of network services. Additionally, many geographically dispersed companies are considering blended IP solutions to improve latency and performance across the globe.

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Is Security FUD delaying your Public Cloud Adoption?

Robert Stroud

Public Cloud continues to emerge 

Whether it’s the growth of service providers transitioning to offer services, the emergence of Containers within Hyperconverged solutions, or the potential emergence of Google succeeding, the public cloud is set for a year of “hyper-growth”!  That said we have to sort through the FUD (Fear, Uncertainty and Doubt), especially in security, to determine the appropriateness of public cloud for your organization.

 

Is the low hanging cloud fruit eaten?

The rush to cloud to date has clearly been within “systems of innovation,” applications geared mostly to customer engagement (so-called “systems of engagement”).  Enterprises leveraging public cloud are looking to get new innovative applications and services rapidly to market. These applications have been primarily driving customer acquisition and then fostering customer loyalty. These initiatives represent just the tip of the iceberg, the real opportunity is in moving “systems of record”, or everyday work to the public cloud.

One example is GE which is in the process of moving 9,000 apps to the public cloud.  As stated in the GE plan, the criteria is to select target applications based on the understanding of the risk associated.  This posture allows GE to develop their cloud skills based on their learning with “low risk” applications.

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Forrester's Top Trends For Customer Service In 2016

Kate Leggett

It’s a no-brainer that good customer service experiences boost satisfaction, loyalty, and can influence top line revenue. Good service — whether it's to answer a customer's question prior to purchase, or help a customer resolve an issue post-purchase should be easy, effective, and strive to create an emotional bond between the customer and the company. Here are 5 top trends - out of a total of 10 - that I am keeping my eye on. My full report highlighting all trends can be found here:

Trend 1: Companies Will Make Self Service Easier. In 2015, we found that web and mobile self-service interactions exceeded interactions over live-assist channels, which are increasingly used by customers as escalation paths to answer harder questions whose answers they can’t find online. In 2016, customer service organizations will make self-service easier for customers to use by shoring up its foundations and solidifying their knowledge-management strategy. They will start to explore virtual agents and communities to extend the reach of curated content. They will start embedding knowledge into devices — like Xerox does with its printers — or delivering it via wearables to a remote service technician.

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Apple's Real Innovation And Responsibility Is The App Store

Ted Schadler

Apple announced today that it sold $144 million in its App Store on January 1st and more than $20 billion in 2015. Wow. This from a company that launched $0.99 songs in 2001 on iTunes and didn't even consider apps to be useful when it introduced the iPhone in 2007. From public filings, Apple App Store net revenues (the 30% that Apple makes on digital media and app sales plus some other bits and pieces) grew from nothing in 2000 to $19,909 in fiscal year 2015 (see Figure 1). As you can see, growth is slowing down (though from a large base).

Figure 1 Apple's Reported App Store Net Sales. Source: Apple 10-K Filings

This App Store revenue breaks down into:

  • Media, including music, video, and books. Apple launched iTunes (the original App Store) in 2001 with the blessing of the music industry. For the first time, publishers had a paid outlet for digital music. It's only grown from there.
  • Apps. I remember vividly when my neighbor John told me he was coding apps on his nights and weekends (it was a brunch with snow outside in early 2009). That phenomenon -- developers flocking to this new computer opened my eyes to the power of smartphones. Apps and in-store purchases are more than half of App Store revenues.
  • In-app purchases. Apple keeps 30 cents for every dollar spent in an app, too. (It's why Amazon won't let you buy books in the Kindle app -- it doesn't want to give Apple that 30 cents.) 
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Global Tech Market Will Continue To Grow At 4%-5% Rates In 2016 And 2017

Andrew Bartels

Forrester has just published our global tech market report for 2016 and 2017 (see “The Global Tech Market Outlook For 2016 To 2017- The Five Themes That Will Define Tech Spending In The Next Two Years”). For the first time, our January 2016 global forecast includes telecommunication services (voice and data, wireline and wireless), which increases the overall size of the global market for tech purchases by business and government by $625 billion to a total of $2.9 trillion in 2016. However, even the addition of telecomm services cannot pull the global tech market out of the 4%-5% growth track, with growth at 4.5% in 2016 and 4.7% in 2017 when measured in exchange-rate-adjusted US dollars.

The five main themes that define the global tech market over the next two years are:

1.       Moderate overall growth remaining below 5%. The global tech market in constant currency terms will continue to grow modestly throughout 2016 and 2017 at 4.5% and 4.7%, respectively. The strong US dollar will persist in 2016, resulting in lower dollar-denominated growth rates. However, we expect the dollar to lose some steam by 2017, so we project 4.9% growth in US dollar terms.

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Three Billion Smartphone Customers Are Ready. Now Go Make Them Successful.

Ted Schadler

If I hear one more story about "the next big thing" only to find it's a niche product like a skateboard or a toy like a consumer drone or a convenience tool like a smartwatch or a fancy way to open a door or detect smoke, I think I'll puke. The last big product innovation was smartphones. And it was a doozy. Most people don't really need another gadget. They need the game-changing gadget they have to do more.

I believe we are still at the beginning the biggest technology-fueled shift we've every seen, the mobile mind shift. A smartphone in the hands over three billion people is a game-changer. But only if we embrace it as a platform to deliver everything someone needs in the mobile moments of their day.

On your smartphone today:

  • Can you always get a great Internet connection . . . you can afford?
  • Can you manage every aspect of your complex digital life?
  • Can you vote?
  • Can you schedule a doctor appointment, renew your dog license, apply for a mortgage, replenish your cupboard, or do your job?
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Why 2016 Will Be The Year Of Digital Signage And Displays

JP Gownder

I've just published a major new report, The Digital Signage And Display Opportunity in 2016. I'll also be holding a webinar on this topic on Tuesday, January 26th, 1-2pm ET USA; it's entitled Screening the World: How Digital Signage, Displays, and Magic Mirrors Drive Business Value. Please register for my webinar here.

Since Forrester was founded in 1983, we've never had a coverage area on digital signage  ̶  until now. Why? In the age of the customer, digital signage and related display technologies are growing rapidly, because:

  • It's now a dynamic, disruptive, interesting technology. Once just a simple, unidirectional, broadcasting mechanism, digital signage now offers an array of new technology features like interactivity, facial recognition, and magic mirrors, and others that can drive valuable business scenarios across any vertical. Digital signage also interacts increasingly with mobility, as more installations allow customers to take what they see on the sign with them on their own smartphones.

  • Regulatory and business requirements drive adoption. The FDA ruled that all QSRs must provide nutritional information on all food and beverages by December 1, 2016. Digital signage solution providers report QSRs as one of the fastest-growing segments of the digital signage market as a result of this ruling to help package nutritional information with dynamic menus. 

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Are providers adapting to managed services for the megaclouds in 2016?

Robert Stroud

“Enterprise-Cloud”, reality or marketing term?

First we need to define what we mean by “enterprise cloud”. For this definition, the minimal criteria set includes: robust security, reliable performance, disaster recovery, growing set of services, constantly investing and a great and growing ecosystem of partners.  Based on this definition (along with the tremendous growth in public cloud), then all of the public cloud leaders are indeed “Enterprise-class”. In short, the term "Enterprise-class" is fundamentally a term targeted to allay the cloud fears of enterprise technology managers.

Providers are adapting to offer managed services for the megaclouds.

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Age Of The Customer Drives Investment In Business Intelligence Tools

In the age of the customer, customer-obsessed firms serious about personalizing customer experience invest in business intelligence (BI) and analytics tools.  Companies collect more and more data on their clients today. BI software is increasingly important to extract information from the raw data, revealing insights. Analytics software tools go beyond traditional reporting and analysis to anticipate customer behavior and provide real-time insights.

In our recently published Business Intelligence And Analytics Software Forecast (Global), 2015 to 2020, we take a more in-depth look at the market’s growth potential. We expect the global BI and analytics software market to grow at a 12% CAGR over the 2015 to 2020 period.

The traditional BI market has matured, but still offers a significant growth opportunity. While business intelligence software is not a new product, Forrester projects robust growth for the solution. As we move into the Internet of Things era, an exponential increase in the number of connected devices will drive demand for BI software tools to understand the information. We expect the BI software market to grow at a 9% CAGR over the forecast period.

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2016 – Hyperconverged Solutions With Containers To Become The “Norm”!

Robert Stroud

Containers are all the rage!

Over the past year Containers such as Docker have generated tremendous interest and uptake among well-known cloud providers, who use them to deliver some of the largest and most popular cloud services and applications. Container adoption is being driven by the promise that containers deliver the ability to “build once and run anywhere", allowing increased server efficiency and scalability for technology managers.

Hyperconvergance growing in adoption

A second trend developing at a similar rate is the adoption of Hyperconverged platforms. Hyperconverged platforms architect compute, storage and network together as a complete system (whether physical or virtual). Blending ease of use, scalability, and integration into easily consumable webscale building blocks which allows infrastructure and operations (I&O) leaders to spend less time engineering and tuning fundamental infrastructure and more time putting capabilities in the hands of their firms' customers.

Hyperconvergance leveraging Containers, the perfect Cloud match

The growth of containers and Hyperconverged solutions with containers is emerging and in 2016 will become commonplace.This combination will yield the most flexible application packaging yet. AWS, CoreOS, Docker, Google, Mesosphere, Red Hat, VMware, and the various OpenStack players will lead the way. Hyperconverged infrastructure will be the foundation because it provides great flexibility with underlying resources in the pool for cloud services.

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