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

Jennifer Adams

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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ForecastView Meets Business Technology

Jennifer Adams

Welcome to my blog!

I joined Forrester recently as a senior forecast analyst on the ForecastView team focusing on business technology (BT) topics. What is ForecastView you ask? It’s a Forrester product that puts the numbers around our research reports by publishing a five-year quantitative outlook. To learn how our forecasts can help you with your investment decisions, read our ForecastView overview.

Our BT forecast team takes a look at cloud, security, IoT, business intelligence, marketing ad technology, Big Data, and other hot topics in the BT space. We launched our ForecastView BT bundle in 2015. In case you missed it, our three 2015 forecasts examined eCommerce platforms, cloud security, and API management. Some highlights:

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IBM Opens Its Global Watson IoT Headquarters In Munich

Dan Bieler

IBM opened its global Watson Internet of Things (IoT) headquarters in Munich this week. It is hardly unusual for this quintessential global business to open research centers on a global scale. But the decision to move the HQ for one of the most dynamic areas of the digital transformation arena to Munich is noteworthy for several reasons. The move underlines that:

  • IoT has a very strong B2B component. Yes, IoT will play a role in consumer segments such as the connected home. But connectivity limitations and costs, compliance, and security will put many IoT ambitions in the consumer space to rest. The real action will be in the B2B space, where IoT will be elemental to drive activities like predictive maintenance, fleet management, traffic management, supply chain management, and order processing. Forrester expects the market size for B2B eCommerce, of which IoT is a subset, to be about twice that of B2C by 2020.
  • IoT and big data are closely intertwined. The real value of IoT solutions will not come from the hardware components of connected assets but from the data they generate and consume. In order to manage and make sense of the data that connected assets generate, cognitive systems and machine learning will play a fundamental role for the evolution of IoT. “Employing” Watson in the IoT context elevates IBM’s role in the IoT market significantly.
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Enterprise And Midsize Customer Service Solutions - What's The Difference?

Kate Leggett

When looking to purchase a customer service solution, buyers have to remember that more features is not better; many times more is just more. In fact, when you don't need or can't use extra features, more is sometimes worse.

With this in mind, we see that customer service solutions fall into two primary groups to choose from: 

  • Customer service solutions for enterprise organizations. Customer service vendors focused on large organizations — organizations with typically 1,000 or more agents who are primarily phone agents — offer robust case management, agent guidance in addition to CTI integration, reporting, analytics and data management capabilities. These vendor solutions can scale to serve very large agent populations, in the tens of thousands or higher. These products have been traditionally been sold as on-premise products, but many deployments are now shifting to the cloud. Many vendors offer deeply vertical solutions, and have pre- and post-sale company resources dedicated to support their vertical products. Vendors in this category also target midsize organizations, offering prepackaged versions of their solutions with more affordable price tags. The leading vendors in this category are highlighted our most recent Customer Service Wave for enterprise organizations.
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