“Curation” – Moving Mass Production to Bespoke-Like Offerings

Once upon a time, the term “curate” was mainly associated with museums.  We pictured curators carefully selecting art or artifacts aligned with a specific theme or idea they were trying to convey in their exhibits – but that idea is changing.

Marketers have adopted the idea of curation to mean tailoring your company’s products, services, or content to appeal to a specific type of customer.

Over the last 10 years, the concept of “curated content” has gained ground everywhere and has become particularly important for vendors in different vertical industries.  For example, fashion houses “curate” their collections to appeal to their type of clientele; retail buyers “curate” their product assortments to appeal to their specific customer base; and IT vendors are getting the message…their customers are looking for IT solutions that work specifically for them, solving their problems and making them more productive.  Business customers are no longer interested in purchasing hardware or software products that are “hard to use” or take a lot of time training employees to use.

I bring this up, because I recently attended an HP media and analyst virtual briefing on their upgraded line of Z Workstations.   HP said they made innovations based on customer insights, addressing key pain points experienced, specifically among “creative” industries, such as architects, designers, engineers and photographers.  According to HP, their creative customers reported looking for improvements in productivity, added flexibility, and upgraded security, all within budgetary constraints. HP’s improvements to the Z line were done to address specific needs for a very specific set of customers, things like upgraded processors, smaller form factors and added security.

I think HP is on the right track. AMI has been talking to small, mid-size and large enterprises (SMLBs) about which PC features are most important to them.   Our worldwide data shows SMLBs in “creative” verticals rank certain features much higher than “non-creative” verticals – things like ultra-thin design, type of processor (e.g., Intel, AMD), durability, lightweight, and multiple USB ports, among others.

With the ever-increasing “connectedness” of social media and the digital transformation within vendors themselves, new ideas like “curating” merchandise and new technologies such as AI will change the marketing narrative from guiding customers to products to customers guiding product offerings.

~ Eileen Zimbler, Vice President

ITaaS – The Next Step Towards the Software-Defined Data Center

Nowadays consumers are moving towards an “Everything-as-a-Service” model and businesses have similar expectations for their IT departments. Hence the advent of “IT-as-a-Service” (ITaaS). Software-Defined Data Center (SDDC) can provide a strategic approach to support the business goals of a firm and provide the speed, agility & elasticity to thrive with digital transformation.

For years businesses have had to adapt to greater competition and changes in the economic purchase cycle. Now organizations are embarking on a path towards digital transformation with an objective of building newer competencies around being more adaptable to an ever-changing landscape as well as becoming more consumer-oriented, cost-effective, aligned to consumer needs, less complex and more efficient. This transformation is vital to counter competition from new sources, small startups, and often from companies born in the cloud. Small startups can create turmoil in the industry thus causing problems to established market leaders.

The above facts are almost universal for all businesses and have always existed for chief experience officers (CXO). But what has changed now is enhanced competition from new sources.

The Software-Defined Data Center (SDDC) – a key tool for Digital Transformation

SDDC can provide a strategic approach to support business goals and provide flexibility to thrive by embracing digital transformation. At the fundamental center of this transformation is the data center which is constantly evolving in an effort to keep up with business objectives.

It’s an accepted fact that the ability to bring new applications and services to market fast is crucial to success in today’s rapidly-moving marketplaces. Consequently, organizations are adopting public cloud services, or implementing hybrid cloud strategies, as they deliver business agility beyond the capacity of internal IT infrastructures. SDDC can support all workloads in a holistic approach optimally across the entire data center. To achieve this, a properly configured SDDC must display the following main principles:

  1. The SDDC must be dynamic and adaptive to respond to changes in resource workload. The adaptability should be automated and built on defined configurations as per the demands of the applications it runs.
  2. It must be ‘intelligent’, eliminate complexity and create elastic computing without direct human intervention.
  3. The SDDC must be robust to compensate for hardware and software problems and continue with the highest level of availability.

Modernize the Data Center

While businesses understand the need to modernize data centers and complete the journey to a hybrid cloud and SDDC, they still face significant challenges.

According to Sanjay Deshmukh, VMware’s vice president of End User Computing – “Apps drive various changes in enterprise infrastructure. Companies born in the cloud can integrate a modern data centers into operations from the beginning. The challenge for most other firms is how to advance the existing infrastructure to take advantage of new cloud-application capabilities without losing critical functionality from the legacy technology on which the business relies.”

Software and Automation

“Modernizing data centers is about altering the organization’s mindset from hardware to software, and embracing automation,” says Sanjay. “Companies mistakenly think they’re automated when they run scripts, but if the hardware changes, the company must then rewrite those scripts. That’s not true automation, which means delegating to the software.”

For modernizing, change is not always limited to technology; it also asks for changes to staff roles & the policies needed to accomplish work efficiently. In many cases, that means updating technologies developed over years specific to the business and have been working reliably.

Bottom-Line Savings and Top-Line Growth

Immediate benefits of modernization may be difficult to demonstrate to top management. An SDDC model delivers ROI / cost-savings through automation, reduced labor costs, improved security, and simplified IT management, but these savings are not visible in the short term and will take time to seen in the bottom-line.

There are immediate bottom-line savings, but significant top-line value, too, e.g. driving new business models. Once a business changes to SDDC, it is far more agile and able to rapidly respond to business needs.

Faster agility increases go-to-market strategies and drives innovation. New apps and services can be quickly developed, tested and improved through accelerated iteration. Also, modern data centers enable companies to scale up to meet demand and scale down when necessary.

Businesses with modernized data centers save money, innovate better and react to market changes faster. Other businesses innovate slowly and spend more time & money attending to hardware infrastructure issues & repairs.

It is better for companies to modernize data centers focusing on automating manual IT, modernizing infrastructure with virtualization software across the entire data center stack, focusing on unified management and laying a foundation for running both traditional and modern cloud-native applications.

Conclusion

Utilizing SDDC to create IT as a Service provides a strategic roadmap for IT leadership. It sets the basic principle on how a data center needs to evolve; it creates an evolutionary path for the data center. SDDC is a strategic approach to ensure the data center supports business goals and provides the flexibility required to enable businesses to embrace the digital transformation and thrive.

~Subrata Sarkar, Senior Research Analyst

Augmented Reality the Next Step in Product Design and Manufacturing

Augmented reality (AR) is a type of interactive, reality-based display environment that takes the capabilities of computer generated display, sound, text, and effects to enhance the user’s real-world experience. Basically, it overlays 3D graphics on real-world surroundings using devices like mobile, tablets, or smart-glasses.

AR was supposed to transform the consumer industry but could not live up to its expectations. Even the Pokémon GO craze faded away after few months. Interestingly, AR in the B2B world has far better news. A recent study found that one out of three manufacturers expect to adopt virtual reality (VR) or AR technologies by 2018. In hindsight, this makes perfect sense because it is easier to find business uses for AR than consumer ones.

Let’s look at consumer versus business uses for AR. Does the average consumer really need to see restaurant menus or apartment listings while walking down the street?  However, a technician who needs to fix a jet engine in 30 minutes or less can benefit greatly from a hands-free way to identify potential issues and their fixes.

AR in Product Design:
Driven by extreme consumerism, products and services for consumer and commercial customers are going through massive changes. This is affecting the ecosystem of designing and delivering smarter products and services. As a result, not only products but also the tools we use to design those products are evolving.

For example, an engineer is designing the interiors of a rocket. Augmented reality tools will let that engineer sit inside that design while creating it, which quite literally sounds like a scene from a Marvel’s Iron Man movie. Designers are constantly looking into leveraging AR technology to visualize various prototypes and hypotheses by overlaying virtual design elements onto a real environment.

AR can be used to perform post design checks as well. Designers at Volkswagen use AR to overlay a CAD model of a car on top of a real car to check anomalies between virtual and physical designs. Also, engineers no longer need to compare each 2D drawing with a prototype which shortens the product development cycle.

Apart from improving quality of a product, AR can be used to design the next generation of products. Once AR is out in the field, all the embedded sensors can collect various data points that can be analyzed to see how users interact with these products under a range of real-world conditions. The results can appear in AR while designing the product and suggest improvements based on collected data.

AR in Manufacturing:
AR in manufacturing can be divided into two logical sections: Assembly and Training.

Assembly:
Initially, multiple workers spent long hours to complete a single product. Henry Ford came along and changed everything with assembly line. The speed of production increased dramatically with the concept of the conveyor line. Now, in many instances, robots are replacing humans but there are still some tasks which robots cannot handle. Augmented reality will provide these factory workers with a visual display of the parts and instructions necessary for assembly. This eliminates the need to look at blueprints on laptops or hard copy, thus saving time and reducing errors. For example, Boeing currently uses AR glasses to guide technicians as they wire hundreds of planes a year. As a result, Boeing has cut production time by 25% and lowered error rates to nearly zero.

Training:
Product lifecycles are getting shorter and companies are expected to continuously update and upgrade product designs. As the product design changes the manufacturing and/or assembling process also changes. AR applications can be used to train the new employees or to provide new instructions to existing employees. AR combined with voice search allows employees to solve their questions on the go. AR training in production helps to prevent failures and reduces the training time for new workers. It also increases the quality of work as employees have all the necessary information available instantly with visual directions to complete the task.

The adoption of Augmented Reality is essential to drive growth of industry 4.0. The potential of AR tools is extensive in manufacturing and product design as it can be applied at every stage of the product development life-cycle from design to delivery. The technology is cost beneficial and scalable and has a huge potential in the B2B market.

~ Ankit Mehta, Associate

Travel, Expense, and Invoice Management Automation Boosting Business Performance

Managing expenses and invoices is an inescapable part of doing business. There is simply no way around it. But, firms have a choice as to how they track and manage their spending. They can do it the old-school way—updating countless spreadsheets, tracking and filing paper work (invoices and receipts), and running around for signatures. Or, they can leave the cumbersome processes behind and opt for an automated travel, expense (T&E), and invoice solution.

The digital transformation is rendering traditional methods obsolete, and organizations are increasingly automating business functions such as expense and invoicing to improve efficiencies and boost productivity. Small and mid-sized business with 1-999 employees (SMBs) are beginning to catch on. According to AMI’s Global Market Sizing Model, worldwide SMB spending on T&E and invoice solutions is expected to reach nearly $4.7 Billion by 2021. This represents an 18.6% compounded annual growth rate (CAGR) from 2017. Cloud-based solutions are outpacing their on-premise counterparts with spending on SaaS T&E and invoice spend growing faster than 23% year over year through 2021.

There are dozens of brands to choose from including SAP Concur, Xero, MS Dynamics and Zoho to name a few. A top notch, comprehensive solution is one that offers, but is not limited to the following features.

  • Analytical tools for better tracking of data on spending
  • Auto-populate of expense reports
  • Receipt capture via mobile app
  • Flagging of non-qualified expenses
  • Integration with traditional Accounting/Finance/ERP software (i.e. QuickBooks, SAP ERP)
  • Integration with corporate credit cards
  • Travel and hotel booking in a user-friendly environment

Technology solutions really shine when they enable businesses to tackle key challenges and automated T&E and invoicing is a prime example of a software solution that does just that. Through its conversations with SMBs, AMI-Partners has found that companies using a well-rounded T&E and invoice solution benefit as they are able to:

  • Save time and money
  • Increase employee satisfaction
  • Improve employee and company compliance
  • Gain better visibility into spending and cashflow

These benefits tie together and are reinforced by one another.  For example, employees using a T&E application spend less time submitting expense reports which boosts employee satisfaction. Happy employees are more likely to use the application, which improves compliance. Since more information is captured, financial decision makers have better visibility into data on company spending, which they can more readily analyze. Finally, improved visibility helps firms to gain financially as it allows them to uncover cost saving opportunities.

Ultimately, a well-integrated T&E and invoice solution empowers firms to focus on overarching goals such as customer acquisition and business expansion.  Automation gives decision makers a clear picture of how money is flowing through the organization while giving back some of that ever-precious resource…time.

To learn more about how businesses are adopting automated solutions such as T&E and invoicing visit www.ami-partners.com or drop us a line at ask_ami@ami-partners.com

~ Joseph Bertran, Associate Director

The Evolution of Business Analytics: From Reactive to Proactive

Business analytics — Boy have things changed!  In the past static reports were all that we had to use now there are interactive dashboards that allow users to dig deeper into their data and utilize it while it’s still current.

Forecasting Made Easy

Gone are the days when forecasting was done with crystal balls. People are using “intelligence” in their “business”. Business forecasting has seen a tremendous shift in methodologies from gut instinct to statistical forecasting and demand modeling for example.

No matter what you’re trying to achieve, either estimating future monthly sales or optimiz-ing your supply chain, forecasting is all about using existing data to predict the future. To accomplish this, very large amounts of data must be processed quickly and efficiently. Nobody can beat a machine when it comes to that. By using this processing, improved data access is possible and previously hidden insights can be uncovered.

Advanced analytics revolves around predicting trends and future possibilities and making recommendations based on potential outcomes. Businesses are using sophisticated tools like simulation, machine learning and data mining to identify trends and patterns in structured as well as unstructured data. There are numerous potential use cases for machine learning- risk detection, behavioral analysis, customer support, image recognition, text analysis, and much more.

Machine learning and Artificial Intelligence (AI) will make estimates of future behavior just as accessible as historical data.

Outlier identification simplified

Machine learning enables businesses to find anomalies as they occur, and this real-time identifi-cation lets them take immediate action. This can be used in cases where real-time information can drive valuable responses, such as in fraud detection & surveillance, allowing fraud to be identified immediately and an alert sent to the customer. Real-time information processing can also assist image & voice recognition, and product recommendations.

To take it a step further, businesses should consider feeding this information into their business intelligence system (BI) to aid in policy exchange and product development.

Machine learning and AI capabilities, when combined, allow businesses an opportunity to catch inconsistencies in real time and correct them before they can become problems and or issues.

Implications of Machine Learning

In the case of machine learning, you get what you give. Machine learning is based on algorithms that learn from data and is dependent on relevant and reliable data. In other words, we are teaching a program how we make decisions. The value extracted from machine learning depends greatly on the quality of algorithms, reliable data, and the degree to which these systems process structured and unstructured data. So, businesses must analyze all available data for quality.

Organizations should have a clear goal in mind. What are the questions that need to be answered and what data is needed to answer those questions?

The adoption of machine learning enabled AI applications allows faster decisions and more accurate insights. This is useful for product development, supply chain, logistics, customer relationship management, marketing to name a few. In a hyper competitive world, businesses that can realize value from their data assets using advanced analytics such as machine learning and artificial intelligence will be ahead of the competition.

~Kunika Sodhi, Associate

Artificial Intelligence is Modernizing the Future Workspace

Technology and data administration is maneuvering across vertical borders and previously isolated sectors are being integrated and creating new business opportunities. By capturing the diverse needs and expectations of today’s multi-demographic workforce, these connected technologies will help businesses of all sizes to plan and invest in their future workplace strategy.

“The modern workplace starts with empowering everyone in organizations to be more creative, collaborative and ultimately apply technology to help shape the culture of work” – Microsoft

Artificial Intelligence (AI) is among the most significant chapters in this great growth story. With a CAGR of over 50% through 2021, AI is developing into one of the key forces that in changing the outlook of the workplace, and will force many of today’s workplace habits, tools and environments to become archaic over the next 4-5 years.

With the red-carpet being rolled out for AI, we are starting to see the rise of a more personalized user experience which is vigorously adapting to capture and translate content in terms of relevance and preference. These technologies, when unified with cyber “customer service” agents, speech recognition interfaces and wearables, are leading to a more unified and collaborative experience.

A leading telecom, MNC having operations in India, is using AI to collect and crunch data from a variety of sources to find people with the right talents and the experience to match. Their HR system can also analyze workers’ email to identify job sentiments and triggers appropriate action for management. Similar cases have been seen in multiple domains where the use of chatbots and robotics have reduced human interaction from tactical jobs to more thinking roles.

The growing importance of AI in the workspace has triggered Google to transform its Translate Service to an AI model. In addition, Cisco and Microsoft have been advancing ways AI can impact everyday work life, from helping to connect users in virtual meetings to acting as an active listening agent that provides additional context regarding topics being discussed.

While countries such as U.S., China, Germany and South Korea have been making strong investments in developing their AI technologies, India too has picked pace in advancing its technologies. The Indian government’s push for ‘Make in India’ and ‘Start-up India’ has given a much-needed lift to the AI ecosystem. With tech start-up driving the way, India today has over 160 start-ups who are purely focused on AI and have raised over $30 million in venture investments to build their AI programs.

We are only at the beginning of this digital journey where AI and chatbots transform all aspects of the workspace including collaboration, communication, cross-function (HR, Production etc. processes), mobility, cloud, and security. We are seeing a huge migration of business processes becoming AI enabled and driving the business world forward.

However, the eminent fear that the advent and incorporation of AI will replace the human race with robots still looms overhead. Another way of looking at AI is to transpose the letters. “IA = Intelligence Assistance”. This would emphasize the fact that AI is only assisting the individual worker to work smarter and not make them less important to the workforce. In summation I would like to suggest that we all enjoy the change and let’s make our workspace a smarter place!

~ Kishalay Choudhury, Director Client Services

Riverbed New Channel Partner Program “Riverbed Rise” – Innovative and In-time Amid Ever-Changing Needs of Consumers

On February 9, 2018 we were invited to an analyst briefing that was hosted by Riverbed. Riverbed is one of the major players in the WAN optimization space with expansion toward software-defined technologies. They focus on providing hybrid networking, SD-WAN, SaaS and infrastructure visibility, working towards building a software-defined architecture for digital business. The purpose of this seminar was to introduce their new partner program Riverbed Rise. With this program they plan to consolidate their contact with partners from “compliance concept” to “capacitating their partners based on performance and value-based awards”.

Riverbed Rise is a clear transition from their traditional program, which is based on competency. This new program is based on the three-key designed operational principles of simplicity, flexibility and profitability. The objective is to expand their customer portfolio by tapping existing and new businesses and simultaneously ensure that partners’ performance is at their peak.

The key focus area of this program is to align Riverbed’s sales strategies to expand their portfolio sales and strengthen their commercial segment. Riverbed has introduced a performance & value-based reward system to acknowledge the performance of all partners with different requirement levels and financial models.

Riverbed Rise a Partners’ Panacea:

  • Riverbed aims to address issues related to new technology adoption and digital transformation of its channel partners through this new program of industry-leading digital performance solutions.
  • Riverbed’s new partner program offers more choice options to customers. It also ensures that the new partner program accommodates all unique business needs of their partners and at the same time guides them vis-à-vis decision making for investment and profitability plans in the long run.
  • Further, partners have more possibilities to select the different Training and Certifications criteria in accordance with their businesses.
  • Riverbed Rise is primarily based on dividends. These are determined by the overall partner performance and not on competencies or revenue attainment. It gives equal opportunities to all Riverbed partners to compete on individual strengths and customer value propositions, in their preferred target markets.

In the changing and rapidly disruptive business world, Riverbed’s program provides partners with individual decision power with the added benefits of earning and spending criteria that would also be unique in every instance.

Riverbed’s Journey in 2018:

Riverbed has made significant changes to its product portfolio in the last 18 months. Building on its legacy as a leader in WAN optimization, the company believes that these changes will create new opportunities for partners, to expand into new technology areas including SD-WAN and Digital Experience Management. Its focus on Digital Performance is aimed at addressing some of the most pressing challenges businesses are facing as they embark on digital transformation and move to the cloud. Riverbed Rise is an innovative program designed for partners of all types to respond immediately to these rapidly changing customer needs.

Riverbed Rise promises the partners to achieve more on productivity, performance and profitability through the unique reward system based on new business models and a diversified range of services. With this innovative reward matrix giving dividend and achievement rewards to associated partners, Riverbed is highly placed on the diverse partners’ ecosystem and in the competitors’ circle.

The new partner program has also enabled Riverbed to expand its partner base into new business avenues, emerging markets and newer verticals. Furthermore, Riverbed Rise is expected to help build a new partner portal with strong marketing tools revolving around simplified, flexible and a profitable dividends-based model.

As We See It:

Riverbed Rise has more commitments beyond the traditional partner schemes. However, the need of the hour is to sustain the longer retention of partners while keeping the product portfolio diversified.

Enforcing the authorized partners to use all their dividends for training, shows Riverbed’s priority on partner training and indeed supporting the partners to elevate their expertise.

In addition, Riverbed should also ensure the reach of this newly launched program to small and emerging markets where end user dynamics are very specific to each region and industry. They can also enrich their product positioning and roadmap with inclusive strategies for when partners’ investment plan is minimal or indecisive regarding changing adoption trends of various technologies.

What Does Their Success Depends On?

The strength of the Riverbed Rise partner program is centered around a strong partners’ base and a diversified product portfolio. With this program, Riverbed is aiming to strengthen their present relationship with existing partners as well as new market regions and in the ever-changing technology scenario. The more Riverbed empowers their partner ecosystem and enhances collaboration with their partners, the more likely Riverbed will obtain the success they are envisioning from this program.

~Arpana Bharti, Analyst and Subrata Sarkar, Sr. Analyst

From Reseller to MSP – A Complex, But Lucrative Business Transformation Journey

Business Transformation is Complex, but Manageable

Channel Partners selling technology solutions to small, mid, and large-sized businesses are having to transform their businesses to stay relevant as their clients move an ever-increasing number of business processes and workloads into the cloud.

This transformation requires carefully mapping the initial cloud and managed services portfolio against available customer base, internal technical and sales skills, service delivery tools, and available investment dollars. Further, modeling the total revenue and profitability impact of this transition is key to understanding the impact on cash flow, especially from smaller annuity streams, which need to be renewed annually.

How to plan and successfully execute the transition from being an on-premise services provider to delivering managed services and cloud solutions is where the channel ecosystem is expecting help from their vendor-partners.

Strong Revenue Upside to Business Transformation

From less than 50,000 in 2016, the number of managed services providers will grow to almost 75,000 worldwide in 2021. AMI-Partner’s tracking of these MSPs indicates most have yet to fully penetrate their existing customer base. On average, an MSPs has so far converted only 20% of their customers to managed services. Clearly, this opportunity remains untapped for the most part.

More significantly, by transforming themselves from a reseller to an MSP, one in two have acquired net new customers that were previously beyond their capacity to serve thus expanding their business in ways unforeseen.

Technology vendors can help accelerate this transformation within their partner ecosystem by setting up formalized advisory programs that impart strategic advice via workshops, as well track key metrics on a one-on-one partner basis.

The key is to uncover best practices used by channel partners that have successfully transformed their businesses and deconstruct and replicate their secret sauce across a broader network of partners.

~Deepinder Sahni, SVP

SaaS – The New “Cash Cow”

The conversation about software as a service (SaaS) has been going on for a long time.  The evolution of hosted applications is pretty interesting. It all started back in the 1960s when IBM and other mainframe vendors offered computing power and database storage from their data centers to the financial industry and other large firms.  Fast forward to the 1990s when, with the proliferation of the internet, Application Service Providers (ASPs) began offering hosted business applications. According to Wikipedia, the acronym (SaaS) allegedly first appeared in an article published in February 2001 by the Software & Information Industry Association (SIIA).

Some may think SaaS is passé and has been talked about to death, but although SaaS can be considered a “mature” market there are some very good reasons to revisit cloud software:

  1. Industry analysts and mainstream media all cite SaaS as a technology with strong growth prospects for both adoption and spending. AMI estimates that worldwide, small, medium and large businesses (SMLBs) spent $62 billion on SaaS solutions in 2017 and that figure is projected to more than double by 2021.
  2. Globally, about 22 million firms are planning to allot more of their IT budgets for hosted/cloud solutions as opposed to on-premise IT products and services with the largest portion slotted for SaaS applications.
  3. SaaS solutions are major forces driving growth as industry mainstays, who were formerly strong on-premise vendors, shift emphasis to the cloud. For example, Oracle reported Q3’17 overall cloud revenue increased 51%, but SaaS revenues rose 62% and Microsoft reported strong increases across all of its cloud offerings and is now the leading cloud service provider (Office 365 revenues alone increased over 10%).

“SaaS” comprises a wide variety of different cloud-based applications, from the most basic e-mail to solutions tailored for very specific industries.  Spending in 2017 on prominent hosted applications was strong. Beyond email, other leading apps included hosted CRM, business intelligence, productivity and highly customized line of business software (vertical or industry specific software).

As SMLBs seek to leverage technology to help them reduce OPEX, improve efficiency and employee productivity and improve the customer experience, many are looking to the cloud as a solution. About one-third of firms we surveyed reported migrating more applications to cloud services was very important to their company’s continued success. Firms reported a variety of reasons for adopting cloud solutions, including cost savings, scalability and flexibility.  Many businesses feel SaaS solutions allow them access to technologies that might otherwise have been out of reach cost wise, while others utilize cloud services because it enables them to reduce system hardware by using cloud vendors’ servers to store data. In addition, SMLBs will increasingly look to bundle SaaS solutions when making new PC and device purchases.  Popular bundles include hosted productivity suites, security, data back-up/recovery, online data storage, and online document collaboration.

Overall, projected growth for SaaS apps is strong through 2021 (20% CAGR).  Fueling this growth will be solutions such as productivity, point of sales, business intelligence, email, quotes & invoicing and travel and expense solutions.

Software as a Service is a concept that will continue to evolve as it is a win-win for everyone.  SMLBs will benefit as they shift legacy on-premise solutions to seat-based models for cost savings, flexibility and scalability, as well as access to new technologies. Independent software vendors (ISVs) offering cloud solutions will be able to attract and engage firms that may not want to incur the large capital investments required for on-premise installations. Cloud hosters, such as AWS, Microsoft Azure, Google and IBM, will benefit as more ISVs shift their current on-premise solutions to the cloud.

~ Eileen Zimbler, VP

IoT 101

Internet of Things (IoT) is a popular buzz word around town. What is IoT? Why now? What are the growth elements?  How do I even segment these IoT devices?

Too many questions and too many ‘things’ to answer.

Let’s start IoT 101.

Definition:

Internet of Things refers to the networking of physical objects using embedded sensors, actuators, and other devices that can collect or transmit information about these objects (excluding smartphones and computers). As humans directly interact with the device for information exchange, therefore smartphones and computers are not considered IoT.

Tesla’s self-driving car is considered a partial IoT device as it has thousands of sensors and motors which can move without human intervention and take people from one place to the next.

IoT Market:

Murphy’s Law can be helpful to describe the IoT concept with a little tweak: Whatever can be connected, will be connected.

  • By a recent estimate there are over 20 billion devices connected to the internet as of 2017 and that number is forecasted to reach over 75 billion devices by 2025.
  • According to AMI’s Global Forecast Model, small, medium and large businesses spend on IoT technology reached over $800 billion worldwide in 2017.
  • There is a huge potential for IoT in developing economies in terms of adoption. Also, nearly half of the value is expected to be generated from developing countries.

Growth Elements:

Technology, being the root of all development, is at the center of every new breakthrough. The driving factors behind the development and adoption of IoT is the widespread availability of all the technical components and infrastructure.

  • Hardware: Many IoT devices rely on multiple sensors to monitor the environment around them. The cost of these sensors has dropped 30-70% in the past decade and prices are expected to drop further leading to more cost-effective sensors.
  • Internet: The expansion of the internet is another major growth element of IoT. Approximately 45% of the global population is connected to the internet. This increase in connectivity is paving the way for higher IoT adoption worldwide.
  • Smartphones: Smartphones can be a major driver for this segment despite not being an IoT device. IoT relies heavily on “remotes” to monitor and manage IoT devices. Today smartphones account for over 65% of mobile phones sold globally. These can be used as remotes to control IoT devices. According to AMI’s Global Forecast Model, businesses have installed over 4 million smartphones and over 1.3 million tablets as of last year.

IoT Segmentation:

IoT is very tricky in terms of segmentation because of various components involved and there are many gray areas between just being another tech product and an IoT product. Also, in terms of market adoption, it is difficult to identify IoT penetration in businesses and hence difficult to track spending. Here at AMI, we have identified 3 distinct segments for IoT to simplify tracking.

IoT Hardware:

Hardware is considered a building block in the IoT ecosystem. IoT Hardware includes spending on standalone components as well as those installed in devices, sensors, appliances, vehicles, machinery and many more. According to AMI’s Global Forecast Model, hardware components within IoT accounts for 50% of overall spending within the IoT segment. As we are in the initial phase of IoT growth, companies are setting up the necessary infrastructure for IoT thus increasing hardware spend.

IoT Software:

Some areas included in IoT software spend are IoT OSs, platforms, end user applications and cloud services (which is still in the early development phase). Software provides an integrated set of capabilities including mobile application libraries, analytics, security and device/services management.

IoT platforms include Cisco Jasper, Windows 10 IoT, Azure IoT Suite, Uptake, and Ayala.

IoT Services:

IoT services include solution design consulting, implementation, deployment, and management services as provided by service providers of all sizes such as Datatrend Technologies, Softweb Solutions, Accenture, IBM, AT&T and Verizon.

The IoT services market has wide reaching potential for one simple reason: IoT in business is well connected with other disciplines like security, data management and other vertical specific elements. No company can do everything alone and that’s where IoT service providers can help these companies achieve efficient results.

Finally, IoT will give birth to all new business models based on technology. Remember the Tesla car? Now imagine, Tesla selling just car service and not the actual cars. Anything-as-a-Service, selling transportation service rather than automobiles.

In a nutshell, companies are spending more on infrastructure set up and deployment. This is due to the initial growth phase of IoT being hardware centric. In the next few years, the market will experience an incredible growth in the IoT Software and Services industry. We will see companies spending more on platforms, security and analytics because of IoT expansion.

~ Ankit Mehta, Associate