COVID-19 and the subsequent global recession have thrown a wrench into IT spending. Many enterprises have placed new purchases on hold. Gartner recently projected that global spending on IT would drop 8% overall this year — and yet dollars allocated to cloud-based services are still expected to rise by approximately 19 percent, bucking that downward trend.
Underscoring the relative health of the cloud market, IDC reported that all growth in traditional tech spending will be driven by four platforms over the next five years: cloud, mobile, social and big data/analytics. Their 2020-2023 forecast states that traditional software continues to represent a major contribution to productivity, while investments in mobile and cloud hardware have created new platforms which will enable the rapid deployment of new software tools and applications.
With entire workforces suddenly going remote all over the world, there certainly are a number of specific business problems that need to be addressed, and many of the big issues involve VPNs.
Assault on VPNs
Millions of employees are working from home, and they all have to securely access their corporate networks. The vast majority of enterprises still rely on on-premises servers to some degree (estimates range from 60% to 98%), therefore VPNs play a vital role in enabling that employee connection to the network. This comes at a cost, though: bandwidth is gobbled up, slowing network performance — sometimes to a crippling level — and this has repercussions.
Maintenance of the thousands of machines and devices connected to the network gets sacrificed. The deployment of software, updates and patches simply doesn’t happen with the same regularity as when everyone works on-site. One reason for this is that content distribution (patches, applications and other updates) can take up much-needed bandwidth, and as a result, system hygiene gets sacrificed for the sake of keeping employees productive.
Putting off endpoint management, however, exposes corporate networks to enormous risks. Bad actors are well aware that endpoints are not being maintained at the same level as pre-pandemic, and they are more than willing to take advantage. Recent stats show that the volume of cyberattacks today is pretty staggering — much higher than prior to COVID-19.
Get thee to the cloud: Acceleration of modern device management
Because of bandwidth concerns, the pressure to trim costs, and the need to maintain machines in new ways, many enterprises are accelerating their move to the cloud. The cloud offers a lot of advantages for distributed workforces while also reducing costs. But digital transformation and the move to modern device management can’t happen overnight.
Enterprises have invested too much time, money, physical space and human resources to just walk away. Not to mention, on-premises environments have been highly reliable. Physical servers are one of the few things IT teams can count on to just work as intended these days.
Hybrid environments offer a happy medium. With the latest technology, enterprises can begin migrating to the cloud and adapt to changing conditions, meeting the needs of distributed teams. They can also save some money in the process. At the same time, they don’t have to completely abandon their tried-and-true servers.
Solving specific business problems: Content distribution to keep systems running
But what about those “specific business problems,” such as endpoint management and content distribution? Prior to COVID-19, this had been one of the biggest hurdles to digital transformation. It was not possible to distribute software and updates at scale without negatively impacting business processes and without excessive cost.
The issue escalated with the shift to remote work. Fortunately, technology providers have responded, developing solutions that leverage secure and efficient delivery mechanisms, such as peer-to-peer content distribution, that can work in the cloud. Even in legacy environments, vast improvements have been made to reduce bandwidth consumption.
These solutions allow enterprises to transition from a traditional on-premises infrastructure to the cloud and modern device management at their own speed, making their company more agile and resilient to the numerous risks they encounter today. Breakthrough technologies also support multiple system management platforms and help guarantee endpoints stay secure and updated even if corporate networks go down – something that, given the world we live in today, is a very real possibility.
Companies like Garmin and organizations such as the University of California San Francisco joined the unwitting victims of ransomware attacks in recent months. Their systems were seized, only to be released upon payment of millions of dollars.
While there is the obvious hard cost involved, there are severe operational costs as well — employees that can’t get on the network to do their jobs, systems must be scanned, updated and remediated to ensure the network isn’t further compromised, etc. A lot has to happen within a short period of time in the wake of a cyberattack to get people back to work as quickly and safely as possible.
Fortunately, with modern cloud-based content distribution solutions, all that is needed for systems to stay up is electricity and an internet connection. Massive redundancy is being built into the design of products to provide extreme resilience and help ensure business continuity in case part or all of the corporate network goes down.
The newest highly scalable, cloud-enabled content distribution options enable integration with products like Azure CDN and Azure Storage and also provide a single agent for migration to modern device management. With features like cloud integration, internet P2P, and predictive bandwidth harvesting, enterprises can leverage a massive amount of bandwidth from the internet to manage endpoints and ensure they always stay updated and secure.
Given these new developments precipitated and accelerated by COVID-19, as well as the clear, essential business problem these solutions address, expect to see movement and growth in the cloud sector. Expect to see an acceleration of modern device management, and despite IT spending cuts, expect to see a better, more secure and reliable, cost efficient, operationally efficient enterprise in the days to come.
Overall investments in digital resiliency have increased steadily throughout the year as businesses prioritize or accelerate adoption of cloud, collaborative, and digital transformation projects, IDC reveals.
Security has also been a major investment area, driven by the shift to more remote work and accelerated cloud adoption in 2020.
“Digital resiliency refers to an organization’s ability to rapidly adapt to business disruptions by leveraging digital capabilities to not only restore business operations, but also capitalize on the changed conditions,” said Stephen Minton, VP in IDC‘s Customer Insights & Analysis group.
“As the COVID-19 crisis has shown, the ability to respond quickly and effectively to unexpected changes in the business environment are critical to an organization’s short-term success. To prepare for future business disruptions, organizations need plans that will enable them to rapidly adapt as opposed to just respond.
“Investments in digital capabilities not only enable an organization to adapt to the current crisis but also to capitalize on the changed conditions.”
The Digital Resiliency Investment Index
The Digital Resiliency Investment Index is comprised of two factors – digital core investments and digital innovation investments.
Digital core investments are comprised of spending on the core components of digital resiliency: cloud, security, collaborative support for remote workers, and digital transformation projects. This score should increase over time as organizations shift budget away from traditional and legacy IT spending and toward these core components of digital resiliency.
Digital innovation investments are measured using a monthly survey of enterprises on their current and anticipated IT investment focus, including how much new or reallocated spending is targeted at digital resiliency and business acceleration versus crisis response measures. This score should also increase over time as organizations shift their spending focus back to building a digital enterprise.
Overall, investments in cloud, collaboration, and security have managed to grow throughout 2020, despite a decline in overall IT spending.
In recent, months, the focus on resiliency has increased as organizations realize the importance of being prepared for future business disruptions. As a result, digital resiliency spending is expected to accelerate in 2021 as the global economy improves.
Resiliency investments by location
On a geographic basis, resiliency investments grew fastest in Asia/Pacific, in line with the region’s overall response to the pandemic. Investments in the United States improved noticeably in October, which may reflect a combination of short-term and long-term factors.
Meanwhile, Europe’s results declined slightly in October as the region returned to crisis response mode with a surge in coronavirus cases and new socio-economic restrictions.
“The next several months may put increased pressure on some organizations to respond to second waves of COVID infections and economic lockdowns, which will be reflected in our monthly surveys throughout the winter,” said Minton.
“What we have learned already this year is that the organizations which were among the early adopters of cloud, digital, and collaborative technologies were best-positioned for a crisis no one could have predicted.
“Digital resiliency in the coming 6-12 months will to some extent reflect the speed at which others were able to pivot their tech investments in 2020, even as overall budgets were constrained by economic uncertainty.”
The global number of industrial IoT connections will increase from 17.7 billion in 2020 to 36.8 billion in 2025, representing an overall growth rate of 107%, Juniper Research found.
The research identified smart manufacturing as a key growth sector of the industrial IoT market over the next five years, accounting for 22 billion connections by 2025.
The research predicted that 5G and LPWA (Low Power Wide Area) networks will play pivotal roles in creating attractive service offerings to the manufacturing industry, and enabling the realisation of the ‘smart factory’ concept, in which real-time data transmission and high connection densities allow highly-autonomous operations for manufacturers.
5G to maximise benefits of smart factories
The report identified private 5G services as crucial to maximising the value of a smart factory to service users, by leveraging the technology to enable superior levels of autonomy amongst operations.
It found that private 5G networks will prove most valuable when used for the transmission of large amounts of data in environments with a high density of connections, and where significant levels of data are generated. In turn, this will enable large-scale manufacturers to reduce operational spend through efficiency gains.
Software revenue to dominate industrial IoT market value
The research forecasts that over 80% of global industrial IoT market value will be attributable to software spend by 2025, reaching $216 billion. Software tools leveraging machine learning for enhanced data analysis and the identification of network vulnerabilities are now essential to connected manufacturing operations.
Research author Scarlett Woodford noted: “Manufacturers must exercise caution when implementing IoT technology, resisting the temptation to introduce connectivity to all aspects of operations. Instead, manufacturers must focus on the collection of data on the most valuable areas to drive efficiency gains.”
Despite a global pandemic, direct digital transformation (DX) investment is still growing at a compound annual growth rate (CAGR) of 15.5% from 2020 to 2023 and is expected to approach $6.8 trillion as companies build on existing strategies and investments, becoming digital-at-scale future enterprises, according to IDC.
Digital transformation investment predictions
Prediction 1: accelerated DX investments create economic gravity. The economy remains on course to its digital destiny with 65% of global GDP digitalized by 2022 and will drive over $6.8 trillion of direct DX investments from 2020 to 2023.
Prediction 2: digital organization structures and roadmaps mature. By 2023, 75% of organizations will have comprehensive digital transformation implementation roadmaps, up from 27% today, resulting in true transformation across all facets of business and society.
Prediction 3: digital management systems mature. By 2023, 60% of leaders in G2000 organizations will have shifted their management orientation from processes to outcomes, establishing more agile, innovative, and empathetic operating models.
Prediction 4: the rise of the digital platform and extended ecosystems. By 2025, driven by volatile global conditions, 75% of business leaders will leverage digital platforms and ecosystem capabilities to adapt their value chains to new markets, industries, and ecosystems.
Prediction 5: a digital first approach. While “digital first” prevails in every experience, 60% of enterprises will invest heavily in digitalizing employee experience in 2021, transforming the relationship between employers and employees.
Prediction 6: business model reinvention. By 2021, at least 30% of organizations will accelerate innovation to support business and operating model reinvention, fast-tracking transformation programs to future-proof their businesses.
Prediction 7: sustainability and DX. By 2022, the majority of companies will realize greater value by combining digital and sustainability, giving rise to digitally driven and sustainably enabled projects as the de-facto standard.
Prediction 8: digitally native cultures. To thrive in digital supremacy economy, 50% of enterprises will implement the organizational culture optimized for DX in 2025, based on customer-centric and data-driven.
Prediction 9: accelerating digital experiences. By 2022, 70% of all organizations will have accelerated use of digital technologies, transforming existing business processes to drive customer engagement, employee productivity, and business resiliency.
Prediction 10: business innovation platforms. By 2023, 60% of G2000 companies will build their own business innovation platform to support innovation and growth in the new normal.
According to Shawn Fitzgerald, research director, Worldwide Digital Transformation Strategies at IDC, “Organizations with new digital business models at their core that are successfully executing their enterprise-wide strategies on digital platforms are well positioned for continued success in the digital platform economy.
“Our 2021 digital transformation predictions represent areas of notable opportunity to differentiate your own digital transformation strategic efforts.”
A failing cybersecurity market is contributing to ineffective performance of cybersecurity technology, a Debate Security research reveals.
Based on over 100 comprehensive interviews with business and cybersecurity leaders from large enterprises, together with vendors, assessment organizations, government agencies, industry associations and regulators, the research shines a light on why technology vendors are not incentivized to deliver products that are more effective at reducing cyber risk.
The report supports the view that efficacy problems in the cybersecurity market are primarily due to economic issues, not technological ones. The research addresses three key themes and ultimately arrives at a consensus for how to approach a new model.
Cybersecurity technology is not as effective as it should be
90% of participants reported that cybersecurity technology is not as effective as it should be when it comes to protecting organizations from cyber risk. Trust in technology to deliver on its promises is low, and yet when asked how organizations evaluate cybersecurity technology efficacy and performance, there was not a single common definition.
Pressure has been placed on improving people and process related issues, but ineffective technology has become accepted as normal – and shamefully – inevitable.
The underlying problem is one of economics, not technology
92% of participants reported that there is a breakdown in the market relationship between buyers and vendors, with many seeing deep-seated information asymmetries.
Outside government, few buyers today use detailed, independent cybersecurity efficacy assessment as part of their cybersecurity procurement process, and not even the largest organizations reported having the resources to conduct all the assessments themselves.
As a result, vendors are incentivized to focus on other product features, and on marketing, deprioritizing cybersecurity technology efficacy – one of several classic signs of a “market for lemons”.
Coordinated action between stakeholders only achieved through regulation
Unless buyers demand greater efficacy, regulation may be the only way to address the issue. Overcoming first-mover disadvantages will be critical to fixing the broken cybersecurity technology market.
Many research participants believe that coordinated action between all stakeholders can only be achieved through regulation – though some hold out hope that coordination could be achieved through sectoral associations.
In either case, 70% of respondents feel that independent, transparent assessment of technology would help solve the market breakdown. Setting standards on technology assessment rather than on technology itself could prevent stifling innovation.
Defining cybersecurity technology efficacy
Participants in this research broadly agree that four characteristics are required to comprehensively define cybersecurity technology efficacy.
To be effective, cybersecurity solutions need to have the capability to deliver the stated security mission (be fit-for-purpose), have the practicality that enterprises need to implement, integrate, operate and maintain them (be fit-for-use), have the quality in design and build to avoid vulnerabilities and negative impact, and the provenance in the vendor company, its people and supply chain such that these do not introduce additional security risk.
“In cybersecurity right now, trust doesn’t always sell, and good security doesn’t always sell and isn’t always easy to buy. That’s a real problem,” said Ciaran Martin, advisory board member, Garrison Technology.
“Why we’re in this position is a bit of a mystery. This report helps us understand it. Fixing the problem is harder. But our species has fixed harder problems and we badly need the debate this report calls for, and industry-led action to follow it up.”
“Company boards are well aware that cybersecurity poses potentially existential risk, but are generally not well equipped to provide oversight on matters of technical detail,” said John Cryan, Chairman Man Group.
“Boards are much better equipped when it comes to the issues of incentives and market dynamics revealed by this research. Even if government regulation proves inevitable, I would encourage business leaders to consider these findings and to determine how, as buyers, corporates can best ensure that cybersecurity solutions offered by the market are fit for purpose.”
“As a technologist and developer of cybersecurity products, I really feel for cybersecurity professionals who are faced with significant challenges when trying to select effective technologies,” said Henry Harrison, CSO of Garrison Technology.
“We see two noticeable differences when selling to our two classes of prospects. For security-sensitive government customers, technology efficacy assessment is central to buying behavior – but we rarely see anything similar when dealing with even the most security-sensitive commercial customers. We take from this study that in many cases this has less to do with differing risk appetites and more to do with structural market issues.”
Operator‑billed revenue from 5G connections will reach $357 billion by 2025, rising from $5 billion in 2020, its first full year of commercial service, according to Juniper Research.
By 2025, 5G revenue is anticipated to represent 44% of global operator‑billed revenue owing to rapid migration of 4G mobile subscribers to 5G networks and new business use cases enabled by 5G technology.
However, the study identified 5G networks roll-outs as highly resilient to the COVID-19 pandemic. It found that supply chain disruptions caused by the initial pandemic period have been mitigated through modified physical roll-out procedures, in order to maintain the momentum of hardware deployments.
5G connections to generate 250% more revenue than average cellular connection
The study found that 5G uptake had surpassed initial expectations, predicting total 5G connections will surpass 1.5 billion by 2025. It also forecast that the average 5G connection will generate 250% more revenue than an average cellular connection by 2025.
To secure a return on investment into new services, such as uRLLC (Ultra-Reliable Low-Latency Communication) and network slicing, enabled by 5G, operators will apply this premium pricing for 5G connections.
However, these services alongside the high-bandwidth capabilities of 5G will create data-intensive use cases that lead to a 270% growth in data traffic generated by all cellular connections over the next five years.
Networks must increase virtualisation to handle 5G data traffic
Operators must use future launches of standalone 5G network as an opportunity to further increase virtualisation in core networks. Failure to develop 5G network architectures that handle increasing traffic will lead to reduced network functionality, inevitably leading to a diminished value proposition of its 5G network amongst end users.
Research author Sam Barker remarked: “Operators will compete on 5G capabilities, in terms of bandwidth and latency. A lesser 5G offering will lead to user churn to competing networks and missed opportunities in operators’ fastest-growing revenue stream.”
The COVID-19 pandemic has largely proven to be an accelerator of cloud adoption and extension and will continue to drive a faster conversion to cloud-centric IT.
Global spending on cloud services to rise
According to IDC, total global spending on cloud services, the hardware and software components underpinning cloud services, and the professional and managed services opportunities around cloud services will surpass $1 trillion in 2024 while sustaining a double-digit compound annual growth rate (CAGR) of 15.7%.
“Cloud in all its permutations – hardware/software/services/as a service as well as public/private/hybrid/multi/edge – will play ever greater, and even dominant, roles across the IT industry for the foreseeable future,” said Richard L. Villars, Group VP, Worldwide Research at IDC.
“By the end of 2021, based on lessons learned in the pandemic, most enterprises will put a mechanism in place to accelerate their shift to cloud-centric digital infrastructure and application services twice as fast as before the pandemic.”
Strongest growth in the as a service category
The strongest growth in cloud revenues will come in the as a service category – public (shared) cloud services and dedicated (private) cloud services. This category, which is also the largest category in terms of overall revenues, is forecast to deliver a five-year CAGR of 21.0%.
By 2024, the as a service category will account for more than 60% of all cloud revenues worldwide. The services category, which includes cloud-related professional services and cloud-related management services, will be the second largest category in terms of revenue but will experience the slowest growth with an 8.3% CAGR. This is due to a variety of factors, including greater use of automation in cloud migrations.
The smallest cloud category, infrastructure build, which includes hardware, software, and support for enterprise private clouds and service provider public clouds, will enjoy solid growth (11.1% CAGR) over the forecast period.
Factors driving the cloud market forward
While the impact of COVID-19 could have some negative effects on cloud adoption over the next several years, there are a number of factors that are driving the cloud market forward.
- The ecosystem of tech companies helping customers migrate to cloud environments, create new innovations in the cloud, and manage their expanding cloud environments will enable enterprises to meet their accelerated schedules for moving to cloud.
- The emergence of consumption-based IT offerings are aimed at leveraging public cloud-like capabilities in an on-premises environment that reduces the complexity and restructures the cost for enterprises that want additional security, dedicated resources, and more granular management capabilities.
- The adoption of cloud services should enable organizations to shift IT from maintenance of legacy IT to new digital transformation initiatives, which can lead to new business revenue and competitiveness as well as create new opportunities for suppliers of professional services.
- Hybrid cloud has become central to successful digital transformation efforts by defining an IT architectural approach, an IT investment strategy, and an IT staffing model that ensures the enterprise can achieve the optimal balance across dimensions without sacrificing performance, reliability, or control.
In the aftermath of the COVID-19 pandemic, global biometric device revenues are expected to drop 22%, ($1.8 billion) to $6.6 billion, according to a report from ABI Research. The entire biometrics market, however, will regain momentum in 2021 and is expected to reach approximately $40 billion in total revenues by 2025.
Global biometric device revenues in 2020
“The current decline in the biometrics market landscape stems from multifaceted challenges from a governmental, commercial, and technological nature,” explains Dimitris Pavlakis, Digital Security Industry Analyst.
“First, they have been instigated primarily due to economic reforms during the crisis which forced governments to constrain budgets and focus on damage control, personnel well-being, and operational efficiency.
“Governments had to delay or temporarily cancel many fingerprint-based applications related to user/citizen and patient registration, physical access control, on-premise workforce management, and certain applications in border control or civil, welfare, immigration, law enforcement, and correctional facilities.
“Second, commercial on-premise applications and access control suffered as the rise of the remote workers became the new norm for the first half of 2020. Lastly, hygiene concerns due to contact-based fingerprint technologies pummelled biometrics revenues forcing a sudden drop in fingerprint shipments worldwide.”
Not all is bleak, though
New use-case scenarios have emerged, and certain technological trends have risen to the top of the implementation lists. For example, enterprise mobility and logical access control using biometrics as part of multi-factor authentication (MFA) for remote workers.
“Current MFA applications for remote workers might well translate into permanent information technology security authentication measures in the long term,” says Pavlakis. “This will improve biometrics-as-a-service (BaaS) monetization and authentication models down the line.”
Biometrics applications can now look toward new implementation horizons, with market leaders and pioneering companies like Gemalto (Thales), IDEMIA, NEC, FPC, HID Global, and Cognitec at the forefront of innovation.
“Future smart city infrastructure investments will now factor in additional surveillance, real-time behavioral analytics, and face recognition for epidemiological research, monitoring, and emergency response endeavors,” Pavlakis concludes.
The growing volume and complexities of cyber threats present a compelling case for adopting threat intelligence platforms (TIPs), a Frost & Sullivan analysis finds.
These solutions help organizations navigate the ever-increasing threat landscape and allow for further analysis and threat intelligence operationalization.
The TIP market least affected by the pandemic
The yhreat intelligence platform market is one of the cybersecurity markets that will be least affected by COVID-19. It is estimated to reach $234.9 million by 2022 from $132.7 million in 2019, at a compound annual growth rate (CAGR) of 21%.
“The proliferation of TIP use cases indicates the convergence of the TIP space with adjacent markets,” said Mikita Hanets, Information & Communication Technologies Research Analyst at Frost & Sullivan.
“Vendors increasingly aim to offer some elements of TIP functionality in SOAR and SIEM platforms and vice versa. Going forward, solutions that enable businesses to operationalize threat-related data and set up workflows for cyber incidents will converge in the next three years.”
Hanets added: “North America will dominate the market and contribute the maximum revenue, followed by Europe, the Middle East and Africa (EMEA), Asia-Pacific and Latin America. Technology and telecommunications will be the fastest-growing vertical market for TIP vendors in the next two years, while banking and finance is expected to contribute the most by 2022.”
Growth prospects for market participants
The growing sophistication of attacks and the necessity of using threat intelligence for proactive cyber defense present immense growth prospects for market participants who:
- Increase their presence in geographical areas like EMEA, Asia-Pacific and Latin America, where the penetration rate is currently low.
- Expand the network of third-party SOAR integrations or develop native SOAR capabilities. Enterprises with mature cybersecurity practices need intelligence-powered SOAR.
- Develop SIEM capabilities to offer seamless, intelligence-driven solutions. TIP vendors can build on their data management experience and offer a fully consolidated solution.
- Develop threat detection and threat hunting capabilities to enable investigations of security incidents. Threat intelligence is instrumental in securing enterprises because it enables security teams to prevent cyberattacks in real time and identify a breach that might have occurred in the past.
- Develop or acquire intelligence-driven vulnerability and risk management technology. The ability to assess an organization’s exposure and the risk to its global threat data is a key feature of the next generation of solutions.
An analysis by PwC shows blockchain technology has the potential to boost global gross domestic product (GDP) by $1.76 trillion over the next decade. That is the key finding of a report assessing how the technology is being currently used and exploring the impact blockchain could have on the global economy.
Through analysis of the top five uses of blockchain, ranked by their potential to generate economic value, the report gauges the technology’s potential to create value across industry, from healthcare, government and public services, to manufacturing, finance, logistics and retail.
“Blockchain technology has long been associated with cryptocurrencies such as Bitcoin, but there is so much more that it has to offer, particularly in how public and private organizations secure, share and use data,” comments Steve Davies, Global Leader, Blockchain and Partner, PwC UK.
“As organizations grapple with the impacts of the COVID-19 pandemic, many disruptive trends have been accelerated. The analysis shows the potential for blockchain to support organizations in how they rebuild and reconfigure their operations underpinned by improvements in trust, transparency and efficiency across organizations and society.”
- The report identifies five key application areas of blockchain and assesses their potential to generate economic value using economic analysis and industry research. The analysis suggests a tipping point in 2025 as blockchain technologies are expected to be adopted at scale across the global economy.
- Tracking and tracing of products and services – or provenance – which emerged as a new priority for many companies’ supply chains during the COVID-19 pandemic, has the largest economic potential ($962bn). Blockchain’s application can be wide ranging and support companies ranging from heavy industries, including mining through to fashion labels, responding to the rise in public and investor scrutiny around sustainable and ethical sourcing.
- Payments and financial services, including use of digital currencies, or supporting financial inclusion through cross border and remittance payments ($433bn).
- Identity management ($224bn) including personal IDs, professional credentials and certificates to help curb fraud and identity theft.
- Application of blockchain in contracts and dispute resolution ($73bn), and customer engagement ($54bn) including blockchain’s use in loyalty programmes further extends blockchain’s potential into a much wider range of public and private industry sectors.
Blockchain’s success will depend on a supportive policy environment, a business ecosystem that is ready to exploit the new opportunities that technology opens, and a suitable industry mix.
Economic benefits across continents
Across all continents, Asia will likely see the most economic benefits from blockchain technology. In terms of individual countries, blockchain could have the highest potential net benefit in China ($440bn) and the USA ($407bn). Five other countries – Germany, Japan, the UK, India, and France – are also estimated to have net benefits over $50bn.
The benefits for each country differ however, with manufacturing focused economies such as China and Germany benefiting more from provenance and traceability, while the US would benefit most from its application in securitisation and payments as well as identity and credentials.
At a sector level, the biggest beneficiaries look set to be the public administration, education and healthcare sectors. These sectors are expected to benefit approximately $574bn by 2030, by capitalising on the efficiencies blockchain will bring to the world of identity and credentials.
Meanwhile, there will be broader benefits for business services, communications and media, while wholesalers, retailers, manufacturers and construction services, will benefit from using blockchain to engage consumers and meet demand for provenance and traceability.
Digital transformation as top priority
The potential for blockchain to be considered as part of organizations’ future strategy is linked to a research with business leaders that showed 61% of CEOs said they were placing digital transformation of core business operations and processes among their top three priorities, as they rebuild from COVID-19.
“One of the biggest mistakes organizations can make with implementing emerging technologies is to leave it in the realm of the enthusiast in the team. It needs C-Suite support to work, identify the strategic opportunity and value, and to facilitate the right level of collaboration within an industry,” comments Davies.
“Given the scale of economic disruption organizations are dealing with currently, establishing proof of concept uses which can be extended and scaled if successful, will enable businesses to identify the value, while building trust and transparency in the solution to deliver on blockchain’s potential.”
The report warns that if blockchain’s economic impact potential is to be realized, its energy overhead must be managed. Growing business and government action on climate change, including commitments to Net Zero transformation, will mean that organizations need to consider new models for consolidating and sharing infrastructure resources to reduce reliance on traditional data centres and their overall technology related energy consumption.
Despite ongoing economic uncertainty amidst a global pandemic, many dealmakers remain optimistic about the outlook for the year ahead as they increasingly pursue alternative merger and acquisition (M&A) methods to navigate the crisis and pursue new disruptive business growth strategies.
According to a Deloitte survey of 1,000 U.S. corporate M&A executives and private equity firm professionals, 61% of survey respondents expect U.S. M&A activity to return to pre-COVID-19 levels within the next 12 months.
Soon after the WHO declared COVID-19 a pandemic on March 11, deal activity in the U.S. plunged — most notably during April and May.
Responding M&A executives say they tentatively paused (92%) or abandoned (78%) at least one transaction as a result of the pandemic outbreak. However, since March 2020, possibly aiming to take advantage of pandemic-driven business disruptions, 60% say their organizations have been more focused on pursuing new deals.
“M&A executives have moved quickly to adapt and uncover value in new and innovative ways as systemic change driven by the pandemic has resulted in alternative approaches to transactions,” said Russell Thomson, partner, Deloitte & Touche LLP, and Deloitte’s U.S. merger and acquisition services practice leader.
“We expect both traditional and alternative M&A to be an important lever for dealmakers as businesses recover and thrive in a post-COVID economy.”
Alternative dealmaking on the rise
For many, alternative deals are quickly outpacing traditional M&A activity as the search for value intensifies in a low-growth environment.
When asked which type of deals their organizations are most interested in pursuing, responding corporate M&A executives’ top choice was alternatives to traditional M&A, including alliances, joint ventures, and Special Purpose Acquisition Companies (45%) — ranking higher than acquisitions (35%).
Private equity investors plan to remain more focused on traditional acquisitions (53%), while simultaneously pushing pursuit of M&A alternatives — including private investment in public equity deals, minority stakes, club deals and alliances (32%).
“As businesses prepare for a post-COVID world, including fundamentally reshaped economies and societies, the dealmaking environment will also materially change,” said Mark Purowitz, principal, Deloitte Consulting LLP, with Deloitte’s mergers and acquisitions consulting practice, and leader of the firm’s Future of M&A initiative.
“Companies were starting to expand their definition of M&A to include partnerships, alliances, joint ventures and other alternative investments that create intrinsic and long-lasting value, but COVID-19 has accelerated dealmakers’ needs to create more optionality for their organizations’ internal and external ecosystems.”
Virtual dealmaking to continue playing large role post-pandemic
87% of M&A professionals surveyed report that their organizations were able to effectively manage a deal in a purely virtual environment, so much so that 55% anticipate that virtual dealmaking will be the preferred platform even after the pandemic is over.
However, virtual dealmaking does not remain without its own challenges. Fifty-one percent noted that cybersecurity threats are their organizations’ biggest concern around executing deals virtually.
“When it comes to cyber in an M&A world — it’s important to develop cyber threat profiles of prospective targets and portfolio companies to determine the risks each present,” said Deborah Golden, Deloitte Risk & Financial Advisory, cyber and strategic risk leader, Deloitte & Touche LLP.
“CISOs understand how a data breach can negatively impact the valuation and the underlying deal structure itself. Leaving cyber out of that risk picture may lead to not only brand and reputational risk, but also significant and unaccounted remediation costs.”
Other virtual dealmaking concerns included the ability to forge relationships with management teams (40%) and extended regulatory approvals (39%). When it comes to effectively managing the integration phase in a virtual environment, technology integration (16%) and legal entity alignment or simplification (16%) are surveyed M&A executives’ largest and most prevalent hurdles.
“It may be too early to assess the long-term implications of virtual dealmaking as many of the deals currently in progress now are resulting from management relationships that were formed pre-COVID. We also expect integration in a virtual setting will become much more complex a few months from now,” said Thomson.
“Culture and compatibility issues should be given greater attention on the diligence side, as they pose major downstream integration implications.”
International dealmaking declines, focus on domestic-only deals
Interest in foreign M&A targets declined in 2020 as corporate executives reported a significant shift in their approach to international dealmaking, with 17% reporting no plans to execute cross-border deals in the current economic environment, an 8 percentage point increase from 2019.
In addition, 57% of M&A executives say less than half of their current transactions involve acquiring targets operating primarily in foreign markets.
Notably, the number of survey respondents interested in pursuing deals with U.K. targets dropped by 8 percentage points, while Chinese targets declined by 7 percentage points. Interest in Canadian (32%) and Central American (19%) targets remained highest.
Vendor revenue from sales of IT infrastructure products (server, enterprise storage, and Ethernet switch) for cloud environments, including public and private cloud, increased 34.4% year over year in the second quarter of 2020 (2Q20), according to IDC. Investments in traditional, non-cloud, IT infrastructure declined 8.7% year over year in 2Q20.
These growth rates show the market response to major adjustments in business, educational, and societal activities caused by the COVID-19 pandemic and the role IT infrastructure plays in these adjustments.
Across the world, there were massive shifts to online tools in all aspects of human life, including collaboration, virtual business events, entertainment, shopping, telemedicine, and education. Cloud environments, and particularly public cloud, were a key enabler of this shift.
Spending on public cloud IT infrastructure increased 47.8% year over year in 2Q20, reaching $14.1 billion and exceeding the level of spend on non-cloud IT infrastructure for the first time. Spending on private cloud infrastructure increased 7% year over year in 2Q20 to $5 billion with on-premises private clouds accounting for 64.1% of this amount.
Hardware infrastructure market reaching the tipping point
The hardware infrastructure market has reached the tipping point and cloud environments will continue to account for an increasingly higher share of overall spending.
While IDC increased its forecast for both cloud and non-cloud IT spending for the full year 2020, investments in cloud IT infrastructure are still expected to exceed spending on non-cloud infrastructure, 54.8% to 45.2%.
Most of the increase in spending will be driven by public cloud IT infrastructure, which is expected to slow in 2H20 but increase by 16% year over year to $52.4 billion for the full year.
Spending on private cloud infrastructure will also experience softness in the second half of the year and will reach $21.5 billion for the full year, an increase of just 0.3% year over year.
As of 2019, the dominance of cloud IT environments over non-cloud already existed for compute platforms and Ethernet switches while the majority of newly shipped storage platforms were still residing in non-cloud environments.
Starting in 2020, with increased investments from public cloud providers on storage platforms, this shift will remain persistent across all three technology domains.
Compute platforms to remain the largest segment of spending
Within cloud deployment environments in 2020, compute platforms will remain the largest segment (50.9%) of spending at $37.7 billion while storage platforms will be the fastest growing segment with spending increasing 21.2% to $27.8 billion, and the Ethernet switch segment will grow 3.9% year over year to $8.5 billion.
Spending on cloud IT infrastructure increased across all regions in 2Q20 with the two largest regions, China and the U.S., delivering the highest annual growth rates at 60.5% and 36.9% respectively. In all regions except Central & Eastern Europe and the Middle East & Africa, growth in public cloud infrastructure exceeded growth in private cloud IT.
At the vendor level, the results were mixed. Inspur more than doubled its revenue from sales to cloud environments, climbing into a tie for the second position in the vendor rankings while the group of original design manufacturers (ODM Direct) grew 63.6% year over year. Lenovo’s revenue exceeded $1 billion, growing at 49.3% year over year.
Long term, spending on cloud IT infrastructure is expected to grow at a five-year compound annual growth rate (CAGR) of 10.4%, reaching $109.3 billion in 2024 and accounting for 63.6% of total IT infrastructure spend. Public cloud datacenters will account for 69.4% of this amount, growing at a 10.9% CAGR.
Spending on private cloud infrastructure will grow at a CAGR of 9.3%. Spending on non-cloud IT infrastructure will rebound after 2020 but will continue to decline overall with a CAGR of -1.6%.
It takes more than a single eureka moment to attract investor backing, especially in a notoriously high-stakes and competitive industry like cybersecurity.
While every seed-stage investor has their respective strategies for vetting raw ideas, my experience of the investment due diligence process involves a veritable ringer of rapid-fire, back-to-back meetings with cybersecurity specialists and potential customers, as well as rigorous market scoping by analysts and researchers.
As the CTO of a seed-stage venture capital firm entirely dedicated to cybersecurity, I spend a good portion of my time ideating alongside early-stage entrepreneurs and working through this process with them. To do this well, I’ve had to develop an internal seismometer for industry pain points and potential competitors, play matchmaker between tech geniuses and industry decision-makers, and peer down complex roadmaps to find the optimal point of convergence for good tech and good business.
Along the way, I’ve gained a unique perspective on the set of necessary qualities for a good idea to turn into a successful startup with significant market traction.
Just as a good idea doesn’t necessarily translate into a great product, the qualities of a great product don’t add up to a magic formula for guaranteed success. However, how well an idea performs in the categories I set out below can directly impact the confidence of investors and potential customers you’re pitching to. Therefore, it’s vital that entrepreneurs ask themselves the following before a pitch:
Do I have a strong core value proposition?
The cybersecurity industry is saturated with features passing themselves off as platforms. While the accumulated value of a solution’s features may be high, its core value must resonate with customers above all else. More pitches than I wish to count have left me scratching my head over a proposed solution’s ultimate purpose. Product pitches must lead with and focus on the solution’s core value proposition, and this proposition must be able to hold its own and sell itself.
Consider a browser security plugin with extensive features that include XSS mitigation, malicious website blocking, employee activity logging and download inspections. This product proposition may be built on many nice-to-have features, but, without a strong core feature, it doesn’t add up to a strong product that customers will be willing to buy. Add-on features, should they need to be discussed, ought to be mentioned as secondary or additional points of value.
What is my solution’s path to scalability?
Solutions must be scalable in order to reach as many customers as possible and avoid price hikes with reduced margins. Moreover, it’s critical to factor in the maintenance cost and “tech debt” of solutions that are environment-dependent on account of integrations with other tools or difficult deployments.
I’ve come across many pitches that fail to do this, and entrepreneurs who forget that such an omission can both limit their customer pool and eventually incur tremendous costs for integrations that are destined to lose value over time.
What is my product experience like for customers?
A solution’s viability and success lie in so much more than its outcome. Both investors and customers require complete transparency over the ease-of use of a product in order for it to move forward in the pipeline. Frictionless and resource-light deployments are absolutely key and should always mind the realities of inter-departmental politics. Remember, the requirement of additional hires for a company to use your product is a hidden cost that will ultimately reduce your margins.
Moreover, it can be very difficult for companies to rope in the necessary stakeholders across their organization to help your solution succeed. Finally, requiring hard-to-come-by resources for a POC, such as sensitive data, may set up your solution for failure if customers are reluctant to relinquish the necessary assets.
What is my solution’s time-to-value?
Successfully discussing a core value must eventually give way to achieving it. Satisfaction with a solution will always ultimately boil down to deliverables. From the moment your idea raises funds, your solution will be running against the clock to provide its promised value, successfully interact with the market and adapt itself where necessary.
The ability to demonstrate strong initial performance will draw in sought-after design partners and allow you to begin selling earlier. Not only are these sales necessary bolsters to your follow on rounds, they also pave the way for future upsells to customers.
It’s critical, where POCs are involved, that the beta content installed by early customers delivers well in order to drive conversions and complete the sales process. It’s critical to create a roadmap for achieving this type of deliverability that can be clearly articulated to your stakeholders.
When will my solution deliver value?
It’s all too common for entrepreneurs to focus on “the ultimate solution”. This usually amounts to what they hope their solution will achieve some three years into development while neglecting the market value it can provide along the way. While investors are keen to embrace the big picture, this kind of entrepreneurial tunnel vision hurts product sales and future fundraising.
Early-stage startups must build their way up to solving big problems and reconcile with the fact that they are typically only equipped to resolve small ones until they reach maturity. This must be communicated transparently to avoid creating a false image of success in your market validation. Avoid asking “do you need a product that solves your [high-level problem]?” and ask instead “would you pay for a product that solves this key element of your [high-level problem]?”.
Unless an idea breaks completely new ground or looks to secure new tech, it’s likely to be an improvement to an already existing solution. In order to succeed at this, however, it’s critical to understand the failures and drawbacks of existing solutions before embarking on building your own.
Cybersecurity buyers are often open to switching over to a product that works as well as one they already use without its disadvantages. However, it’s incumbent on vendors to avoid making false promises and follow through on improving their output.
The cybersecurity industry is full of entrepreneurial genius poised to disrupt the current market. However, that potential can only manifest by designing it to address much more than mere security gaps.
The lifecycle of a good cybersecurity idea may start with tech, but it requires a powerful infusion of foresight and listening to make it through investor and customer pipelines. This requires an extraordinary amount of research in some very unexpected places, and one of the biggest obstacles ideating entrepreneurs face is determining precisely what questions to ask and gaining access to those they need to understand.
Working with well-connected investors dedicated to fostering those relationships, ironing out roadmap kinks in the ideation process is one of the surest ways to secure success. We must focus on building good ideas sustainably and remember that immediate partial value delivery is a small compromise towards building out the next great cybersecurity disruptor.
Business support systems (BSS) are necessary to provide the fast-changing requirements in 5G and enhance customer experiences, a Frost & Sullivan research reveals.
They also help communication service providers (CSPs) deliver personalized service experiences for consumers and businesses.
BSS market could experience a slowdown
Vendors have introduced advanced BSS features, including the ability to support flexible deployments (core and edge) and options for network slice lifecycle management, which are critical in helping CSPs deliver on multi-partner business models.
However, due to COVID-19, the global BSS market is estimated to experience a slowdown in the short term, whereas the long-term outlook remains positive.
“It is evident that BSS can significantly drive efforts to help organizations address key concerns such as introducing digital services and enabling customers to personalize their service experience,” said Vikrant Gandhi, Senior Industry Director, Information & Communication Technologies at Frost & Sullivan.
“However, businesses from across many other industry verticals are still relatively early in their digitization efforts and are facing issues similar to those of CSPs in the early days of their digital transformation efforts.”
Gandhi added: “Given the evolving situation, it is more critical than ever for wireless networks to function reliably and support the connectivity requirements across the board. BSS vendors are supporting existing 4G (and earlier generations) network services that currently drive the majority of their revenue.
“Going forward, while the wireless industry remains a priority for BSS vendors, they are also able to align BSS solutions to meet the needs of communications, financial services, healthcare, and media and entertainment companies, as well as government entities.”
BSS vendors can partner with CSPs to create immense growth prospects
- Pioneer new price plans and partner-based business models such as B2B, B2C, and B2B2X for 5G success.
- Introduce AI-driven BSS and customer experience solutions that help CSPs deliver differentiated 5G services.
- Leverage cloud-native principles and support flexible deployments (core and edge) to help operators monetize different features of the network and create new opportunities.
- Implement a robust 5G policy that can set performance characteristics, including quality of service (QoS) and latency. With 5G, the policy can control networks and services down to the device level to ensure the best customer experience while managing valuable network resources.
IoT gateways are becoming an increasingly important link in the IoT security and device authentication value chain and emerging as a crucial conduit for intelligent operations across the entire IoT.
The new wave of next-generation smart IoT gateways has arrived at an opportune time, enabling a breadth of novel security, intelligence, and authentication operations at the edge, causing IoT vendors to revisit their deployment and management strategies.
According to ABI Research, there will be 21.4 million next-gen smart IoT gateways shipped in 2025.
“Smart IoT gateways are currently caught amid a greater transformative evolution, further enhancing capabilities for gateways, shifting focus toward the edge, and reversing the cloud-centric investment priorities of the past decade,” states Dimitrios Pavlakis, Digital Security analyst at ABI Research.
The characteristics of next-gen smart IoT gateways
The primary characteristics of next-gen IoT gateways include enhanced cybersecurity options, extended connectivity support, edge processing and filtering, authentication and management, cloud services, analytics, and intelligence operations.
These highly demanding technological characteristics have been steadily reaching the core of the implementation lists of IoT implementers, shifting the dynamics of IoT security and pulling focus ever closer to the edge.
“This is not to say that edge-focused IoT gateways will completely replace data servers and cloud computing – far from it. Rather they are set to create a more symbiotic relationship between them while increasing the amount of responsibility towards edge computing and intelligence-gathering operations,” Pavlakis explains.
Turning challenges into well-honed value propositions
The current market demands brought forth by the intense increase of IoT technologies allow gateway vendors to turn challenges into well-honed value propositions. This can include tackling the secure transition of legacy equipment into larger IoT fleets, enable increased visibility, monitoring, and management of IoT devices, aid in the clash between IT and OT in industrial and healthcare systems, and streamline digital security and device management.
The surge of IoT gateways shipments is expected to create a variable penetration rate across different IoT end markets led by innovative gateway vendors like Advantech, Cisco, Kerlink, MultiTech, and Sierra Wireless.
“The data suggest that video surveillance, heavy transport vehicles and equipment, intelligent transportation, and fleet management depict the highest penetration rate for the next-level security and intelligence components for smart IoT gateways, with a clear focus revolving around automotive verticals and data-heavy applications,” Pavlakis concludes.
A LexisNexis Risk Solutions report tracks global cybercrime activity from January 2020 through June 2020. The period has seen strong transaction volume growth compared to 2019 but an overall decline in global attack volume. This is likely linked to growth in genuine customer activity due to changing consumer habits.
The period has seen strong transaction volume growth compared to 2019 but an overall decline in global attack volume. This is likely linked to growth in genuine customer activity due to changing consumer habits.
The report analyzes data from more than 22.5 billion transactions processed, a 37% growth year over year. Mobile device transactions also continue to rise, with 66% of all transactions coming from mobile devices in the first half of 2020, up from 20% in early 2015.
There’s also an uptick in transactions from new devices and new digital identities. This is attributed to many new-to-digital consumers moving online to procure goods and services that were no longer available in person or harder to access via a physical store, during the pandemic.
Attacks by region
The EMEA region saw lower overall attack rates in comparison to most other global regions from January through June 2020. This is due to a high volume of trusted login transactions across relatively mature mobile apps.
The attack patterns in EMEA were also more benign and had less volatility and fewer spikes in attack rates. However, there are some notable exceptions. Desktop transactions conducted from EMEA had a higher attack rate than the global average and automated bot attack volume grew 45% year over year.
The UK originates the highest volume of human-initiated cyberattacks in EMEA, with Germany and France second and third in the region. The UK is also the second largest contributor to global bot attacks behind the U.S.
One example of a UK banking fraud network saw more than $17 million exposed to fraud across 10 financial services organizations. This network alone consisted of 7,800 devices, 5,200 email addresses and 1,000 telephone numbers.
Decline in attack rate
The overall human-initiated attack rate fell through the first half of 2020, showing a 33% decline year over year. The breakdown by sector shows a 23% decline in financial services and a 55% decline in e-commerce attack rates.
Latin America experienced the highest attack rates of all regions globally and realized consistent growth in attack rates from March to June 2020. The attack patterns in North America and EMEA had less volatility and fewer spikes in attack rates from the six-month period observed.
Attack vector global view
Media is the only industry that recorded an overall year over year growth in human-initiated cyberattacks. There was a 3% increase solely across mobile browser transactions.
Globally, automated bots remain a key attack vector in the Digital Identity Network. Financial services organizations experienced a surge in automated bot attacks and continue to experience more bot attacks than any other industry.
Across the customer journey
New account creations see attacks at a higher rate than any other transaction type in the online customer journey. However, the largest volume of attacks targets online payments. Login transactions have seen the biggest drop in attack rate in comparison to other use cases.
Analysis across new customer touchpoints in the online journey is included in this report for the first time, providing additional context on key points of risk such as money transfers and password resets.
All industries have felt the impact of COVID-19. There are clear peaks and troughs in transaction volumes coinciding with global lockdown periods.
Financial services organizations realized a growth in new-to-digital banking users, a changing geographical footprint from previously well-traveled consumers and a reduction in the number of devices used per customer. There have also been several attacks targeting banks offering COVID-19-related loans.
E-commerce merchants have seen an increase in digital payments and several other key attack typologies that coincide with the lockdown period. These included account takeover attacks using identity spoofing and more first-party chargeback fraud.
Rebekah Moody, director of fraud and identity at LexisNexis Risk Solutions, said: “The move to digital, for both businesses and consumers, has been significant. Yet with this change comes opportunity for exploitation. Fraudsters look for easy targets: whether government support packages, new lines of credit or media companies with fewer barriers to entry.”
According to the IDC Worldwide Quarterly Server Tracker, vendor revenue in the worldwide server market grew 19.8% year over year to $24.0 billion during the second quarter of 2020. Worldwide server shipments grew 18.4% year over year to nearly 3.2 million units in 2Q20.
In terms of server class, volume server revenue was up 22.1% to $18.7 billion, while midrange server revenue declined 0.4% to about $3.3 billion and high-end systems grew by 44.1% to $1.9 billion.
“Global demand for enterprise servers was strong during the second quarter of 2020,” said Paul Maguranis, senior research analyst, Infrastructure Platforms and Technologies at IDC. “We certainly see areas of reduced spending, but this was offset by investments made by large cloud builders and enterprises targeting solutions that support shifting infrastructure needs caused by the global pandemic. Investments in Asia/Pacific were also particularly strong, growing 31% year over year.”
The worldwide server market ended 2Q20 with a statistical tie between, and Dell Technologies for the number 1 position. HPE/New H3C Group finished the quarter with market share of 14.9% while Dell Technologies captured a 13.9% share of worldwide revenues. Inspur/Inspur Power Systems took third place with 10.5% share and impressive 77% year-over-year growth.
Lenovo and IBM tied for fourth with 6.1% and 6.0% share, respectively. The ODM Direct group of vendors accounted for 28.8% of total server revenue at $6.9 billion with year-over-year growth of 63.4% and delivered 34.4% of all units shipped during the quarter.
On a geographic basis, the Asia/Pacific region performed very well this quarter growing at a combined 31.%. China outperformed the competitive set, growing 39.8% year over year, followed by Japan at 24.9%, and the rest of the region (Asia/Pacific excluding Japan and China) at 13.4%. The United States also grew 25.0% year over year while Canada declined 11.2%. Latin America was able to grow 15.6% while Europe, the Middle East and Africa (EMEA) declined 5.8% year over year.
Revenue generated from x86 servers decreased 17.4% in 2Q20 to $21.6 billion. Non-x86 servers grew revenues 47.4% year over year to around $2.4 billion.
The total security appliance market delivered solid unit shipment and revenue growth in the second quarter of 2020 (2Q20), according to IDC.
Worldwide revenue increased 7.5% year over year in 2Q20 to $4.2 billion. Unit shipments experienced similar growth, increasing 8.0% year over year to a little over 1.1 million units.
The unified threat management (UTM) market segment accounted for the most significant revenue growth. This segment saw an increase of $250 million in revenue for 2Q20 when compared to the same quarter a year ago.
UTM continues to drive market expansion and as the largest overall segment, accounting for 61.8% of the worldwide security appliance market, it is still showing double-digit growth at 10.7% year over year in 2Q20.
In addition to UTM, the Web security segment continues to show strong signs of growth, increasing by 10% year over year. The intrusion detection and intrusion prevention segments (IDS and IPS) declined by similar amounts year over year at -6.2% and -5.1% respectively.
The United States accounted for 44.3% of the total security appliance market revenue in 2Q 2020, up from 42.7% a year ago and with double-digit annual growth of 11.6%. The two other regions showing double-digit growth compared to 2Q19 are Asia/Pacific (excluding Japan and China) and Japan with growth of 10.2% and 14.1% respectively.
The Middle East and Africa (MEA) region grew 8.9% year over year, while Central and Eastern Europe (CEE) saw a 7.2% annual expansion. Western Europe grew 5.5% year over year.
Canada and Latin America showed growth for 2Q20 as well with a 5.4% and 4.6% annual increase respectively. The only region showing a slight decline for the quarter was China with the total security appliance market in the region declining 3%.
“Despite the ongoing pandemic, network security appliances experienced a strong 10.0% growth rebound in 2Q20 over the previous 1Q20 decline. This was due to the increased spending to enable the expanded remote workforce and to secure on-premise resources,” said Pete Finalle, senior research analyst, Security and Trust at IDC.
The global wide area network optimization market size is estimated to reach $4.88 billion by 2027, registering a CAGR of 9.5% from 2020 to 2027, according to Grand View Research.
The growing need for efficient network optimization across business organizations is the major factor in driving the market growth. Moreover, in a bid to achieve improved Quality of Service (QoS) and productivity on their existing network, companies across the globe are increasingly deploying network optimization solutions, thereby supporting the market demand.
The ongoing COVID-19 pandemic has compelled several business organizations and educational institutions to shut their operations temporarily. The closure of educational institutes has necessitated students to use virtual offerings (example – Google Classroom) for learning.
In a bid to offer a unified digital learning experience to students, universities and institutions have been forced to deploy robust network infrastructure, necessitating the need for network monitoring and thereby driving demand for wide area network (WAN) optimization solutions.
Similarly, several enterprises have allowed their employees to work from home till the pandemic is contained, thereby necessitating a reliable and effective network monitoring solution to help minimize latency in the network and deliver an agile response to employees and clients. Therefore, the COVID-19 outbreak is expected to have a positive impact on market demand.
Global WAN optimization market: Key suggestions
- In 2019, North America accounted for a market size of $914.60, attributed to the presence of a number of large enterprises and data centers.
- The SD-WAN optimization solution segment is estimated to witness significant growth from 2020 to 2027, owing to the rapid deployment of SD-WAN across enterprises globally. The SD-WAN helps businesses to enhance their application performance and offers an enhanced user experience.
- Cloud-based WAN optimization solutions segment is expected to witness remarkable growth over the forecast period on the back of benefits associated in terms of accessibility offered and infrastructure cost.
- Increasing awareness regarding cost-benefit associated with a cloud-based business model has led to the increasing adoption of cloud-based WAN optimization solutions across large, medium, and small enterprises in the Asia Pacific. Increasing adoption of cloud-based solutions, especially across verticals including IT and telecom, healthcare, and retail is expected to help the region expand at a CAGR of 10.5% over the forecast period.
- Prominent players such as Cisco Systems; Citrix Systems; and Vmware are strategically focusing on establishing partnerships to strengthen their client base and increase overall revenue share in the market.
With the introduction of the next-generation 5G network, many businesses and service providers are investing heavily in high-speed cloud-RAN (C-RAN) and core network deployments.
While C-RAN helps service providers to reduce huge costs associated with the infrastructure, the high-speed network needs continuous monitoring to ensure operational performance through minimal downtime. Thus, imminent need to minimize the downtime and thereby improve operational performance is expected to drive demand for WAN optimization solutions among business organizations.
With the advent of edge computing and its increased adoption across industry verticals, small-scale data center establishments are on the rise. To attain optimal computation and ensure unified communication during the data exchange process between data centers, businesses are increasingly deploying WAN optimization solutions.
Moreover, the key market players are significantly focusing on partnerships and collaborations with large service providers to capture market share.
Key players in the WAN optimization market
- Cisco Systems
- HPE (Silver Peak)
- Riverbed Technology
- Citrix Systems
- Broadcom (Symantec Enterprise)
- FatPipe Networks
- Versa Networks
- Blue Coat System
- Infovista Corporation
- NTT Communications
- Aryaka Networks
- Circadence Corporation
- Array Networks
- Sangfor Technologies
Despite COVID-related supply and demand disruptions, customers deployed more data center ethernet switches in the first half of 2020 than they did in the same year-ago period, according to Crehan Research. Port shipments increased by 12% year-over-year, resulting in a new record high.
Hyperscale cloud service providers and China leading the way
Hyperscale cloud service providers and China were significant contributors to the market’s growth, according to the report. The hyperscale cloud service provider’s contribution was reflected in the especially strong growth of 100 gigabit ethernet (GbE) and 25GbE – a preferred data center networking architecture within this customer segment. In fact, 100GbE and 25GbE combined had a 40% year-over-year increase, comprising a majority of total data center switch port shipments.
“This robust shipment growth, even in the face of COVID disruptions, is a reflection of the critical nature of data center networks in delivering needed services to businesses, homes and governments,” said Seamus Crehan, president of Crehan Research.
“The data center networking vendors have really risen to the challenge of helping their customers keep networks up and running, despite the myriad of obstacles presented during this pandemic.”
Other data center switch shipments top contributors
- Cisco accounted for the majority of data center switch shipments and saw stable year-over-year market share.
- As a result of its strong presence in the hyperscale cloud service provider sector, Arista was a key driver of the 100GbE switch growth, holding the top share position in this segment.
- In correlation with the strong growth in China, H3C and Huawei gained additional market share.
- Nvidia, through its Mellanox acquisition, saw a doubling of its data center switch shipments, on the strength of its Spectrum-based 100GbE switches.
“Back in January 2017, we forecast that combined shipments of 100GbE and 25GbE would comprise over half of all data center ethernet switch shipments by 2021,” Crehan said. “These recent results show that the transition to higher networking speeds that underpin modern data center architectures is happening even faster than expected.”
Edge computing is a foundational technology for industrial enterprises as it offers shorter latencies, robust security, responsive data collection, and lower costs, Frost & Sullivan finds.
In this hyper-connected industrial environment, edge computing, with its solution-agnostic attribute, can be used across various applications, such as autonomous assets, remote asset monitoring, data extraction from stranded assets, autonomous robotics, autonomous vehicles, and smart factories.
Multi-access edge computing market growth rate and revenue
Despite being in a nascent stage, the multi-access edge computing (MEC) market – an edge computing commercial offering from operators in wireless networks – is estimated to grow at an astounding compound annual growth rate of 157.4%, garnering a revenue of $7.23 billion by 2024 from $64.1 million in 2019.
“The recent launch of the 5G technology coupled with MEC brings computing power close to customers and also allows the emergence of new applications and experiences for them,” said Renato Pasquini, Information & Communication Technologies Research Director at Frost & Sullivan.
“Going forward, 5G and MEC are an opportunity for telecom operators to launch innovative offerings and also enable an ecosystem to flourish in the business-to-business (B2B) segment of telecom service providers using the platform.”
Pasquini added: “From the perspective of the MEC ecosystem, software—edge application and solutions—promises the highest CAGR followed by services—telecom operators’ services, cloud providers’ infrastructure-as-a-service, and edge data center colocation services.”
Growth prospects for MEC market participants
It is predicted that approximately 90% of industrial enterprises will utilize edge computing by 2022, presenting immense growth prospects for MEC market participants, including:
- Telecom operators should work on solutions and services to meet the requirements for connected and autonomous cars.
- System integrators should provide end-to-end solutions, which would be a significant value addition for enterprises because 5G requires specific skillsets.
- The combination of 5G and the new specialized hardware-based mobile edge compute technologies can meet the market’s streaming media needs now and in the future.
- Telecom operators must partner with cloud providers and companies with abilities related to artificial intelligence, machine learning, and computer vision to design solutions for autonomous cars, drone delivery, and others.
- Companies in the MEC space must capitalize on the opportunity for innovation and new developments that utilize 5G and MEC, such as augmented reality (AR) and virtual reality (VR), which can also be applied to games.