Worldwide 2012 spending on enterprise application software is now expected to only total $120.4 billion, according to a new Gartner forecast, a 4.5 percent increase over last year instead of the 5 percent originally anticipated. But there is good news: SaaS and cloud services are expected to grow 16 percent in the next three years. The new forecast shows that with only limited signs of improvement in the near term the growth projection for this year has been adjusted downward from a five percent increase in the earlier forecast of the first quarter of 2012 over 2011’s spending of $115.2 billion. Meanwhile, SaaS and cloud-based services are forecast to grow in usage, expanding from 11 percent of enterprise application spending in 2010 to 16 percent in 2015. The increase reflects overall market demand, with more buyers evaluating their options during the current technology refresh cycle, and returning buyer confidence for enterprise software as the market slowly recovers and organizations resume investing in technology. “The global marketplace is still experiencing a series of conflicting and contrasting economic news reports, and the full impact of the economic uncertainty on the enterprise software markets may not be readily assessable until the end of the first half of 2012,” said Tom Eid, research vice president at Gartner. “Spending in 2012 is anticipated to focus on industry-specific applications [such as] upgrades to established, mission-critical software, integrating and securing established systems and infrastructure, and software as a service (SaaS) deployments representing extensions to, or replacement of, existing applications and new solutions.” Gartner’s analysis of the enterprise application software market segments shows the projected revenue increases for enterprise resource planning (ERP) of $24.9 billion in 2012, office suites at $16.5 billion, business intelligence (BI) at $13 billion, and customer relationship management (CRM) to exceed $13 billion. The analysis also shows that cost optimization and shifts in spending will continue to move the market away from in-house “megasuites” in favor of “alternative software acquisition models” with “the automation of processes” that better manage expenditures. Because of this, vendors offering SaaS, IT asset management and virtualization capabilities will continue to benefit from organizations looking to shift up-front capital expenses to operational expenses. Additionally, an increasing number of organizations are demanding software functionality as a service, such as infrastructure as a service (IaaS), platform as a service (PaaS) and SaaS, or via cloud-based services rather than on-premises. As a result, Gartner says, vendors are offering more technology as subscription-based solutions and “pay as you go” offerings, positioning them as more cost-effective and as a way to counter the effects of economic belt tightening. SaaS and cloud-based services help vendors to expand revenue growth by making it easier for end users to test and evaluate new types of software, provision new users to current technologies, and migrate users off older versions to newer versions of software. Additional information is available in the Gartner special report, Report “Forecast: Enterprise Software Markets, Worldwide, 2011-2016, 2Q12 Update” which was released June 20 and on the company’s web site.
(Gartner, Inc.,408-468-8312, www.gartner.com.)
According to new analysis from Frost & Sullivan, the Global Mobile Backhaul and Wireless Core Market earned $357.5 million in revenues in 2011 and is expected to increase 15.1 percent to $954.4 million by 2018. The new study, Analysis of the Global Mobile Backhaul and Wireless Core Market, released June 21 shows that with the deployment of long-term evolution (LTE) the market is moving from time domain multiplexing (TDM) to new architectures such as Internet protocol (IP) and Ethernet. This change allows mobile operators to offer the same or superior levels of service as provided with TDM while creating opportunities for the mobile backhaul test equipment market. Since operators are looking to refresh the existing infrastructure of both the LTE networks and existing 3G networks, they will need to clearly understand the overall mobile network, says Frost & Sullivan. They need improved infrastructure to support traffic, original equipment manufacturer (OEM) protocols, and detect failures quickly. “As the industry transitions to more packed data, service assurance and quality will become increasingly crucial; thus testing will be vital to enhance customer experience,” said Mariano Kimbara, senior research analyst for Frost & Sullivan. “Leading companies educate service providers about technologies with scenarios testing, the need to upgrade their backhauls and address performance issues.” Testing companies are also rolling out certification programs to ensure consistency for telecom-network standards. These certifications have homogenous network devices that work together, enabling a more scalable implementation of OEM technologies across the networks. Additionally, mobile 4G operators are expanding rapidly with no intention of slowing down in the near future. According to Frost & Sullivan, the greater processing capability and performance, powerful operating systems and the availability of intelligent mobile devices, such as tablets and smartphones, have placed a huge stress on mobile networks. The explosion of media-rich and bandwidth-intensive applications is compelling network operators to reevaluate the mobile network infrastructure to improve user experience and reduce costs. “To handle the heightened demand, the mobile backhaul test equipment market is moving to defined classes of service, as it allows the operators to restrict service traffic with premiums on high-speed downloads and multimedia,” said Kimbara. “The market will also get a boost from the rise in service costs.” Additional information on the study, Analysis of the Global Mobile Backhaul and Wireless Core Market, is available on the company’s web site.
(Frost & Sullivan, 210-477-8427, www.frost.com.)
According to a new Forrester Research survey of Consumer Bankers Association (CBA) members, retail banks plan to invest more money to enhance their mobile offerings because of consumers’ growing interest in banking from their mobile devices. The CBA members reported that they will spend one-third of their total digital budget on the mobile channel this year. The survey was conducted in collaboration with CBA's Emerging Channels Committee and the joint research project surveyed digital executives at 19 leading US and Canadian banks. The findings are summarized in a two-part report, The State Of North American Retail Banking eBusiness 2012, released June 20. The survey showed that banks’ mobile spending will focus on three key functions: alerts, remote deposits, and person-to-person payments. While these executives believe digital wallet initiatives show great strategic promise and are therefore watching them closely, most are taking a wait-and-see approach with their 2012 investments. “Payments are by far one of the biggest opportunities in the space for both online and mobile as the growth of person-to-person and mobile wallets continues,” said Brad Strothkamp, vice president at Forrester and principal analyst serving eBusiness & Channel Strategy Professionals, a Forrester blog. “As these initiatives move forward, digital teams will need to drive innovation not only internally but also in the vendor space, especially in areas like digital wallets and revenue-generating payment products.” Richard Hunt, president of the CBA, said, “CBA and our Emerging Channels Committee members are at the forefront of mobile banking developments, as part of our ongoing commitment to meeting the needs of our customers. These findings illustrate how vital the mobile space has become and how innovation is driving the retail banking industry.”
(Consumer Bankers Association,202-552-6371, www.cbanet.org; Forrester Research, Inc., 617-613-6104, www.forrester.com.)
The global revenue for carrier Wi-Fi access points and controllers will reach $2.2 billion in 2017, according to a new report by ABI Research released June 19. According to the report, the majority of the total market in 2011 was accounted for by Cisco, Ruckus Wireless, and Ericsson/BelAir, and as traditional mobile infrastructure vendors add Wi-Fi to their portfolios, these early market share rankings will fluctuate. Carrier Wi-Fi is defined as Wi-Fi that is provided as a service to mobile carrier customers, owned and operated directly or indirectly by the carrier, such as a third party hotspot provider. “While carrier Wi-Fi is still in relative infancy today, the drive by mobile operators to offload data traffic is providing a significant boost to this segment of the market,” said Nick Marshall, ABI principal analyst for mobile networks. The rollout of carrier Wi-Fi has been hampered up until now by the lack of standards which make the process seamless and transparent for the subscriber. Additionally, the use of increasingly sophisticated connection managers, which aggressively seek out validated Wi-Fi access in accordance with the service provider’s policies, will accelerate this trend. Because of this trend, carrier Wi-Fi data traffic offloaded is expected to grow to around 30% by 2017. The report, Carrier Wi-Fi and Mobile Offload, is part of ABI Research’s Femtocell and Small Cell Research Service. Additional information about the report is available on the company’s web site. (ABI Research,516-624-2500, www.abiresearch.com.)
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