Public Cloud Forecast for Australia, New Zealand, South Korea, Singapore

The public cloud services market in Australia, New Zealand, Singapore and South Korea will  grow 12.8 percent in 2016 to total $8.11 billion, up from $7.19 billion in 2015, according to Gartner researchers.

By 2019, Gartner predicts that total public cloud services spending in the mature parts of Asia will rise to $12.4 billion.

Software as a Service is fastest growth segment of the public cloud services market in Australia, New Zealand, Singapore and South Korea with a projected growth rate of 22.5 percent, and a revenue projection of $1.67 billion

Public Cloud Services Forecast, Australia, New Zealand, South Korea, Singapore (US $Millions)

	2015	2016	2017	2018	2019	2020
Cloud Business Process Services (BPaaS)	762.0	778.1	826.7	873.5	919.9	974.6
Cloud Application Services (SaaS)	1,365.1	1,672.6	2,091.2	2,601.1	3,189.8	3,863.2
Cloud Application Infrastructure Services (PaaS)	205.4	248.0	305.3	359.9	412.8	469.3
Cloud System Infrastructure Services (IaaS)	601.2	651.3	733.1	824.8	922.1	1,041.2
Cloud Management and Security Services	227.5	278.3	340.8	402.9	470.4	541.8
Cloud Advertising	4,033.9	4,485.1	5,102.1	5,837.7	6,660.6	7,623.4
Total	7,195.1	8,113.3	9,399.1	10,899.8	12,575.5	14,513.4

source: Gartner  

30 Billion IoT Endpoints by 2020, Verizon Predicts

With an addressable market that includes more than 150 million cars that are not currently connected, over 300 million utility meters, nearly one million vineyard acres and 45 million people sharing goods and services in the United States alone, the Internet of Things (IoT) is now mainstream according to Verizon.

The “State of the Market: Internet of Things 2016 report, authored by Oxford Economics, suggests the worldwide Internet of Things market will grow from $591.7 billion in 2014 to $1.3 trillion in 2019 with a compound annual growth rate of 17 percent.

The installed base of IoT endpoints will grow from 9.7 billion in 2014 to more than 25.6 billion in 2019, hitting 30 billion in 2020, the report suggests.

In 2015, enterprise IoT startup companies outpaced funding for consumer startup companies by 75 percent.

Verizon’s experts say that enterprise IoT startup companies will raise two to three more times in capital in 2016 compared to their consumer IoT counterparts.

1/2 of Asia Mobile Operators Partner with OTT App Providers

Just over half of 60 Asian mobile service providers  surveyed by Alepo have working partnership agreements with over the top app providers in place today, while nearly all expressed interest or intent in creating partnerships.

Most of the agreements seem to center on OTT voice and messaging, but content revenues are growing.

Over-the-Top (OTT) services represent a $28 billion market worldwide, projected to double to $54 Billion by 2019  In the Asia Pacific region alone, Alepo says.

OTT TV and video revenues are expected to reach $18 Billion by 2021,

Displacement of existing voice and messaging revenue streams by OTT substitutes is driving the interest in partnering.  underscored the severity of operators’ revenue loss to OTT providers.

“Proliferation of over-the-top (OTT) content services such as Skype and WhatsApp amongst others could trigger a whopping 30 percent to 50 percent revenue hit on telecom companies’ voice services,” said Rajan Mathews, Director General of the Cellular Operators Association of India, “Telco messaging revenues have already taken a 30% hit, thanks to OTT players.”

Many mobile service providers therefore have concluded that it makes sense to partner, in hopes of salvaging at least some revenue from customers who prefer to use OTT voice and messaging.

Alepo suggests mobile service providers have three strategic options for dealing with OTT competition: control, compete or collaborate. Since some of us would argue “control” is not viable--or even lawful--long term, the three options might alternatively be phrased: coexist, compete or partner.

In that view, coexistence simply means mobile operators cannot prevent OTT competition, but must simply accept that third party apps are both possible as a matter of technology and also desirable as a matter of consumer demand.

Ovum estimates that 31 percent of all OTT partnerships globally come from the Asia  region, with the highest concentration in social media.

The path of collaboration makes sense for many mobile service providers in large part because it has proven so difficult for any mobile operators to create viable branded substitutes to the leading OTT messaging apps, for example.

If revenue sharing is possible, when working with an OTT partner, that will appear the best possible alternative among the several options: doing nothing, building a rival service, or working as an OTT business partner.

US. 600-MHz Auction Bidding Will Begin in July

The first stage of the Federal Communications Commission’s 600-MHz auction, clearing former TV broadcast spectrum, might end soon, with some indication of how much spectrum TV broadcasters are willing to give up, and therefore setting minimum bids for the follow-on auction to mobile service providers.

The forward auction is expected to begin in July 2016, and might--some observers believe--generate about $30 billion in bids on the low end, and possibly as much as $70 billion on the high end.

Perhaps more than has been the case in important mobile spectrum auctions, alternatives will be part of the bidding calculations participants make. More than is typically the case, other options for gaining spectrum arguably exist.

T-Mobile US widely is expected to be sold, at some point, so acquiring T-Mobile US not only gives the buyer spectrum assets, but also operating cash flow and customer base.

Sprint has excess spectrum it almost certainly would be willing to sell, and many now believe Dish Network eventually will sell all of its mobile spectrum assets as well. Some day, Sprint itself will be sold, many speculate. That also would allow a buyer to acquire rich spectrum assets.

Coming, eventually, is lots of millimeter wave spectrum useful for adding capacity, if not necessary coverage.

One consideration everyone will be watching: will Comcast try and acquire spectrum? Some think that would be a tip off about Comcast’s expected entry into the U.S. mobile basis, as it initially could operate as an MVNO, though nobody expects that as a permanent solution.

Comcast also is viewed as a prime candidate to eventually buy one of the weaker U.S. mobile carriers, probably T-Mobile US.

New Street Research now expects both Comcast and "maybe" Charter to launch nationwide U.S. mobile service mobile service using their MVNO agreements with Verizon, as early as this year.

"We expect cable companies to launch commercial wireless offerings over the next twelve months, with Comcast likely leading the charge," New Street Research predicts.

Cable operators could provide wireless services to 20 percent of their residential customers in the next five years, New Street said in a "very conservative" prediction, stealing 35 million customers from incumbent cellular companies, Fierce Wireless reports.

That would give cable operators 13 percent of the U.S. wireless market, leading to slower growth for T-Mobile US and a one percent decline in Sprint subscribers over perhaps five years.

"We would expect them to roll the product out gradually at the outset; however, once they get going, they could take share pretty rapidly."

Carriers could lose between $1.8 billion and $3.8 billion in EBITDA to cable companies during that time, New Street said, with Verizon and AT&T seeing a seven percent to nine percent reduction in EBITDA in 2021.

T-Mobile would see EBITDA growth fall from 13 percent to 9 percent, while Sprint would see growth fall from five percent to roughly zero.

Value and Price Misaligned?

To a certain extent, one always has to discount consumer responses to surveys, since people often do not do what they indicate they will do, and just as often do what they say they will not. 

Still, it is shocking how little many consumers say they will pay for "premium" video network fare. 

Of course, one might also not that "value" and "price" might, in this case, be misaligned. Many of us would be willing to bet that many consumers would actually value HBO, Showtime or Starz at some number above "zero." The issue is what that number will turn out to be. 

Developers Working on IoT Apps Up 34%, Year over Year

The number of developers currently working on Internet of Things (IoT) applications has increased 34 percent since last year to just over 6.2 million today, according to a study sponsored by Evans Data Corp.

In addition, the increase of development for mobile devices, up 14 percent since last year, has led to smartphones being the most commonly connected IoT platform.

Asia will lead, in terms of most developers, to 2021, the study suggests. Growth in India and China will be key, in that regard.

Alphabet (Google) Might Win Smart Cities Transportation Business Model

And the winner of coming smart cities initiatives might well be…..Google. Sustainable business models are the key problem for smart cities initiatives. By some estimates, up to 30 percent of U.S. urban car traffic is created by people looking for parking spaces.

In the U.S. “Smart Cities Challenge,” Columbus, Ohio has won a $40 million grant from the U.S. Department of Transportation to develop a smart transportation capability.

Sidewalk Labs (part of Alphabet, formerly part of Google) is one of many U.S. firms working to support parts of the Columbus project. Sidewalk is initially offering its Flow software to Columbus.

Flow applies Google’s expertise in mapping, machine learning and big data to urban problems such as public parking. Sidewalk says Flow would use camera-equipped vehicles, like Google’s Street View cars, to count all the public parking spaces in a city and read roadside parking signs.

Then Flow would then combine data from drivers using Google Maps with live information from city parking meters to estimate which spaces were still free. Arriving drivers would be directed to empty spots.

“Only Google or Apple are in a position to track parking occupancy this way, without expensive sensors on poles or embedded in the tarmac,” says Alexei Pozdnoukhov, director of the Smart Cities Research Center at the University of California at Berkeley.

Sidewalk also hopes to persuade private parking garages to add their spaces to Flow’s database, and even proposes something called “virtualized parking”. A bit like Airbnb for cars, this would allow retailers and offices to temporarily rent private parking spaces usually reserved for shoppers and workers.

So there is the sustainable business model, in part. Revenues from sales of virtualized parking spaces might be worth $2,000 a year to the city, for each rented spot, also using surge pricing that varies prices by the level of demand.

Flow also would allow parking meter staffs to plot the most-efficient routes, generating perhaps $4 million in additional parking infraction revenue.

By incorporating data from ridesharing and public transportation modes, Flow could estimate the cost of a journey, as well as travel time, using everything from buses and taxis to Uber, Lyft, car-share services like Zipcar and even bike-shares.

Sidewalk Labs was spun out from Google with a mission to “improve city life for everyone,” and is providing use of the Flow software and 100 public Wi-Fi kiosks in Columbus.