Why SD-WAN Matters

With the caveats that I do not primarily cover core networks or enterprise communications, I would still argue that importance of software-defined wide area networks (SD-WANs) is not that the market is so large, comparatively speaking, or even that SD-WAN eventually will displace legacy networking platforms.

Strategically, all core networks are evolving towards virtualization, which means all core networks will define, create and support virtual private networks as a basic assumption.

In other words, all WANs eventually become virtual private networks.

There are some related advantages for service providers, ranging from the possibility of offering differentiated classes of service as a core feature of such networks, to allowing more-efficient use of networks, to reducing operating cost and capital investment.

Customers might gain from ability to buy customized network features that match user core business models (whether there are requirements for latency, quality of service or bandwidth.

In a larger sense, we move closer to the ideal next-generation network we have been talking about--and moving towards--for several decades: a network that can supply not only bandwidth but features on demand, dynamically.

source: Nokia Networks

Top Global Tech Execs "Favorite Apps" are Highly Fragmented

One hears quite a lot these days about monopolies enjoyed by app firms such as Google, Facebook or Amazon, with many calling for antitrust action. So it might come as quite a surprise that top global technology executives have highly-fragmented "favorite app" profiles, with scores generally in low single digits, even for the "favorites."

In other words, as concentrated as consumer use appears to be, at least some consumers (top technology execs) show no comparable concentration of "favorites," though of course that does not answer the question of the amount of usage the favorite apps get.

Top tech executives globally have highly-fragmented sets of “favorite apps,” at least when asked to name them, unaided. Use of LinkedIn in India, at 11 percent, is the highest reported mention of a “favorite app.” Globally, LinkedIn is tops at four percent.

In China, Baidu gets seven percent mentions. In Japan, Gmail gets seven percent, while BBC is tops at eight percent. In the U.S. market, Amazon is highest at five percent.

survey of 850 global technology executives suggests.

source: KPMG

Walmart Weighs New Video Streaming Service

A possible Walmart video streaming service aimed at rural and Middle America viewers is something of a “Fox News” strategy, aimed at a large segment of the potential audience whose cultural, religious and social views are distinct from those of urban viewers in big cities on the east and west coasts.

It is a risky thought. The U.S. online video subscription market is nearing saturation, so growth would have to come from taking market share. It will be an expensive proposition if Walmart produces some original programming. As Amazon Prime seems to have found, it is hard to create audience-attracting original programming.

Aiming for a cost that is less than Netflix or Amazon Prime, it is not yet clear whether the service would license content solely, or mostly; nor is it yet clear whether the service would include some original content.

Even if “free two-day shipping” is the main reason people subscribe to Amazon Prime, consumers still indicate that the video service is “very important.” Walmart obviously will try and leverage the stickiness of subscription video to reinforce its own retail strategy, which increasingly relies on online distribution.

source: Strategy Analytics

On the other hand, Amazon Prime is starting to generate significant direct revenue, even if the video service is a way to boost value for the Prime membership overall. Lots of consumers arguably join Prime just for the shipping benefits, with the online video a way of justifying the subscription’s value.

source: CB Insights

Also, there is evidence that online video viewers shop more using online services. That is another potential value for Walmart: it positions itself to grab a bigger share of active online shopping users.

So the point is that a potential Walmart streaming service provides a mix of value, including direct revenue, a potential boost for its online retailing business and a chance to create a new advertising and promotion vehicle.

source: Compete

In some ways that mix of value is true even for AT&T, whose DirectTV Now service primarily aims to generate direct subscription revenue, but also creates bundling opportunities for the rest of AT&T's subscription businesses, as well as an advertising opportunity.

source: Beyond Devices

App and Platform Providers Move into Health

It arguably is easier to “move up the stack” when a business already operates at the platform, app or device level. And that could be the case for Alphabet, Amazon, Apple and Microsoft as they seek to create new roles for themselves in the health business.

Alphabet wants to leveraging its extensive cloud platform and data analytics capabilities in the health area, including health records, for example.

source: Business Insider

Amazon is moving towards distribution of  medical supplies and pharmaceuticals. Alexa could become an in-home health concierge.

Apple logically sees itself as a medical device supplier. Microsoft operates Microsoft Health.   

Ridesharing Might Increase Traffic, But Public Transit is Failing, Anyway

Nobody knows whether ridesharing services increase traffic, decrease it, or have no effect. It is likely all three scenarios are possible, depending on geography. In parts of the country that are relatively dense, with highly developed public transportation, ridesharing might increase traffic, if it shifts ridership from public transportation.

This is a relevant trend for mobile service providers since such networks are expected to play a growing role supporting autonomous vehicles that might replace much of the human-driven ridesharing supply.

Some now argue that ridesharing services increase traffic. Others will point out that passengers are shifting away from use of public transportation is falling anyway, for obvious reasons: jobs and the places people live are more scattered than in the past.

In many U.S. cities, buses and light rail simply are not flexible and convenient enough to move people where they need to go.

That is why ridership of public transit has been falling. U.S. transit ridership in March 2018 was 5.9 percent below March 2017, according to the latest data published by the Federal Transit Administration.

In fact, use of public transif seems to have been falling for three years.

Ridership declined in all of the nation’s 38 largest urban areas (and the 39th, Providence, gained only 0.1 percent new riders). Transit systems in Austin, Boston, Charlotte, Cleveland, Miami, Milwaukee, Philadelphia, San Diego, and Tampa-St. Petersburg all suffered double-digit declines, with Austin losing 19.5 percent and Charlotte 15.4 percent despite being two of the fastest growing urban areas in the nation.

The problem seems to be that “big box” transportation does not work as well, anymore, since jobs now are more dispersed, in most cities. That is one reason some believe more flexible, smaller capacity solutions might work better.

And yes, with enough land use planning to densify urban cores one can concentrate work, but at the cost of creating unaffordable housing close to work. There is no painless solution.

One study estimates 70 percent of Uber and Lyft trips are in nine large, densely-populated metropolitan areas (Boston, Chicago, Los Angeles, Miami, New York, Philadelphia, San Francisco, Seattle and Washington DC.

Other studies reach opposite conclusions, arguing that ride sharing services can reduce traffic. One MIT study suggests multiple passengers per vehicle would have a clear effect on traffic.

  

Referred to as transportation network companies, such TNCs account for 90 percent of TNC or taxi trips in eight of the nine large, densely-populated metro areas (New York is the exception) and in other census tracts with urban population densities, the study estimates.

In suburban and rural areas, taxis serve slightly more riders than TNCs. The same is true in New York City (counting car services in the taxi category).

People with disabilities make twice as many TNC/taxi trips as non-disabled persons, but taxis account for two thirds of their TNC or taxi trips.

TNCs compete mainly with public transportation, walking and biking. About 60 percent of TNC users in large, dense cities would have taken public transportation, walked, biked or not made the trip if TNCs had not been available for the trip.

About 40 percent would have used a personal vehicle or a taxicab had TNCs not been available for the trip.

The bottom line, one study claims, is that  shared ride services such as UberPOOL, Uber Express POOL and Lyft Shared Rides, while touted as reducing traffic, in fact add mileage to city streets, at least in bigger urban areas.

Private ride TNC services (UberX, Lyft) put 2.8 new TNC vehicle miles on the road for each mile of personal driving removed, for an overall 180 percent increase in driving on city streets.

Inclusion of shared services (UberPOOL, Lyft Line) results in marginally lower mileage increases – 2.6 new TNC miles for each mile in personal autos taken off the road.

Shared rides add to traffic because most users switch from non-auto modes. But that is happening with public transportation in any case.

Customer Cloud Infrastructure Spending Grows 50%

Spending on cloud infrastructure services jumped 50 percent, year over year, in the  from second quarter of 2017, according to Synergy Research. Synergy estimates that quarterly cloud infrastructure service revenues (including IaaS, PaaS and hosted private cloud services) are now comfortably over $16 billion.

“Revenue growth at Microsoft, Google and Alibaba far surpassed overall market growth rate,” says Synergy, but Amazon maintained its dominance with 34 percent market share.

Smaller providers are losing share. Of the top 25 cloud providers, only three other companies have seen their market share increase significantly, though none of the three has yet broken through the one-percent market share threshold.

Meanwhile IBM market share has been relatively stable at around eight percent, thanks primarily to its strong leadership in hosted private cloud services.

source: Synergy Research

How Comcast and AT&T Strategies Compare

It would not be stretching an analogy to say that, in the U.S. market, Comcast and AT&T have broadly similar strategies. Both are the most clearly committed to diversifying their roles within the internet and content ecosystems, and particularly focusing on ownership of content creation assets.

In its second quarter, for example, Comcast earned about half its revenue from consumer triple-play services, its “legacy.”

In its second quarter, AT&T earned perhaps $29 billion from traditional mobile and fixed communication services, about 75 percent of total revenue.

Roughly 25 percent of revenue was contributed by the video distribution and partial results of Warner Media for the second quarter. So it speaks volumes that AT&T now says it is a “modern media company.”

One has to suppose that the goal is to shift as much as half of revenue from voice, mobile communications or even internet access to content ownership and content distribution.

It is worth noting that in the consumer services segment (exclusive of consumer mobility), about 71 percent of AT&T segment revenues now come from video entertainment, not voice or internet access.

The point is that content and related assets now are viewed as key by both Comcast and AT&T, essentially as a means to occupy different roles within the content and communications ecosystem.

And, eventually, the revenue profiles of Comcast and AT&T might not be too dissimilar. Where Comcast is diversifying away from its legacy video services position, AT&T is increasing its exposure in those areas.

Where business services and mobility are significant revenue contributors for AT&T, Comcast is growing in those segments. And where Comcast is a content creation company, so AT&T now is a content company, in part.

That fundamental "take market share from the other guy" strategy has not changed too much over the last two decades. Basically, telcos upgraded to broadband to trade market share with the cable competitors. Cable has grown by taking telco voice and internet access share in the consumer segment, and now is encroaching on business customer share.