HCTS 2019: Digital Transformation? More like Digital Revolution

It is that time of year again – registration for our 2019 Hosting & Cloud Transformation Summit (HCTS) is now open! Our 15th annual Summit will be held at ARIA Las Vegas, September 23-25, 2019.

Fifteen years of holding an event of this magnitude is no small thing – and neither is the theme our analysts chose for this year: Empowering the Digital Revolution. We will welcome our analysts and hosting, cloud, datacenter and managed services industry experts to our main stage at ARIA Las Vegas to discuss how the same blueprint that propelled technology companies to become the most valuable corporations in the world will also guide other, less tech-focused, organizations toward similar success. The success or failure for many of these organizations will depend on aid from service providers.

Regardless of where they came from or how long they have been around, all organizations will succeed or fail in this transformation based on their ability to embrace change in an era of unprecedented IT innovation by technologies – such as artificial intelligence (AI) and machine learning (ML), the Internet of Things (IoT) and edge computing, and DevOps and containers – and many won’t have the in-house manpower or resources to adjust quickly. This is where service providers will play a critical role. They will be in a key position to ease that transition with tools and services to manage infrastructure on a subscription basis to aid these companies.

Figure 1 (from left to right) Mark Rice, General Manager of Services Partners at Microsoft; Kelly Hartman, Global Head of the AWS Partner Network at AWS; Daijiang (DA) Han, Head of Global Strategic Alliances at Alibaba Cloud; and Al Sadowski, Research Vice President at 451 Research presenting at HCTS 2018Figure 1 (from left to right) Mark Rice, General Manager of Services Partners at Microsoft; Kelly Hartman, Global Head of the AWS Partner Network at AWS; Daijiang (DA) Han, Head of Global Strategic Alliances at Alibaba Cloud; and Al Sadowski, Research Vice President at 451 Research presenting at HCTS 2018HCTS 2019 will bring top executives alongside our analysts to share key insights on how they plan to leverage service providers to manage cloud infrastructure and leverage security, networking, IoT and colocation services to name a few. Our presenters will also revive previous conversations about partnering with hyperscalers – much like during Research Vice President Al Sadowski’s session that brought executives from Alibaba, AWS and Microsoft to the same stage at a technology event for the first time (Figure 1) – and about how to be more inclusive in the technology industry – much like during our panel with our partners from Women in Cloud and Research Vice Presidents Kelly Morgan and Melanie Posey.

We will post updates between now and September announcing speakers, speaking sessions and sponsors. Until then, register today to get an early bird rate for HCTS 2019, and let us know on Twitter about your favorite HCTS moment from the past 15 years with the hashtag #451HCTS. We look forward to seeing you at HCTS 2019!
HCTS 2019 will bring top executives alongside our analysts to share key insights on how they plan to leverage service providers to manage cloud infrastructure and leverage security, networking, IoT and colocation services to name a few. Our presenters will also revive previous conversations about partnering with hyperscalers – much like during Research Vice President Al Sadowski’s session that brought executives from Alibaba, AWS and Microsoft to the same stage at a technology event for the first time (Figure 1) – and about how to be more inclusive in the technology industry – much like during our panel with our partners from Women in Cloud and Research 

Has Integrated Automation conquered the land RPA and AI once battled for?

Contributed by Principal Analyst Carl Lehmann 

Much the way Winter came for the Game of Thrones heroes in the new season (we promise this is the only Game of Thrones reference and we will not share any spoilers), there is talk spreading in the tech industry that Integrated Automation has come to displace tools like robotic process automation (RPA). We certainly don’t disagree, in fact, we predicted back in 2017 that RPA companies would likely not survive as stand-alone vendors.

In this report from April 2017, we predicted that RPA vendors that focused only on automating repetitive tasks, while very welcome in many IT departments in the short term, would be less likely to survive as stand-alone vendors compared to more sophisticated platforms that can call upon various machine-learning (ML) technologies to add contextual awareness and guidance of unstructured interactions toward desired outcomes. Even RPA platforms that can automate based on rules, conditional routing and logical operations, and modify behavior based on their learnings were also considered tech that would likely be subsumed into ML platforms of hyperscale CSPs, IT leviathans and tool kits of larger systems integrators, according to our analysts. In our opinion, it was unlikely RPA would last long as a stand-alone product.

Again in August 2017, our analyst team noted a rising trend with BPM software transforming into a process- and content-oriented application development and runtime platform, which we coined as 'digital automation platform' (DAP). DAPs, as referenced in the report, will emerge as uniform development, integration and runtime environments that enable intelligent process automation (IPA) – a managerial discipline focused on intuitive user experiences, contextual awareness and transparent execution. Much like what others are describing as Integrated Automation today, DAP would require RPA capabilities – to create software 'bots' that automate repetitive human activities in business processes – and AI integration – to expose 'next best guess' activities for application developers and users (process stakeholders) and extract insight – in one solution. In particular, RPA was cited to “likely become a core enabling technology in several DAP vendors' offerings.” 

In short, DAPs and Integrated Automation sound less like the death of RPA and similar technologies, and more like the next logical evolution toward accelerating business operations and making them efficient. Both describe feature-rich development platforms for content- and process-oriented applications, and a method to extract knowledge from automated execution to meet the innovation and operational efficiency needs of enterprises. In fact, our most recent research highlighting this evolution (in this spotlight report, now available for public access) covers why we believe the core tools needed to discover and effect how value and advantage are created include next-generation DAPs, RPA technology, hybrid integration platforms (HIPs), and process mining technologies (PMT) platforms. 451 Research clients can access all Market Insight reports on RPA and DAP and beyond in our Research Dashboard. Don’t have access? Apply for a Trial.

Much the way Winter has come for the Game of Thrones heroes in the new season (we promise this is the only Game of Thrones reference and we will not share any spoilers), there is talk spreading in the tech industry that Integrated Automation has come to displace tools like robotic process automation (RPA). We certainly don’t disagree, in fact we predicted back in 2017 that RPA companies would likely not survive as a stand-alone vendors.

Key Analyst Insight Roundup from Google Cloud Next ‘19

Contributed by Research Vice President Matt Aslett

Earlier this month, some of 451 Research's analysts across multiple channel disciplines joined 30,000+ Google Cloud Next attendees in San Francisco. As in previous years, the event allowed our team to ponder whether and how Google would be able to translate its popularity with developers into enterprise adoption.

Having attended all three of the Google Cloud Next events (as well as the preceding GCP NEXT event in 2016), we have found it interesting to watch the event become increasingly enterprise-focused while the Google Cloud business attempts to maintain its engagement with developers and startups. Although the latter are still able to experiment to their heart's content using Google Cloud services, there is a clear strategy shift from the company to focus its sales teams on major deployments that will be taken into production at scale. This will increasingly involve Google's internal engineers engaging more directly with enterprise customers, particularly for AI projects, to build playbooks for repeatable, transformational use cases. To do so will likely require the company to engage more fully with consulting and service providers, as well as build up its own professional services organization.

When thinking about overall enterprise strategy, we found that while Google Cloud undoubtedly has had some success with enterprise customers over the years, the flagship customers, such as Spotify, have tended to be digital-native. Deliberate attempts to refocus its sales strategy landed more traditional flagship accounts, but it is fair to say that engaging with enterprise customers while maintaining Google's relationship with developers has not been an easy balancing act. New CEO Thomas Kurian outlined how the company is hiring more enterprise sales staff, but that is only one aspect of how Google is changing – and had already begun to change prior to Kurian's appointment – to address enterprise customers.

Another notable change is Google’s more empathetic approach to meeting customers where they are – accepting that while many potential customers might like to ‘run like Google,' legacy on-premises investments combined with adoption of other cloud services often don't make that possible. The launch of the Anthos hybrid cloud platform for on-premises and multi-cloud application development and management is a good indication of that strategy change, while there has also been a detectable change of emphasis toward describing Google Cloud Platform less as a destination and more as an engine for digital transformation. There is also a greater focus on use cases and ‘solutions' rather than stand-alone products/services. This should serve the company well, particularly in relation to AI and ML, although it will also likely require an increased investment in consulting and professional services.

What we have provided here are only some of the high-level impressions from our analysts. 451 Research subscribers can access this Market Insight report in our Research Dashboard that features all the high-level takes on the most interesting developments from the conference across hybrid- and multi-cloud, AI and machine learning, data and analytics, security, workforce productivity, and IoT. Not a current subscriber? Apply for a Trial.

Global Colocation and Wholesale Datacenter Market to Exceed $54 Billion by 2023

Today, we released projections that the global colocation and wholesale market will exceed $54 billion in revenue by 2023, according to its latest quarterly Datacenter KnowledgeBase (DCKB) – which now tracks more than 6,100 facilities and 1,535 datacenter providers worldwide.
 
451 Research estimates that by the end of 2018, the market had $38.2 billion in revenue. Equinix and Digital Realty remained the global leaders with 9.9% and 6.3% market share, respectively.
 
As for global colocation and wholesale datacenter supply, in terms of net operational square feet, 451 Research analysts expect to see an overall five-year CAGR of 6% by 2023, while global demand is anticipated to be slightly higher at a 7% CAGR.
 
“Cloud provider demand continues to drive strong growth in the top datacenter markets and we expect that to spread beyond the top 20 global markets in the coming years,” said Kelly Morgan, VP of Datacenter Services & Infrastructure. “Some individual markets may see supply growth of 20% or higher, while other slower-growth markets will offset that to provide single-digit growth overall.”
DCKB Global MTDC SQ Supply & Demand
About Datacenter KnowledgeBase
The Datacenter KnowledgeBase (DCKB) database covers more than 6,100 individual datacenters operated by 1,500+ datacenter companies serving North America, Europe, Middle East and Africa (EMEA), Asia Pacific (APAC) and Latin America (LATAM). The DCKB tracks colocation and wholesale datacenter facilities globally, and providers insight into facility capacity and capability, investment and expansion opportunities, and future facility builds.
 
This unique database provides the industry’s most authoritative and comprehensive set of datacenter intelligence, covering more than 100 metrics per facility. The 451 Research team gathers data from primary sources including on-site visits, assessments and direct outreach, to validate and collect this data directly from datacenter operators.

Not a current subscriber of the DCKB? Learn more.
 

451 Research, a leading technology analyst and advisory firm, today released projections that the global colocation and wholesale market revenue will exceed $54 billion by 2023, according to its latest quarterly Datacenter KnowledgeBase (DCKB) – which now tracks more than 6,100 datacenters in 1,535 companies worldwide.

 

451 Research estimates that by the end of 2018, the colocation and wholesale market saw $38.2 billion in revenue – 85% of which are currently tracked in the latest Datacenter KnoweldgeBase. Equinix and Digital Realty remained the global leaders with 9.9% and 6.3% share respectively.

 

As for global MTDC supply – in terms of Net Operational Square Footage – 451 Research analysts expect to see an overall five-year CAGR of 6% by 2023, while global demand is anticipated to reach a slightly higher CAGR at 7%.

RSA Conference US 2019 – Wrap up

Contributed by Research Director’s Scott Crawford and Dan Kennedy

In case you missed it, the annual RSA Conference US – one of information security’s premier showcases – was held earlier this month in San Francisco. As per usual, our Info Security team was on site alongside the other 42,500 attendees.

Innovation was prominently highlighted at RSAC with the annual Innovation Sandbox startup competition. Analyst Pat Daly said the following about the competition, “At the startup end of the spectrum, the top two finalists at this year's Innovation Sandbox, Axonius and Duality Technologies, couldn't have been more different. Whereas Duality claims to have discovered the holy grail by solving the scale and performance issues of homomorphic encryption, Axonius focuses on the somewhat less glamorous problem of asset management by aggregating information from across an enterprise's IT and security architecture to generate an up-to-date asset inventory. It is very telling that, between these two vendors, it was the long-standing problem solved by Axonius that won out against Duality's shiny new offering. While the security industry is constantly looking ahead to the next disruptive technology, whether it is containers, serverless computing, IoT, zero-trust or (in this case) homomorphic encryption, the results of the sandbox show that there is still definite value to be created in solving difficult problems that have nagged at enterprises for decades.”

Despite RSAC’s continued focus on innovation, the sense we picked up from attendees on the show floor was a lot of 'more of the same.' While we find this a bit discouraging – given the increasingly critical role security needs to play in the growing penetration of digital transformation – there were some noteworthy exceptions. It may surprise some that a couple of these weren't the moves of startups, but of strategic vendors introducing a new sort of disruption to the market.

We see these disruptions as examples of an even larger trend, which was the central theme at the (well-attended) annual 451 Research RSA Conference breakfast: the 'innovator's dilemma' and how it threatens existing players in infosec. These players face a direct challenge, not from other vendors of stand-alone products in markets segmented from the rest of IT, but from the cloud hyperscalers and innovators about how IT is developed, deployed and run. These disruptors are redefining the very nature of technology and are incorporating security more directly into concepts from 'GitOps' to cloud-native techniques. This leaves many of security's incumbents facing a daunting choice: continue to cultivate what has succeeded up to now, at the risk being left behind in the future, or embrace today's disruption at the cost of further investment in a winning legacy strategy.

There were many key security trends covered at the RSA Conference such as security analytics, endpoint security, cloud security, zero-trust, managed services, network defense, DevSecOps, regulation and privacy. Our team provides more commentary on the 2019 RSA Conference in a Market Insight report, available through our Research Dashboard. Not a current subscriber? Apply for Trial.