technology media & telecommunication innovation trend · ict (€ ion) €1,091.78 billion...
TRANSCRIPT
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Technology Media & Telecommunication Innovation Trend Key competitive areas
– In collaboration with Intesa Sanpaolo Innovation Center –
July 2016
2
Context and Headlines (1/2)
• Investment in ICT across vertical and geographical markets will outpace average GDP growth in the
EU, reaching 2.4% CAGR in Italy (2014-19), with end-users channeling spend into 4 main areas which
will remain a priority in the short to mid term;
1. Applying cloud computing
• Infrastructure as a Service will overtake the traditional data center services in revenue terms in
Europe in 2019 with the technical and economic benefits expected to act as strong drivers of robust
growth of 38.9% CAGR (2014-19)
• Beneath the strong leader (Amazon Web Services), the IaaS market is a highly fragmented
comprising numerous global and regional vendors and customers choice of providers depends on a
range of factors
• From a technology perspective, integration of new IT environments with on-premise data centers is
necessary to allow seamless operations
2. Leveraging big data analytics
• Uptake of big data analytics, the process of analyzing data to uncover patterns using computing
algorithms, is driven by greater awareness and increased availability which will fuel a 35.9% CAGR
globally (2014-20)
• The banking, government and retail sectors have the largest “use cases” with demand from the
enterprise segment helping large vendors such as SAS, which offers a deep and broad portfolio of
solutions, maintain leadership
• Apache Hadoop has made huge strides in acting as a catalyst to BDA adoption but Apache Spark,
an open source data processing framework, is making up ground
3
Context and Headlines (2/2)
3. Deploying next generation networks
• 5G, the next generation in wireless networks, promises to be faster with less latency and more
bandwidth than its predecessors and is estimated to represent a ~$250 billion opportunity with its
impact to be felt across a range of vertical end-markets
• Telecom operators and equipment suppliers are at the forefront of developing infrastructure,
products and services but opportunities in the automotive sector, in particular, are abound as 5G
facilitates the autonomous car and Over The Air updates
• South Korea, China, and Japan are working on deploying 5G technology with Asia in general ahead
of Europe and America
4. Maintaining network security
• Advanced persistent threats and distributed denial of service attacks are examples of
approaches that cybercriminals are using with increasing regularity and greater sophistication to
steal from and disrupt companies and other organisations
o Network security sandboxes offer protection against the former and represent a market
opportunity of $3.5 b globally by 2019
o Vendors such as FireEye sell to end-users in the financial and government sectors and are
leading the move to “sandbox-as-a-service” solutions
o DDoS appliances and services offer protection against the latter and represent a market
opportunity of $0.9 b globally by 2019
o Arbor Networks leads a segment which is being shaped by the development of new technologies
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Introduction
5
Investment in ICT across vertical and geographical markets will outpace average GDP
growth in the EU, reaching 2.4% CAGR in Italy (CAGR, 2014-19)
0,00
200,00
400,00
600,00
800,00
1.000,00
1.200,00
1.400,00
1.600,00
2011 2014 2019
Rest of Europe 205,03 224,72 259,85
Switzerland 33,73 36,87 42,16
Sweden 34,24 37,71 43,63
Netherlands 48,61 53,74 63,03
Spain 71,70 79,05 92,15
Russia 71,93 90,22 112,88
Italy 109,97 118,43 133,60
France 140,16 156,09 182,78
Germany 185,31 205,50 244,58
UK 191,09 212,36 252,20
ICT
Sp
en
din
g (
€ B
illi
on
)
€1,091.78 billion €1,214.68 billion
€1,426.85 billion
Year
ICT Spending in Connected Industries: ICT Spending by Countries, Europe, 2011, 2014 and 2019
Frost & Sullivan All figures are rounded. Base year = 2014
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ICT Spending in Connected Industries: Technology Drivers in the ICT Industry, Europe, 2015–2019
From a technology perspective, end-users are channeling spend into four main areas
which will remain a focus in the short to mid term
Technology Trends 1–2 Years 3–4 Year 5th Year
Applying Cloud Computing H VH VH
Leveraging Big Data Analytics H H H
Deploying Next Generation Networks H M M
Maintaining Network Security M H H
NFV/SDN M H VH
Enabling Mobility M M M
Deploying M2M/IoT M M M
Web 4.0 L M H
Wearables & Integration of Consumers L M M
IT/OT Convergence L M M
Impact Ratings: H = High, M = Medium, L = Low
Frost & Sullivan
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Applying cloud computing, leveraging big data analytics, deploying next generation
networks and maintaining network security are key programmes
ICT
Industry
• Infrastructure for operational and
enterprise use requires ICT companies,
particularly communications service
providers, to rely on cloud computing as a
cost-effective service delivery mechanism.
• Enabling customers to deliver cloud
services would also require ICT companies
to invest in cloud-enabled networks to
support their cloud strategies.
• Telecoms network analytics are an
immediate revenue opportunity for ICT
companies as IoT gains maturity. A caveat
remains that privacy and data security must
be sufficiently established to ensure a
sustained revenue stream.
• Unexplored Big Data and analytics areas
will underpin investments in IT software as
the industry defines new market opportunity.
Applying Cloud Computing Leveraging Big Data Analytics
• LTE rollouts especially in Eastern Europe
Broadband access, particularly high speed
access for rural and remote communities
across most of Europe.
• Network optimisation investments such as
software defined networks (SDN) and
network function virtualisation (NFV) to
ensure a most cost effective service delivery
for customers.
• Establishing market leadership in data
security is a strategic goal for ICT
companies in this current hyperconnected
era.
• Complying with data security
regulations is another legislatively driven
factor for ICT companies to invest in ICT
solutions.
Deploying Next Generation Networks Maintaining Network Security
ICT Spending in Connected Industries: Technology Drivers in the ICT Industry, Europe, 2015–2019
Frost & Sullivan
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1. Applying cloud services
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Infrastructure as a Service (IaaS) will overtake the traditional data center services in
revenue terms in Europe in 2019
Traditional Data Centre Services versus IaaS Revenue Growth, Europe, 2014-2019
Infrastructure as a service (IaaS) is defined as hosted, scalable data centre infrastructure resources,
available on-demand, without term or usage commitments, and charged through a pay-per-use model.
IaaS comprises ‘raw’ infrastructure, onto which users can build and deploy applications or workloads.
Though enterprises are migrating some applications to the cloud, they continue to run certain
applications – notably, retail colocation and managed hosting – in traditional data center environments.
Definition/Segmentation Frost & Sullivan Base year = 2014
10
Drivers Short Mid Long
The scalability, flexibility, and agility of IaaS continue to drive demand H H H
Cost savings resulting from a pay-per-use model is an attractive feature of IaaS for
customers H H H
The developer community is attracted by the test and development and high-
performance computing potential of IaaS H H H
Ease of global expansion contributes to IaaS uptake across verticals M M M
The technical and economic benefits offered by multi-tenant IaaS are expected to act as
strong drivers of robust growth
Market Trends Frost & Sullivan
IaaS Market: Key Market Drivers and Restraints, Europe, 2015–2019
Restraints Short Mid Long
Concerns about data security are expected to slow down uptake of IaaS M M M
Regional and vertical market regulations cause uncertainty about IaaS M M M
Concerns related to interoperability with existing systems delay IaaS adoption M M L
Variations in cloud definitions cause confusion among customers M L L
11
In Europe, the IaaS market was valued at $2.9 billion in 2014 and will expand to reach
$10.1b by 2019, a 38.9% CAGR
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
0,0
2.000,0
4.000,0
6.000,0
8.000,0
10.000,0
12.000,0
2012 2013 2014 2015 2016 2017 2018 2019
Revenue 766,3 1.277,5 1.954,5 2.858,3 4.078,2 5.695,2 7.717,6 10.117,4
Growth Rate - 66,7 53,0 46,2 42,7 39,6 35,5 31,1
Gro
wth
Rate
(%
)
Reve
nu
e (
$ M
illi
on
)
Year
Market Analysis & Forecast Frost & Sullivan
IaaS Market: Revenue Forecast, Europe, 2012–2019
Market demand for IaaS continues to grow exponentially, thus resulting in year-on-year (YoY) revenue
growth rates in the 30%–70% range. As the service evolves out of the introductory stage, medium-sized
and large businesses are leading the drive towards cloud adoption.
All figures are rounded. Base year = 2014
12
Beneath the strong leader, the IaaS market is a highly fragmented comprising numerous
global and regional providers
Number of Companies in the Market ~20
Competitive Factors Security, quality of service, network access, portfolio, technology, cost
Key End-user Groups Enterprises across vertical sectors such as finance, retail, healthcare,
manufacturing, automotive, digital media and public sector
Major Market Participants and their share in
revenues terms in 2014
Amazon Web Services (49.2%), Microsoft (5.8%), Rackspace (4.0%),
CenturyLink (2.7%), Verizon (2.6%)
Market Share of Top 3 Competitors 59.0%
Other Notable Market Participants
35.7% amongst British Telecom, Colt, CSC, Google, IBM, Interoute,
LeaseWeb, NTT Communications, Orange Business Services, Sungard
Availability Services, T-Systems and Telefonica
Notable Acquisitions and Mergers IBM acquired SoftLayer in 2013
Key Players & Forecast Frost & Sullivan
IaaS Market: Competitive Structure, Europe, 2014
13
0
1
2
3
4
5
Interoperabalitywith Existing
Systems
Local DataCentre
Price
NetworkIntegration with
Cloud
Cloud Portfolio
CustomerRapport with
Cloud Provider
Competitive Factors
Cloud Portfolio: When choosing an IaaS solution,
customers prefer different environments based on the
type of application hosted. They may want a public cloud
solution for certain business applications, but a more
secure private cloud service for hosting sensitive
customer data. Moreover, they may prefer to self-serve
some environments, while outsourcing management for
others. Flexibility is central to the customer’s choice
Local Data Centre Services: Vertical market
specifications and country laws often stipulate that data
should be housed within the country of origin. These
regulations tilt the market in favour of local providers with
more points of presence in the region than global
counterparts. To overcome this challenge, some global
providers use colocation sites near the customer to host
their cloud services.
Interoperability with Existing Systems: It is important
for cloud services to be compatible with existing
enterprise systems. Enterprise decisions to migrate to a
third-party cloud are governed by its compatibility with
the third-party provider’s cloud platform. It is, therefore,
important for service providers to offer customers a
choice, rather than to restrict their platform to a particular
hypervisor.
Customers’ choice of provider depends on a range of factors among which the breadth
of its cloud portfolio, the location of its data centers and the extent to which its services
are interoperable with existing systems are key
IaaS Market: Competitive Factors
Affecting Customer Choice of Cloud
Providers, Europe, 2014
Frost & Sullivan Customer Analysis
14
Technology Frost & Sullivan
From a technology perspective, integration of new IT environments with on premise data
centers is necessary to allow seamless operations
Enterprises’ challenges
• Disparate environments
• Security
• Latency
Providers’ solutions
Many providers have identified customers’
requirement for hybrid cloud solutions. However,
each provider has a different understanding of
hybrid cloud and the extent of its importance in
the long term. Broadly, it includes a combination
of hosted IaaS services in different cloud
environments (public and private), on-premise
infrastructure, and traditional hosting services
(managed hosting and colocation services).
MPLS
Core
Cloud
services
Retail
Colocation
Managed
Hosting
On premise
IaaS Market: Hybrid IT, Europe, 2012–2019
Delivering Hybrid IT
15
In Italy, the IaaS market was valued at $198 million in 2014 and will expand to reach $1.2b
by 2019, a 44.3% CAGR
0,0
10,0
20,0
30,0
40,0
50,0
60,0
0,0
200,0
400,0
600,0
800,0
1.000,0
1.200,0
1.400,0
2012 2013 2014 2015 2016 2017 2018 2019
Revenue 81,9 127,0 198,1 305,0 461,8 673,8 944,2 1.238,0
Growth Rate - 55,1 56,0 54,0 51,4 45,9 40,1 31,1
Gro
wth
Rate
(%
)
Reve
nu
e (
$ M
illi
on
)
Year
Market Analysis & Forecast Frost & Sullivan
IaaS Market: Revenue Forecast, Italy, 2012–2019
In general, sales cycles for IaaS in Italy are long. This combined with the economic crisis means that
uptake has been slower than elsewhere. Italian clients prefer regional providers but growing realization
of technology benefits is expected to spur rapid growth over the next 4–5 years.
All figures are rounded. Base year = 2014
16
2. Leveraging big data analytics
17
Big data analytics (BDA), the process of analyzing data to uncover patterns using
computing algorithms, breaks down into data discovery and visualization (DDV) and
advanced analytics (AA)
Big Data Analytics (BDA) is defined as the process of analyzing data to uncover
patterns using computing algorithms, programming, and statistical modeling
techniques to find valuable and timely correlations, resulting in actionable insights
that drive business decisions inside an organization.
BDA supports an organization’s capability to make proactive real-time decisions. This
helps position companies to be more predictive than reactive. BDA facilitates access to
traditionally “siloed” data sources and uncovers previously inaccessible information.
Analytics capabilities further help detect anomalies.
Frost & Sullivan breaks BDA down into two categories: Data Discovery and
Visualization (DDV) and Advanced Analytics (AA).
1. DDV solutions integrate, transform and analyze disparate, relational, and non-
relational data sources using complex data mining and exploration on large data
sets to find correlations for insights into a business and its performance.
2. AA does all that a DDV solution does, but is much more bespoke in terms of
building use case-specific predictive or prescriptive data models using advanced
modeling techniques.
Both DDV and AA differ from traditional Business Intelligence (BI) in that they can
handle large sets of data and perform complex analysis that querying in BI does not
accomplish.
Definition/Segmentation Frost & Sullivan
Big Data
Correlations
Insights
Business Decisions
18
Drivers Short Mid Long
The high demand from business users for interactive analysis and insights from
disparate sources of data developed on top of Hadoop drives growth H H M
The recognition that analytics can drive competitive and operational advantages
increases BDA uptake H H M
The availability of enterprise-grade security and data governance, offered by the
vendor community, drives BDA adoption H M L
The push for cloud-based, subscription licensing models, with easy start-and-stop
abilities, increases adoption, especially within the SMB segment M M L
The market is driven by growing demand, greater awareness and increased availability
but integrating solutions into legacy infrastructure in a secure and cost-effective manner
remains a challenge
Market Trends Frost & Sullivan
BDA Market: Key Market Drivers and Restraints, Global, 2016–2022
Restraints Short Mid Long
Challenges in terms of integrating a secure BDA solution into existing legacy
infrastructure and workflows slow adoption H M M
The high cost barrier around deploying an analytics solution and hiring the necessary
talent prevent adoption among SMBs, thus slowing growth M M L
The lack of best practices to solve industry-specific business problems for BDA
prevents growth M L L
Home-grown solutions prevent organizations from making a business case for
external vendor solutions L L L
19
Globally the BDA market was valued at $4.5 billion in 2014 and will expand to reach
$22.7b by 2020, a 35.9% CAGR
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25,0
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35,0
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45,0
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5.000,0
10.000,0
15.000,0
20.000,0
25.000,0
30.000,0
35.000,0
40.000,0
2015 2016 2017 2018 2019 2020 2021 2022
Revenue 4.497,8 6.073,5 8.444,8 12.070, 16.838, 22.774, 29.603, 36.855,
Growth Rate 31,4 35,0 39,0 42,9 39,5 35,3 30,0 24,5
Gro
wth
Rate
(%
)
Reve
nu
e (
$ M
illi
on
)
Year
Market Analysis & Forecast Frost & Sullivan
BDA Market: Revenue Forecast, Global, 2015–2022
The high demand for DDV solutions to democratize analytics for business users drives growth; Hadoop
acts a catalyst for advanced analytics adoption. The rising demand also
helps keep the pricing high, which results in increased revenue.
All figures are rounded. Base year = 2015
20
BDA Market: Percent Revenue by
Vertical, Global, 2015
The banking, government and retail sectors are the largest with use cases in healthcare
and life sciences on the rise
17,7%
15,1%
11,4%
10,1%
10,0%
7,2%
6,4%
22,1%
Banking & Financial Services Government & Intelligence
Retail Telecommunication
Healthcare & Lifesciences Business Services
Manufacturing Others
Customer Analysis
Others includes education, energy, fitness, food & dining, home services, ICT, legal services, media & entertainment, real estate, travel & hospitality and utilities
Banking & Financial Services continues to be the
most profitable vertical due to popular use cases such
as fraud detection & security. This helps companies
identify the patterns hidden in their data to distinguish
fraudulent activity. Compliance & regulatory reporting
is another prevalent use case with organizations
implementing BDA to meet requirements that, for
example, swap traders document their trades.
Government & Intelligence requires specific
solutions for applications such as law enforcement,
suspicious activity tracking, crime management and
the prediction of tax fraud. Mature vendors such as
Palantir, SAS, IBM, Splunk, and SAP dominate this
vertical. BDA applications help authorities improve
intelligence, reduce crime, and determine illegal
activities by disseminating data from various sources.
Retail applications for BDA fall under use cases such
as customer insight, marketing, merchandising,
planning, pricing analysis, and demand forecasting.
Using sales data to identify clusters to plan shelf space
and product assortment, inventory management
across categories and price optimization are examples
of ways in which the retail sector is leveraging
analytics for in-depth insight into customer behavior. Frost & Sullivan
21
Demand from the enterprise segment has helped large vendors maintain leadership
with SAS & IBM winning large deals and Qlik &Splunk demonstrating growth with well-
integrated product suites
Number of companies in the market ~28
Competitive factors
Depth and breadth of product line, customer verticals served,
geographical footprint, M&As, partnerships and funding activities, and
price-performance ratio
Key end-user groups Enterprises
Major Market Participants and their share in
revenues terms in 2015
SAS (16.5%), Qlik (12.2%), IBM (11.1%), Splunk (11.1%), Tableau
(9.3%)
Market share of top 3 competitors 39.8%
Other notable market participants
39.8% among 1010data, Alpine Data Labs, Alteryx, Ayata, Centrifuge
Systems, Context Relevant, Datameer, FICO, Guavus, HP, Lavastorm
Analytics, Microstrategy, Palantir, Pentaho, Platfora, Revolution
Analytics, SAP, Sisense, Dell, TIBCO, Zettics, RapidMiner, KNIME
Distribution structure Direct sales, OEM partners, value-added resellers, technology partners,
and professional service partners
Key Players & Forecast Frost & Sullivan
BDA Market: Competitive Structure, Global, 2015
22
1010data Alteryx
Splunk
IBM
Palantir
Pentaho
Microstrategy
Datameer
Guavus
SAP
Pro
du
ct
Lin
e a
nd
Co
mp
eti
tive
Str
ate
gy f
or
the
BD
A M
ark
et
Market Penetration
TIBCO
Lavastorm
Analytics
Revolution
Analytics
Platfora
Tableau
SAS
Qlik
TIBCO
SAS
TIBCO
SAS
TIBCO
Dell
SAS
FICO TIBCO
SAS
TIBCO
SAS
TIBCO
SAS
TIBCO
SAS
TIBCO
SAS
TIBCO
SAS
TIBCO
SAS
TIBCO
SAS
TIBCO
SAS SAS SAS SAS
Sisense
KNIME RapidMiner
Reni
Analytics
BDA Market: Competitive Landscape, Global, 2015
SAS is the clear market leader when measured in revenue terms but also in respect of
the depth/breadth of its portfolio, the end-user verticals that it serves, and its customer
education/support services
Niche Participant Contender
Emerging/Receding Participant
Market Leader
Challenger
SAS offers a wide portfolio of products for DDV and AA, many of which are industry-specific. It finds
applications in industries including retail, financial services, government, business services, and
manufacturing. SAS offers training online and at demo centers, and is making huge strides in terms of
helping its customers overcome some of the common challenges that decrease productivity Bubble size indicates company size by revenue Frost & Sullivan Key Players & Forecast
23
Technology Frost & Sullivan
Apache Hadoop has made huge strides in acting as a catalyst to BDA adoption but
Apache Spark, an open source data processing framework, is making up ground and
offers notable benefits
Apache Hadoop has made huge strides in acting as a catalyst in the BDA adoption cycle.
While the Hadoop stack is still emerging, the cost and agility benefits it offers are encouraging several
companies to complement their existing Enterprise Data Warehouse (EDW) environments with Hadoop
implementation, primarily for data warehouse optimization. That said, Hadoop’s open source system
requires a company to have all the necessary technical know-how to implement it, which can offset the
cost benefits it offers.
Apache Spark is an open source data processing framework that runs in-memory computations for real-
time data querying and interactivity. It has seen rapid adoption in the Big Data and analytics community as it
offers some notable technology benefits, including the following:
• Spark can run up to 100 times faster than MapReduce for large-scale data processing
• As opposed to Hadoop, Spark has a library of function calls that can be invoked for parallel computation
• Spark lets users quickly write applications in Java, Scala, or Python. It offers a built-in collection of more
than 100 operators for data transformation and processing
• Spark comes with support for SQL queries, machine data and unstructured data, and streaming data
and graph processing. These capabilities provide tremendous flexibility for developers, thus improving
their productivity
Cloudera is the first company to have commercially shipped Spark with its Hadoop distribution. At present, it
has more than 200 customers using Spark, over 60% of whom are using Spark in production. Recently, IBM
launched an Apache Spark-as-a-Service offering that allows IBM Analytics users to capitalize on their
structured and unstructured data by accessing real-time insights in the cloud.
24
3. Deploying next generation networks
25
Speed: 100Mbps
Latency: 10-15ms
Bandwidth: 20MHZ
Year: 2010
4G LTE Speed: 500Mbps
Latency: 5-7ms
Bandwidth: 100MHZ
Year: 2013
LTE-A
Speed: 400Kbps
Latency: 60-70ms
Bandwidth: 200KHZ
Year: 2001
3G
Speed: 1-10Gbps
Latency: 1-5ms
Bandwidth: 6-30GHZ
Coverage: 100%
5G
Primary Services:
• Phone calls
• Messaging
• Mobile TV
Primary Services:
• Phone calls
• Messaging
• Data transfer
• Cloud computing
• Video streaming
Primary Services:
• Phone calls
• Messaging
• Data transfer
• Voice
• Video streaming
• High-speed connectivity
• Autonomous vehicle
• IoT
Primary Services:
• Phone calls
• Messaging
• Data transfer
• Cloud computing
• Video streaming
• High-speed
connectivity
5G, the next generation in wireless networks, promises to be faster with less latency and
more bandwidth than its predecessors
Wireless Networks, Global, 2015–2020
Definition/Segmentation
26
Technical specifications are yet to be confirmed but the telecom industry faces a number
of challenges in order to meet high expectations
Market Trends Frost & Sullivan
5G Market: Key Market Expectations and Challenges, Global, 2015–2019
Expectations
from 5G
High Download
Speed Close to
1–10Gbs/s
100% Network
Coverage
Support 1,000X
more Traffic
Volume
Latency Period
Close to 1–5ms
Higher Battery Life
and Lower Power
Consumption
10–100X Number of
Connected Devices
5G operates at bandwidth between 6GHz-100GHz. Higher
frequency bands offer small cell radius coverage, so
achieving widespread coverage through a traditional setup
is a challenge
Achieving latency time close to 1 millisecond requires all
content be served from a physical position very close to the
base station, less than 1 kilometer. To attain this, an inter-
operator connection point is needed, which is a challenge
Setting up infrastructure to support wide coverage of
network to attain low latency will end up increasing
operation expenditure. The added cost will frame 5G as a
costly technology. This challenge needs to be addressed.
Specification such as speed, bandwidth, and latency time
are not accepted globally. Without a set global standard,
cashing in on the new technology is difficult.
Expectations
Challenges
27
It is estimated that 5G represents a ~$250 billion opportunity with its impact to be felt
across a range of vertical end-markets
Market Analysis & Forecast Frost & Sullivan
5G Market: Revenue Forecast, Global, 2016–2020
All figures are rounded. Base year = 2014
Cumulative Market Size (2016-2020)
The wireless networking industry will experience a paradigm shift in the next 2 to 3 years as 5G
development takes over the communication industry by storm. With current prototypes, R&D, and trials set
through 2020 for 5G development, it is estimated that 5G penetration by 2020 will already generate
significant annual services revenue, with opportunities across verticals
Telecommunication – For the telecommunication industry, 5G
wireless broadband addition would provide faster speed and
meet new technological enhancements such as the Internet of
Things. 5G would facilitate natural disaster communications,
broadcast services, and lifeline communications with enhanced
connectivity.
Automotive – With the introduction of 5G connectivity, the
automotive industry will go through a technological
transformation that would allow vehicles to be interconnected
on a mass scale using an Internet of Things approach. With this
addition, an opportunity for an advanced automation level will
pierce through industries’ research initiatives where 5G would
be a supporting technology for high-end automation in the
automotive industry.
Information Technology – The revolution of 5G in the
information technology industry will drive improvements to
all aspects of communication and services delivery. This
implementation will impact virtualized infrastructure,
service-driven networks, real-time performance and
incorporation of M2M and IoT. Another major area that will
be enabled by 5G is Haptic Internet.
Healthcare – The industry has become technologically
advanced, where many breakthroughs were achieved
using information and communication technologies. With
the implementation of 5G and the IoT platform, consistent
user behavior monitoring in various situations and
environments would allow real-time monitoring of patients.
Big Data analytics would also break through with the
penetration of 5G.
28
Use Cases
Autonomous/ Connected
Vehicle OTA Updates
Augmented/ Virtual Reality
Contextual and
Personalized Services
Wearable Technology
5G Market: Automotive Use Cases, Global, 2015–2019
Utilizing cloud
and location
for multimodal
services
Alerts to actual
real-time
information to
increase safety
Focus on
in-vehicle
firmware
update
High speed
connected
brain
requirement
Vehicle soon to
be extension of
the connected
home
• Real-time
sensor fusion
• Entertainment
services
• Third-party app
integration
• Firmware
updates
• Software
updates
• Vehicle status
• Real-time
traffic
• Real-time
parking
• ADAS
information
• Personalized
driver
preferred
services
• Setting vehicle
interior
parameters
• Communicatin
g with home
appliances
In particular, opportunities in the automotive sector are abound as 5G is needed to
support the massive amounts of real time data processing that are required to facilitate
the development of truly autonomous vehicles
Customer Analysis Frost & Sullivan
29
5G Market: Automotive Use Cases, OTA Updates, Global, 2015–2019
5G to Support
OTA Updates
Key Challenges:
• Need to reduce the download time of the firmware update
• Network coverage for firmware update
• Able to connect only ~10-50 devices for download to create network traffic
• To reduce recalls and expenses/customer experience on recalls
What?
How?
• With 5G network coverage
close to 100% the firmware
updates can be performed
anywhere, anytime.
• With increased download limit
close to 2Gbs/s the updating
can be completed within
seconds.
• 5G has the capability to
connect more than 100
devices at the same time and
offer services.
Parameters Comments
Market Status Conventional OEMs will start offering FOTA updates as of
2018. Currently, Tesla offers this feature
Level of Impact
Initially, the impact will be limited because unlike Tesla,
conventional OEMs want to use OTA only for the software
and not for the electronic control unit (ECU)/firmware
Future Use
Cases
Updating firmware in the ECU, functional software
(infotainment), security patch updates
Example:
Tesla, through 3G and Wi-Fi, offers OTA for its software and requires download
time of close to 45 minutes. With the help of 5G speed and its reliable network,
Frost & Sullivan anticipates that the download time will be reduced close to 80%,
which is approximately 5 minutes.
In the shorter term, Firmware Over The Air (FOTA) upgrades will become a popular
feature of all new vehicles, improving the driving experience and reducing the time spent
on recalls and the cost of warranties
Customer Analysis Frost & Sullivan
30
Telecom operators, equipment suppliers and research institutions are at the forefront of
developing infrastructure, products and services
Key Players & Forecast Frost & Sullivan
5G Market: Competitive Structure, Global, 2015
o Founded in 1972, InterDigital develops and
designs advanced technologies that enhance
common mobile communications and
capabilities. The company designed and
developed various innovations that are used in
digital cellular, wireless products, and wireless
networks, including 2G, 3G, 4G, and IEEE 802-
related networks and products.
InterDigital develops advanced
communication technologies
NTT DOCOMO providing
secured mobile services
Alcatel-Lucent collaborative 5G deployment
o One of Japan's largest telecom companies,
NTT DOCOMO emphasizes on the
importance of integration efficiency of higher-
and lower-frequency bands in order to satisfy
its requirements of achieving 1,000-fold
increase in system capacity and 100-fold
increase in data transaction rate.
o Alcatel-Lucent is a key participant in the
networking and communication industry. For
5G initiatives, it has collaborated with Verizon
and Huawei to deploy 5G services in the near
future. Alcatel has launched Bell Labs
Consulting services to help consumers develop
a strategic 5G plan for their individual usage.
o For 5G, Samsung has participated in the EC-
Korea Cooperation Agreement on ICT & 5G
between South Korea and the European Union.
Further 5G developments have enabled
Samsung to achieve successful beta testing for
5G transmission that recorded a 7.5Gbps or
940MB per second transmission rate in
October 2014.
Samsung innovative 5G
enabling development
Ericsson robust 5G
initiatives
KT Telecom initiating 5G
wireless services
o Ericsson, being a strong participant in the
telecommunication industry, is driving 5G
technology development with its partners and
leading operators to provide a solid foundation
for network capabilities in mobile broadband,
IoT, and media delivery. Ericsson collaborated
with Telstra to provide 5G services for the 2018
Commonwealth Games in the Gold Coast.
o KT Telecom, one of South Korea's major
telecommunications companies, is conducting
extensive 5G trials to launch its 5G wireless
services for the 2018 Winter Olympic Games
that will be hosted in Pyeongchang.
31
South Korea, China, and Japan are working on deploying 5G technology with Asia in
general ahead of Europe and America
5G Market: Technology Deployment, Global, 2015
Europe
• Agreement signed by EU commission with 5G-PPP, Dec 2013
• Public funding of Euro 700 million through the Horizon 2020 program
• June 2014: agreement with South Korea to reach a global consensus by
end of 2015 on the broad definition and key functionalities of 5G
• May 2015: agreement with Japan, similar to South Korean agreement
• Service providers still improvising on the LTE connection and infrastructure
• March 2, 2015: MoU signed between 4gamericas and 5G PPP for
examining the various elements of use cases, requirements, and
component and infrastructure for 5G technology
• 4gamericas members: Alcatel-Lucent, AT&T, Cable & Wireless, Cisco,
Ericsson, Nokia, Qualcomm, Sprint, T-Mobile US
• $1.4 billion invested by South Korea for 5G development and set to launch
5G commercial use services in 2020
• South Korean big 3 providers SKT, LGU+, and KT working very closely to
deploy the technology by 2020
• Japan to realize its 5G commercial use during the 2020 Olympics in Tokyo
North
America
Asia
5G commercialization
expected between
2020–2025
Carriers:
Ericsson, Deutsche
Telekom, Vodafone
5G commercialization
expected between
2020
Carriers:
SKT, KT, China Mobile,
Huawei
5G commercialization
expected between
2020–2025
Carriers:
Verizon, AT&T
Technology Frost & Sullivan
32
4. Maintaining network security
33
4. a. Protecting against Advanced Persistent Threats (APT)
34
APTs, which are run like a business by cybercriminals, have forced security vendors
to take a different approach to detecting malware
• Advanced persistent threats (APTs) is an umbrella term that is used to describe threats which:
o Utilize a type of advanced “zero day” malware
o Evade signature-based detection techniques
o Target or focus on specific individuals or organizations
o Aim to achieve a monetary or intellectual property gain and are run like a business with a return on
investment (ROI) objective
o Look to penetrate an environment (network or endpoint)
• APT’s have forced security vendors to take a different approach to detecting malware: instead of trying
to detect malware based on what it is (signature based), behavioral malware detection relies on what the
malware does.
• A network security sandbox, one of the a growing number of solutions, is an analysis environment
(often virtualized) in which a suspicious program is executed and the behavior of the program is observed,
noted, and then analyzed in an automated manner.
• This approach is more effective than just looking at the appearance of the executable, because
sandboxing goes beyond just the mere appearance of the binary, and observes what the binary does;
and, therefore, it is much more conclusive in determining if an executable is malicious.
• Network sandboxes, although powerful, are not a magic bullet.
• The cybercriminal community has not remained complacent and, as sandboxing technologies have
become more popular as a form of protection for enterprise networks, cyber miscreants have developed
evasive binaries. Definition/Segmentation Frost & Sullivan
35
Drivers Short Mid Long
Increasingly complex and advanced cybercrime drives demand for network security. H H M
Complexity of Advanced Persistent Threats (APTs) rendering signature-based defences
less effective H M L
Integration into existing platforms like UTM ease implementation. M H L
Spear phishing attacks creates difficult to manage threat vector M M M
The complexity of APTs has rendered signature-based defences less effective with
network security sandboxes offering a solution
Market Trends Frost & Sullivan
Network Sandbox Market: Key Market Drivers and Restraints, Global, 2015–2019
Restraints Short Mid Long
Network security tools required to provide cybersecurity increase while corporate
security budgets are not keeping pace. H M M
Organizations are challenged to recruit and retain security professionals to implement
and manage new solutions M M L
The network sandbox market is highly fragmented M M M
Perimeter-centric security implementations are becoming the new “signature-based
defenses” as customers look to analyze East-West traffic L M H
36
0
50
100
150
200
250
300
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
2011 2012 2013 2014 2015 2016 2017 2018 2019
Revenue ($ M) 30,4 103,2 229,1 536,8 1.012,6 1.597,7 2.238,5 2.922,5 3.506,6
Growth Rate (%) 239,8 122,0 134,3 88,7 57,8 40,1 30,6 20,0
Globally the network sandbox market was valued at $0.54 billion in 2014 and will expand
to reach $3.51 billion by 2019, a 45.6% CAGR
Re
ve
nu
e (
$M
illio
n)
Gro
wth
Ra
te (
%)
Year
Network Sandbox Market: Revenue Forecast, Global, 2011–2019
Market Analysis & Forecast Frost & Sullivan All figures are rounded. Base year = 2014
37
Network Sandbox Market: Percent
Revenue by Vertical, Global, 2014
Network security sandbox solutions have their genesis in the financial services and
government sectors but healthcare is a growing area with security needs increasing and
compliance requirements strengthening
23,7%
15,5%
8,5% 9,4%
14,1%
28,9%
Financial Government Healthcare
Education Technology Others
Customer Analysis
Network security sandbox solutions have found their
application with organizations that have acute
security needs and are driven by strict compliance
requirements.
It is no surprise, therefore, that the market has its
genesis in the United States, especially in the
financial sector which remains the dominant industry
on a global basis with a 23.7% share.
This is followed by the government vertical (15.5%).
Although the healthcare industry is a strong
consumer of security services, it is not subject to the
same compliance requirements as other sectors
Without a “checkbox” on the compliance checklist for
network security sandbox, healthcare organizations
have not adopted network security sandbox services
at the rate that one might expect.
Over the forecast period, Frost & Sullivan expects the
adoption of network security sandbox solution to
accelerate as healthcare organizations are becoming
increasingly motivated to prevent breaches and
not just maintain compliance.
Frost & Sullivan
38
FireEye dominates the network sandbox market, continuing to capitalize on its first
mover advantage and supporting more files and operating systems (OS) than its top
competitors such as Palo Alto and McAfee
Number of companies in the market ~12
Competitive factors Files Supported, OS Support, Systems Activity Detection, Deployment
Options, Protocols, Emulation, Anti-Evasion, Features
Key end-user groups and their share in
revenues terms in 2014
Large organizations and enterprises (86%) in the Education, Financial,
Government, Healthcare and Technology sector
Major Market Participants and their share in
revenues terms in 2014 FireEye (62%), Palo Alto (14%), McAfee (12%)
Market share of top 3 competitors 88%
Other notable market participants 12% among Blue Coat, Check Point, Cisco, Fortinet, Lastline,
Symantec, Trend Micro, Websense and Zscaler
Distribution structure Direct sales, Value Added Reseller (VAR), Managed Service Provider
(MSP) & Distributors
Key Players & Forecast Frost & Sullivan
Network Sandbox Market: Competitive Structure, Global, 2014
39
The company did not invent the sandbox but made the term part of the vocabulary of
security professionals and is at the forefront of developing the next generation sandbox-
as-a-service solution
• FireEye did not invent the sandbox, but it certainly made the term part of the everyday vocabulary of
security professionals. FireEye developed and brought to market a purpose-built, virtual machine-based
sandbox platform, the core of which is branded MVX engine.
o It is important to note that FireEye does have a patent on their approach to virtual machine-based
security but Acquisitions of companies such as Mandiant and organic product development has
evolved the FireEye offerings to be a holistic approach to APT defense.
• The platform employs a virtualized execution engine and a cloud-based threat intelligence network that
protects organizations at all stages of the attack lifecycle (exploit, malware download, callback, data
exfiltration and lateral spread) and across all primary threat vectors (Web, email and file systems). The
MVX engine detonates Web suspicious objects, attachments and files, including attacks that leverage
unknown vulnerabilities. The MVX can detonate and correlate attacks across multiple attack stages (or
stages of kill chain) and multiple vectors to be able to identify the more evasive threats.
• FireEye has an advantage at the scale of analysis that can be provided. The platform can scale over
2,000 simultaneous micro-VMs, enabling FireEye to do multi-vector, multi-flow analysis at line rates or
close to line rates. If an organization wants to be able to also inspect html and Javascript traffic, such
capabilities are important.
• Market Innovation: FireEye-as-a-service
• FireEye has created an innovative new offering, enabled by the acquisition of Mandiant, which removes
the implementation and operation complexities associated with the addition of another network security
technology and, most importantly, supports increasingly stretched security departments with combatting
complex threats.
Frost & Sullivan Technology
40
4. b. Protecting against Distributed Denial of Service (DDoS) attacks
41
DDoS attacks are coordinated, malicious attacks against specific organisations which
can be mitigated by deploying appliances and/or services
• Distributed Denial of Service attacks (DDoS) are targeted attacks against specific organizations.
• Threat actors utilize DDoS attacks to disrupt business operations, communications capabilities, and to
harass and embarrass targeted organizations.
• DDoS attacks accomplish this goal by overwhelming the victim's network bandwidth and computing
resources, thereby blocking access or degrading performance for legitimate users.
• However, DDoS attacks range in effectiveness, complexity, size, frequency, and duration, making them
difficult to anticipate, prepare for, detect, and mitigate without specialized solutions.
o A volumetric attack, for example, is a coordinated and purposeful deluge of unsolicited traffic that is
designed to consume all available network resources and bandwidth.
o An application layer attack is a more sophisticated attack that targets weaknesses in logic in Web
applications. Some require little bandwidth and are therefore stealthy and difficult to detect.
• Businesses have many options to mitigate DDoS attacks. Some of these most basic and low-cost options
include setting Access Control Lists (ACLs) and rate-limiting in switches and routers to drop traffic that
“looks like” a DDoS attack or that comes from known bad IP addresses.
• This overview includes two segments: DDoS mitigation appliances and services.
o The appliance segment includes solutions that inspect traffic inline, in real-time, and solutions that
sample network flow data.
o The services segment includes cloud-based services offered as “always-on” routed monthly service
and “on-demand” DDoS mitigation services.
Definition/Segmentation Frost & Sullivan
42
Drivers Short Mid Long
More frequent DDoS attacks creates stronger customer awareness H H M
Massive scale DDoS attacks test the limits of deployed mitigation solutions H H M
Internet access and Web services will increase in importance to businesses in every
industry H H M
DDoS mitigation offers a measurable return-on-investment (ROI) H H M
Increased interest in acquiring protection against DDoS attacks is directly related to the
greater frequency with which they occur
Market Trends Frost & Sullivan
DDoS Protection Market: Key Market Drivers and Restraints, Global, 2015–2019
Restraints Short Mid Long
Lack of technical expertise limits customer willingness to invest in sophisticated DDoS
mitigation solutions H M L
The potential damages of a DDoS attack may not warrant a full DDoS mitigation
solution M M M
Availability of several different DDoS mitigation solutions confuses customers M M L
The targeted nature of DDoS attacks reduces the urgency to deploy mitigation solutions M M L
43
0
5
10
15
20
25
30
0
200
400
600
800
1.000
1.200
2011 2012 2013 2014 2015 2016 2017 2018 2019
Revenues ($ M) 257,9 297,3 354,8 449,5 569,0 677,0 779,5 883,3 977,2
Units ('000s) 5,5 6,8 8,6 11,5 15,2 18,4 21,5 24,6 27,4
Globally the DDoS protection market was valued at $449.5 million in 2014 and will
expand to reach $977.2 million by 2019, a 16.8% CAGR
Re
ve
nu
e (
$M
illio
n)
Un
its
(0
00
s)
Year
DDoS Protection Market: Revenue and Unit Shipment Forecast, Global, 2011–2019
Market Analysis & Forecast Frost & Sullivan All figures are rounded. Base year = 2014
44
DDoS Protection Market: Percent
Revenue by Vertical, Global, 2014
DDoS attacks have traditionally targeted the entertainment, retail and high tech markets
but the problem has spread across verticals
39,8%
13,3%
12,0%
8,0%
7,8%
7,5%
11,7%
High Tech Financial RetailEntertainment Government EducationOthers
Customer Analysis
Others includes hospitality, manufacturing, travel and utilities
Financial markets face a range of attack types,
including DDoS attacks. These organizations have
robust network defenses and tend to invest in the best-
of-breed appliances available.
• In 2012, financial organizations faced blended
attacks as part of the “Operation Ababil” DDoS
campaign.
• In 2015, hacker groups launched DDoS extortion
campaigns against many financial organizations in
which they demanded payment in Bitcoins.
Government agencies are regularly targeted for
DDoS attacks as part of cyber warfare, activism, and
espionage campaigns. This vertical is a relatively
slow adopter despite the large number of attacks.
The education market is a rapidly emerging vertical
market. Students with technical savvy or access to
DDoS tools launch DDoS attacks against school and
district systems, often during mid-term or final exams.
Traditionally, retail (e-commerce), high tech, and
entertainment (gaming, gambling, media, adult, and
news) have been the vertical markets with the most
demand for DDoS mitigation solutions Frost & Sullivan
45
Arbor Networks and Akamai are the leading providers of DDoS mitigation solutions,
notably competing on accuracy, scalability and usability
Number of companies in the market ~25
Competitive factors Accuracy, scalability, usability, latency, cost of ownership, roadmap
Key end-user groups and their share in
revenues terms in 2014
Enterprises (46.3%) and Service providers (42.3%) in the Education,
Entertainment, Financial, Government, High Tech and Retail segments
Major Market Participants and their share in
revenues terms in 2014 Arbor Networks (40%), Akamai (23%), Radware (13%)
Market share of top 3 competitors 76.2%
Other notable market participants
23.8% among A10 Networks, Allot Communications, Andrisoft, Citrix,
CloudFlare, Corero, DOSarrest Proxy Defense, F5 Networks, Fortinet,
GenieNRM, Huawei, Imperva, Juniper Networks , Level 3 (Black Lotus),
Nexusguard, Neustar, NSFOCUS, Psychz Networks, Radware, RioRey,
Verisign, X4B
Distribution structure Direct sales, OEM partners, value-added resellers, technology partners,
and professional service partners
Key Players & Forecast Frost & Sullivan
DDoS Protection Market: Competitive Structure, Global, 2014
46
The various types of DDoS mitigation solutions provide a wide range of options to
meet customer requirements whilst new technologies e.g. Software Defined Networking
have the potential to bring additional benefits
• The DDoS mitigation appliance segment includes products deployed inline for real-time inspection of
network traffic as well as products that function by sampling network flows and metadata to identify
patterns indicative of an attack. High-end DDoS mitigation appliances utilize high performance hardware
to accelerate inspection of network traffic. This hardware allows the solution to inspect traffic without
also becoming a potential point-of-failure or performance bottleneck.
o The engineering, R&D, and high quality materials used in these products are expensive and DDoS
mitigation appliances can be cost prohibitive for many organizations.
• The DDoS mitigation service segment includes content delivery network (CDN) based DDoS mitigation
services and cloud-based DDoS scrubbing services.
o DDoS mitigation services feature a monthly subscription price that is much lower than an equivalent
DDoS mitigation appliance. Multiple years of DDoS mitigation service can add up to be more
expensive than a DDoS mitigation appliance. However, the DDoS mitigation service may still be
appealing as it transforms a very large capital expense into a more manageable operational expense.
• New technologies may change the process of mitigating DDoS attacks
o Software-defined networking (SDN) and network function virtualization (NFV) is the process of
separating networking processes from the underlying hardware.
o Separation and abstraction of network functions has the potential to provide many benefits including
more efficient and resilient networks. Theoretically, these advanced networking technologies could
minimize the need for DDoS mitigation solutions.
o The effect of this trend is contingent upon the widespread adoption of SDN.
Frost & Sullivan Technology
47
Appendices
48
Principal abbreviations
AA Advanced Analytics
ACL Access Control List
APT Advanced Persistent Threat
BDA Big Data Analytics
BI Business Intelligence
EDW Enterprise Data Warehouse
DDV Data Discovery & Visualization
DDoS Distributed Denial of Service attacks
CAGR Compound Average Growth Rate
CDN Content Delivery Network
EU European Union
Gbps Gigabits per second
GDP Gross Domestic Product
GHZ Gigahertz
IaaS Infrastructure as a Service
ICT Information & Communication Technology
IP Internet Protocol
IoT Internet of Things
IT Information Technology
Kbps Kilobits per second
KHZ Kilohertz
M2M Machine To Machine
Mbps Megabits per second
MHZ Megahertz
MoU Memorandum of Understanding
MSP Managed Service Provider
NFV Network Functions Virtualization
OEM Original Equipment Manufacturer
OS Operating System
OT Operational Technology
ROI Return on Investment
SDN Software Defined Networking
SMB Small Medium Business
VAR Value Added Reseller
49
Frost & Sullivan
www.frost.com
July 2016
Study carried out exclusively for
Intesa Sanpaolo Innovation Center
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