Despite – or perhaps because of – ongoing advances, the opportunity for disruption across key technology sectors remains ripe. So much so, in fact, that Mizuho technology analysts Abhey Lamba and Neil Doshi recently hosted Mizuho’s first Silicon Valley Seminar to better understand how the industry is evolving to address critical challenges.
The two-day tour allowed for conversations with both public and private company executives, as well as on-site visits with companies in the Valley. While vendors generally displayed positivity toward the pace of innovation and market opportunity in the big data, traditional BI and cloud areas, recurring challenges included longer sales cycles, the need for customer education, growing complexity and competitive responses.
While industry behemoths may dominate the headlines, Mizuho found that there’s plenty of room for competition. Here are the key takeaways that any diligent investor, consumer or technologist needs to know.
Legacies Leave Opportunities
While business intelligence and database markets were once dominated by legacy companies such as IBM, Oracle and SAP, growing complexity has bred opportunities for companies to reimagine and enhance market offerings.
In the database market, for example, the advent of mobility, cloud computing and internet-enabled devices shifted the paradigm and drove consumer demand for a wholly reimagined breed of applications which can weather high volumes of high velocity unstructured data. Given the demands of new workloads, the opportunity for NoSQL technology vendors such as MarkLogic and MongoDB widens. Similarly, traditional business intelligence incumbents have demonstrated slowed innovation, opening the door for new vendors, such as Birst.
In addition to the advantage conferred by taking a modern approach to traditional software, market entrants in the database and business intelligence realms will likely also be able to better meet the escalating pace of consumer expectations, posits Tom Groenfeldt for Forbes. As companies seek to protect and store more and more data, they must consider how to also make it more broadly available. “A next generation that thinks in terms of crowd-sources insight will demand it,” he writes.
Changes in the Cloud
Cloud adoption is nothing new and neither are the accompanying security, compliance and regulatory concerns. Yet, the cloud space boasts a few changes that may drastically alter the market landscape.
Perhaps the most newsworthy is Amazon’s pivot from channel partner to vendor with its own distributions of open source technologies. As it begins competing with its vendors at the lower-end of the market, Amazon presents a double-edged sword for entrants, at once posing as a director competitor while simultaneously seeding the market.
Analyst conversations at the seminar also pointed to an increase in public cloud migration for marginal workloads, a trend they expect to intensify over time with cloud workloads continuing to constitute a larger part of overall workload mix.
Providing further evidence for this trend is the disdain customers have voiced for vendor lock-in, driving many emerging vendors in the data and analytics space to deploy solutions on leading public clouds.
Some estimates paint an even more aggressive picture of cloud adoption. For example, a recent Cisco analysis concluded that more than four-fifths of all data center traffic (83 percent), will be based in the cloud with most of this movement going to public cloud services, resulting in more workloads (56 percent) in the public cloud than in private clouds (44 percent).
With Amazon’s cloud expansion, contempt for vendor lock-in and a swing toward public clouds for marginal workloads, the drum of cloud adoption continues to beat uninterrupted.
Netflix vs. Hulu vs. Vessel
Private Internet companies also deserve merit for their potential to disrupt the disruptors – as may be the case in the video services market.
While an enduring icon for industry disruption, Netflix may not forever be the most prominent video service provider. “It is not necessarily a zero-sum-game between Netflix, YouTube, Amazon and Hulu,” Doshi wrote in a note following the seminar. For companies such as Vessel, which provides both free and subscription content, there are enough potential variations on the video streaming service model to attract substantial followings.
Another promising private company, the analysts also met with SurveyMonkey executives, who remain positive on their business outlook. Clearly, they are not the company’s only advocates, as the service has gained notoriety for its widespread polling of election sentiment through its 2016 Election Tracking project.
Through this hands-on approach to industry evaluation and analysis, Mizuho’s takeaways from the seminar paint a picture of ongoing development and potential disruption, highlighting trends to follow for the months – if not years – to come.
Simon Hylson-Smith
CEO, Paragon
Simon Hylson-Smith is a former financial industry Editor and currently CEO of Paragon.