Shulou(Shulou.com)06/03 Report--

Back in 2009, the biggest news in technology was Oracle's $7.4 billion acquisition of Sun, a full-stack vertical system that runs through servers, storage, operating systems, middleware, databases, and programming languages. In the twinkling of an eye, when the time comes to 2019, people are talking about AI, big data, containers, Kubernetes, hybrid clouds. The world is changing so fast.

The past decade has been a decade of rapid development of digital technology, and earth-shaking changes have taken place in technological trends, market patterns and business models. Synergy Research has made detailed statistics and reviews on the data of enterprise IT expenditure, IT revenue, SaaS and other market segments over the past decade, and has formed a valuable statistical chart from which we can see how the digital decade, especially the impact of cloud computing on the industry, has changed the world.

Cloud Infrastructure this decade: from 0 to N

First of all, let's take a look at the great changes in corporate IT spending over the past decade.

Corporate spending on data center hardware and software has grown slightly over the past decade, almost stagnant for several years, and did not rebound until 2018 and 2019. Virtualization software, Ethernet switches, and network security are the highest growth segments. The share of servers in the entire data center market remains stable, but the share of storage has declined.

Compared with stagnant spending in traditional data centers, spending on cloud infrastructure has grown unprecedentedly over the past decade and has led to cloud computing giants like AWS. According to Synergy Research statistics and forecasts, the global market for cloud infrastructure services will reach $97 billion in 2019, surpassing spending on data center equipment for the first time.

Spending on cloud infrastructure exceeds that of traditional data centers for the first time in 2019

Specific to the market segment, after ten years of magnificent growth, the IaaS market has generally remained stable in 2019, while PaaS (especially database), Internet of things, and data analysis have begun to become the fastest growing segments, while the share of managed private cloud has declined in 2019.

In fact, the past decade has been a decade of increasing complexity of enterprise applications, a surge in data volume and data analysis, and a gradual IaaS process of infrastructure. Cloud computing is also from 0 to N, the rise of cloud infrastructure service providers, to a large extent absorb the global server shipments, the need for new data center construction. Today, half of all server sales go to the data centers of cloud service providers.

It can be predicted that over the next decade, corporate spending on cloud infrastructure will continue to grow at a high rate and widen the gap with traditional data center spending, and a truly cloud world is accelerating.

SaaS this decade: a Dream of $100 billion

Let's take a look at the software market from the performance of SaaS over the past decade.

According to Synergy Research, revenue in the SaaS market has increased by $100 billion over the past decade, with an average annual growth rate of 39%. The share of the total software market has risen from 2% a decade ago to 23% today, which is still low, and it can be predicted that SaaS still has great market potential in the future. However, this ratio is also easy to understand, because only when IaaS and PaaS are completed at the infrastructure level will SaaS gradually catch up.

By contrast, revenue from traditional permanent license software has performed very mediocre this decade, with an average annual growth rate of less than 4%.

If IaaS has contributed to the growth myth of AWS, SaaS has been the key to Microsoft's successful transformation over the past decade. Microsoft has seized on the trend of SaaS well over the past decade, doubling its software revenue to more than $100 billion in a decade, while SaaS revenue has grown from zero to more than $20 billion.

The annual scale of SaaS2019 reaches 100 billion US dollars.

When it comes to market segments, SaaS has had a significant impact on all major software applications. At present, the largest areas of SaaS are collaboration, CRM and HCM, among which collaboration and HCM have the highest growth rate. ERP's rate in the SaaS market is still low.

The reason why SaaS has become more and more attractive in the past decade is mainly due to the significant improvement in hosting capabilities brought about by the improved cloud computing infrastructure, and SaaS itself is more economical and flexible to use, and more user-friendly. There is no doubt that the potential of SaaS will further explode in the next decade, while traditional software companies will be stuck in a narrower and narrower market if they do not accelerate the transformation.

In this decade, a number of very good SaaS companies have been born. In addition to the old SaaS company Salesforce, Workday, Zendesk, Splunk, Cloudera, Tableau and so on are all contact representatives. The rise of these companies has also greatly promoted the development of SaaS.

The decade of UC collaboration: cloud and Local role Transformation

UC collaboration is an area that has been deeply affected by cloud computing over the past decade.

According to Synergy Research, annual spending on UC collaboration tools is about $45 billion in 2019, of which 68% are based on hosted and cloud-based deployment models, compared with 32% for local deployment models. Over the past decade, the market for cloud-based deployments has quadrupled, while the market for on-premises deployments has declined by an average of 4% a year. Within a decade, the two have quietly completed the transformation of roles.

Among locally deployed products, the largest market segments are IP phones, video conferencing, email, and content management, but their related spending has been declining, with only a few, such as IP phones, showing some growth. In the cloud deployment market, there has been strong growth in areas such as CPaaS, TeamWork applications, UCaas, CCaaS, and cloud file sharing.

With the rapid development of the mobile Internet over the past decade and the gradual introduction of 5G into commercial use in the last year or two, significant technological advances have led to improved communications and new ways to provide business productivity, as well as complexity of enterprise collaboration tools and solutions.

There is no doubt that Microsoft and Cisco are still leaders in the UC collaboration market, but a large number of new market entrants have emerged in the collaboration market in the last decade, and these market entrants are extremely strong, such as Zoom, Slack, etc., and there are often media reports that Microsoft and other companies may buy them. Others, such as Drobox and Twilio, are excellent representatives.

Unicorns this decade: the initial growth of market disruptors

Cloud computing has revolutionized the entire IT industry over the past decade. And the change also led to the emergence of a number of start-ups, and achieved great growth in the market.

In the enterprise market, billions of dollars in revenue is an important threshold, which marks that the company is beginning to take shape in the system of products, markets, channels and users, and begins to have a certain influence in the market. According to Synergy Research data, there are 12 suppliers with annual revenue of more than US $1 billion, of which six belong to the SaaS field, including Workday, ServceNow and so on.

There are also outstanding representatives in other areas, such as software-defined network company Arista NetWorks, super-convergence company Nutanix, all-flash company PureStorage and so on. The 12 companies had revenues of only about $200m in 2009 and more than $23 billion by 2019.

Twelve companies have receivables of more than $1 billion

In addition to these 12 companies, many start-ups have been acquired by large companies in the past decade, including the recent acquisition of Tableau,Nimble Storage by Salesforce and the acquisition of HPE. In addition, revenues such as RingCentral, Zendesk, Zoon and Slack will soon reach billion dollars.

After careful study, it is found that SaaS is the area where unicorns have made the most breakthroughs in this decade, especially in some specific innovative applications. In areas such as network facilities, storage, and cloud infrastructure, size and broad product mix are often more important, which is precisely the advantage of the giants, which makes it more difficult for startups to break through in these areas.

The Ten years of the Giant: the Great Banner of the changing City

Don't think that only startups have emerged in this decade of digitization, and that the changes made by giants in the market are also regrettable.

Compared with 2009, today's enterprise IT market has become "beyond recognition". Ten years ago, Amazon and Google had almost nothing to do with the enterprise IT field, and Salesforce was still in its early stages and had not yet formed a climate. Today, both Amazon and Google are taking advantage of cloud computing to enter the enterprise market. The Chinese market is similar. Alibaba and Tencent are the most prominent representatives of the Chinese market.

Synergy Research calculates the revenue of the giants in the enterprise market, and from 2009 to 2019, the annual revenue growth of the enterprise division of six companies exceeded $10 billion, of which Microsoft achieved the biggest growth so far in the enterprise sector, reaching $50 billion, followed by Amazon, Huawei, Dell, Cisco and Salesforce. The enterprise market revenue of Google and Adobe has not yet exceeded 10 billion US dollars, but the growth momentum is strong.

There are eight large companies that have increased their business by $10 billion.

The Synergy Research statistics do not reflect the ranking of the largest corporate IT suppliers, but the rankings of suppliers that have driven market growth over the past decade, which have been the biggest drivers of the IT market, including cloud computing, over the past decade.

Of course, we can not ignore a clear stream, which does not show that it is not leaking, but has written a legendary story of rapid growth over the past decade, quietly increasing the annual market size to the level of 10 billion US dollars, it is the ODM. Relying on strong demand from users of very large data centers, ODM makes and makes hardware for them, with revenue of $17 billion in 2019.

The eight suppliers + ODM tripled annual corporate sector revenue to $320 billion in a decade, most of which was the result of natural growth. With one exception, Dell, which bought EMC and VMware in 2016, boosted revenue from its enterprise business unit.

The pace of fighting in the market continues. Therefore, we can see that Microsoft, AWS and Google have strongly entered the market of hybrid cloud and even private cloud. Huawei is not willing to be a supplier in the field of infrastructure, but has begun to enter the field of cloud computing strongly.

Overall, the past decade has been the most drastic change in the enterprise services market, reflected in all-round changes in user applications, product technology, business models, and market patterns. Not only a large number of start-ups have emerged, but also the "cross-border" behavior of giants is becoming more and more obvious, all of which are driven by digitalization. If the timeline is lengthened, the past decade is only the beginning of the accelerated pace of digitization, and the wave of the digital world has rolled in in the future.

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