The IT vendor landscape is constantly in flux, with mergers, acquisitions, new technology developments and the growth of the cloud having a huge impact on which companies might be the most strategic partners for organizations looking to enhance their technology infrastructure.
Consider some of the major technology merger and acquisition activities just over the past year: Microsoft acquired LinkedIn, Oracle acquired NetSuite, Broadcom acquired Brocade, HPE is buying Nimble Storage, and Dell acquired EMC.
These transactions could shift the balance of power in certain IT segments, or strengthen the position of some of the market leaders. We talked to industry analysts to determine which companies are the leaders in various industry segments, and which are the up-and-coming challengers.
The network infrastructure market is undergoing a significant, almost disruptive, evolution because of the ongoing digital transformation of the enterprise, says Rohit Mehra, vice president, network infrastructure at International Data Corp. (IDC).
“And this is happening across multiple domains, as a result of key market trends such as mobility and cloud, and more recently, the increased uptake of IoT specific applications,” Mehra says.
The market “is in the middle of the largest transformation it has seen since IP became the dominate network transport protocol,” adds Andre Kindness, principal analyst at Forrester Research, covering infrastructure and networking. “While network companies have come and gone, the traditional network market really has [not] changed much over the last 15 years.”
Many vendors have started realizing that creating networking equipment for the general market is a dead-end game, Kindness says. "There isn’t much [growth] in campus, generic branch offices, or data center networks,” he says. “The real growth is connecting devices together inside a plant, car, airplane, oil platform, hospital, etc. The generic networking switch and AP [access point] isn’t built for those environments and unique demands.”
This current market shift encompasses a clear change toward software and associated “as-a-service” consumption models, a broader move toward network virtualization across all segments, and an effort toward improving application and infrastructure security, Mehra says.
Within that context, Cisco is the incumbent and the leader, with enterprise technologies that span several segments, Mehra says. “It continues to refine and fine tune its overall portfolio to ensure it can meet the market needs of the segments it serves, including the enterprise campus and the data center, as well as service providers,” he says.
Other major players in the networking space, including HPE/Aruba and Brocade/Ruckus, “have the intrinsic portfolio and market strengths to challenge Cisco’s leadership in the coming years,” Mehra says.
Smaller players and startups will play a significant role in their own right, Mehra says. These include Aerohive, Fortinet, Extreme and Huawei in the wired/wireless equipment market; and Viptella, VeloCloud, CloudGenix, Versa and Cybera in the emerging area of SD-WANs.
Other innovative networking vendors include Accelerated Concepts, Arista Networks and LiLee Systems, Kindness says.
And enterprises can expect more changes in the coming year. “In terms of the outlook for 2017, this seems to be yet another year with significant M&A [merger and acquisition] activity,” Mehra says.
Endpoint and network security
Information security has long been a key concern of technology and business executives. But the high-profile data breaches that seem to be in the news on a regular basis, the growing sophistication of attackers and the risks associated with the “digital economy” seem to have raised security awareness to an even higher level.
“The information security world faces significant challenges in both attack and defense, and 2017 will be a big year,” says Eric Hanselman, chief analyst at 451 Research. “Organizations have to move beyond simply swatting malware and up their game. Threats are moving too fast to try and deal with these on a reactive basis.”
Products that protect endpoints, such as client devices, have taken on a particular importance, with the growth of mobile devices in the workplace.
Symantec, McAfee (Intel) and Trend Micro are the market leaders in this area, says Robert Westervelt, IDC research manager and team lead for its data and IoT security practices.
“These vendors have the most market share globally,” Westervelt says. “Their combined market share makes up 53% of the $8.5 billion market. That doesn’t make them the ‘best’ vendors, but the vendors that have the broadest customer base and strong brand recognition.”
The three vendors have added components to their endpoint security offerings to address advanced threat detection, incident response, and remediation, Westervelt says.
They are being challenged by companies such as Cylance, Crowdstrike, Carbon Black, and SentinelOne. “We track these four emerging vendors and find them gaining adoption, and in some cases displacing the established security vendor players,” Westervelt says.
Symantec and McAfee have responded to these market disruptors and are finding success within their existing customer bases, Westervelt says. Those two, along with Trend Micro “are in good position to maintain a strong customer base, despite the disruption to this highly complicated market,” he says.
As for network security, Cisco’s sheer market clout in enterprise switching and routing “keeps it at the table when companies are choosing firewalls and other security devices for the network,” says Rik Taylor, senior analyst at Ovum.
In next-generation firewalls, Palo Alto Networks “has the mindshare above all others, though Check Point remains a significant alternative,” Taylor says.
Other vendors to watch in the security market, Hanselman says, include Tanium, Tenable Network Security, Rapid7 and Accelerite.
Cloud services continue to grow in popularity as many organizations create hybrid IT environments consisting of public clouds, private clouds and on-premises data centers. But as the market matures, that doesn’t mean it gets any easier to select services.
“Cloud providers have created ever-more complex and comprehensive services,” says Donnie Berkholz, research director at 451 Research. “The march of serverless or function-as-a-service offerings is only increasing this trend.”
Amazon Web Services (AWS) is the current global leader in public cloud infrastructure-as-as-service (IaaS), after inventing the category more than 10 years ago, says Dave Bartoletti, principal analyst at Forrester.
“AWS has the broadest range of infrastructure and platform services, the largest global footprint, and a huge partner ecosystem—yet it still sets the pace for innovation, releasing hundreds of new and updated services every year,” Bartoletti says.
Amazon’s Lambda serverless computing “takes application developers to a new level of functional abstraction beyond the traditional cloud instance model,” Berkholz says. “Serverless application development has significant transformational potential. It requires a marked change in development models and a commitment to the Lambda platform, but that won’t hold back those that are looking to capitalize on the development speed it offers.”
Microsoft Azure is AWS's strongest challenger, Bartoletti says, also boasting a large global footprint and a range of services, especially aimed at developers.
IBM and Google round out the big four global public IaaS vendors. “Google excels in open source developer and database services, container platforms, and machine learning services, while IBM offers an enterprise-focused range of both on- and off-premises infrastructure and development platforms aimed at helping large companies modernize more traditional applications,” Bartoletti says.
Oracle and Centurylink are also established global public IaaS providers, and are investing heavily to challenge the top four, he says.
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Companies providing private cloud software include some of the biggest names in the IT industry: HPE, VMware, Dell, Oracle, IBM, Microsoft, Cisco, NetApp and Red Hat.
Data center transformation
As with networking equipment, the data center technology market is undergoing a transformation.
“The strategic vendor category of the past is a dying breed,” says Sophia Vargas, an analyst at Forrester. “HPE, Cisco, Dell and IBM still dominate the hardware markets, but enterprises are increasingly going cloud first [for] all net new and app refreshes, slowly reducing their reliance on these legacy vendors. The focus now turns to solving the hybrid operations challenge and pursuing tools and vendors that can help enterprises manage this new complexity.”
This data center modernization category could include public cloud services, private cloud software, and tools for devops and automation, application release automation, workload automation, hybrid cloud management and orchestration, etc., from a variety of vendors, Vargas says.
The established hardware vendors are also increasing their capabilities in these categories via acquisitions and investments, Vargas says.
One of the larger trends in data center technologies is the growing adoption of hyperconverged systems, says John Abbot, co-founder and research vice president at 451 Research.
“While they’re a useful option for many applications, enterprises are still getting comfortable with how and where to use them,” Abbot says. “With an IPO from Nutanix and HPE’s acquisition of Simplivity, there is also significant M&A activity that will continue in the year ahead.”
Aside from HPE/Simplivity and Nutanix, which Abbott says is one of the archetypes of the hyperconverged revolution, the market also includes companies such as Maxta and Springpath.
While there’s been considerable excitement about the potential for 5G mobile capabilities, the continued expansion of Wi-Fi availability and the prevalence of broadband usage could blunt 5G uptake, Hanselman says.
The new mobile technology “promises high throughput and low latency, [but] it will need considerable revenue for network operators to justify the large investments required to bring it into global markets,” Hanselman says. It has gained considerable notice as a medium for IoT communications.
“The world of IoT already has significant competition for a dominant communications technology, and Wi-Fi and 5G will vie for applications here, as well,” Hanselman says.
Ericsson, in partnership with Cisco, has created opportunities for itself in this area after going through a difficult year, Hanselman says. “The potential to blend Wi-Fi and 5G access technologies is solid,” he says. “The challenge is taking full advantage of what’s out there.”
Then there’s Huawei, which Hanselman calls a nimble and broadly integrated supplier that has become a significant player in the global access market. “It developed its wireless technology internally and has the potential to build an offering that is a continuum of services for enterprise and network operators,” Hanselman says.
Nokia, with the acquisition of Alcatel Lucent last year, now owns a set of technologies that could let it cover enterprise requirements at the same depth that it’s worked with network operators, Hanselman says. “It now has a portfolio that covers infrastructure and access capabilities, and could do great things if it can close the loop to bring them together,” he says.
With the number of LTE deployments “turning the corner across the world, wireless infrastructure vendors are increasingly seeking newer engagement models with their current customer base,” adds Sathya Atreyam, research manager within IDC’s Worldwide Mobile and Internet of Things (IoT) Network Infrastructure research practice.
The Nokia-Alcatel Lucent merger consolidated the number of large-sized companies, Atreyam says. “Today we have Ericsson, Huawei, Nokia, ZTE and Samsung as the major contenders in the mobile/wireless network equipment market,” he says. “Success for wireless infrastructure vendors lies in their portfolio ability to span across radio access and mobile packet core.
With the onset of 5G-related research and development and associated trials, there are many startup companies bringing newer radio access methodologies as a key building block to 5G story, Atreyam says.
Smaller companies in the 5G radio arena include Cohere Technologies, CBNL, Artemis Networks, Federated Wireless, Xcell Air, and Interdigital.
“It is also important to look out for companies that are attempting to disrupt the typical mobile internet architecture by leveraging the power of multi-access edge computing [and] cloud-based service delivery mechanisms,” Atreyam says.
This story, "The ultimate guide to strategic tech partners" was originally published by Network World.