The increasing market dominance of the “FAANGs” – a term coined to describe Facebook, Amazon, Apple, Netflix, and Google – along with a resurgent Microsoft, spells bad news for original equipment manufacturers (OEMs).
That’s according to Dimension Data’s Tech Trends 2019 report, which identifies industry trends that will come to define the business technology landscape in 2019 across customer experience, cybersecurity, digital business, digital infrastructure, digital workplace, technology futures and services.
Ettienne Reinecke, Dimension Data’s group CTO, said digital transformation will become a reality next year, and often referenced but rarely accomplished transformation projects will start coming to life thanks to the maturity of technologies like artificial intelligence (AI), machine learning and robotic process automation.
“Empowering employees, the use of accurate data, intelligent and connected application, and technology delivered as a cloud-based or managed service are all at the forefront of the technology trends for 2019,” he said. “They present a big opportunity for businesses in every sector, to improve internal processes, the services they provide customers, and the ability to develop and grow.”
Reinecke foresees a period of “unprecedented change and disruption for major technology vendors driven by factors largely outside of their control.”
“Not only are technology consumption patterns changing, but how innovation is driven, products are developed, and intellectual property is shared in an opensource and free manner,” he said. “All of this is driving disruptions that are hard to predict or manage.”
FAANGs don’t buy their technologies from OEMs like HPE, Dell, Cisco or IBM, Reinecke said. Instead they source technologies or components from original device manufacturers (ODMs), write their own code and build their own offerings. This diminishes the addressable market for OEMs.
In addition, these companies are making their source code available in open-source communities, such as the Open Networking Foundation and the Open Compute Project, allowing enterprises that have the resources and funding to follow suit, and reducing the total addressable market for OEMs even further, according to the report.
Now add new consumption patterns, such as IaaS and SaaS offered at scale, and the addressable market reduces even further, Reinecke said.
FAANGs also are out-innovating the more established players, he said. For example, Google and Microsoft are embedding advanced innovation into all their products and services, at no additional charge, making it increasingly hard for narrowly focused technology companies to compete. Applications are enriched with analytics, machine learning, AI and the application stack itself, to provide additional value, depending on the use case.
“The effect of all this on OEMs will be significant, and in some market areas OEMs are already competing for roughly 40 percent of the total addressable market,” Reinecke said. “As time goes on we’ll have a lot of big fish competing in a smaller and smaller pond — and I foresee that the big fish will start eating the small fish. I believe that the vendor landscape is going to undergo a metamorphosis over the next three to five years and those that emerge will …
.@Telarus aims to streamline commissions and build partner loyalty. dlvr.it/RBjWJJ
August 22 2019 @ 21:32:04 UTC