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Tech Market Insight: Mary Meeker’s 2017 Internet Trends Report Reveals Current State of the Tech Industry

5 June 2017
2017 Internet Trends Report

Mary Meeker’s annual Internet Trends Report has arrived, providing well respected and in-depth insight on the current state of the tech industry and what the market can expect into the future.

The 2017 report provides considerable promise for the sector, describing the past half-decade as “epic” for public and private internet companies. Furthermore, Meeker points out that “the big are only getting bigger” and global technology mergers and acquisitions are “robust relative to history”.

We’ve summarized the key enterprise points in this year’s 350+ page slide deck below:

Enterprise User Demands & Spend

  • Whilst data center spend continued to hold a significant majority (63%) of 2016 IT infrastructure budgets, this is down 13% from 2013 with public and private cloud spend up 8% and 6% respectively
  • The top cloud computing concerns are shifting, with data security seeing a surprising drop from 42% in 2012 to 35% in 2015 – though it remains the top cited cloud concern. The focus shifted from cost uncertainly to vendor lock-in (from 7% to 22%) and compliance/government (from 21% to 27%)
  • The expectation is that enterprise software will mirror that of consumer apps in terms of design, ease of use and reliability. Unsurprisingly, customers expect that their enterprise services can be delivered via the cloud, on a subscription pricing model and with personalized UX
  • Whilst both public and private cloud spending increased overall, public cloud spending remained static for AWS. However, Microsoft Azure grew significantly with a 14% increase in spend, Google Cloud grew modestly at 5% and IBM managed just 1% (more on Battle of the Cloud in our recent blog post)
  • The way enterprise IT teams perceive their infrastructure is evolving with cloud growth stimulating innovation and creating new opportunities in edge computing, methods of software delivery, containers, microservices and elastic databases

2017 Internet Trends - IT Infrastructure Spend GraphSecurity

  • Cost savings and ease of adoption are driving a rapid uptake of enterprises using cloud-enabled apps, particularly with marketing, HR, finance and sales teams who have the most users of cloud services. The report notes this should be arousing security and compliance concerns given 94% of all cloud apps are not “enterprise-ready” (according to Netskope)
  • Since 2014, there have been almost 40 global cases of security breaches in which more than 10 million identities were exposed. The most significant breach being two from Yahoo! which made global headlines thanks to a staggering 500 million user accounts being hacked and published online. Tech companies: Oracle, Verizon and Three also reported security breaches in 2016
     

Global Internet Market Capitalization Leaders

  • The global internet giant rankings (listed in the table below) saw some movement in the 2017 report with even further lead extensions of the top players with 85% of the top 20 all growing in market value from 2016
  • There were no new entrants to the top 20 which could be thanks to market value growth, coupled with aggressive acquisitions of startups and competitors over the past 12 months, cementing their market capitalization leader status
  • There was 27.8% overall market value growth of the internet market leaders (combined totals) with four Chinese companies reporting the strongest growth: Didi Kuaidi at 50%, JD.com at 41.4%, Tencent at 38.5% and Alibaba 34.7% respectively
Company Region 2016 Ranking 2017 Ranking 2016 Market Value ($B) 2017 Market Value ($B) Market Value Growth
Apple USA 1 1 $547 $801 31.7%
Google (Alphabet) USA 2 2 $510 $680 25.0%
Amazon USA 3 3 $341 $476 28.4%
Facebook USA 4 4 $340 $441 22.9%
Tencent China 5 5 $206 $335 38.5%
Alibaba China 6 6 $205 $314 34.7%
Priceline USA 7 7 $63 $92 31.5%
Uber USA 8 8 $63 $70 10.0%
Netflix USA 14 9 $44 $70 37.1%
Baidu China 9 10 $62 $66 6.1%
Salesforce USA 11 11 $57 $65 12.3%
Paypal USA 13 12 $46 $61 24.6%
Ant Financial China 10 13 $60 $60 0.0%
JD.com China 16 14 $34 $58 41.4%
Didi Kuaidi China 20 15 $25 $50 50.0%
Yahoo! USA 15 16 $36 $49 26.5%
Xiaomi China 12 17 $46 $46 0.0%
eBay USA 17 18 $28 $38 26.3%
Airbnb USA 18 19 $26 $31 16.1%
Yahoo! Japan Japan 19 20 $26 $26 0.0%

 

  • Tech companies dominated 40% of the top 20 global companies (industry-wide) with Apple, Google (Alphabet), Microsoft, Amazon and Facebook securing the five top spots. In 2011, just 20% of tech companies made the top 20 global companies list with Apple and Microsoft the only tech representation in the top five for that period
  • This year’s report also draws attention to the fact that many of the top internet giants are “a long way from where they started”:
 From:  To:
Apple Personal Computer Maker  Smartphone/Computer/Tablet Maker, Content/Media Marketplace and Cloud Services
Google (Alphabet) Online Search Engine  Ad Ecosystem, Web Browser, Digital Video Platform, Content Marketplace, Navigation Tools, Cloud Services, AR/VR Software and more
Amazon Online Bookseller  Global B2B/B2C/C2C Commerce Platform, Content Ecosystem, Digital Video/Music Platform, eReader/Tablet/IoT/OTT Device Maker, Cloud Services, Logistics and more
Facebook US Social Network  Global Social Network, Instant Messaging Platform, Image Sharing Platform, AR/VR Software/Hardware and Ad Ecosystem
Tencent Instant Messaging Platform  Social Network, Gaming, Content Ecosystem, Ad Ecosystem, Cloud Services and more
Alibaba Chinese B2B Commerce Platform  Global B2B/B2C/C2C Commerce Platform, New Retail, Ad Ecosystem, Cloud Services, Logistics Data Platform, Content Creator and more

 

The full 2017 Internet Trends report is available for download now. Looking for more information on global internet and cloud companies? There are 5,000+ cloud service providers and data center operators on Cloudscene and it’s free to search.

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