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1 Frost & Sullivan Publisher Sample Phone: (US) or or (Int'l) Hours: Monday - Thursday: 5:30am - 6:30pm EST Fridays: 5:30am - 5:30pm EST customerservice@marketresearch.com MarketResearch.com
2 Cloud Infrastructure Testing and Cloud-based Application Performance Monitoring Market Virtualisation, Security, and Performance Expected to Drive Market Growth May 2014
3 Contents Section Slide Number Executive Summary 4 Market Overview 10 Total Cloud Infrastructure Testing and Cloud-based APM Market --- External Challenges: Drivers and Restraints 18 Forecasts and Trends 30 Demand Analysis 36 Geographic Analysis 38 Cloud Infrastructure Testing Segment Breakdown 49 Cloud-Based Application Performance Monitoring Segment Breakdown 67 The Last Word (Conclusions and Implications) 81 Appendix 84 3
4 Executive Summary Cloud infrastructure testing consists of products and solutions used to test the physical components as well as those associated with the cloud s virtualised layer. However, cloud-based application performance monitoring concentrates on monitoring and troubleshooting business critical cloud application in terms of quality of experience (QoE) of end user and security testing. The global cloud infrastructure testing and cloud-based application performance monitoring markets generated $ million and $ million in 2013 and had base year growth rates of % and %, respectively. Though participants such as Compuware Corporation, Keynote Systems Incorporated, and Hewlett-Packard are leading in the cloud-based APM market segment with individual revenue shares of %, %, and %, respectively, other participants such as AppDynamics Incorporated, New Relic Incorporated, Riverbed Technology, and AppNeta have made significant inroads into the market. Ixia and Spirent Communications are significant participants in the cloud infrastructure testing market. Other participants in this segment include Shenick Network Systems and Quali Systems Limited. 5
5 Executive Summary (continued) Market drivers include the importance of security within the cloud, need to effectively reduce downtime, and the sheer volume of enterprises adopting cloud-based infrastructure. Restraints include the lack of standards and interoperability and transition from IPv4 to IPv6 protocol. From an end-user s perspective, network equipment manufacturers have a % share in the cloud infrastructure market segment, followed by service providers and enterprises with revenue shares of % and %, respectively. Other end users represented a % share in this market segment. In the base year 2013, North America accounted for $ million of the overall cloud infrastructure testing and cloud-based application performance monitoring market, while the Europe and the Asia-Pacific regions accounted for $ million and $ million, respectively. The rest of the world generated $ million that year. 6
6 Executive Summary Market Engineering Measurements Total Cloud Infrastructure Testing and Cloud-based APM Market: Global, 2013 Market Overview Market Stage Market Revenue Market Size at End of Forecast Period Base Year Market Growth Rate Growth $ M $ M % (2013) (2020) Compound Annual Growth Rate Customer Price Sensitivity Degree of Technical Change % 8 (CAGR) (scale:1 [low] to 10 [High]) (scale:1 [low] to 10 [High]) Decreasing Stable Increasing For a tabular version click here. Note: All figures are rounded. The base year is
7 Executive Summary Market Engineering Measurements (continued) Competitor Overview Number of Competitors More than Number of Companies that Exited* Number of Companies that Entered* (active market competitors in base year) (2013) (2013) Decreasing Stable Increasing *Companies with revenue of more than $50 M Note: All figures are rounded. The base year is
8 Executive Summary CEO s Perspective 1 Cloud infrastructure and cloud-based APM will witness significant growth in the years ahead. 2 The rate of migration from the CAPEX to OPEX model is an important market driver Security, service-level agreements (SLAs), and downtime within the cloud are important factors that should be addressed. The lack of standards and interoperability among different cloud computing vendors is challenging. Though North America is a leading participant, the APAC region will witness more market penetration. 9
9 Market Overview Definitions Cloud computing is synonymous with computer resources and software distributed over a shared network. Unlike the CAPEX model where IT businesses have dedicated infrastructures for their business, cloud computing characteristics are scalable, multi-tenant, and work on a subscriptionbased model. The different service models offered by cloud service providers include the following: o Software-as-a-Service (SaaS): In this service model, end users access software, and other applications are hosted on the cloud by the cloud provider at a nominal fee. o Infrastructure as a Service (IaaS): In this service model, participants offer physical equipment to enterprises on which their proprietary software and applications are installed. o Platform as a Service (PaaS): In this service model, PaaS providers offer an application development platform along with infrastructure such as storage, network, and virtualisation technology. 11
10 Market Overview Definitions (continued) Cloud deployment models used include the following: Private clouds: These are comprised of dedicated servers specifically meant for a single enterprise. The dedicated server (level of infrastructure) can be either located at the premise of the service provider or deployed in-house. This is the most secure of all deployment models. Although this deployment model has typical cloud characteristics like scalability and virtualisation, the onpremise deployment model tends to be towards the traditional CAPEX model, because the enterprise still invests in procuring the necessary software and infrastructure to run its proprietary data in-house. Public cloud: The server infrastructure is shared among subscribers, unlike the private cloud deployment model with stand-alone servers. The information is outsourced to the cloud service provider, and the user is billed according to the frequency of use. Hybrid cloud: This deployment model is a blend of private and public cloud deployment. Conservative enterprises can keep sensitive data on their private cloud and outsource data that are not so sensitive into the public cloud. Hybrid clouds can allocate extra resource from the public cloud if there were a sudden spike in the enterprises private cloud model. 12
11 Market Overview Definitions (continued) Cloud infrastructure testing would involve the testing of the cloud s physical and virtualised components before deployment to test for conformance, load, and performance. Testing across the different cloud deployment models is important in order to ensure that conformance, security and performance are not compromised when the deployment model goes live. Levels of infrastructure that need to be tested include network interconnectivity, server, and the virtual environment. It also involves the conformance testing of components which constitute the different service models offered by the cloud service provider. Testing of virtual servers and storage and different components that constitute the virtual environment are a significant piece of cloud infrastructure testing. 13
12 Market Overview Definitions (continued) Application performance management primarily focuses on an application s quality and performance from an end-user s perspective. Unlike traditional IT management, APM takes a more proactive approach to performance monitoring by breaking barriers in between and providing a more cohesive and holistic view of the entire application. Application performance management is a fragmented market that aims at analysing the performance of applications critical to the business requirement. As the degree of migration to the cloud continues to increase, a growing need for APM software that is deployable on the cloud exists, which would enable end users to perform the performance of business-critical applications. The cloud based APM solution is generally provided as an SaaS offering. Like the cloud, cloud-based APMs are also scalable and multi-tenant. Unlike the traditional APM that focussed on Java and.net, contemporary APM solutions also integrate languages such as PHP and Ruby. *Network Instruments was acquired on January 6th 2014, by JDS Uniphase Corporation 14
13 Market Overview Key Questions This Study Will Answer Hypotheses Is the market growing? How long will it continue to grow and at what rate? What factors drive or restrain market growth? What influence do these drivers and restraints have on the industry? What are the key market and technological trends in the global cloud infrastructure testing and cloudbased application performance monitoring market? What is the competitive structure in the global cloud infrastructure testing and cloud-based application performance monitoring market? What market segments, regional markets, or vertical markets have demonstrated the greatest growth? 15
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