General Themes

• White box hardware

Red Hat

• Acquisition of 3scale for APIs
• RHEL is currently the cash cow
• JBoss Middleware enables applications to speak together
• OpenShift PaaS / rapid application development through microservices (PaaS)
• OpenStack:

Amazon

• Mix shift to higher profitability cloud, which is expected to be the highest portion of revenue
• Moving upstream from SMB to enterprise
• At recent event, had GM, Coca Cola speak, speaking to effectiveness of enterprise strategy
• Most developers prefer AWS
• Aurora is gaining traction (SQL database)
• RedShift has solid traction (data warehouse)
• Workspaces competes with VMWare and Citrix
• Solid security in public cloud
• Roll-out of QuickSight
• Chosen by GuideWire for IaaS
• Chosen by Salesforce as preferred IaaS hosting

Best-In-Class Offerings

• ServiceNow: opportunity to also penetrate ITSM market; very strong customer renewal rates
• ServiceNow: current beachead in service management (incident, problem, service catalog); moving to operations management (servers, application, storage, virtualization, cloud, network) – this model enables ServiceNow to penetrate a business model typically dominated by incumbents (IBM, CA, Microsoft, BMC)
• Workday: opportunity to move down-stream to penetrate SMB market; incumbents (Oracle, SAP) slower to move to cloud)
• Other higher growth opportunities include marketing / customer service targeting SMB space: Hubspot (inbound marketing); Zendesk (leader in customer services software)

• Slow GDP growth resulting in investments in front office
  • Accounting / Enterprise / ERP
  • Productivity Applications
  • Sales and Marketing Applications

Market has had a defensive posture this year, positively benefiting infrastructure players

• Red Hat
• Oracle
• VMWare

Value Play: BI / Analytics Uncertainty

• Larger players increasing competition for the likes of Tableau with fears of Microsoft, Qlik, and Amazon (QuickSight) getting in the way