Mary Meeker, partner at venture firm KIeiner Perkins Caufield & Byers (KPCB), released her annual internet trends report on Wednesday. As usual, the lengthy compilation of Internet prognostications offers a comprehensive look at the current digital technology landscape and what tech trends to expect next.
Amazon Web Services remains the undisputed leader in terms of cloud adoption, but Google and Microsoft Azure are starting to catch up. Citing data from RightScale, the report shows that AWS is being used by 57 percent of IT professionals, the same as from a year earlier. Meanwhile, Azure cloud adoption increased 14 percent in the last year and Google cloud adoption grew by 5 percent.
Businesses are spending almost as much on private and public clouds as they are on traditional data centers. Spending on public and private clouds last year rose to $36 billion, up 37 percent since 2014. That accounts for 37 percent of IT infrastructure spending last year, compared to 63 percent spent on traditional data centers. In terms of cloud concerns, the report notes a shift in focus from data security and cost uncertainty to vendor lock-in and compliance.
GOOGLE AND FACEBOOK OWN THE DIGITAL AD MARKET
Internet advertising will surpass TV ad spending within six months, with 85 percent of the growth going to Google and Facebook. Google made an estimated $35 billion in advertising revenue in 2016 compared to Facebook's $14 billion.
However, Facebook's ad business is growing at a much faster rate -- 62 percent year-over-year in 2016 compared to Alphabet's 20 percent growth over the same period.
SMARTPHONE GROWTH CONTINUES TO SLOW
This one is hardly breaking news, however Meeker points out that shipments of smartphones grew just 3 percent year-over-year in 2016 versus 10 percent year-over-year in 2015.
Internet penetration growth is also slowing, but with 3.4 billion internet users globally, about 46 percent of the world's population is connected.
Meeker also highlighted slowing smartphone sales and internet growth in last year's report.
HEALTHCARE AT A DIGITAL INFLECTION POINT
The healthcare industry is in a "virtuous cycle of innovation," Meeker explains in the report. Data is at the core of healthcare innovation, with more sources of digital health data resulting in a proliferation of data sets, which leads to more data insights and ultimately, a greater impact on healthcare delivery and patient outcomes.
Wearables are contributing to the rise of consumer health data, with 25 percent of Americans owning a wearable device, up 12 percent from 2016.
E-COMMERCE IS GETTING BIGGER
Meeker said online retail sales in the US increased 15 percent from 2015 to 2016. Meanwhile, package/parcel volume growth is up 9 percent year-over-year, as more consumers do their shopping online.
Retail store closings also may break a 20-year record, according to the report. Meanwhile, Amazon is opening brick-and-mortar stores, including a book store in New York City and a grocery store, sans cashiers, in Seattle.
Among other e-commerce findings, Meeker pointed out that Amazon now sells more private-label batteries than Duracell, owning about 30 percent of the US market as of August 2016. Amazon also now ranks third in terms of sales of baby diapers, behind Pampers and Huggies.