VC Meeker Observes Big Cloud Growth, Slowing Smartphone Shipments

Renowned venture capitalist and securities analyst Mary Meeker released the 2017 edition of her widely read Internet Trends Report May 31 at the Code Conference in Ranchos Palos Verde, California. In the report, she observes that smartphones are a favorite tool for interacting with the internet, but that handset shipments slowed in 2016. Google and Facebook are dominating internet advertising and that situation isn’t likely to change soon, she notes. Even wearables received some attention in Meeker’s report. This eWEEK slide show will discuss some of the highlights of Meeker’s report. Read on to learn more about her Internet Trends 2017 Report.

The internet just keeps growing. At the end of 2016, there were 3.4 billion internet users worldwide, a more than 10 percent increase from 2015. However, growth has slowed in recent years—in 2010, for instance, year-over-year growth hovered at around 15 percent.

Smartphone unit shipments are still rising, but growth has slowed. In 2015, total smartphone shipment unit growth was 10 percent from 2014. Last year, however, smartphone shipment growth was up 3 percent year over year.

Google and Facebook seem to be unstoppable forces in online advertising. At the end of 2016, the internet giants generated 85 percent of all online advertising. Google’s revenue totaled more than $35 billion, up 20 percent year over year. Facebook, meanwhile, saw a 62 percent revenue increase over 2015, hitting nearly $15 billion.

Quality customer service is essential to keep internet customers coming back, and poor service will send them to a competitor. According to Meeker’s report, 82 percent of customers in 2016 reported they had stopped doing business with a company after a poor experience online. That’s up from 76 percent in 2014.

Despite declining television viewership declining and more people turning away from traditional entertainment, Netflix is soaring. According to the report, Netflix is now generating more than 30 percent of the total home entertainment revenue in the United States. That’s up from 0 percent of that revenue in 2007.

As a percentage of total IT infrastructure spend, public and private clouds are getting a larger chunk of corporate budgets. According to Meeker’s report, 37 percent of infrastructure spend in 2016 was dedicated to cloud investment, up from 23 percent in 2013.

In a survey of the enterprise’s top cloud-related concerns, 35 percent of respondents cited data security as a major concern. Compliance and governance were cited as a big concern for 25 percent of respondents, and another 22 percent of corporate customers said vendor and services lock-in was a problem.

There are now more bots using the internet than humans. At the end of 2016, more than 50 percent of all internet traffic came from bots—a stark departure from 2015, when bot traffic was much lower than human traffic.

Tech companies appear to be well-positioned to capture consumer health data. According to the Meeker report, 60 percent of respondents would share their health data with Google and 56 percent would share it with Microsoft. Fifty-four percent and 50 percent of people would share their health data with Samsung and Apple, respectively.

Wearables are proving exceedingly popular, according to the Meeker report. In fact, 25 percent of Americans now use wearable technology of some sort. That figure is up from 12 percent in 2016 and likely will rise in the coming year.