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The regional PC market’s American bias

In 2017 spending on PCs increased by 5% to $153 billion – the first annual growth since 2012. The same is not true of annual shipment growth, which has typically been stronger due increasing competition and declining average values. This trend was reversed in 2017 when the popularity of machines based on new processors by Intel and AMD led to an increase in average selling prices – the market grew by 3% to 230 million. Over the last few years the Americas – a region dominated by the US of course – has grown faster than either EMEA or Asia Pacific (see Figure).

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The gaming market – open v proprietary lessons for all ITC suppliers

Although the gaming console market is small and about ‘entertainment’, there are a number of issues it can help us with when trying to work out what’s going on in other, larger and more important areas of the IT and communications industry. As always my statistics published here are from the ITCcandor market model, which is used by executive in the industry to make better business plans.

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IBM leads the shift from server… to cloud… driven data storage



Eric Herzog (Chief Marketing Officer and VP of Global Channels for IBM’s storage division) held an analyst meeting at the beginning of February, which gave me an excellent chance of catching up on the division’s progress. IBM typically reports only its storage systems hardware revenues in its quarterly financial reports, but disclosed in its Q4 quarterly financial call that its storage software accounted for 42% of the storage division’s revenues in Q4, which implies that its total divisional revenues were $2.6 billion. Read more »

ITC 2026 – a software-defined, cloud delivered ITC world


I’ve been working on forecasting the IT and communications market today, having been able to finalise my Q4 estimates following Dell’s financial announcements last night. The trends many of us have been talking about for the last few years appear to be accelerating now. In particular telecom service and hardware markets appear sluggish in comparison with IT service and software categories (see Figure).

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ITcandor publishes 2017 mobile device market shares and forecasts

Press Release – Didcot, March 2018

Mobile devices of all types are vital for providing a window into the digital world for consumers and business people alike. ITCandor has been sizing and forecasting the market since 2009. I’m pleased to announce the full availability of our market share and forecasts workbooks, which can form a solid set of data for anyone drawing up business plans for these and associated markets. Read more »

ITCandor and euroLan partner for the Formula 1 IT project

Press Release – Didcot, February 2018

Formula 1 – winning ways in IT

Much has been made over the years about how motor racing inventions have been applied to everyday cars and vehicles – aerodynamics, anti-lock brakes, electronic control units, disk brakes, kinetic energy recovery systems, etc. However little has been written about them as advanced IT users until now.

Just think about how the special F1 ecosystem makes the teams stand out as computer users. Read more »

The profitability of Qualcomm and Broadcom/Avago

Evaluating the profitability of Broadcom/Avago (I’m using this name to remind myself that Avago renamed itself after the company it bought) and Qualcomm is important for those deciding whether the acquisition of the latter by the former goes ahead in the next few days/weeks.

My Figure shows the annual profitability (which I calculated by revenues by net profit) of  most of the players, including those major companies acquire by each. Although Avago has changed it’s name, I’ve labelled each company by it’s original title. Read more »

US tax cuts reveal the huge off-shore funds held by ITC vendors

Beyond the headline social implications The Tax Cuts and Jobs Act enacted by the US government in December will have a major effect on the national balance of global IT players in the world market. Following my initial analysis, I’ve been investigating each supplier in turn as it publishes its financial results for Q4 2017. While there are still a few major vendors yet to report (HPE and Dell for instance), there’s already enough information to guess at the size of the off-shore funds being repatriated from the one-off payments the suppliers have made in Q4.

My Figure shows the changes in corporation tax made in December. Read more »

US tax and the global ITC industry – digging and filling holes


In December the US made multiple changes to its tax laws as part of President Trump’s nationalistic campaign to improve investment and employment entitled the ‘Tax Cuts and Jobs Act’. Most important for the global IT and communications market is the change in corporation tax; not only in its reduction from 35% to 21%, but also in its status from a global to territorial system; meaning that multinational companies will no longer have to pay extra for their international profits. This has already led to the repatriation of international profit pools typically held in off-shore banks. My Figure shows the total net profit and profitability (net profit/revenues) of all the 180 ITC suppliers currently in the the ITCandor market model. It demonstrates a 3-4 year cycle of profit taking with peaks in 2007, 2010, 2014 and 2017-8. It means that there is currently more at stake than in the shallow years. This paper looks at the implications of this change on the global and regional markets I track.

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Debunking ‘Digital Transformation’

PRESS RELEASE

Didcot, Jan 25, 2018

 

Debunking ‘Digital Transformation’ – start with the business challenges

Today Smart-Guidance[1] introduced Digital Transformation as a new theme – joining its work to raise awareness of the EU’s GDPR data protection legislation being enacted in May this year.

In our first look at digital transformation we identify:
*The massive growing importance of the term
*The need for a common definition of digital transformation
*The reason why suppliers often use such poorly defined terms
*Seven urgent business challenges driving the need for adoption
*The need to look at each industry sector separately to establish their specific needs

This is our first step in defining ‘digital transformation’ so we can compare and contrast vendor offerings and profile the challenges, solutions and benefits for customers in more detail in our upcoming research papers.

 

‘It’s a concept defining some particular sort of journey made by business and/or its partners and consumers. The trouble is we’re all starting from different places with multiple different destinations in sight’, says Martin Hingley (ITCandor).

‘Digital transformation is a process where the advances in IT and communications technology are leveraged and exploited to the benefit of businesses, their ecosystems and the wider society’, according to Dr. Mital Mehta (TekPlus).

To read our analysis in full please click here.

For more information on Smart-Guidance services in terms of the value to users and potential sponsorship advantages for vendors, please contact info@itcandor.com or Info@Smart-Guidance.com.

 

[1] Designed to meet the information needs of end-users Smart-Guidance is a joint venture between TekPlus and ITCandor.

Meltdown and Spectre – 2.7b vulnerable devices and a $37b bill for mitigation

The revelation from Google’s Project Zero team and others that the way memory is handled in modern computer chips creates 2 major security vulnerabilities doesn’t come as a surprise, but will take time and money to mitigate and much of the Moore’s law increases given us in all last year’s new processors will be swallowed up by the work-arounds and patches needed to prevent smart hackers from mining sensitive data from all types of computers. Read more »

ITCandor publishes predictions for the IT and communications industry in 2018

PRESS RELEASE – Didcot, Jan 8, 2018

Siri, Alexa, Watson – what can I do now you’ve put me out of work?

ITCandor has published its 10 predictions for 2018 – its 9th continuous year and a process that includes a self-assessment of its accuracy each year. Over 2,000 people have already read them online since publication on Jan 1st. 

2018 Highlights include:

  • The year will see increasing social unrest as white and blue collar employees are made redundant by robots and computer-based automation
  • AWS will replace Cisco as the world’s largest supplier of IT infrastructure to enterprise customers
  • Oracle will make strong headway as an enterprise IT supplier due its offerings meeting new market demands
  • Cloud services (IaaS, PaaS, SaaS) will see the strongest growth in demand demoting HPE and other suppliers who have chosen not to provide them
  • ITC demand in EMEA will be lower than in the Americas and Asia Pacific partially due to a lack of major vendor support by the EU
  • The will be major clashes between governments and the largest ITC suppliers over data protection, stateless finance and tax affairs

 ‘The market will grow, new nationalism will continue to disrupt normal spending patterns, cloud will outgrow everything else, vendor consolidation will continue as product areas commoditise, spending growth in EMEA will be behind the other continents… all developments of earlier trends. The big issue to emerge in 2018 will be the realisation that AI, machine learning and automation are moving too fast to maintain full employment. Governments around the world will find it increasingly difficult to handle the consequences, putting them at loggerheads with the largest ITC suppliers.’ – Martin Hingley, ITCandor

We make these predictions each year to stimulate a debate about the status of the ITC industry and to help business planners address issues that might otherwise come at them from left field. We particularly enjoy discussion the underlying issues and forecasts with leading execs, especially if they disagree some or all of them – so contact us to book a meeting.

What others are saying about the predictions:

‘I hope @mHingley is wrong on this one. The problem is ….he’s usually right’,

‘Going against the conventional #cloud wisdom. An interesting prediction from ITCandor’s @mhingley’ – (via Twitter)

‘Bonne année Martin! Thank you for sharing again your predictions for the ICT industry. Great read!’ – (via LinkedIn)

To read these predictions in full and/or download them as a presentation or document visit https://www.itcandor.com/2018-prediction-intro/

To contact ITCandor please email: info@itcandor.com

ITCandor 2018 predictions – Siri, Alexa, Watson – what can I do now you’ve put me out of work?

Welcome to my predictions for the ITC industry in 2018. The market will grow, new nationalism will continue to disrupt normal spending patterns, cloud will outgrow everything else, vendor consolidation will continue as product areas commoditise, spending growth in EMEA will be behind the other continents… all developments of earlier trends. The big issue to emerge in 2018 will be the realisation that AI, machine learning and automation are moving too fast to maintain full employment. Governments around the world will find it increasingly difficult to handle the consequences, putting them at loggerheads with the largest ITC suppliers.

These are my predictions:

  1. The global ITC market grows 1.8% to $6.7 trillion
  2. EMEA ITC spending falls behind the Americas and Asia Pacific
  3. UK the worst, Switzerland the best country for spending growth
  4. SaaS, IaaS, PaaS – the fastest growing offerings
  5. Cloud – local and regional CSPs gain against global giants
  6. People are the product, but they don’t get paid 
  7. Enterprise computing shifts off premise – AWS replaces Cisco as top enterprise supplier
  8. Storage commoditisation puts more suppliers out of business
  9. Oracle makes strong headway as an enterprise supplier
  10. Automation will create social disorder

As always I’ve had lots of help and suggestions from my friends and colleagues, to whom I give my thanks as always – and to Hieronymus Bosch for the illustrations. My process started with a self-assessment of my predictions for last year. I’m keen to discuss these ideas with you – especially if you disagree – so please contact me and book a meeting. Click on the following download my predictions as a document and/or slide set.

Navigate our predictions – intro 1 2 3 4 5 6 7 8 9 10

10. Automation will create social disorder

It might be because I’m seeking justification for a career spent helping IT companies to sell their offerings more successfully, but I’m becoming deeply concerned about the way in which automation by both physical and Web-based robots is changing our world. In 2018 there will be more conflicts between the world governments of the world and the largest global suppliers; blockchains will allow those suppliers and the super-rich to squirrel their billions into stateless off-shore funds. Meanwhile the gap between the ‘haves’ and ‘have nots’ of society widens – especially as automation spreads through manual to general purpose office tasks making millions unemployed. To a certain extent the new nationalism we’ve seen in the UK, US and Spain is a reaction – ‘if only we can redefine our borders to something smaller and more manageable, maybe we can improve the lives of the poorer citizens’, or ‘why are we giving so much money away to people who aren’t part of our group’ are part of the motivation. Unfortunately automation means that, even is we create local businesses and bring back manufacturing from cheaper offshore countries it will have little positive effect as the new automated factories will have only tiny workforces. Automation is removing millions from the workforce. In the ITC industry – the driver of automation – for instance we would employ 2 million more in 2018 if productivity had remained at 2005 levels and of all the countries in the world China is suffering from the greatest replacement of its workforce with robots.

We are already suffering from social disruption as whistle blowers such as Wikileaks and the Paradise papers expose the tax avoidance schemes of the rich and suppliers such as Apple. Governments are slow and/or powerless to resist the movement of wealth into the pockets of the super rich. My dystopian tenth prediction is that things will come to a head in 2018 – that automation will be resisted by new Luddites, who try to resist the rapidly increasing changes to employment and relative wealth between the rich and poor. As an industry we should be aware of these changes, reinforce our CSR strategies to address the underprivileged and be aware of how our technology affects employment levels.

‘Siri, Alexa, Watson – how can I pay for things now you’ve put me out of work?’

Martin Hingley January 1st 2018

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9. Oracle makes strong headway as an enterprise supplier

Let me start by saying that I currently have no business ties to Oracle – this prediction isn’t a ‘thank you’ to the company in any way. It’s the result of studying the financial results of 180 vendors every quarter since 2008. Sun was the world’s largest server supplier for a period in the 1990s and combined with Oracle in 2010 to become one of the deepest thinking, different and often most frustrating supplier of all. It’s clear vision of social business and the way businesses had to change in order to make the most of new computing techniques was balanced by expensive and inflexible pricing of its world-leading database and ERP offerings. Like IBM it was one of the first traditional enterprise suppliers to embrace the cloud as a delivery model for its software and hardware infrastructure offerings. In 2017 a number of other suppliers launched (or planned to launch) special cloud services to accommodate Oracle’s different software offerings.

As increasing numbers of customers shift their spending to off-premise solutions so the differences between the way Oracle does business ceases to be as important – the acquisition, funding and management of Oracle products will stop being a limiting factor for many.

Just like Apple in 2009 Oracle looks set to make a major push in 2018, especially as it builds out the international capabilities of its newly-acquired NetSuite business. My ninth prediction is that it will outgrow most other enterprise IT suppliers in the year, using its cloud services approach to win multiple new customers and rise from a long period of relative obscurity.

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8. Storage commoditisation puts more suppliers out of business

My Figure shows a forecast for raw storage revenues and capacity between 2005 and 2020. Although capacity doesn’t always grow on a quarterly, or even annual basis (see 2011 and 2012), it continuously outperforms the financial results of its manufacturers. The increasing standardisation of interconnections and ready availability of storage management software from specialist vendors mean that most users no longer need to spend over the odds for storage systems from established players. In 2018 the huge differences in price between integrated offerings from Dell EMC, IBM, NetApp and other major vendors and the more ‘do it yourself’ solutions using commodity raw storage and clever software will widen even further. Large customers will still need help in balancing and managing their block, file and object storage and in improving their data governance to meet the requirements of data protection legislation and the onslaughts of internal and external cyber criminals.

My eighth prediction is that the increasing commoditisation of the storage business will create even more vendor consolidation and turmoil in 2018. While the challenges of new unstructured data sources and Web app development will keep users focused on learning and mastering new storage techniques, increasing numbers of them will avoid paying large sums of money for handholding by the leading storage systems vendors.

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