At a country level sales in the USA will continue to be far the largest (31% of the world), although I expect the 2024 total will be very slightly down on 2023. I expect Japan and Australia to see the strongest growth (2.6% in both). Of the other major country markets I expect sales in China, the UK, Canada and Brazil to fall, while France, Spain, Italy and Germany will see between 0% and 1% growth.
In my research I split ITC offerings into 4 mutually exclusive categories. In 2024 I expect that IT Services will remain the largest (39% of the total) with growth in the year of 1.7%. Software (now larger than both Telecommunications and Hardware) will see the strongest growth (5%). I expect sales to decline in both Telecommunications (-3.1%) and Hardware (-5.0%).
I split the 4 categories in my research into 32 separate offerings; of these I expect Software as a Service (SaaS) to see the greatest growth in 2024 (14%), followed by Operating Systems (10%), IaaS (9%) and PaaS (9%). Sales of Implementation services (12%) and Applications (11%) will be the largest in the year.
I’m nervous to make predictions around raw storage devices following the failures I’ve made here over the last couple of years. There’s no doubt that these markets have proved highly volatile since the pandemic, when not enough of these components were made to meet demand and then were over produced. It doesn’t take a genius to work out that each of the three main constituent types (DRAM and NAND chips, hard Disk Drives) will start to grow again sometime soon; it’s just a question of ‘when’ and ‘by how much’. In 2024 I expect to see growth in each of these areas (see my Figure above). If these do not grow in the year we’ll need to reconsider their hitherto important role in products and the industry and the importance of storage systems within the entire industry.
Artificial Intelligence (AI) has been threatening to take a lead role as a revenue generator in our industry for many years. 2023 was a year in which we saw very dramatic growth from the specialist suppliers involved. My Figure above shows Nvidia’s reported ‘datacenter’ revenues by quarter; this is where it counts sales of its GPUs and associated Infiniband networking). In terms of solutions IBM’s Watson and Watson X alongside cloud-based ones from AWS, Google and Microsoft have also seen dramatic growth. AI will continue to grow rapidly in 2024. Time will tell whether the late moves to address AI ethics and safety through alliances and regional legislation are enough to prevent some major catastrophes as commercial and government organizations begin to deploy generative AI at scale.
Both the USA and the UK will have general elections in 2024. Politics in both countries have been badly affected by international (mainly Russian) interference in the past; I believe that the UK’s decision to leave the EU for instance would not have been taken were it not for the billion or so Facebook adverts delivered in the last months and weeks of campaigning. While politicians of all parties now understand how to weaponize Social Media, they are still relatively naïve in trying to prevent it from distorting democratic decisions. I expect that cyber criminals in countries such as Russia and China will attempt and maybe succeed to influence 2024 poles in many countries.
Before publishing my predictions for 2024, it’s time to appraise those made for this year – which saw the attack by Russia on Ukraine continue and a new war start as Israel devastates Gaza following Hamas’ atrocious terrorist attack. As always, I’ve marked each between 1 and 10 based on their accuracy.
At 67% accuracy this was another poor year for my forecasts; I can perhaps excuse myself by noting that the ‘territorial conflicts between Russia and the Ukraine’ mentioned at the beginning of last year’s predictions escalated into a full-scale invasion.
| No. | My top 10 predictions | Score | Comment |
| 1 | The total ITC market will fall by 2% as inflation, war and a resurgent pandemic restrict growth | 4 | It was a poor year for sates with 0% overall growth. COVID-19 infections continue, Russia’s attack on Ukraine continues; while war in the Middle East has flared. Inflation reared up and is now being addressed by many governments. |
| 2 | ITC spending in EMEA will grow faster than in Asia Pacific, while that in the Americas continue to outstrip both | 4 | The Americas will grow by 1%, Asia Pacific by 2% and EMEA by 0% in 2023. |
| 3 | Manufacturers and large retailers industry will begin to deploy private 5G infrastructures for machinery, drones and office productivity | 8 | IoT and 5G solutions began to be widely adopted, although not at the dramatic speed predicted by some. |
| 4 | ‘hybrid’ cloud will move from a generic description to a number of specific solutions served by specific vendors and service suppliers | 8 | Google’s definition is still wide, AWS’s and Azure’s is ‘cloud+on premise’ resources; IBM’s is specific to combinations of its own environments and public clouds. |
| 5 | Chinese ITC spending will decline as it fails to manage the resurgent pandemic | 7 | The market declined by 2% when measured in current dollars; it grew by 3% when measured in Yuan Renminbi. |
| 6 | Cyber security spending will increase significantly as hackers exploit the rapidly expanding IoT threat landscape | 10 | Cyber security grew by around 8% in 2023. Trend Micro and others are addressing the IoT threats well. |
| 7 | Cloud services will grow by 6% only, as enterprises spend to connect them securely to on premise production systems | 5 | IaaS/PaaS look likely to grow by 12%; SaaS by 15% in 2023 – down on 2022, still stronger than I expected. |
| 8 | Raw storage will increase as new products with much higher capacity come to market | 2 | Spending on HDD, NAND and DRAM all decreased significantly in 2023. |
| 9 | Consumer products get IoT-ified en masse | 8 | Watches, home security devices and vehicles led the transformation in 2023. |
| 10 | War breaks the global ITC market – better sponsor national/regional component manufacturing | 7 | War expanded to new theatres; new chip plants and alliances spread to mitigate single points of failure in the global market. |
With a score of 63% my predictions were not the greatest of the 15 published here. The most obvious omission was the dramatic rise in the deployment of generative AI solutions by public cloud suppliers – an area I will be addressing in my 2024 ideas.
This week 57 organizations announced their creation of the AI Alliance – a consortium designed to advance the altruistic use of open source code and methods for the creation of generative AI models (see my summary of their 6 initial ‘values’ in my Figure above). Read more »
Infinidat is a modern, growing storage systems supplier with very interesting high-performance products. A private company head-quartered in Herzliya, Israel with its US business based in Waltham, MA., it was founded by Moshe Yanai in 2011 – a key inventor of storage products at EMC and XIV (an object storage supplier acquired by IBM in 2008). Read more »
Part of the sofftness of the ITC market I’ve pointed to before is due to a fall in the shipped capacity of storage. I wanted to share some of the advanced research I conduct to highlight this area. My Figure above shows the quarterly shipped capacity of the three most important types of raw storage device.
Last week Cisco announced its intention to acquire Splunk for $157/share, equalling around $28 billion. If it goes ahead it will be Cisco’s largest. Splunk’s total revenues have grown to be roughly the same as Cisco’s security sales (my Figure above). One difference is that Splunk’s business is moving rapidly towards a cloud subscription model (see later); in comparison Cisco’s is dominated by network hardware sales. Read more »
In the second quarter of 2023 there was a 3% growth in ITC spending to $1.855 trillion and a 10% growth in the total net profit of all vendors to $275 billion (see my précis in the Figure above); however, on an annual basis spending was flat at $7.155 trillion and profits were down 13% at $960 billion. The softness I reported last quarter remains, with a significant downturn in memory (HDD, DRAM and NAND) and devices. As a counterbalance there is a strong investment in general AI by public clouds. I want to share my findings with you and welcome any questions you might have as a result. Read more »
The gaming market is founded on proprietary console platforms from three suppliers – Sony (Playstation), Nintendo (Switch) and Microsoft (Xbox). Other software vendors, such as Activision Blizzard and Electronic Arts, address these platforms only once through being licensed to do so by one of the three suppliers (see my Figure above for their revenue trends, showing the sum of their four quarter sales at the end of each quarter since Q1 2014). Read more »
IBM announced last updated its FS5000 series storage systems in February 2021, having launched them the year before. This week it announced the FS5045, which replaces the FS5035. Like the FS5035, the new product includes
To differentiate it from the cheaper FS5015, giving it the same enhanced data resilience capabilities available on the higher-end IBM Flash System 5200, 7300, and 9500 models. Like the FS5015, the FS5045 comes complete with a licence to use IBM Spectrum Virtualize for help storage use in multi-cloud environments.
Hardware specifications for the FS5045 include:
IBM also announced that the FS5015 and FS5045 can now be covered in its Expert Care Basic and Advanced service contracts. It cut its list prices for its storage systems worldwide by 15% on April 20th this year. This seems sensible given the crashing prices on NAND devices I highlighted in my last post. This is clearly a time for enterprise customers to increase the capacity of raw storage in the arrays they use.
The IT market is going through a downturn and I wanted to try to explain where this softness comes from and what it means for sales in the rest of 2023. Read more »
One of the mainframe’s last physical definition has been broken with IBM’s introduction of its new rack-mounted z16 product, since for the first time its range now includes a product that isn’t sold encased in a ‘frame’[1]. Read more »
Cloud computing has been one of the fastest growing and exciting IT markets over the past decade. Typically bought by enterprises wanting to avoid the complexity of setting up, deploying and managing applications them in their own data centers, cloud services come in three flavours – software, platform and infrastructure – to which we attach the phrase ‘as a Service’ to create the sub-markets of SaaS, PaaS and IaaS. In this post I’ll look at their growth from a regional and vendor angle and put cloud spending in context with other areas of the enterprise IT market. Read more »
I’ve been working in the IT and Communications markets for almost 40 years and throughout this period there has been a constant debate around the convergence of these two industries. The arrival of Private 5G brings convergence back as a major issue as IT servers, storage and software are being used in the core, edge and access network – areas that in previous generations were the preserve of the service provider network suppliers. Read more »
Storage systems are vital to the IT industry. In 2022 spending grew by 2.2% to reach $37.9 billion, shipments, by 0.5% to 1.2 million, while the installed based reached 4.1 million – 2.9% up on 2021. In this post I’ll look at the market movements with comparisons to the development of HDD, NAND and DRAM. Read more »
For an annual update on the server market click here.
The server market grew by 6.8% to reach $97 billion in 2022; unit shipments were up 5.4% at 29 million and the installed base grew by 2.0% to reach 87 million at the end of the year. In this post I’ll review what happened, why and what that means for the future. Read more »