Category: News

High street footfall drops

highShoppers on the UK’s high street are continuing to decline, recent figures from the British Retail Consortium have shown.

One retail analyst has suggested the drop is partly thanks to a vicious cycle, where stores are forced to focus on their online efforts – but neglect shop fronts as a result.

The British Retail Consortium (BRC) released figures showing that shopper numbers had fallen by 1.2 percent in December, compared to the same time in 2011.

Shopping centres reported the greatest fall with a 2.8 percent decline, followed by out-of-town retailers, with a one percent fall, while high street locations saw footfall stumble by 0.5 percent.

The BRC said that the decline for the month as a whole came despite a rise of 7.5 percent in shopper numbers in the immediate week before Christmas.

The figures coincided with data released by the Office for National Statistics last week, which found that, although UK retail sales grew 0.3 percent in December, this figure was the lowest rise on record since 1998.

Patrick O’Brien, a retail analyst at Verdict, said there are a number of factors at play.

“Some shoppers stay away by online shopping, and this has let to retail chains investing less in their stores which in turn has made them less attractive creating a vicious circle,” he said, speaking with ChannelEye. “As a result, some high streets are looking very shabby indeed, and shoppers are tending to make one big trip to destination shopping centres such as Westfield Statford instead of several trips to the high street.”

Co-op Group hit by job cuts, scrapped IT system

Co-operative_headquarters_manchesterIt’s been a bad week for the Co-operative Group, with stories of job cuts and full-year profits almost written down to nothing.

The sorry story starts with the Co-operative’s banking arm, which reportedly spent its money on an IT system that could be scrapped. Sources told the Times that the cost of doing this could set the bank back by  £200 million – almost the cost of its full year profits.

The company had taken on the Finacle IT platform upgrade project in 2009 as part of  a £700 million integration programme linked to its partnership with the Britannia Building Society.

However, it has since had second thoughts about the system following a potential purchase deal of 632 branches from Lloyds Banking Group.

If the buy goes ahead, according to the Times, the Co-op will scrap the system and instead adopt the infrastructure currently used by Lloyds. This could land it with a huge hole in annual profits, which are set to be announced in mid-March. Last year’s earnings by the bank stood at £201 million.

A section of its retail arm is also struggling.  According to the BBC, the company has announced that 338 jobs could be slashed in the Midlands after plans to close its Fashion and Home department stores.

The announcement comes after the group reported “substantial losses,” and “changing retail behaviour” at its department stores in Derby, Ilkeston and Chesterfield, in Derbyshire; Coalville and Wigston in Leicestershire; and Stafford.

However, the Group said it will try to turn some of these stores into different entities, which could help keep job losses to a minimum.

Emerging markets open up to increased data centre investment

datacentrebatteriesAccording to a report from Tariff Consultancy Ltd, which focuses on data centre development in 11 emerging markets, Russia and Turkey are way ahead of the pack.

TCL looked at Albania, Bosnia, Bulgaria, Croatia, Macedonia, Moldova, Montenegro, Russia, Serbia, Turkey, and the Ukraine. Of these, the four largest are Russia, Turkey, Ukraine and Bulgaria respectively, though in the group, Russia by itself is expected to account for half of all data centre floor space by the end of the year.

Generally speaking, the size of the data centres are relatively small, TCL noted. In the 11 regions, the average size was just over 800 square markets, which is a great deal less than in established markets. The largest facility has up to 10,000 square metres of raised floor space. However, over the next five years, the total space should rise to 143,000 square metres, up from 109,000 at present – or a 30 percent increase going into 2018.

Pricing will also increase, with the average rack space rental increasing 10 percent up to 2018. The most expensive pricing is in the Russian market.

Trends outlined in the report mirror a transformation in the regions which are seeing more and more development and investment, both from foreign investors and by government, with a view to boost economic growth in the countries. This could also, of course, prove a boon to channel players looking for new markets to open up in. Ultimately, TCL concludes, the development of data centre space in these emerging markets proves high spec housing and hosting is no longer exclusive to established markets.

 

 

 

ARM set to grow share in server market

arm_chipA report from Markets and Markets (M&M) suggested that the micro server market will be worth $26.55 billion by 2014 and microprocessors based on ARM technology are set to take a significant share.

Micro servers major on low power consumption and have small footprints, and use multiple mobile processors. The main market will be small to medium sized businesses and applications use light duty web serving, can be used for dedicated hosting, cloud computing and analytics.

Right now, this sector only accounts for 2.3 percent of total server sales, but M&M predicts that in the next five years to reach between 25 and 30 percent of sales worldwide.

While some large enterprises are already using micro servers in an area dominated by Intel Atom and Xeon CPUs, 64 bit ARM processors are set to appear in 2014 and that will change the market dynamics, the research company said.

North America is the biggest market for micro servers currently, followed by Europe, but it is expected that the Asian region will overtake Europe by 2018.  Vendors already in the game include Intel, HP, Dell, Fujitsu and Samsung.

UK business head honchos to seek new ventures in 2013

officeAlmost a third of British business decision makers want to jack in their jobs for new challenges and more money, a survey has found.

According to AGM Transitions, of the 100 people asked, 31 percent said they were likely or very likely to seek out a new career this year. Money was the main driver to a change, with 37 percent citing this reason, while just under a fifth said they wanted a new challenge.

However, in the current economic climate only 37 percent said they were confident about securing a new role.

Of those hoping to move on, half said they would be turning to job websites, while just over a third said they would rely of newspaper adverts.

A further third said they would use existing business contacts, while the same proportion said head-hunters and recruiters would be their new best friends.

Despite social media increasingly being used for business networking and research purposes, 67 percent still do not use social media to promote or market themselves in the industry.

Finding the right opportunity was the most daunting aspect of changing jobs, with 40 percent admitting to this, while 23 percent said they feared change.

Cloud Distribution moves to change Value Added Distributor status quo

cloud1Cloud Distribution has hired start up guru Adam Davison in a bid to give its Value Added Distributor competitors a run for their money.

The company claims that other firms offer little or no support to as yet “undiscovered” vendors that have the potential to disrupt the UK market’s status quo.

It claims its new weapon will help it  search out next generation networking and security vendors, which will complement its portfolio of disruptive technology products.

Davison has been appointed to seek out companies wishing to bring innovative networking and security technology solutions to the UK. The company boasts it’s best placed to offer these firms the best foothold as understands the market and “delivers real value-add.”

Davidson’s team has, according to the company, already begun to develop tools for the channel, which will help launch these products to the market. These include tailored vendor support launch packs, bespoke sales training, pre-sales and technical training, a virtual marketing team and an end user pipeline generation platform.

Apparently these have all been created to help VARs get up to speed with the new products and grow a network of qualified opportunities.

Adam Davison says he has first-hand experience of what it’s like as a start-up trying to break through.  He added there was a real need for a “next-generation distributor” who was willing to put “evangelistic effort into less well-known, but high value proposition vendors.”

Adam’s appointment follows a series of new hires as Cloud Distribution expands and develops its team which has included James Ball, Technical Manager and Tracey Hannan, Sales Manager for the new Northern office.

OLED and LCD patent pecking set to continue

fightLow profits within the LCD market born from cooperation between tech companies, will lead to a continuous spree of patent spats, an analyst has warned.

The comments from Bob Raikes, principal analyst  at Meko, come as yet another two companies went to war late last week over patent infringement claims. This time it was Samsung who went after its rival LG, filing a suit and seeking invalidation of its patents on LCDs.

However LG was not blameless in the spat, kicking off the fight last month when it raised  three patent infringement claims on LCD technologies against Samsung. In court documents filed last month in the Seoul Central District Court  LG pointed the finger at its enemy, claiming that the Samsung Galaxy Note 10.1 infringed on three different patents related to LG’s In-Plane Switching (IPS) technology.

This led Samsung to retaliate with a an intellectual property tribunal, where it moaned to the court that three LCD patents held by LG Display were invalid as a result of existing patents on the same technology.

The spat is just one of many to come from tech companies with patent infringement claims been thrown about left, right and centre.

Samsung has had its fair share, going to war with LG in the past as well as well publicised disputes with Apple in the US.

However, it seems the war within the LCD and OLED markets may continue.

“The period of the development of LCD has been a period of cooperation and
competition,” Mr Raikes told ChannelEye.

“Basically, everybody uses very similar technology, materials and equipment. As a
result the industry grew very quickly and costs came down very rapidly. However, nobody made any money.

“For OLED (and there are no other technologies currently on the horizon),
the companies are trying to make profit, so there is relatively little cooperation. They know this is going to be slower, but they don’t want a repeat of the financial mess that the LCD industry is in.

“LG and Samsung use different technology, materials and manufacturing
techniques and equipment. Sony & Panasonic & AUO are collaborating on parts
of the technology, but only parts. They use different materials and techniques to the two Koreans.

“All of them will fight over who is doing what to try to protect their uniqueness.”

ONS data shows low retail growth for Xmas 2012

bromleyhsUK retail sales grew 0.3 percent in December, the Office for National Statistics has revealed, which is the lowest rise on record since 1998.

There was an upward tick in retail from August 2011, however, in December 2012 the growth was lower than expected. The quantity of goods grew 0.3 percent from the same time last year, while overall amounts spent was estimated to have grown 0.7 percent.

Except for December 2010, when retail was severely affected by bad weather, December 2012 was the lowest growth since 1998, which was at -0.4 percent. Comparing the month with November 2012, both quantity bought and amount spent dropped by 0.1 percent.

Online sales were 1.2 percent higher compared with December 2011, but compared with November, the ONS says the proportion of web sales fell at a slower rate than in previous years – which is seasonally unusual. Retailers told the ONS that online shoppers helped with overall sales and made up a larger proportion of sales in December than expected.

According to data from Experian, December 2012 was the busiest Christmas ever for online retailers, with plenty of consumers going online on Boxing Day and Christmas to spend festive cash and vouchers. There was a 30 percent growth in visits since last year.

Year on year growth from non-store retailing and non-food stores was cancelled out by large drops in spending at food stores and petrol stations. Overall, the estimated weekly spend in all retail was £8.5 billion for the month, compared to £8.4 billion in December 2011.

 

Intel resellers expect more training

IntelIntel’s resellers have said they are not overly concerned about the company’s latest financial figures.

However, they have pointed out that they would have liked to see more money spent on training rather than the marketing budget Intel announced in the wake of its financial announcement.

“We’d love more training but if Intel is blowing its money on marketing we’ll probably only see promotional benefits,” one software reseller told ChannelEye.

His comments come as the company announced that it would be throwing $18.9 billion on research and development, along with marketing and administrative costs, this year, an increase from 2011 when it spent $16 billion in this sector, and  up from $18.2 billion last year.

However, that was the only good news for Intel’s resellers and stakeholders with the company
announcing that its profits were down 27 percent in the last quarter.

The company reported  a net income of $2.5 billion, down 27 percent from $3.4 billion, a year earlier. Revenue fell three percent to $13.5 billion from $13.9 billion.

However, resellers weren’t phased, hinting they’d been given advance warning.

“Software sales for us have been ok, but we were sent an email two weeks ago warning us of these figures.

“We’re not worried, a bit of pressure from the top is something we can easily handle,” the software reseller added.

Another continued the sentiment and support for the company, claiming: “It’s not affected us up to this point.

“We’ve still gained support and training as promised. I assume there will now be pressure however to ensure we sell as much as possible. Maybe Intel should invest more in products and training, which would help us sell more and boost revenues.”

In the last six months, shares of Intel have fallen about 18 percent. Although this could be put down to the economic climate, it is more likely that the company has failed to impress with its shiny, all dancing Ultrabooks, which retailers yesterday said were still stagnating on shelves as a result of consumers demanding higher spec features over fashion based products.

And while some resellers have stayed loyal to their mother ship, one was a little bit more outspoken telling ChannelEye:  “The news isn’t the best, of course it’s not. But the fact that the company has said it will be spending more on development and marketing can only be a good thing for us. Whether or not there’s more pressure on us to work harder to tighter margins remains to be seen.

“In terms of training, we do receive a fair bit but some of it is expensive. What we need is free workshops that have been taken out of a budget somewhere. However I doubt that’ll happen anytime soon.”

Ovum: the cloud is unstoppable

clouds3Analyst house Ovum has released a report that forecasts trends to watch in the cloud for 2013 which predicts the industry shows no signs of slowing down.

According to senior analyst Laurent Lachal, cloud computing will evolve to tackle two challenges it has faced so far, namely reducing implementation costs and boosting innovation. Vendors and enterprises face some problems with successfully building both private and public clouds, but Lachal insists they will “make it work” in 2013 – on their own and as part of increasingly complex ecosystems.

Public, private, and hybrid clouds are building momentum, according to Lachal, and increasingly approaching enterprise grade class, but Ovum believes it is “early days” for both vendors and enterprises. We can expect the cloud to begin reaching its maturity in 2013, however, it will take another five years before this is complete, according to Ovum.

Ovum believes that in 2013, cloud computing will begin to form its own ecosystem. Rather than being viewed as a single platform as part of a larger infrastructure, public clouds will be seen as a central ecosystem hub both for cloud service providers and consumers.

“They offer a new way to accelerate participation in the rapidly evolving social networking and mobile ecosystems of the internet age,” Lachal said. “Some industry sectores are benefiting from the data centre as a hub, an increasingly cloud computing-centric ecosystem of partners that assembles in a key location or data centre such as around financial exchanges, web and online services, or media content”.

Data itself will drive further adoption of the cloud. As cloud services along with the apps that run on it generate data, cloud services and applications are needed to make sense of it, Ovum said. This means that cloud will evolve in line with other upcoming industry trends such as machine to machine communication, smart cities initiatives, the consumerisation of IT, open government data, and big data.

Ovum notes that the market is currently focused on big data in particular, however, the group thinks that from this year onwards there’s going to be an interest in the shift from vendors and enterprises to turn data into a manageable resource – something they can make money from. The start, Ovum believes, will be data abstraction, sharing, and valuation.

Samsung flattens Apple in smartphone helter-skelter

Samsung rules the roostA report suggests Apple will see its sales of smartphones peak this year and from then on will pursue the seemingly unstoppable rise and rise of Samsung.

According to ABI Research, smartphones will represent 50 percent of all handset sales in 2013, and by 2018 2.4 billion smartphones shipping will represent 69 percent of all handsets. By then, LTE handsets will represent 50 percent of smartphone shipments and 35 percent of all handsts.

Michael Morgan, a senior analyst at ABI, said: “Apple will be chasing Samsung’s technology, software device leadership in 2013 through the foreseeable future.” He said that the Korean chaebol grew its smartphone market share from eight percent to over 30 percent last year. Apple will remain flat until 2018, he predicted. While Samsung is relying on Google Android for 90 percent of its smartphone shipments, ABI thinks that it will use other OSes including Bada, Tizen and Windows Phone.

Even though many handsets will support LTE in the future, people may not have access to LTE networks.  ABI thinks that LTE will be the fastest growing WWAN in history.

Samsung has plenty of advantages over Apple – it is a vertically integrated company and is able to keep costs down by providing essential components from its own manufacturing arsenals.

Retailers: Ultrabooks shunned, Windows 8 sales poor

Windows-8Consumers are shunning expensive Ultrabooks for strong features as well as making sure they try before they buy, retailers have said.

Despite hopes that Windows 8 and Ultrabooks would see a rise in sales over the Christmas period after a damp 2012, people kept their purse strings tight and shunned the internet to visit stores and make considered purchases.

One nation wide PC retailer said, speaking with ChannelEye, that in-store sales were higher than net sales, on average. “I think this is because people wanted to come in and have a play,” the retailer said. “It’s not like it used to be where you’d just buy a model over the net and if it wasn’t as good, replaced it a few years later – people are looking for reliable models that are worth their price tag”.

Another nation-wide retailer that stocks technology agreed, telling ChannelEye that try before you buy is growing and there has been a lot of footfall in the technology sections, where products are expensive and considered purchases. “The economic climate has dictated that this needs to be done to have an enduring product that complies to needs,” the retailer said. “Laptops are no longer throwaway products or hand-me-downs. They are important for business needs and therefore need to last and be easily upgraded”.

It was hoped that Windows 8 and Ultrabooks would get a Christmas boost after a slow 2012. However, research from IDC showed that Windows 8 failed to encourage shoppers to part with their cash, with many sticking to their old laptops and installing the new OS on there.

One source at a nation wide PC retailer, however, pointed out that the operating system was instrumental in pushing some sales, although Ultrabooks remained on the shelves.

“Sales of both were pretty poor for the Christmas period if I’m honest. Windows 8 pulled in more revenue, while Ultrabooks, slipped even further down.” the source said. “Laptops equipped with Windows 8 software did better than Ultrabooks, showing people aren’t fussed about size. They just want a reliable machine.”

IDC suggested the lack of sales were down to PC vendors getting too involved in promoting the touch feature of Windows 8, while Intel’s emphasis on its skinny form factor did it no favours as the price tag was still sky high.

The PC retailer agreed that at the moment, people aren’t looking for style, but “they are looking for a rugged laptop with business and necessary bells and whistles and there are lower end laptops that offer this, meaning people will pay a price for the OS but not the design”.

However, one distributor had other ideas on how the market had fared, claiming that his company had been left hardly any surplus stock of Windows 8 equipped hardware.

“Windows 8 did better than we expected over the Christmas period and we were hardly left with any surplus stock,” he said. “However, January has proved a little bit quieter. This is obviously expected. People paid for these machines at top end prices during the festive season because they want something that can be wrapped up and shown off under the tree. These people are probably who Microsoft was targeting. Those with money.

“Now, the sales are depending on people with lower incomes who just don’t have the cash to splash on brand new laptops,” the distie said.

HMRC moves to clamp down on fat cats

FAT CATHM Revenue & Customs (HMRC) has decided to take its crusade to clamp down on affluent tax dodgers one step further.

The tax man has announced that it will be ramping up its investigations, hiring an extra 100 inspectors to its Affluent Compliance Team.

Created in 2010, as a result of £917 million in funding – presumably from tax payers’ cash- this team already has 200 eagle eyed spies and does what it says on the tin – targets wealthy Britons living in the UK who may be concealing money from the Revenue.

The HMRC said that it was now adding to its team as a result of a £5 million investment in September last year.

To be in with a chance of gaining a position in the team, the HMRC says applicants must have external experience and appropriate qualifications for inspector and lead case director roles.

With the announcement the watchdog has also said it’s expanding its search, targeting those who are sitting on a fortune of £1 million to £20 million, from the previous start figure of £2.5 million.

Fat cats with annual earnings of more than £150,000 are also being scrutinised.

Overall the amount of people that fall into these categories make up around 300,000 of the British population, HMRC claimed.

Since the unit opened the HMRC said it’s been successful in raking in the cash, claiming that by the end of December 2012 the department had brought in an extra £75 million in tax, which was “well ahead of expectations”.

It now has set itself a target of £586 million by the end of 2015.

Foreign companies set up local clouds for UK

cloudForeign cloud vendors are waking up to the fact that European companies need data stored locally.

Already there has been concerns within the EU that some of the larger multinational cloud vendors are trying to score lucrative contracts in Europe.

The problem is that many foreign countries have laws which require their companies to turn over any data to their intelligence agencies.
In the US the Patriot Act requires all US companies to hand over data if the Government wants it. That means that if EU data crosses the pond it can become US government property.

UK customers of Megaupload found that out the hard way when their data was seized as part of a copyright dispute between the US government and the company..

Similar problems exist with companies that connect to Indian outsourcers which have cloud operations. Although it has not happened yet, data can be seized by Indian spooks under their terrorism acts.

The EU has been issuing warnings to companies that they could be in trouble if their data levels the boundaries of the trade bloc.

Last year, Sophia In’t Veld, a member of the Parliament’s civil liberties committee complained that the way it was worded US Patriot Act effectively overrules the EU Directive on Data Protection. She called for the Commission to remedy this situation.

Now it seems that the foreign vendors are starting to listen and are getting around the problem by setting up local clouds in the EU.

The latest idea has come from the ResellerClub, one of the world’s largest providers of Web Presence Products. It is now offering its resellers Hosting and Shared Hosting on Servers located in the UK.

Under the deal resellers can assure their customers Shared Hosting as well as Reseller Hosting on server locations are based in the UK.

Bhavin Turakhia, Founder of ResellerClub said hosting meant that website owners can reduce latency and benefit from better local search engine rankings.

Turakhia said that since the UK is one of ResellerClub’s biggest markets and resellers were warning that the content had to be kept local.

Earlier this year another cloud supplier saw a hole in the market and created a cloud platform that could manage the different levels of infrastructure and service required in a highly-secure cloud environment.

The company pointed out that “there’s a lot of concern around data security, particularly in Europe where there’s a great deal of anxiety about the Patriot Act, we felt that increasing our focus on security could offer an interesting and important opportunity for us,” a company spokesman said.

One of the company’s selling points is that its customers know and can control where their data is based and where that data is being accessed from.

It can be expected that as the EU looks closer at Data Protection then more such regional cloud packages will be required.

HMV pooch put down, Blockbuster busted

nippergonerHMV’s pooch has been put down. Staring into a rifle rather than a gramophone, Nipper’s one of the latest goners in the struggling high street. The question is just why exactly he and the chain have taken this long to croak.

His Master’s Voice had been shouting – with a sickly sore throat – for quite some time about how it is still relevant. HMV tried to launch a digital on-demand service, it committed more of its shelf space to electronics, and attempted to lift itself out of an inevitable quagmire. All the nostalgia is fair enough considering the brand’s longstanding legacy (though this Telegraph article makes a compelling case otherwise) – what doesn’t make sense is the illogical idea that Britain’s high street is integral to its national character or even its larger economy. Britain went through the luddite movement once already. Haven’t we learned our lesson? Once the technology is out there, you can’t turn back the clock, and trying to do so is understandable, but stupid.

Shopping online makes sense. This is why it is so successful. Given the choice between getting on a bus, standing in a queue, paying more, and with a limited selection – compared to one click ordering in under a minute, cheap, for exactly what you want or need – is it any surprise the consumer has largely chosen the web? It is possible that a retailer will figure out a hybrid model at some point in the future, and bargain or pound shops are unlikely to have many problems in a recession, but for the sort of commodities that don’t need to be tried on, the internet is a better option.

Any sympathies in wake of the bust must be directed toward the thousands of staff that lost their jobs because management refused to innovate in an age where taking risks and doing so is the  only way to succeed. Consistently playing catch-up, and thoroughly outpaced, it is a miracle HMV managed to hold on as long as it did. As for the unfortunate staff: let the demise of HMV, and all the others, work as a warning that in a permanently connected society it’s now nearly impossible to rest on your laurels and run a successful operation. HMV, of course, is only one of the most recent. Jessops (which previously shared the same chief executive as HMV’s last) was another casualty, before it, Comet, and before that, more. It has just been announced that Blockbuster will go into administration – South Park aired an episode about the inevitability of this outcome in October 2012.

Britain’s high street hasn’t been about some vague and nostalgic notion of community for a long time. Its steady transformation from local merchants and butchers to identikit hubs of big brand shops, that look the same in every British suburb, was complete years ago.

Adam Smith described Britain as a nation of shopkeepers, and that – first published in 1776 – is still true today. But it is something that must change. The high street’s death rattle has only just begun. An economy committed to hiring people to sell products – let alone barely producing –  is bound to fail, and we can only expect more casualties to come.

According to some critics, the blame is solely in the hands of management. Speaking with ChannelEye, Luke Ireland, business strategy adviser and non-executive director, said: “It is no surprise that we see three more major retailers succumb to the power of the internet.

“Don’t blame tax avoidance or government policy blame the management for not embracing the internet.

“It’s not going away and unless you fundamentally build it into everything you do your business will fail. I feel for the staff but if you work for a retail business which ignores the internet I’d look for another job.”