IDC says the channel must embrace the DX economy

chinaflagBeancounters at IDC have been telling the Chinese channel that it must rush to embrace the digital transformation (DX) economy and what applies there, should really apply to Blighty.

China’s economy has entered a period of transformation and both the governments and businesses alike are actively seeking new growth modes. Digital transformation (DX) of business, backed by the latest ICT technologies, is the answer.

IDC forecasts that digital transformation will attain macroeconomic scale over the next three to four years, changing the way enterprises operate and reshaping the global and Chinese economy. This is the dawn of the “DX Economy”.

Kitty Fok, Managing Director of IDC China, said: “DX will be a top priority for all business in the coming decade. Executives must adapt to the new rules of competition and accelerate DX process; meanwhile IT executives must take up new roles, transforming IT department into a strong technical partner. Executives of ICT vendors must be aware of their customers’ new demands, changing from its role of tech support to a DX partner for customers. ”

China is expected to continue growing steadily in 2017, with GDP growth of more than six percent.

IDC predicts that the Chinese IT market will expand by 2.3% in 2017, entering a period of adjustment.

Personal device market is likely to remain flat whereas the enterprise infrastructure hardware market is expected to grow 7.3 per cent in 2017. The Software market is forecast to expand 7.5 per cent, while the IT service market to grow 8.7 per cent. Growth in the traditional hardware, software and services is likely to slow, but rapid growth of 15 per cent or higher is forecast for markets that are associated with innovation accelerator technologies (3D printing, robotics, cognitive system, Internet of Things, AR and VR, and the next generation security) and the 3rd Platform (cloud computing, big data, mobile, social).

IDC said that we are looking at the dawn of the DX Economy and that by 2020, 50 per cent of China’s Top 1000 companies will see most their business depends on their ability to create digitally-enhanced products, services and experiences.

There will be mass customization to accelerate business transformation: By 2018, the top 10% of China’s industry leaders will develop the ability to allow customers to build custom product and service bundles. By 2018, Chinese companies investing in IoT-based operational sensing and cognitive-based situational awareness will see 40 per cent improvements in the cycle times of impacted critical processes.

Information-based products and services will start gaining popularity. In 2018, one fourth of China’s Top 1000 companies will gain the revenue from information-based products. By 2020, the demand for digital-related services will account for 30 per cent of total worldwide services spending.

Crowd-funding to improve startup’s success rate, IDC said. By 2019, China’s Top 500 firms and lots of internet companies will use Kickstarter-like methods to allocate capital to 10 per cent of new projects, aiming to increase their new product introduction success rates by over 30 per cent.

Digital revenue streams will drive business growth. By 2019, 20 per cent of China’s IT projects will create new digital services and revenue streams that monetise data. More than 20 per cent of CIOs will shift primary focus from physical to digital and move away from BPM and optimisation by 2018.

 

There will be more self-adaptive security and risk management. The Chinese will tighten policy on security and controllability, driving investment on IT security by governments and large state-owned enterprises to grow by 15 per cent on average annually. By 2018, half of CIOs will help drive global risk portfolios that enable adaptive responses to security, compliance, business, or catastrophic threats.

The new wave of cloud computing (dubbed Cloud 2.0) will facilitate ICT ecosystem revolution. IDC said that by 2020, 40 per cent of all enterprise IT infrastructure and software spending will be for cloud-based offerings.

“The Cloud will morph to become distributed, trusted, intelligent, industry-focused and channel-mediated. By 2018, the number of Industry Collaborative Clouds will be more than 40; by 2020, more than half of China’s Top 100 will be digital services suppliers through ICCs,” IDC said.

Sarah Shields is Dell EMC’s channel queen

sarah-shields-new-620x350Dell EMC has confirmed that Sarah Shields has the top job running its UK and Ireland channel.

Shields ran the local channel for Dell and was facing off against Kevin Sparks her EMC counterpart. It is not clear what his role will now be in the glorious new empire. Dell says it will be making any announcement about his role in the future. We hope he does not get special projects, with an office in the lift.

She officially takes control in February and will head up a new Dell EMC partner programme. Of course, Dell says that its new cunning plan was built in “collaboration” with its “partners” that sell its stuff.

Dell EMEA channel overlord, Michael Collins claimed that resellers, integrators and distributors had seen “significant [sales] growth” under Shields over the past 19 months.

Shields joined Dell, from Gateway in 2008 and has run the consumer, online, SMB and enterprise channels. Before Gateway, where she was as European sales director she had been a business manager at Acer and channel manager at AMD.

Sky enters the UK mobile market

satellite_dishes_fever__13Sky has entered the UK mobile market with a SIM-only deal that allows data allowances to roll over each month, and offers free calls to the 11 million British households that buy its telly services.

The broadcaster said that it was “time to shake up” the mobile market, particularly in data, where many customers paid for more than they used because they were worried about exceeding their allowance, the pay TV group said .

Sky is the last of Britain’s big four broadband providers to offer mobile to its customers, giving it the full “quad play” offer, which also includes TV and fixed-line telecoms.

Stephen van Rooyen, Sky’s UK and Ireland chief executive, said the company had asked more than 30,000 potential customers what they wanted from a mobile service, and more flexibility on data was top of the list.

“We’ve designed it based on what people told us they want – it’s easy, flexible and transparent and it puts the customer in control,” he said

Sky is also piggybacking on the O2 network, although it will issue its own SIM cards and handle all parts of the customer relationship.

Mobile customers will not receive a combined bill for all Sky services, however, as the company said customers preferred to keep an individual relationship with their mobile provider.

Sky is offering three packages of 1GB, 3GB and 5GB of data a month priced at 10 pounds, 15 pounds and 20 pounds, respectively, with free calls and texts for its TV customers.

 

BT must legally separate from Openreach

Divorce Just Ahead SignTelecoms watchdog Ofcom has barked at BT to legally separate from its Openreach division.

For those who came in late Openreach runs the UK’s broadband infrastructure and considerably miffs BT’s rivals including Sky and Talk Talk.

They claim that Openreach charged too much for the use of broadband lines and was unresponsive to their demands. They wanted a full break-up of BT, with Openreach being turned into a separate company.

Now it seems that Ofcom agrees saying that BT had not voluntarily addressed competition concerns Ofcom laid out in July, it said.

Ofcom said it was preparing a formal notification to the European Commission to start the process.

The regulator has resisted calls to split Openreach off entirely.

Ofcom said BT had not gone far enough to address its concerns about BT’s ability to favour its retail business when making investment decisions in Openreach.

It wants Openreach to become a distinct company with its own board, with non-executives and a chair unaffiliated with BT.

Openreach would have a duty to treat all its customers equally, the regulator said.

Tablets could be the next big channel package

tabletBeancounters at IDC seem to think that the channel could make big money flogging tablets to corporates.

While tablet sales in the consumer market are deader than Steve Jobs, corporates can find a use for the bigger models.

IDC predicted that because of the mobility attractions of the hardware tablets will be a key investment for  firms undergoing digital transformation next year.

Premium devices drove tablet growth in the third quarter, with IDC recording a 13.1 percent increase year-on-year in the commercial sector. Overall there were 8.2 million tablets shipped in Western Europe in Q3, which represented a 6.7 percent decline on the same period last year.

Although volumes are dropping the unit value has held firm, which has offset the impact of the declines, as more customers pay for higher quality products. The share of detachables in Western Europe priced above €600 increased from 26.5 percent in 3Q15 to 52.2 percent a year later.

Daniel Goncalves, research analyst, IDC Western European personal computing, said that detachables are proving to be particularly attractive to firms, particularly those with the performance and security to meet enterprise standards, are continuously gaining traction and this is boosting demand for premium devices.

“Surface Pro and iPad Pro success comes from them being a notebook replacement, as well as the quality of the devices. The devices are increasingly adopted across consumer and commercial segments, and while in the consumer segment both appeal to the ‘prosumer’ user, in commercial the adoption varies depending on the activities of the end user. iPad Pro is more popular for creative types of jobs, whereas Surface is more likely to be adopted by top executives, partly due to Windows’ strong legacy in enterprise.”

Apple, Samsung and Lenovo dominate the market but Amazon has seen its unit growth increase year on year by 166.5 per cent thanks to the very competitive pricing of its Kindle tablet range.

Oracle is still the “big bad wolf” of software audits

dore_ridinghoodThe Campaign for Clear Licensing (CCL) has lashed out at the “anti-competitive” tactics of software vendors and said that Oracle is the “big bad wolf” of software auditors.

CCL found licensing audits were taking an average of nearly 200 work-hours to resolve and Oracle was the worst offender.”

The research asked respondents to estimate how long an average software audit takes to resolve in work hours and total duration. The average estimate was 194.15 working hours over a duration of 7.13 months.

CCL feels that big vendors are using audits to block competition and restrict innovation. While customers are locked in a room talking with the big vendors about audits, they are not looking at alternatives.

The 194 hour figure has gone up over the last five years because software licensing, and therefore the audit process, has become more complex, CCL said.

Oracle was named and shamed by nearly a quarter as the least helpful vendor in terms of audits. IBM and Microfocus were second and third, ahead of Microsoft, Autodesk, SAP, Adobe, Dell Software and HP.

Although Microsoft was seen in CCL’s survey as the most helpful vendor in terms of audits it did catch a bit of criticism. CCL did not like how previous compliance misdemeanours might be overlooked as long as the customer adopts the software publisher’s strategic products.

“…While less aggressive, this approach is still anti-competitive and it assumes the vendor’s cloud solution is the most viable option.”

Vendors look to the channel for cloud offerings

cloudbustThe Global Technology Administration Council (GTDC) claims that vendors are increasingly relying on the channel when it comes to their cloud offerings.

The GTDC – whose associates cover Tech Data, Ingram, Avnet, Arrow, Westcon, Exclusive Networks and Scansource, claim that distributors will be dependant on the channel to bring cloud solutions to market and wrap services around cloud offerings.

“The emergence of cloud has transformed distribution along with the IT industry. Increasingly, vendors are relying on the channel to bring cloud solutions to market and that won’t change in 2017,” the report said.

Already Microsoft has indicated that it will use the channel more in 2017 to give it more opportunity as to expand its public cloud assets.

The role distribution will play in the cloud has often been questioned, with some in the industry warning distributors need to evolve or risk becoming irrelevant.

In the GTDC report Wayne Peters, senior director of Arrow Capital Solutions at Arrow highlighted financing as an important role that distributors will play in 2017.

“Cloud financing is becoming a critical component of selling cloud. In many cases, it takes what has traditionally been called non-traditional financing, but soon will become traditional financing as more solution providers get used to selling cloud and customer demand accelerates.

“We are also seeing a shift in the market with respect to the cloud ecosystem requirements and our partners selling and finance cloud.

“Some of the things we do around recurring revenue and bringing new partners into the ecosystem helps our base become broader and makes cloud easier for partners to sell,” the report said.

 

 

GameStop predicts bleak Christmas

gamestop-inside-930x618Bricks and mortar peddler of computer games, GameStop, is predicting a bigger than expected drop in sales for the crucial holidays.

The troubled company is the world’s largest retailer of video games, and has been struggling as more players switch to downloading games on their consoles from buying physical copies.

Chief Operating Officer Tony Bartel warned that revenue from the videogame category, which includes new hardware, software and accessories, is expected to decline in double digits in November and by single digits in December.

Bartel said the company expected revenue from the business to be flat to positive in January.

Hopes that Activision Blizzard’s “Call of Duty” game would pull GameStop’s nadgers out of the fire were also dashed as these are expected to be lower than a year earlier.

GameStop also forecast total sales to decline between 5-10 percent in the current quarter, translating into revenue of $3.17 billion-$3.35 billion.

Analysts on average were expecting revenue of $3.45 billion. The company expected things to be bad this year and it has maintained its full-year profit forecast.

Bartel said the company expects to expand its operating earnings by diversifying its portfolio.

Under Chief Executive Paul Raines, GameStop has been expanding its digital and mobile offerings and snapping up technology brand stores that sell mobile phones and other electronic devices.

Revenue in its technology brand business rose 54.4 percent in the third quarter from a year earlier.

GameStop’s net income fell to $50.8 million in the third quarter ended 29 October from $55.9 million last year.

Oracle makes a noise about Dyn

featuredimage_post32Oracle has written a cheque for the troubled DNS provider Dyn which was hit by a distributed denial of service attack in October that crippled some of the world’s biggest and most popular websites.

Oracle wants to add Dyn’s DNS solution to its bigger cloud computing platform, which already sells/provides a variety of Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) products and competes against companies like Amazon’s AWS.

The deal is expected to be worth about $600 million, but no one is going on record to say that. It is also unclear if the deal was being negotiated before the Mirai botnet took down a series of sites in October.

Dyn powers some 3,500 customers’ sites.  In its statement, Oracle said the outfit “drives 40 billion traffic optimization decisions daily for more than 3,500 enterprise customers”. Customers include Netflix, Twitter, Pfizer and CNBC among many others.

Oracle president Thomas Kurian said that Oracle already offers enterprise-class IaaS and PaaS for companies building and running Internet applications and cloud services.

“Dyn’s immensely scalable and global DNS is a critical core component and a natural extension to our cloud computing platform.”

In a letter from Kurian to customers and partners, Oracle fails to even mention of Dyn’s DDoS attack. Instead he talks about how Dyn’s platform “monitors, controls, and optimizes Internet applications and cloud services to deliver faster access, reduced page load times, and higher end-user satisfaction.”

The pair will continue to operate independently until the transaction closes.

Dyn is Oracle’s 114th acquisition. Other recent acquisitions to fill out its enterprise cloud services, include the security startup, Palerra which might be useful to solve Dyn’s woes.

 

Symantec buys Lifelock for extra security

securityAnti-virus outfit Symantec is writing a $2.3 billion cheque for US identity theft protection company LifeLock.

The hope is the tech outfit can breathe new life into its Norton cybersecurity unit which has been suffering from the downturn in PC sales. Symantec’s security software often comes bundled with personal computers and while Norton remains profitable, its sales have been falling.

Symantec Chief Executive Greg Clark said that the acquisition will bring $660 million in revenue to the consumer business and returns it to longer sustainable growth.

Symantec recently bought Blue Coat Inc, which helps firms maintain security over the internet, in a $4.65 billion deal. Clark previously held the top job at Blue Coat, and made the switch after the deal closed.

LifeLock offers services such as monitoring new account openings and credit-related applications to alert consumers about unauthorised use of their identity. It also works with government agencies, merchants and creditors to remediate the impact of identity theft.

Fran Rosch, executive vice president of Norton Business Unit, said that Symantec had dabbled in identity security but had nowhere near Lifelock’s 4.4 million members.

Symantec expects to finance the transaction with cash on balance sheet and $750 million of new debt.

Salesforce doing better than expected

 

Salesforce forecastSalesforce_Logo_2009 current-quarter revenue above what the cocaine nose-jobs of Wall Street predicted.

Deferred revenue, a key metric for subscription-based software businesses, rose 23 percent to $3.50 billion in the third quarter. Analysts on average had expected deferred revenue of $3.42 billion. For the current quarter, Salesforce said it expected revenue of $2.27 billion to $2.28 billion, above analysts’ average estimate of $2.24 billion.

Revenue rose 25.3 percent to $2.14 billion. Analysts had expected revenue of $2.12 billion. Chief Executive Officer Marc Benioff said that Salesforce was expecting to deliver its first $10 billion-year during our fiscal year 2018.

The more optimistic predictions were due to closing deals for its cloud-based sales and marketing software with several new major customers.

Salesforce has consistently reported double-digit growth in recent quarters as companies shift to cheaper and easier cloud-based products, but it is facing growing competition from Oracle and Microsoft.

The results marked a sharp reversal from the previous quarter, when a lighter-than-expected revenue forecast prompted concerns about slowing growth. But this quarter the company closed large deals with customers including Citigroup and Amazon to help it get back on track.

Benioff wants to broaden the company’s cloud offerings through new features, especially focusing on artificial intelligence.

The company, which launched its artificial intelligence platform Einstein this year, has made several acquisitions to build up its machine learning and big data analysis power.

However, competition between Microsoft and Salesforce is now intensifying and Microsoft’s Dynamics product is taking business from Salesforce among mid-sized customers. Microsoft also this summer launched a direct competitor to Salesforce’s AppExchange for business software.

 

Salesforce wants to bring AI to the channel

robotsWhile most channel partners might not be too interested in AI trends, Salesforce has a cunning plan to use the concept to spice up its partner relationship management software.

Salesforce’s PRM software, which is delivered as a service, uses an Einstein AI engine that the software outfit thinks could change the way the channel is run.

At the moment, PRM applications are loaded with data about customer transactions, but sorting through all that data to make the best optimal decision is laborious. Einstein is supposed to instantly identify what combination of products and services will, for example, yield the most profit for them.

Channel management teams can identify what partners make the best use of marketing development funds (MDFs) or have higher customer satisfaction ratings with a specific product or technology.

This means that the vendor can better identify when a customer is most likely to upgrade an existing product or service.

While this will not mean the end of the days where a nice lunch would improve vendor standing, it will mean that sales teams will come to the table with some good facts about what the client wants.

The technology is still limited AI technologies start to cut both ways in the channel. Instead of a PRM application, there will inevitably be a vendor relationship management (VRM) application infused with AI capabilities. Solution providers would then be able to instantly compare which vendor in a category, such as servers and storage, is providing them with the best deal at a given time.

Acquisition happy Exertis looks for a happy Medium

medExertis, which last month wrote a cheque for its Hammer acquisition wants to buy audio visual outfit Medium.

The move is part of Exertis’s cunning plan to snap up complementary businesses. Medium will strengthen its position in the AV market. It will get a much wider range of products and is being pitched to provide resellers with access to a complete solution.

Medium has been around for a long time and supplies a broad range of AV products, including projectors, interactive displays and digital signage from vendors including LG, NEC, Samsung and Panasonic.

The channel player employs 40 and has a turnover of £32 million and flogs its gear to 800 AV resellers across the UK.

Last month Exertis added the storage and server expertise of Hammer to expand its business coverage.

Ian Sempers, Medium MD said: “We are delighted to be joining forces with Exertis. The continued convergence of the IT and AV market means we will be in a great position to service a sector that extends beyond traditional AV solutions. Our expertise and technical knowledge in this market combined with Exertis’ wider product portfolio will provide a compelling proposition for resellers and vendors.”

UK SMEs need help to come up with cloud plan

cloudUK SMEs might need channel help because they are not defining their cloud computing strategy and do not seem to have any plans to formalise anything, according to new research.

The research from Close Brothers polled 906 small businesses across the UK, found that only 29 percent could be bothered formalising their cloud strategy.

Companies in the North East and Wales were the least likely to have a properly defined cloud computing strategy, while London firms were the most likely.

When asked to rate the importance of having a cloud computing strategy, only nine percent of businesses said it was ‘very important’, while 24 percent thought it was ‘important’.
said Ian McVicar, CEO, Close Brothers said the cloud was one of the key digital developments of the last few years and it was important that businesses don’t get left behind because it can be used as a competitive advantage.

“The results of the survey are quite sobering and make it clear that there is some way to go before business owners fully appreciate the importance of the cloud. Fundamentally, cloud computing means companies can avoid, for example, purchasing and hosting servers, along with other infrastructure costs. This is not only a cost saving, but means companies can focus on their core business instead of spending both time and resource on establishing and maintaining an IT infrastructure,” he said.

All this means that the channel can have a foot in the door with SMEs by helping to provide them with cloudy advice. It is apparently likely that an SME is going to approach a potential cloud partner to ask for help, or to work out how their business can be improved by moving to the cloud.

Commercial sector helps PC growth

20120313_InformaticaThe commercial sector has been a PC sales hotspot helping the market deliver low growth in third quarter, at least in Western Europe.

Bean counters from Context have been adding up the numbers, and dividing by their shoe size and decided that the commercial sector has been a growth area. While the back to school windows for the PC market have been disappointing, commercial orders grew to cover up the problems as efficiently as woodchip wallpaper.

Context said that most of the third quarter  was used by distribution to clear PC inventory, using special promotions as a tool, to get things ready for the fourth quarter.

Sales across Western Europe for third quarter came in at 0.8 per cent up, year-on-year, with notebooks improving by 3.5 per cent as desktops continued to decline with a 5.9 per cent fall. The UK saw third quarter PC volume growth beat the overall Western European market, coming in at 1.2 per cent in the third quarter.

Context said there were reasons to be optimistic about the future, with Windows 10 having an impact. However, it warned that Brexit would have an impact on pricing as would the uncertainty caused by the political situation.

The business customer base was the one that kept firing with sales up by 3.3 per cent, with notebooks driving that performance.

So far Windows 10 had not had much of an impact, but Context saw some spending as a result of upgrading to run the latest Voleware.  This is expected to filter through this quarter and the first half of next year.

Marie-Christine Piggott, senior analyst at Context said that there are expectations in the business space of continued, moderate growth at the end of 2016 thanks to year-end projects and Windows 10 commercial sales will also begin to pick up at the end of the year,” said.

There is little hope for the Consumer side. Customers were moving away from the traditional laptops and PCs preferring to splash out on convertibles, Chromebooks and gaming PCs.

Business customers also embraced detachable with that segment rising by 227 per cent year-on-year to go above 250,000 units through distribution.

The third quarter was great for vendors. HP which now commands a third of the units going through distribution. Asus also saw volumes increase by nine per cent  to gain a 13 per cent  share and Dell was also improving, Context said.