Dell EMC is closing the gap on Hewlett Packard Enterprise as EMEA’s top server vendor.
Beancounters at IDC have added up some numbers and divided by their collective shoe size and claimed that Dell EMC saw its server market share in EMEA increase just over three percentage points to 22.4 percent in Q2. HPE’s numbers were disappointing, and it declined over three per cent to 28.4 percent.
IDC senior research analyst Kamil Gregor said total spend for the quarter was up 28.9 percent year on year to $4.1 billion with HPE making up over a quarter of these sales. The number of shipments, however, declined 3.7 percent to 515,000 units shipped.
Some of the largest markets in Europe experienced shipment declines, with Germany seeing a drop of 14 percent and the UK a decline of 8.7 percent. These two regions, however, experienced revenue growth of 23.2 percent and 29.9 percent respectively as the average order of shipments rose.
IDC has increased its forecasts for the amount of cloud infrastructure sales that will be sold globally this year on the back of a solid showing in the second quarter.
The analyst house has charted a 48.4 percent increase in the sale of infrastructure products, including servers, storage and Ethernet switches, sold by vendors and fulfilled by the channel in Q2. As a result, the forecasts for the full year are now coming in a $62.2 billion, an increase of 31.1 percent on last year.
Spending is increasing in public and private cloud areas, up by 58.9 percent and 28.2 percent in Q2 respectively, with the combined investments in cloud infrastructure now accounting for almost half of all the infrastructure spending globally.
IDC is forecasting that spending in cloud environments is going to grow by double digits this year.
Non-cloud IT is dying, and it still accounted for just over half of the total infrastructure market in Q2 and came in with 21.1 percent growth, but it is markedly lower than cloud-related spending.
Natalya Yezhkova, research director, IT Infrastructure and Platforms at IDC said that as the share of cloud environments in the overall spending on IT infrastructure continues to climb and approaches 50 percent, it is evident that cloud, which once used to be an emerging sector of the IT infrastructure industry, is now the norm.
“One of the tasks for enterprises now is not only to decide on what cloud resources to use but how to manage multiple cloud resources. End users’ ability to use multi-cloud resources is an essential driver of further proliferation for both public and private cloud environments”, she added.
The top three regarding market share were Dell, HPE and Cisco. But the shining star regarding revenue growth year on year in Q2 was Lenovo, which delivered a 223.5 percent increase putting it in fourth place.
According to the latest update to the Worldwide Semiannual 3D Printing Spending Guide from International Data Corporation (IDC), the combined spending on 3D printing for Western Europe and Central and Eastern Europe will experience a five-year compound annual growth rate of 15.3 percent, with revenues reaching $7.4 billion in 2022.
Western Europe delivered 83 per cent of total European 3D printing revenues in 2017 and will remain by far the largest contributor in the wider European region, growing at a CAGR of 14.4 percent for 2017–2022. Central and Eastern Europe will be the fastest-growing region, however, with a CAGR of 19.1 percent for 2017–2022.
IDC research manager, European Imaging, Printing and Document Solutions Julio Vial said the 3D printing market is evolving rapidly, with the European market continuing to show good momentum and 2018 proving to be a turning point.
“3D printing has the potential to expand the manufacturing industry, shift distribution locally, and implement on-demand production, reducing unnecessary inventories and shipping costs. It will enable mass customization and printing of different products while reducing costs and recycling excess printer powder. Product weight can also be reduced, and fewer tools will be needed because 3D printers can replace some of them”, Vail said.
Though 3D printing hardware generated the largest spending in 2017, the focus on materials will drive associated spending in the coming years, with a CAGR of 20 per cent in the forecast period, exceeding the hardware component. Services will remain a key part of the market, as consulting and system integration services are a critical component of the 3D printing solution deployment.
IDC said this meant that everything grew to $18.8 billion during the first quarter of 2018, generating more revenue than any other first quarter on record.
Global server shipments also increased 20.7 percent to 2.7 million units.
The rise was driven by “a market-wide enterprise refresh cycle, strong demand from cloud service providers, increased use of servers as the core building blocks for software-defined infrastructure, broad demand for newer CPUs such as Intel’s Purely platform, and growing deployments of next-generation workloads”.
IDC also noted that average selling prices (ASPs) increased during the quarter, thanks to richer configurations and increased component costs, which would have also contributed to revenue growth.
High-end systems grew 20.1 percent to $1.2 billion, midrange server revenue grew 34 percent to $1.billion and volume server revenue increased by 40.9 percent to $15.9 billion.
IDC’s senior research analyst Sanjay Medvitz said that hyperscale growth continued to drive server volume demand in the first quarter.
“While various OEMs are finding success in this space, ODMs remain the primary beneficiary from the quickly growing hyperscale server demand, now accounting for roughly a quarter of overall server market revenue and shipments.”
As for market share, Dell and HPE/New H3C Group were the top two vendors, with 19.1 and 18.6 percent of the market respectively in 1Q18.
Dell also led as the fastest growing server vendor among the top five companies, growing revenue 50.6 percent year on year to $3.6 billion based on a strong performance in all major geographic regions.
Figures from IDC showed that year-on-year growth was four percent with the second half of the year totalling $502 billion, an increase of 3.6 percent.
IDC said it was all due to increased business confidence and the digital transformation trend as some of the factors driving spending.
Digitalisation is helping service providers offset the commoditisation of traditional offerings, and project-orientated revenues are reaping more that outsourcing, support and training, IDC said,
IDC’s Worldwide Semiannual Services Tracker, research manager Lisa Nagamine said: “The demand for a wide range of digital solutions continues to drive the steady growth in the services markets, but it is still cloud-related services that are having the biggest revenue impact.”
The complex nature of most digital transformation projects means customers have to turn to service providers, which is a positive development for those channel players that can plug the gaps, she said.
The US continues to dominate the global market for IT services and enjoyed the strongest growth but IDC is expecting Western Europe to come in with a decent 2018 as economies continue to improve and demand increases. Last year saw the region deliver 2.8 percent growth year on year thanks largely to sales generated in the second half.
IDC has been consulting its Tarot cards and thinks that next year will see massive changes for the channel as firms change their methods of buying IT.
What IDC said is that next year firms will start making technology purchases funded by a line of business purchasing. Digital transformation is driving the change with the analyst house expecting $1.67 trillion to be spent on technology this year with 50.5 percent coming from the IT budget and 49.5 percent being spent by lines of business.
But line of business spending has been growing at a faster rate and between 2016-21 will come in at 6.9 percent a year, compared to 3.3 percent for IT spending.
IDC has looked at the impact of changing buying patterns in vertical markets and concluded that by 2021 only construction and telecommunications will see tech spending led by the IT department.
IDC Customer Insights & Analysis programme director Eileen Smith said that as business functions worldwide embrace 3rd Platform technologies to accelerate time to market, enable new business models, and increase revenue, leaders within these functions are looking to drive decision making and manage the budget of these investments.
“On average, the worldwide line of business functions will fund 50 percent of their total technology purchases in 2018, but with the ease of cloud software, business functions on average will fund an astounding 70 percent of application investments this year”, she added.
The IT department will continue to spend on outsourcing, project-orientated services and networking equipment. Both will spend on the cloud, but more will be spent on IaaS outside the IT office.
In Western Europe, LOBs will accelerate their investments in technology, particularly in the cloud software space. Business managers are becoming more independent, relying less on IT departments to purchase applications or devices. Business-funded spending will experience 6% growth in 2018, four times faster than that of IT departments, showing that many European companies are more exposed to shadow IT spending.
Beancounters at IDC have added up some numbers and divided them by their shoe size and reached the conclusion that only 29 percent of European small business and 41 percent of midsize companies “have taken steps to prepare” for GDPR.
Among non-European SMBs, the share of prepared firms falls to nine percent among small firms and 20 percent of midsize companies. Oddly a fifth of small businesses in the UK and Germany “are not aware” of GDPR and probably think it is a train service.
This means they have seven weeks before the EU’s privacy legislation comes into force on 25 May.
IDC senior research analyst Carla La Croce said: “When looking at GDPR in western Europe, adoption is moving ahead as expected. Bigger companies move faster than smaller companies, and at a country level, Nordic countries are implementing GDPR faster than other western European countries.
GDPR compliance and implementation has been identified as the top security priority.”
The EU claims that by making data protection law identical throughout member states, companies will make savings of £2million annually.
However, the potential penalties for failing to meet these requirements are severe: up to £17.5m or four percent of annual revenues.
SMB research VP at IDC Raymond Boggs added: “As SMB around the world increasingly looks to grow revenue by reaching out to new customers, the importance of global expansion increases.
“But so does the need for first-rate security and data protection, which is why GDPR compliance is important, not just to avoid fines, but to ensure that vital customer information is secure and protected.”
IDC’s research director of artificial brains David Schubmehl, said: “Interest and awareness of AI are at fever pitch. Every industry and every organisation should be evaluating AI to see how it will affect their business processes and go-to-market efficiencies.”
Retail firms will invest $3.4 billion this year on AI, including automated customer service agents, expert shopping advisors and product recommendations, and merchandising for omnichannel operations.
Banking, meanwhile, will spend $3.3 billion mostly on automated threat intelligence and prevention systems, fraud analysis and investigation, and programme advisors and recommendation systems.
Discrete manufacturing and health are the third and fourth-largest industries for AI spend.
IDC forecasts that across verticals, investment in AI will continue to grow, with 40 percent of digital transformation initiatives using AI services by 2019 and 75 percent of enterprise applications using AI by 2021.
The US will deliver more than three-quarters of all spending on cognitive and AI systems in 2018, with western Europe being the second-largest region.
IDC predicts that Japan will see the most vigorous spending growth over the next five years at 73.5 percent followed by China on 68.2 percent.
According to its Worldwide Solid State Drive Forecast Update, 2017-2021 report, the firm predicts SSD unit shipments will grow at a five-year CAGR of 15.1 percent, with revenue growing at a CAGR of 14.8 percent to hit $33.6 billion in 2021.
Apparently this is all down to “greater product availability and improved pricing dynamics” brought on by increasing demand for 3D NAND flash. NAND flash supply constraints will start to go away next year, which will bring “further price erosion” to SSD.
IDC added that the enterprise market will continue showing strong demand during the forecast period while customers seek out flash systems for traditional storage uses and server-attached solutions.
According to IDC, with SSD seeing per-gigabit costs decline, SSD attach rates will grow in servers, all-flash arrays, hybrid flash arrays and hyperscale cloud service provider datacenters.
SSD’s price drop will also lead to more adoption of SSD in PCs and other client devices, according to IDC. It predicts that SSD shipments for the PC and consumer electronics markets will grow at a CAGR of 15.8 percent in the same time period.
Huawei wants to become an industry cloud enabler and a strategic partner to customers across diverse industries by investing USD 500 million in the development of cloud-based professional services, a cloud platform and cloud ecosystem.
This will provide customers with end-to-end cloud transformation service solutions enabling them to build, use, and manage their cloud platforms effectively.
Sun Maolu, President of Technical Service Department for Huawei Enterprise Business Group, said: “With the emergence of a ‘Cloud Only’ era, Huawei is adopting a long term cloud transformation service strategy to support our enterprise customers in their journey to the cloud. Our services strategy centers on the concept of ‘Grow with the Cloud’ and becoming an industry cloud enabler.”
Huawei’s enterprise services will focus on four key areas including cloud innovation, creating a digital platform, supporting smart operations and enabling businesses.
To drive this strategy forward, Huawei will continue to increase its investment in the development of service solutions and Global Service Centers, and tools, platforms and verification labs for professional services.
“In the next five years, we will also focus on research and development of industry clouds, increasing our annual investment by more than 50%. To meet enterprise demand for ICT talent in the cloud era, Huawei will provide a new certification scheme to train ICT architects, ICT developers and industry-specific ICT experts. By 2021, it is estimated that more than 150,000 cloud and industry-specific ICT professionals will have been certified by Huawei,” Maolu said.
The big idea is based around the concept that as enterprises embrace cloud transformation, they will face a new set of challenges across strategy, planning, requirement analysis, business integration, application system evaluation, technology selection, roadmap design, deployment, operations & maintenance (O&M) management, and information security.
According to Xu Jingbin, Director of IT Technical Service Department for Huawei Enterprise Business Group: “With a track record of industry cloud solution delivery, Huawei works closely with our partners to develop end-to-end industry cloud transformation services that cover consulting, assessment, planning and design, migration, disaster recovery (DR), security, and O&M.”
Huawei provides a sophisticated migration process with 4 stages and 17 steps, and professional migration tools developed in-house, which have helped more than 1,000 customers migrate their businesses to the cloud smoothly and efficiently, he added.
To help customers through their cloud transformation, Huawei will invest more than USD 500 million in the next five years to develop all-scenario services and integrated verification capabilities for its enterprise services.
Leslie Rosenberg, IDC Research Director, said: “Huawei invests heavily in the development of Intellectual Property through the establishment of R&D centers to accelerate innovation, differentiation and delivery of its services. The company has skilled services personnel as well as a channel ecosystem around the globe for consistent consulting and integration engagements.
In a recent IDC MarketScape: Worldwide Network Consulting Services 2017 Vendor Assessment, Huawei is positioned as a Major Player, for its global capabilities and R+D strength. Additionally, end users surveyed in the study cited Huawei for its ability to lower operational costs and improve security as well as its ability to deliver reliability, quality and adaptability to customer needs and requirements.”
The white box server market is growing and the IDC numbers from IDC merely serve to reinforce the point, with the revelation that the ODM Direct group of vendors grew revenue by 41.8 percent in the first quarter to $1.2 billion, accounting for 10.4 percent of the market, at a time when overall server revenues declined by 4.6 percent.
Gartner research director Adrian O’Connell found something similar – while there was a global decline of 4.5 percent in server revenues in the same period, revenues in the “others” category rose 4.4 percent. He wrote that leading server vendors are doing all they can to ensure that service providers don’t continue to shift their server purchases toward ODM suppliers.
“Combined with the significant inroads made by China-based suppliers, we expect to see continuing challenges and downward price pressure across the EMEA server market for some time to come,” he said.
HPE struck a deal with Foxconn to sell white box-like servers to cloud and telco providers three years ago. But CEO Meg Whitman recently admitted that server sales had been affected by declining orders from a single customer – probably Microsoft.
Supermicro is one of the key white box venders. In February, it was believed that Chipzilla was the unnamed customer in a deal for more than 30,000 Supermicro servers for a data centre in Silicon Valley.
The death spiral of the “game changing” tablet is continuing and soon there will be very few people wanting to buy one anywhere and resellers would be more likely to successfully flog used bog-roll tubes.
According to IDC, the tablet market continued its “downward spiral” in Q2 this year with worldwide shipments falling 3.4 percent.
The year-on-year decline was caused by tight consumer spending, IDC said. There was even a decline in shipments of detachables in Q2, as consumers wait for flagship launches from Apple and Microsoft.
Detachables had previously been a shining light for the tablet market, which has now been in a state of decline for 11 consecutive quarters.
IDC research director Linn Huang said that the tablet market has essentially become a race to see if the burgeoning detachables category can grow fast enough to offset the long-term erosion of the slate market.
However he has not given up hope yet as new product launches from Microsoft and Apple are generally accompanied by subsequent quarters of inflated shipments.
“The reintroduction of Windows to the ARM platform could help remedy the aforementioned hollowing of the middle of the market, and we expect a proliferation of Chrome OS-based detachables in time for the holidays.”
Despite the market decline, three of the top five tablet vendors saw their quarterly shipments increase year on year.
First-placed Apple, third-placed Huawei and fourth-placed Amazon all saw growth, while second-placed Samsung saw flat growth and Lenovo saw a decline.
Of course SD-WAN vendors have been telling resellers that it is a technology that the channel needs to get involved with as it starts to ramp up for a year or so, but it looks like now they have the backing of IDC.
IDC is expecting SD-WAN infrastructure and services revenues will see a compound annual growth rate of 69.6 percent to hit $8.05 billion by 2021.
The buzz-phrase of digital transformation is behind the move along with a rise of cloud-based SaaS business applications and a wider acceptance of SDN in general.
IDC’s vice prez of infrastructure Rohit Mehra said that “SD-WAN is not a solution in search of a problem.
“Traditional WANs were not designed for the cloud and are also poorly suited to the security requirements associated with distributed and cloud-based applications. And, while hybrid WAN emerged to meet some of these next-generation connectivity challenges, SD-WAN builds on hybrid WAN to offer a more complete solution.”