Caution seems to be the prevailing attitude of two major technology research firms, Gartner and Forrester Research, which both have released their requisite 2012 crystal-balling IT spending forecasts for the next 12 months.
The Gartner forecast is the more conservative of the two, calling for worldwide IT spending to reach $3.8 trillion in 2012, which would be a 3.7 percent increase over 2011. That was a downward revision from its previous prediction for 4.6 percent growth. The major reasons that Gartner has put a damper on its expectations: the financial crisis in Europe and the lingering impact of floods on Thailand on hard-drive manufacturing. (Although that has to be helping the solid state drive situation.)
The two brightest spots in Gartner’s forecast are enterprise software, which should post a 6.4 percent growth rate this year, and telecommunications equipment, which is forecast to grow at 6.9 percent over the next 12 months.
Forrester Research is slightly more optimistic in its forecast, calling for growth (in U.S. dollars) of 5.4 percent to $2.122 trillion. Forrester doesn’t account for corporate telecommunications services in its spending calculations, so that is one of the reasons for the disparity in the overall outlook.
Like Gartner, Forrester points to software as the single biggest IT purchase category in its “Global Tech Market Outlook for 2012 and 2013”, and it expects the revenue for that category to be around $529 billion (about 25 percent of the overall total). The U.S. outlook is relatively bright, with growth of between 6 percent and 7 percent anticipated.
IT consulting and systems integration is the third biggest category of spending anticipated by Forrester (after software and computer equipment). Services spending should reach about $427 billion for the year, according to the report. But if you are a technology solution provider that still favors systems integration in your services mix, you could miss out on some of that growth. That’s because Forrester says the IT consulting and training services segment grew at a rate of about 12 percent in 2011, compared with 11 percent for integration services and 10 percent for IT outsourcing.
“That trend will accelerate in 2012 and 2013, when IT consulting services will grow two to three percentage points faster than systems integration services and even faster compared with IT outsourcing.”
Forrester believes there are two big reasons for that shift:
- Adoption of software as a service, which requires companies to consider their business processes
- The rise of so-called “smart computing” applications that correlate with the growing interest in data analytics and predictive forecasting solutions.
What else is in store for 2012. You should read SearchITChannel’s two forward-looking trend pieces for the next 12 months: “Four trends that will shape IT services in 2012” and “Four technologies that will shape 2012 solutions.”
This development is bound to irk some technology solution providers that have spent oodles of money over the past several years building out practices to deploy Cisco TelePresence solutions. CDW has announced this week that it is now a TelePresence Video Master Authorized Technology Provider. Which means it can pretty much install any TelePresence solution. Anywhere.
The Master status signifies that CDW has ponied up the training money and personnel to develop skills in the advanced collaboration technologies that come as part of TelePresence solutions. It is qualified to sell everything from the single-screen units up into custom TelePresence suites.
This is great news for Cisco, which gains an incredibly high-profile partner in one of its most important emerging technologies areas.
But I have to wonder about the other leading-edge technology solution providers that have helped Cisco build up word-of-mouth and credibility for TelePresence solutions, pioneering the company’s success in this category. Does this move signify that the company will open up the TelePresence technologies into the broader Cisco channel program (instead of “just” the emerging technologies track) sooner rather than later.
The development should stoke the flames of the age-old VAR versus CDW competitive rivalry. Still, it is a sign that video collaboration solutions are becoming more mainstream.
While many people are still clinging today to one last day off associated with the New Year holiday, I’m plowing through the requisite year-in-review and year-ahead materials that those of us in journalism use to help keep us honest throughout the year. With that in mind, I dug up my report from early in January 2011, “Five IT trends for VARs to watch in 2011” so that I could grade myself.
Before I really dig into the meat of this commentary, I will revisit something that I predicted in my introduction. That is, that I would be writing this year’s piece on my tablet computer. Actually, since I’m hunkered down in my home office I am NOT using my tablet to write this commentary, but I DID bring my Apple iPad and a great Bluetooth keyboard from Zagg (Zaggmate) with me to Ireland last September in order to file the three daily submission that shape every morning. Right now, I’m using my solar-powered keyboard from Logitech as a replacement for my MacBook Pro’s built-in keyboard.
Back to the topic at hand, revisiting the predictions we made last year. I’ll recap them.
Trend #1: Tablets and smartphones will become even more prolific. During 2011, the industry’s perception of what it means to be mobile underwent a profound transformation. From ultralight notebook computers to an abundance of tablets, the sheer diversity of mobile technology platforms and the desire of more workers to be mobile at least some of the time is helping fuel a conversation that solution providers will need to address more during the new year: the bring your own device (BYOD) movement. the BYOD trend refers to the desire of employees to use personal gadgets, usually mobile, for work purposes.
How SearchITChannel did: Spot on, considering that NPD Research reports there were more than 1.2 million tablet computers shipped in the first nine months of 2011 alone
Trend #2: Solution providers should embrace social media for their customers and their own internal use. The latest example of the power of social media came during the week between Christmas and New Year’s Eve. Some time during that week, Verizon Wireless quietly disclosed that it would start charging a $2 “fee” for processing one-time payments being made on the phone or online. The mobile carrier grossly underestimated the vitriol of the social media world, which reacted negatively to blast Verizon Wireless for the fee. Within a matter of hours, the company was forced to backpedal.
How SearchITChannel did: Ahead of the curve. Although many smaller companies are still suspicious of the “time suck” that social media might entail, the fact is that technology enthusiasts continue to use social networks such as Twitter and Facebook as sounding boards. Managers ignore social media at their own peril.
Trend #3: Video technology will earn a starring role. Definitely a major theme of the past 12 months, as evidenced by number of top-tier videoconferencing vendors that extended their technologies to mobile platforms including smartphones and tablets. While the stagnant economy kept sales from really taking off, this remains a key theme for emerging collaboration applications.
How SearchITChannel did: In synch with market desires, but not with economic realities of the slow U.S. economic recovery.
Trend #4: The cloud conversation will translate into heightened interest in converged data center solutions. The push to keep it simple continues to inspire businesses to contemplate the benefits of the cloud model, with its simplified approach to provisioning and its promise of helping to better align a company’s true computing capacity needs with what it pays for infrastructure. The mainstreaming of server, storage and networking virtualization architectures continues to be central to this idea.
How SearchITChannel did: In synch with this emerging market, but not with realities of evaluating and piloting converged data center solutions. It takes longer than you expect.
Trend #5: Demand for data loss prevention solutions will intensify. It isn’t coincidence that cloud-delivered backup and disaster recovery services are one of the fastest growing areas of the cloud services market — even though the “storage as a service” concept met a rather infamous fate over the past 10 years. A string of disastrous weather events have convinced a growing number of businesses of all sizes that data-loss preventions solutions are not an optional infrastructure investment.
How SearchITChannel did: Spot on.
What do we think is in store for 2012? Be sure to read the first of our two-part prediction series for the next 12 months, “Four technologies that will shape 2012 solutions.” Stay tuned for the second predictions piece about services trends, coming soon.
The OnForce IT services collective has created a mobile app for the Apple iPhone that coordinates with its field service automation software.
The app, which can be downloaded from the App Store, helps automate the paperwork that needs to be filed when an OnForce service request is handled. It also provides features such as geotagged check-in and checkout, so that technicians can report when they arrive and leave; the ability to receive new requests in real time; directions that are linked to the Google maps service; and access to business documents associated with the account being visited. The graphic to the right shows you what one of the screens looks like.
“Our customers can continue to deliver best-in-class IT service, while technicians can focus more on customers and less on filing paperwork or searching for service event-related information,” said OnForce CEO Peter Cannone.
An Android version of the OnForce mobile field app is due in early 2012, and the company is running a beta test of the software for interested technicians.
If you are sick of the ridiculously short battery life you get out of your smartphone, you may only have five years to wait until kinetic energy technologies offer a respite.
That is just one of the predictions in IBM’s annual list of the five technologies or technology trends that will reshape computing within the next five years. Here are all five predictions:
“Energy: People power will come to life”
IBM is looking at how motion — from the energy that humans create just by walking around to that generated by ocean waves — will transform energy creation by the next half of this decade. Kinetic energy increasingly is being examined as a source for recharging batteries. Devices that use kinetics to charge mobile gadgets are already on the market: check out the nPowerPEG, which is focused at the outdoors set.
“Security: You will never need a password again”
IBM increasingly is getting amped up about biometrics. This is the idea that certain body parts, such as a retina or a fingerprint or maybe even your voice, might replace all those hideous passwords that we have to use for everything and that always seem completely useless when there is a major security breach. I think that this has a real shot at happening, because people are so fed up with password-memorization hell. But the vendors pushing this technology need to get over many people’s distrust of these technologies.
“Mind reading: no longer science fiction”
Today, I randomly ran into someone that I thought of just days ago, in a very unlikely place. This sort of serendipitous thing happens to me pretty often. But this particular IBM prediction scares me. The company believes that over the course of time, you will only have to think of a person’s phone number in order to dial it, due to technologies that link our brain to our mobile phones. The real breakthrough of this technology would be in its ability to help those with physical disabilities or brain orders. But generally speaking, it just scares me and I kind of doubt I’m the only person who feels that way.
“Mobile: The digital divide will cease to exist”
There are plenty of examples about how mobile phones and other mobile technologies are helping people in emerging nations or disadvantage regions here in the United States. IBM believes mobility has the potential to help level the playing field when it comes to access to services, such as healthcare. Personally, I think this is a very worthy goal but I seriously doubt we will reach this nirvana within five years. Maybe IBM is just trying to get people to think about this more, right ahead of the holidays.
“Analytics: Junk mail will become priority mail”
I had to read this one three or four times before I finally understood with IBM was trying to convey. Maybe this will help: suppose you could somehow prioritize all the special offers you receive in your email? Not the ones that are autogenerated spam, but the ones that truly have some value to you as a person, such as the concert tickets you really want to buy or that new technology you want to reserve? You can already do part of this today, but requesting alerts but what if software could take things one step further and take action on promotions that really appeal? That’s what IBM is driving at.
Which of these predictions do you think will hold water over the next few years?
Cisco has created a managed service for its channel partners focused on small-business accounts.
The service, called OnPlus, provides technology solution providers with an appliance and cloud-delivered managed service toolset for supporting network assessments, management and other network advisory services. It is part of Cisco’s pledge to invest $75 million in enablement and systems capabilities that help solution providers grow their businesses.
Dave Tang, director of strategy for Cisco Small Business programs, said research has shown that fewer than 10 percent of small-business VARs have a formal managed service practice. “We are looking to provide them with the tools and capabilities that will allow them to launch these services more formally,” he said.
OnPlus supports the development of services based on the following:
- Assessment – By providing a means for “discovering” network devices and collecting information about warranties, configurations and the like, the solution provider can help advise small businesses about their current and future technology needs.
- Management – OnPlus supports remote connectivity to manageable network devices (from any manufacturer, not just Cisco), so that VARs can provide ongoing advice and troubleshooting support.
OnPlus will be updated routinely, as technologies are themselves updated, Tang said. VARs will be able to access the managed service through browsers, as well as native mobile applications for both Apple iOS platforms and for Google Android-powered devices.
Each OnPlus Network Agent appliance costs $250, which includes a three-year subscription to the OnPlus Service. The service is initially available to Cisco partners in North America; additional geographies will be supported at a later date.
Tang said there are already several hundred small-business networks being managed through the service, which has been in a beta test release phase for the past year. The service is targeted at networks that support several hundred devices.
Market research firm International Data Corp. reports that storage software sales surged by almost 10 percent in the third quarter. The growth came as businesses rush to find better ways to manage their storage devices in the wave of data center virtualization, but it signals a good investment area for IT solution providers in the year to come.
The IDC Worldwide Storage QView found that storage software revenue in the third quarter reached $3.5 billion, which is the second biggest quarter ever for this particular software category. Ironically the first biggest quarter was actually the first quarter of 2011.
So, overall, this has been a bang-up year for storage software, a trend that is likely to continue into 2012.
The press release about the new market numbers quotes Eric Sheppard, research director for IDC’s storage software program:
“Demand for storage software remains at all-time highs. The market has broadly exited the recent phase of product refresh, yet sales continue to increase at impressive rates as users and suppliers come together to help improve the way organizations utilize, manage and protect their valuable corporate data and storage resources.”
The biggest beneficiaries of the sales explosion where EMC, Symantec and IBM, which all experienced double-digit growth in the quarter.
The three biggest growth areas within the storage software sector were:
- Archiving software
- Storage and device management software
- Data protection and recovery software
NetApp is making a bid for the midmarket, and has made some changes to its entry-level product line, the FAS2000 systems, directed at the storage needs of mid-size businesses. The new FAS 2240 is touted as the most powerful entry-level product for the price that companies can build upon as their needs grow. The company has also repriced the existing FAS2040, which is designed for the more value-conscious needs of a small shop or remote office.
Todd Palmer, vice president of Americas Channels at NetApp, told me that the company currently has 16% of the midmarket storage space and is stealing share using the strength of the NetApp brand.
NetApp partners seem pleased with the change, which Palmer said was a reaction to partner and customer needs.
Worldwide revenue for servers increased by 5.2 percent year over year while shipments grew by 7.2 percent, according to the latest forecast figures from market research firm Gartner.
Total revenue for the quarter was approximately $12.9 billion on a worldwide basis, Gartner reported. That compares with $12.3 billion in the third quarter of 2010.
Asia Pacific was the fastest-growing region from a unit sales perspective, while Eastern Europe drove the most revenue growth for the world’s top server vendors. The fastest growing form factor was rack-optimized units, Gartner reported.
The firm noted:
x86 servers forged ahead and grew 7.6 percent in units and 9.3 percent in revenue. Some regions like Western Europe and the United States did not produce as much relative x86-based server growth because of comparatively strong third-quarter results in 2010.”
Unit shipments of RISC/Itanium servers slipped by 6.8 percent, but the vendors managed a 3.5 percent revenue increase over the previous year.
IBM grabbed the top spot from a revenue-generation perspective. It drove $3.84 billion in revenue, up from $3.7 billion in the third quarter of 2010. That was good for 29.7 percent of the overall revenue during the quarter.
Meanwhile, despite a decline in quarterly server revenue, Hewlett-Packard remained the unit shipment leader. HP shipped about 693,265 servers during the third quarter, a 3.1 percent decline for the time period. Its revenue for the quarter was about $3.8 billion, which made it the No. 2 vendor from a revenue standpoint.
Oracle, which was No. 4 vendor during the quarter behind IBM, HP and Dell, generated $763.6 million in server revenue during the quarter, almost flat from $763.9 million in the third quarter of 2010. Its shipments during the quarter didn’t rate a separate mention from Gartner; they fell behind HP, Dell, IBM, Fujitsu and Lenovo.
When your small, family-owned business has been around for more than 100 years AND it has been successful up to this point, it’s kind of a big deal for you to change the way you do things. Don’t you think?
But Carlo’s Bakery, a Hoboken bakery that has received national attention thanks to some well-timed media coverage and the reality TV show fame of master baker Bartolo Valastro, is ready to change the recipe for how it runs its back-office operations — along with the advice of New Jersey managed service provider and IT services company, Exigent Technologies. Paper and pen weren’t cutting it anymore.
Turns out that Exigent Technologies has been tapped to install a completely new infrastructure at Carlo’s Bakery’s 30,000-square-foot location in Jersey City and at its original Hoboken location. The “technology makeover” will include a virtualized network infrastructure, storage area network, printers, security software, servers and client systems (both desktops and notebook computers). Yep, the works. Carlo’s Bakery is investing in Exigent Technologies’s primary managed services offerings to pull this off: the ASSURANCE fixed-fee IT service plan and the PREVENT managed backup and disaster recovery service for small businesses.
Here’s what Leo Minervini, vice president of technology for Carlo’s Bakery, had to say about the plan:
“Investing in IT and selecting a local IT service provider wasn’t a decision we took lightly. Exigent Technologies earned our business every step of the way. From the very first call, the team at Exigent Technologies was clearly a cut above the rest and possessed the genuine enthusiasm, values and proven technology expertise we were looking for in an IT services provider.”
I invite you to reread that last sentence and to reflect on what gets listed first as the factors that inspired the decision: “enthusiasm” and “values.” Not “proven technology expertise.”
As your IT services organization gears up for the end-of-the-year push to finish the year with a bang, it is a great reminder of what differentiates the great MSPs, VARs, resellers, IT solution providers — whatever you want to call yourself — from the rest. It isn’t the skills. Those are a given. It is the attitude that your team displays to your customers.
Think about it.