Global PC Market Maintains Double-Digit Growth in Third Quarter

Despite weak results in some segments, the global PC market maintained strong sequential growth into the third quarter. In the United States, weak back-to-school sales, and a fatigued consumer characterized the environment. Japan exceeded expectations, with strong activity seen in the enterprise and SMB sectors.

Looking at Vendors, HP managed to grow 3% in the U.S., with channel issues in Asia/Pacific negatively contributing to an overall flat year. Dell grew close to 10% overall, with their emerging markets divisions keeping up pace. Lenovo  came away as the best performer out of the group, growing just over 31%, owing most of their performance to business renewal projects across all global regions.

Global PC Market Maintains Double-Digit Growth in Third Quarter Despite Weak Results in Some Segments, According to IDC

13 Oct 2010

FRAMINGHAM, Mass., October 13, 2010 – The global PC market grew 11% in the third quarter of 2010 (3Q10), nearly 3% below expectations. According to the International Data Corporation (IDC) Worldwide Quarterly PC Tracker, constrained consumer spending resulted in a tepid back-to-school season but commercial refresh remained largely on schedule and the overall market improved in September compared to the earlier part of the quarter. Moreover, the market still exhibited positive sequential growth over the second quarter which is the hallmark of third quarter activity. Shipments for most markets were relatively close to expectations, with Japan surpassing the forecast. The U.S. saw the largest difference with forecast growth, coming in at a 3.8% year-on-year increase, which was well below 2Q10 growth of 11.7% and 3Q10 projections near 11%.

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2010 Hype Cycle: Gartner Research Special Report

Every now and then you have to put emerging technologies into perspective, because as new types of products hit the market, invariably there’s a following of hype and misappropriated information regarding their real world implications and understanding. One of the rather clever ways of categorizing new tech is to align its development path along a Hype Cycle, something which Gartner Research (NYSE:IT) introduced just over fifteen years ago.

This way of classifying new products and services starts with a Technology Trigger, or event related to either new research or innovative strategies being developed by private firms and businesses; the cycle then moves onto the Peak of Inflated Expectations, or basically the height of news and buzz; then we move to the Trough of Disillusionment, a lonely place, where many groupies break off and market differentiation takes place; after people get a better understanding they move onto the Slope of Enlightenment, where you see true leaders break out; and finally the Plataea of Productivity, or point at which the technology begins to find its lasting momentum in the marketplace.

Today we’d like to make you aware of Gartner’s 2010 Hype Cycle Outlook, an updated look at the next ten years of technology and where products stand as we move forward. We definitely recommend taking a look and gathering what you can find. It’s an interesting take on where the industry is at, and where it’s going.

Gartner’s 2010 Hype Cycle Special Report Evaluates Maturity of 1,800 Technologies
Hype Cycle Research Provides a Cross-Industry Perspective on Potentially Transformative Technologies

STAMFORD, Conn., October 7, 2010 — 
Media tablets, private cloud computing, and 3D flat-panel TVs and displays are some of the technologies that have moved into the Peak of Inflated Expectations, according to the 2010 Emerging Technologies Hype Cycle by Gartner, Inc.

Gartner has examined the maturity of 1,800 technologies and trends in 75 technology, topic, and industry areas. Each of the 75 individual Hype Cycle reports provides a snapshot of a key area of IT or business. Senior executives, CIOs, strategists, business developers and technology planners should consider these technologies when developing emerging business and technology portfolios. The “Hype Cycle for Emerging Technologies” is the longest-running annual Hype Cycle, providing a cross-industry perspective on the technologies and trends that IT managers should consider in developing emerging-technology portfolios (see Figure 1).

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Cloud Computing 10% of Spending on Outsourced IT Services in 2010

Cloud computing, also known as network computing, has reached a tipping point, where in we are now entering an industry-wide transition from properiety platforms to more open and ubiquitous frameworks. The pattern of change is not just taking place in North America, but from Asia to Africa, enterprises of all sizes are looking to develop public and private elastic infrastructures.

This means the race toward massively scalable, fully parallel systems, is heating up, and leaving the current stack in the dust. The market is seemingly deep in the early stages, so there’s a lot of headroom moving forward. The current estimates from Gartner Research put cloud spending at 10% of total outsourced IT services for 2010; which looks to be a healthy number considering the global economy.

The broader take away from information like this, is that when looking to define your strategy (even in a local market), you have to be aware of the global picture; you need to have a good idea of where capital is shifting and resources are being allocated — because those decisions will drive the predominate narrative.

Read Gartner for the latest:

Gartner Survey Shows Cloud-Computing Services Represents 10 Percent of Spending on External IT Services in 2010

Key Issues Facing the Cloud-Computing Industry to be Examined at Gartner Symposium/ITxpo, October 17-21, in Orlando

STAMFORD, Conn., September 22, 2010 —

Cloud-computing services consumed from external service providers (ESPs) are estimated to be 10.2 percent of the spending on external IT services, according to a worldwide survey by Gartner, Inc.

From April through July 2010, Gartner surveyed 1,587 respondents in 40 countries to understand general IT spending trends and spending on key initiatives such as cloud computing. Participants were IT budget management professionals (CIOs, IT VPs, IT directors, IT managers, etc.). Four hundred eighty-four respondents participated in the drill-down on cloud computing and were asked how their organization’s current budget for cloud computing was distributed, as well as what their estimate was for spending next year.

“The cloud market is evolving rapidly, with 39 percent of survey respondents worldwide indicating they allocated IT budget to cloud computing as a key initiative for their organization,” said Bob Igou, research director at Gartner. “One-third of the spending on cloud computing is a continuation from the previous budget year, a further third is incremental spending that is new to the budget, and 14 percent is spending that was diverted from a different budget category in the previous year.”

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IT Sales and Marketing Budgets Will Rise in 2010

It’s been just over three years since the beginning of the massive market selloff, but 2010 looks to be a solid recovery year for the IT sector. Research from IDC shows that executives are increasing their marketing and sales investments by 3.7% and 5.6% respectively. Also to note, traditional media ad spending has declined by 43%, and digital marketing is growing by 53%. The clear picture details a competitive space in transition, with tactics shifting along with revenue growth.

What does this all mean for the broader market? Expect to see more aggressive movement throughout all sub-sectors of the digital marketplace, from more XaaS (Anything-as-a-Service) offerings, to retooled appliances and mobile devices. So even though the gains may appear to be modest at first, least not forget that exponential returns are at play. Demand build-up is taking place, the key is to establish strategies early enough to be in a good position late 2011, or early 2012, once we start seeing significant movement in the unemployment rate for developed economies.

Again, this news is only supplementary, you must do your own research to quantify the numbers in your particular segment of the market. But it does reveal some truth about the macro picture, something which cannot be taken with a grain of salt, but must be incorporated into any operational strategy moving forward.

IDC Survey Shows Sales and Marketing Budgets Will Rise in 2010

21 Sep 2010

Tech executives face significant sales and marketing process challenges and opportunities

FRAMINGHAM, Mass., September 21, 2010 – The International Data Corporation (IDC) Executive Advisory Group forecasts that IT vendor marketing budgets will increase by 3.7% and vendor sales budgets (investment) will rise by 5.6% for the full year 2010.

Richard Vancil, vice president of IDC’s Executive Advisory Group noted some key trends and offered guidance for the tech executives. “The recession has brought major changes to the level and shape of marketing investment. At the macro level, overall investment is likely to lag revenue growth this year and this is the first ‘watch-out’ for executives, as our research consistently shows that marketing leaders tend to keep budgets in-line with revenue growth. The second factor is the major shift in the shape of the marketing mix. Traditional media spending has declined by 43% this year, and the category of digital marketing has grown by 53%.

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Net Neutrality and the Future of the Web

The web has been a transformational technology over the past fifty some-odd years. From ARPANET to AOL, it has spread across our economic, social, and political landscape. Just in the past ten years, businesses such as Google and Facebook have become household names. Socially we are more connected than at any point in our history, and it’s only increasing; when we launch our Facebook account, or retweet our latest concert pictures, we are wholly exchanging with another at a faster rate, generating mountains of data, creating new opportunities for entrepreneurs across the globe.

But as we stand at this critical point there is still much in question: what is the future of the Internet? Is it open and accessible, racing across boundaries of State and culture, between filters and through established modes of communication? Or is it closed and monitored, sectioned off between those with capital and those without? The crucial answer has yet to be determined, but powerful forces will not remain at bay.

Today, the race for the entire gambit is playing out ever second, of every day, and there’s no clear end in sight. On one side you have moguls of telecom and media, who only see benefits from increased privatization of the Internet’s core protocol, which is to say they argue in support of a tiered Internet, where principles of supply and demand play out in a market based system of “quality services,” giving those with the largest cash accounts access to the fastest routes. On the other side you have the disciples of a new media, new business, new data, who recognize and respect the openness that has allowed for the flourishing of one-thousand business plans. Clearly someone will win out, but what does it look like?

The simple antidote is choice; but where there is choice, there is also competition, which isn’t something established players necessarily care for. But the decision will have to be made in one way or another, because large amounts of moolah are on the side-lines, waiting for the quail to get spooked. The choice has to be a matter of policy, the ability for new players to enter the broadband market will determine the future of the web. If it’s not LightSquared, it’ll be someone else; and if not them, then on to the next one. We will get there. But it doesn’t have to get messy, it doesn’t have to go the way of China, India, or Iran. Some how though, I think everything will turn out ok.

Helpful Links

The future of the internet: A virtual counter-revolution. The Economist. Sep 2nd 2010.

The internet: The web’s new walls. The Economist. Sep 2nd 2010.

LightSquared to Challenge Clearwire with 4g. Bloomberg. Aug 31 2010.

Network Neutrality. Wikipedia.

China Internet Censorship. Wikipedia.

India Internet Censorship. Wikipedia.

Internet Censorship. Wikipedia.

The Great Debate: What is Net Neutrality. C-SPAN. Sep 6 2008.

Disk Storage Systems Market Ships 3,645 petabytes, growing 54.6% year over year.

What’s a good way of knowing how fast data is growing? Examine the external data storage systems market. Revenues so far have reached year-over-year growth of 20.4%, according to International Data Corporation (IDC). Total disk storage systems capacity shipped reaches 3,645 petabytes, growing 54.5% year-over-year. What’s clear is that demand is strong and consistent. The trick is capturing a portion of that demand by offering products and services that align with the best interests of customers.

In the Network Backup market we witness the economics every day, from across the globe, businesses of all types are beginning to understand the value of protecting their digital assets. What we try to do is make it easy for IT professionals to get into the game, enabling them to add additional profit centers to their revenue stream.

The takeaway from this research, and other reports out there, is that we are entering an era of tremendous storage growth, because factors at play in the IT industry, and macro-enviornment, are changing the way people do business — something we recognize and encourage.

Disk Storage Systems Market Sustains Strong Double-Digit Growth Across All Sectors in Second Quarter, According to IDC

03 Sep 2010

FRAMINGHAM, Mass., September 3, 2010 – Worldwide external disk storage systems factory revenues posted year-over-year growth of 20.4%, totaling just over $5.0 billion, in the second quarter of 2010 (2Q10), according to the International Data Corporation (IDC) Worldwide Quarterly Disk Storage Systems Tracker. For the quarter, the total disk storage systems market grew to $6.8 billion in revenues, representing 20.7% growth from the prior year’s second quarter. Total disk storage systems capacity shipped reach 3,645 petabytes, growing 54.6% year over year.

“The first half of 2010 showed continued signs of economic recovery in the disk storage systems market,” said Liz Conner, senior research analyst, Storage Systems. “The external disk storage systems market grew 18.6% from the first half of 2009 in terms of factory revenue and 3.0% from the second half of 2009. Although the first half of 2009 was extremely weak due to the economic crisis, the gain from a relatively strong second half of 2009 shows continued customer investment and importance placed in the storage systems market.”

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Worldwide PC Microprocessor Shipments and Revenues Rise 2Q 2010

To understand the Information Economy, you have to put the right numbers into perspective. A major bellwether for both backup and storage industries is the silicon supply chain, because as the amount of compute cycles increases, so does the amount of data needed to be stored and analyzed. What is interesting is that if you look at the latest PC Processor report from IDC, you can see how the market is favoring growth for server and mobile product lines.

For 2Q10, total world wide PC microprocessor unit shipments increased 3.6%, and revenues increased  by 6.2%. Looking deeper into the numbers you will find systems makers bought more higher-priced PC processors for servers and mobile devices, while desktop processors remained flat. IDC is still firm on their forecast of 19.8% growth for worldwide PC processors in 2010. 2011 is not far down the path, but in terms of analysis it remains a wild-card year for sustainable shipment growth.

Though it is also important to point out that 3Q10 looks to be showing weakness. But considering the overall condition of the world wide economy, you have to expect some drawback as we move forward.

Worldwide PC Microprocessor Unit Shipments and Revenues Rise in the Second Quarter Compared to the First Quarter, According to IDC

Worldwide PC Microprocessor Unit Shipments and Revenues Rise in the Second Quarter Compared to the First Quarter, According to IDC

19 Aug 2010
PC processor vendors had a strong first half, but weakness emerges in the supply chain for 3Q10

SAN MATEO, Calif., August 19, 2010 – Worldwide PC microprocessor unit shipments and revenues in the second calendar quarter of 2010 (2Q10) increased 3.6% and 6.2%, respectively, compared to the first quarter of 2010, according to the latest PC processor study from International Data Corporation (IDC).

The average sequential change in unit shipments between a calendar year’s first quarter and its second quarter is an increase of 1.6%. For revenues, the average sequential change is a decrease of -2.8%. So, these increases represent better performance than usual for a second calendar quarter.

“Such a sequential increase in PC processor shipments alone would have been enough to conclude that the first half was strong for the market,” said Shane Rau director of Semiconductors: Personal Computing research at IDC. “However, a modest rise in revenues, too, points directly to a rise in average selling prices. System makers bought more and higher-priced PC processors in 2Q10 than in 1Q10. Digging a little deeper into the numbers shows that they bought more mobile processors and more server processors, while desktop processors remained flat.”

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Brazilian IT Services Market Reaches $8.9 Billion, Demand CAGR of 12%

If you aren’t keeping an eye on Brazil, then you’re not paying good enough attention. The South American economy is readying itself for recovery, as credit lines thaw and market activity refocusses on growth, digital spending and consumption is steadily increasing, expanding the market for IT products and services.

Government and retail consumers primarily drove demand during the first half of 2010, with the business sector expecting to pick up by H210. Additional broadband internet options are also coming online, with Brazil implementing a national wireless initiative to triple internet access by 2014.

Also to note, PC penetration is currently estimated south of 25% and is expected to increase to 36% by 2013. More consumers equals more opportunity for national and international players, leaving every vertical up for grabs. Approximately 400,000 small businesses reside in Brazil, with high demand in retail, finance, and healthcare sectors.

Check Research and Markets for the report:

Brazil Information Technology Q3 2010
Business Monitor International, July 2010, Pages: 63

[...]

Brazilian IT spending is expected to bounce back in 2010, following strong growth in computer sales in the first half of the year. Government and retail demand drove most of the growth, as Brazil’s economy made a robust recovery, while still-sluggish business demand is expected to pick up in H210. Demand for IT products and services is forecast to grow at a compound annual growth rate (CAGR) of 12% over the forecast period, making Brazil one of the best-performing global IT markets. A National Broadband Plan announced in May 2010 should help to drive future growth in demand for IT products and services.

After 2010, the fundamentals of low computer penetration and growing affordability should keep the market on an upward path. Despite current economic uncertainty, a PC penetration rate of less than 25% indicates plenty of room for market growth. Infrastructure investments following the award of the 2016 Olympic Games to Rio de Janeiro is expected to drive new spending on IT systems and solutions.

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IDC: IT Spending Will Grow 5.2% Over Next 12 Months

The hardware refresh is underway, software sales are picking up, and service backlogs are building; all that from IDC as they publish the latest FutureScan figures. Judging from the overall trend line, buyer intent is steadily increasing at a faster pace than general market indicators. We look to be in solid recovery mode, with fears of a double-dip recession perhaps not in line with real expectations.

Of course, IT is only one aspect of the overall macro picture, but a very vital one. Looking at our own internals we have to agree with IDC’s estimation, as our model has been producing steady growth into 2010; we intend to build on those numbers Q1 and Q2 2011.

IDC FutureScan: A Mid-Summer Bump as Both Indicators Show Improvement

FRAMINGHAM, Mass., August 11, 2010 – The IDC FutureScan indicators for August both showed improvement over July’s results. Combined, the two indicators nearly match IDC’s latest Black Book forecast of 5.2% growth in U.S. IT spending over the next 12 months. In addition, the Buyer Intent indicator has caught up to the U.S. GDP growth forecast of 3%.

“From what we can see at IDC, there is still a major hardware refresh going on, software sales are starting to pick up, and services backlogs are building even if revenue is not,” said Stephen Minton, vice president, Worldwide IT Markets and Strategies at IDC. “Although the market indicators will continue to be challenged by weak revenue and macroeconomic growth, buyer intent remains healthy. Hopefully this will be enough to sustain the long, slow recovery.”

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Cloud Computing to Drive $6.4 Billion in Server Hardware Spending by 2014

Cloud computing is really changing the landscape because it gives executives and managers IT options that scale with complexity, as well as offer flexible pricing models. But let’s not forget, cloud computing is just another term for network computing, or processing information across machines instead of on one local machine. In a lot of ways the entire internet is one machine, with redundancy across the system, and copies of information across wide sets of individual nodes (think of mp3s and movies even).

What we’re watching is the emergence of network computing applications, and that is what is driving the broader narrative. If it’s Amazon’s Elastic Infrastructure, or Google’s App Engine, or XZ Backup’s White Label Backup program (had to drop a plug), then it’s a service which takes advantage of networked machines to do jobs ranging from serving websites, to backing up local data to an offsite and redundant system.

Cloud adoption isn’t just about the industrial infrastructure required to support users from only desktop machines, but increasingly with phones and the emerging tablet market. Verizon’s new Droid is getting great reviews, and has iPhone customers in it’s targets, so healthy competition is revving up. Also wireless networks such as 4g LTE and WiMax are being built as fast as they can get the capital.  In a lot of ways the ground work is being laid, and the future looks bright for the IT sector.

Check out the latest research from IDC for numbers and analysis.

Cloud Computing to Drive $6.4 Billion in Server Hardware Spending by 2014

Cloud Computing to Drive $6.4 Billion in Server Hardware Spending by 2014

FRAMINGHAM, Mass., July 30, 2010 – Cloud computing presents a viable option for IT organizations seeking to reduce the complexity within their IT environments, either by means of converged systems that arrive pre-integrated and ready to use (for private clouds) or systems that are offsite entirely (public cloud). In both scenarios, the pursuit of cloud computing options will drive new spending on server hardware. International Data Corporation (IDC) forecasts that server hardware revenue for public cloud computing will grow from $582 million in 2009 to $718 million in 2014. Server revenue for the larger private cloud market will grow from $2.6 billion to $5.7 billion in the same time period.

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