Depending on which magazine or website you read, the economy is either still in the tank or on its way to even more pain; but let’s see the truth for what it is in the IT industry, which is we’re officially back to business, building products, moving scale, and capturing demand for expansion of the digital universe — you can’t stop this kind of stuff. We’re seeing hardware upgrades, infrastructure investment (just look at the Data Center space), and globally the IT market grew by 8% year-over-year, to more than $1.5 trillion, according to International Data Corporation.
Hardware equipment, such as computer systems, peripherals, storage, mobile devices, and network equipment saw an increase of 16%, to more than $661 billion,the fastest rate of growth for hardware investment since 1996. Storage systems spending grew by more than 14%, servers 9%, and PCs by 11%. Software and services returned to positive growth, reaching 4% and 2% respectively.
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.
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%.
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.
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
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.”
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.
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.
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.
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.”
The managed services industry is growing rapidly across the globe, everywhere we are finding phenomenal numbers. If you look at revenue breakdowns for public companies in this space, you can clearly see why there’s lots of excitement.
Many don’t realize that online back-up companies’ services can be utilized from other countries, and that doing so may save time and money. There are several key reasons for this trend: 1) Data center density laws in the U.K., which are not in place in the U.S., allow data centers in the U.S. to provide [...]
Information management company, Iron Mountain, is reevaluating its digital business services by eliminating digital archiving, online backup and recovery solutions. The billion-dollar company’s strategic plan is to ‘enhance stockholder value’ by only remaining in the market where they have a leadership position to increase ROIC for stockholders. Reasons for shedding themselves of their online backup [...]
Branding is a hot topic – from personal branding (what you relay about yourself through your actions and communications), to branding a company or product (through marketing, public relations, and other avenues). Whether for a person, company, or product, branding is necessary to distinguish from the competition and stand out in the market. And that [...]
Online backup companies are seeing storage growth trends not only because of the exponential increase in electronic data, but also because of electronic data laws. White label online backup companies provide an easy way for businesses to comply with the federal regulations of keeping data available, easily accessible, transparent and auditable. Here’s a super-brief history [...]
We’re in the storage disk market, let’s be clear. On a daily basis we’re hooking up new clusters, managing disk failures, and handling terabytes of bandwidth. One thing we’ve noticed in 2010 was the double digit growth, and it looks as though IDC has their ear to the ground as well. International Data Corporation reports [...]
Depending on which magazine or website you read, the economy is either still in the tank or on its way to even more pain; but let’s see the truth for what it is in the IT industry, which is we’re officially back to business, building products, moving scale, and capturing demand for expansion of the [...]
Still don’t believe data is growing? We caught this little tidbit from our friends over at the Storage Newsletter. The numbers are in, and according to TrendFocus, mobile HDDs are up 3.7% YTY, with Western Digital increasing its market share to 30%, Segate coming in at around 20%, and a total of 29.3 exabytes shipped [...]
You know every once in a while we take a look at the analytics to get a better picture of our audience base, and recently the spectrum has gotten a bit wider. In the early days of the Internet’s expansion it was Netscape versus Internet Explorer; today, it’s Mozilla FireFox, IE, Google Chrome, Opera, and several other varieties all vying for screen-space on our digital devices. What I want to do today is take a look at some of our internals and reflect on the current division within the browser space, and device arena as well — a very interesting segment of our numbers.