Category Archives: Market Analysis

Why isn’t IT market intelligence obsessed with optimising the multibillion-dollar mature industries?

I’ll level with you, I‘m confused.

When I look at recent premier IT events such as Mobile World Congress (MWC) in Barcelona and CES in Las Vegas, I see an industry that is almost entirely focused on the future. Obviously, technology players want to accelerate innovation – the event programme at this year’s MWC for example includes a session called the “4th Industrial Revolution”.

But what about optimising the performance of the mature €650 billion[1] European IT market? Compare the MWC and CES programmes with the Consumer Goods Forum, the premier gathering of the food and drink sector, at €1,048 billion[2] making it the largest manufacturing industry in Europe, and you’ll see a programme in which innovation is there, but sitting alongside good stewardship of their well-established sectors.

In a mature industry, performance parameters are well known, top line growth is small, big players that can’t keep up get acquired by nimbler competitors, and optimisation is key. As well as innovating in emerging technologies, the IT industry should be innovating in its core businesses to optimise performance in the mature sectors. One example – in an area I know well – is how companies see the role of sales tracking in the new world of established technologies, grown up now after 30 years. The over-complication of market intelligence (MI) offerings here is causing a raft of issues, and users of this data should be demanding better. To paraphrase a few people, I’ve heard:

“We are drowning in data, we just don’t know what to do with it …”

“We spend so much time compiling different sources that the real analytics come as a second thought”, and

“We don’t fully understand what each dataset actually represents, or how to act on it.”

In the IT sectors, this sentiment isn’t exclusive to vendors – it is shared in their channel by distribution and reseller partners –it being generally accepted that MI data is sub-par as delivered today.

This problem has been around for quite some time. In a previous role at one of the largest and oldest technology firms in the world, I worked with one of the most sophisticated MI solutions I’ve ever seen. “Well done them”, you might think. In reality, it wasn’t without strife. It took the company over three years to design and implement that solution and, to this day, it still requires many people across the globe to combine multiple data sources into ‘one version of the truth’. The company implemented this solution at the tail end of what was generally considered the ‘maturation’ of the PC industry. Any other company thinking of undertaking a similar task today in the printing, display, PC, or other flat or declining mature industry, would need to be resource-rich and highly committed to the cause.

Whilst it is imperative to stay abreast of shifts in consumer and business trends, managing the at-risk 1% of a multi-billion-dollar established industry is as important, if not more so in some cases, as getting established in multi-million-dollar upcoming categories. Indeed, the frustration voiced by the industry would suggest that this is the case. Is it possible that many participants in these mature-technology industries are struggling to monitor and protect their cash-generating business, and that this impacts their ability to invest in new technology in the future?

What is needed to fulfill the requirements of such companies? At CONTEXT, we are working with our customers and partners to address this issue, and have designed a number of new services that provide both broad and specific analyses of mature IT product categories. The key focus areas for this new breed of deliverables are reliability, cost-effectiveness and simple implementation, so that instead of drowning in data and wasting time trying to bring together multiple data sources, the user is able to integrate information easily into existing operations and spend time more productively in improving their business. In essence, that’s our aim at CONTEXT: to help our customers and partners Optimise Today, and Accelerate Tomorrow.

by TP

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[1] EITO Report Western Europe 2013/14

[2] Food Drink Europe 2014

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Filed under Enterprise IT, Market Analysis, Mobile technology, Networking, Retail

Is Black Friday dead? A US perspective

Guest blog by Chris Petersen, CEO of IMS, Inc.

Is Black Friday dead, or just rapidly waning? Data indicates the demise of the premier kickoff to holiday shopping in the US. It’s not just about the economy and consumer confidence, although those are key factors. The retail phenomena unfolding right now is about universal changes in consumer behaviour, regardless of socio-economic status.

Black Friday has declined in US retail … will the same trend happen in Europe?
In the not too distant past, stores were the premier focal point of holiday shopping. Black Friday was an event created by bricks and mortar retailers to entice consumers to come shopping on the Friday after US Thanksgiving, which always falls on the 4th Thursday of November. Since many US customers take off from work on Black Friday, it became the quintessential retailer marketing event to lure shoppers to the stores with “best deals” of the season. The theory was that if shoppers came early to find a deal, they would come back to stores for the rest of their shopping.

Not surprising, the UK and other European retailers adopted Black Friday as a promotional event to kick off the holiday selling season and draw traffic to stores. CONTEXT’s analysis of distribution trends in 2015 was very predictive for UK retail sales spiking for Black Friday. Will the trend continue in 2016?

Black “Friday” — death by a thousand clicks
Increasingly retail stores have been jumping the gun on Black Friday by offering Black Friday sales before the actual Friday. The result in the US is that there is no longer a singular event. Black Friday has suffered scope creep, and it literally has become a “Black Week” of promotions and deals.

More importantly, consumers don’t see Black Friday as just “stores” any more. Amazon and other online retailers have creatively capitalised on “Black Friday” by offering daily online deals across an entire week, or more. This has created a new trend for “Cyber Monday” which is the first Monday after the traditional Black Friday. In the US, workplace productivity actually drops on Cyber Monday as people at work scramble to get better deals on stuff they didn’t buy or couldn’t get on Black Friday. Cyber Monday is projected to be the single largest volume day of the entire holiday shopping season.

Did the same trend happen in the UK and other countries? Compared to the US, the UK has a higher % of sales occurring online, especially for technology. Many of the UK promotional ads in 2016 now in fact show the Black 5 days of deals: Thursday, Friday, Saturday, Sunday and Cyber Monday.

The net result is that today’s consumer is an empowered consumer. They are not bound by place or time of event. This translates into a much diminished effect of single retailer store events like Black Friday.

Large retailers have privately confided that Black Friday needed to “die”. The traditional approach of cramming all deals into a single day dramatically lowers prices and margin. It would be healthier for both if retailers and consumers could evaluate offers and spread shopping over a period of time. In fact, that is how today’s omnichannel shoppers are already behaving – shopping multiple days in multiple ways.

So what happened in the UK for 2016?
Were Black Friday sales up again this year? Or, did consumers shift more of their shopping purchases to Cyber Monday? How much of their Christmas budget have they spent? The final store sales numbers won’t be tallied for a couple of weeks.

However, CONTEXT is conducting consumer pulse survey right now. We are asking consumers when they shopped, and how much they purchased on Black Friday and Cyber Monday. It will be interesting to see how much they expect yet to spend in the rest of holiday season.

 

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Filed under IoT, IT Distribution, Market Analysis, Mobile technology, PCs, Retail, Retail in CONTEXT, Smart Technology, Tablet PCs

Q&A with Keith Henry, SVP Sales and Marketing at CONTEXT

What is your role at CONTEXT?
Head of Sales & Marketing – to support structure and process development for CONTEXT sales and marketing to drive top-line growth and scale. After all, sales represent the engine of growth!

What attracted you to CONTEXT?
I  re-connected with Jeremy Davies, CEO, after 30 years which is exciting. The opportunity to join a rich data-asset driven firm that is on a growth path and developing added-value solutions represents a very attractive proposition. The selling environment has radically changed since 2009, so this is a wonderful challenge. In addition to that I had heard that Context has a special, warm, ethical, culture which has great appeal.

Where were you working before?
I have spent over 30 years with a number of great firms in the ICT space – Xerox, DataQuest/Gartner, IDC – and most recently Outsell. Outsell is a specialised agency that serves the intersection of Information and Technology domains. I was head of Global Sales and supported their CEO Leadership program: a problem-solving forum for leaders across the Information industry. Significantly – single biggest CEO headache? Sales optimisation and sustainability!

What do you think the main challenges are in the technology industry today? 
Well, to be certain, digital transformation will continue to re-shape the tech landscape creating opportunities for innovators and disrupters alike. That said, I strongly believe “millennials” are set to change many things about our industry, although old-fashioned values such as brand power, sensible profitable growth and customer-centric strategies will continue to be the foundation drivers of the industry.

What is the best business advice you have ever received?
Be hard on issues but soft on people!

What never fails to make you laugh?
Playing tennis in the rain in England– no one seems to notice!

What do you enjoy doing outside of work?
I’m a fan of horse-racing. There are 59 tracks in the UK and I have only been to 27, so the journey continues.

What are you reading at the moment?
“The Culture Map” by Erin Meyer. It provides insight into better understanding of protocols and behaviours of different cultures,- a never ending educational journey in my view.

If you had your time again, what would be your next choice of career?
I have always been intrigued by diplomatic services. I doubt I have the right attributes, probably the illusionary way it is portrayed in films is the appeal!

What do you think are the key ingredients to success in Business Development?
Three crucial ingredients:
Firstly, planning and organising a call
Then, managing an outcome, next steps
Finally, learning to talk the buyer’s language – after all, its all about them!

 

 

 

 

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Filed under IT Distribution, IT Pricing, Market Analysis, Uncategorized

3D Printing: Challenges for the IT Channel

Industry analysts are often asked about the “tipping points” for various technologies. The active involvement of the $135bnIT global distribution market may just be one of the major elements that creates such a tipping point for 3D printing.

But there are challenges on both sides of this equation. For major broad-line distributors, many 3D printer companies are just too small to deal with or are too unfamiliar with the IT channel to bother with at the moment. For the manufacturers of the relatively new breed of personal/desktop 3D printers (those mostly under $5K), the IT channel is a strange, gigantic, unknown entity with rigid terms and conditions, which seem unfriendly to newcomers.

Even 3D-printer vendors who have operated in the professional space with larger, more expensive printers seem to be happy with their legacy direct resellers, many of whom they have been partnered with for decades. But the hype of 3D printing over the last few years and the emergence of this desktop/personal breed of 3D Printers (which, to the channel, act and feel much as any other PC peripheral) potentially calls into question the ability of legacy distribution to push the industry to the next level. The technology keeps getting better and the lines between desktop and professional 3D printers continue to blur, but good products are only part of the marketing mix: the industry seems to be begging more and more each day for a closer relationship between 3D printer companies – new and old – and the IT channel.

The entrance into the market of long-time industry stalwart HP will help. HP knows the IT channel and the IT channel knows HP. HP Inc’s entrance into this market in 2016 will be from the PC side of the split company and will continue to legitimize the technology both on a broad level and within IT circles. This entry will be in the professional space, not the desktop printer space; however, many assume that HP desktop 3D printers will not be too far behind as both the PC industry and HP desperately search for new areas of growth.

While HP’s entrance into the market may indeed be a tipping point, strides are already being made in the nascent desktop 3D printer market, with the top brand in the space, XYZprinting, being an excellent example of this. Part of this company’s success can be attributed to its familiarity with the IT channel through other products in their portfolio, which allows it to quickly place its 3D printers in the global IT distribution market. Stratasys/MakerBot has also been seen to be embracing the channel more, as has 3D Systems (and vice versa: the channel is embracing them). Regional brands can also be found in IT distribution across the globe, collectively allowing this segment to see a 249% year-on-year growth in sell-through from Q2 2014 to Q2 2015 in the EMEA region alone.

So, as the IT channel continues to look for ways to grow beyond single-digit rates and 3D printing looks for ways to get printers into the hands of SMBs, educational institutions, engineering labs and the like, it seems inconceivable that the two cannot grow together.

by CC

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Filed under 3D Printing, Imaging, Market Analysis

Desktop 3D Printer market grows slowly while industrial sales stall

Growth in the Desktop/Personal segment of the 3D printer market continued in Q2 2015, while the Industrial/Professional segment stalled. Key indicators suggest that, in the short term, demand for desktop printers will continue to be strong while this is less quantifiable in the Industrial/Professional sector.

The number of Desktop/Personal 3D printers shipped worldwide Q2 2015 was 25% more than in Q2 2014. While this seems strong, over the previous four quarters unit shipments had risen by over 90% year-on-year. Q2 2015 marked the first ever-sequential decline in unit shipments in this category

While global shipments and demand on the Desktop/Personal side of the business remains strong, printer shipments on the Industrial/Professional side of the Additive Manufacturing sector continued to be challenged. Stratasys and 3D Systems are responsible for a significant portion of global unit sales and revenues in this segment, and both have again reported disappointing results in Q2 2015. This slowing down is seen as a short-term phenomenon with many noting that demand still remains strong. Indications are that many end-users are awaiting the entrance of players such as HP which announced its Multi Jet Fusion technology in 2014.

If these trends continue, the Desktop/Personal segment will be on track for a year-on-year unit growth rate of over 50% for 2014/2015, while the Industrial/Professional segment may only see single digit growth rates. It looks as if regional shipments will continue to be strongest in North America, especially in the Desktop/Personal segment. With an increased number of shipments scheduled for the AP region, some regional share-shift could occur in the near term, however. Additionally, the EMEA region also looks poised for growth with announcements of new or expanded B2B and B2C distribution for from the likes of ABCData, Exertis, MediaWorld (Italy), Midwich, Pico and others.

by CC

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Filed under 3D Printing, Market Analysis

Investing in the long-term viability of the 3D Printing market is not difficult, but investing in 3D Printing stocks surely is

The popular press is filled with stories about 3D printing; some sensational, some more factual/measured. Headlines continue to highlight guns made using 3D printers, advances in medicine that make use of 3D printing and 3D printing of everything from food to houses and bridges – and everything in between including 3D clothing. The stories themselves may have their merits, and each news bite gives a snapshot of the current market or how it is growing and will continue to grow, but many of the headlines can be misinterpreted.

For instance, at the moment, the number of 3D printers sold that actually produce food is negligible and it is not yet possible to print complete organs. So, if you are just reading the headlines, you are only seeing part of the Additive Manufacturing/3D-Printing (AM3DP) market.

Likewise, if you are only following the stock prices of pure-play companies in the AM3DP space, then your impression of the market might be significantly different to the reality. Many an article has been written about the disconnect between the ebbs and flows of stock prices and the real and perceived growth of the industry. Investing in 3D Printing has turned out to be a real challenge, since there is little or no correlation between stock prices and industry growth.

A quick examination of the most visible publicly traded 3D Printing companies over recent years indeed shows that they continued to see solid quarter-to-quarter growth in their collective revenues but that their average stock prices went in the opposite direction in 2014. Before this period, there was an even greater spike in average stock prices as expectations for the 30-year-old technology became overinflated as a result of increased visibility brought on by events such as the annual Consumer Electronics Show and the proliferation of 3D-printed gun stories.

New investing challenges arise as market stalwarts Stratasys and 3D Systems reported lower-than-expected earnings again in Q2.  Each of these companies, and every company associated with 3D Printing, remains quite bullish on the market, however.

by CC

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Filed under 3D Printing, Market Analysis

Why this year will be an interesting ride for IT distribution

by Alex Mesguich, VP of Enterprise Research

Last year saw a number of major strategic changes in vendors such as Lenovo, Dell and HP, the impact of which is yet to be felt by the IT channel. Let’s take a closer look at some of the changes and what opportunities and challenges these might bring for the channel.

Dell
In the past, resellers had only one way of doing business with Dell, and that was direct. But that’s all changing as the privately-held computing giant continues successfully to build and adapt its channel model. Today, over 40% of Dell’s European sales come through the indirect channel, with distribution taking an ever-increasing proportion. Dell will continue to work on educating its channel partner community about its range of products and solutions via dedicated training programmes.

Lenovo
Lenovo’s purchase of IBM’s x86 server business is a positive move for the channel, as it gives Lenovo partners more opportunities to upsell to enterprise customers on the back of the ThinkPad. As long as Lenovo emulates its PC strategy, the channel should reap the benefits. The key for Lenovo is to make sure that the merging of IBM channel programs and tools will not paralyse the execution of their plans for growth.

HP
HP announced plans to separate into two new publicly traded companies in October of last year: Hewlett Packard Enterprise, selling infrastructure software and services, and HP Inc for printers and PCs. The next 12 months will be an extremely important time for the firm as it has to reassure its customers and channel partners that the split has made it a more energised company, and that it understands its customers’ pain points and its partners’ too.

Some of these changes in the vendor landscape will present challenges for the channel this year. While much of this is still unknown, some things are clear:

  1. Dell needs to continue to make it easy for the channel to do business, and increases channel profits by offering standardised bundles.
  2. Lenovo could re-energise the channel server business by doing for servers what they did for ThinkPad.
  3. HP, still with over 20% of European Channel sales, could be a disaster in the waiting if the company split turns out to have been misguided.

 

 

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Filed under IT Distribution, Market Analysis