The Swansong of the HDD?

Storage components have come a long way since the first 3.75 MB HDDs were introduced by IBM in 1956. 2016 in particular has been a landmark year for storage components, as aftermarket sales of solid state drives (SSDs) through European distribution overtook those of hard disk drives (HDDs) for the first time, marking a trend which we expect to speed up in the coming years.

HDD manufacturers have recognised the growing importance of SSDs: in the last two years they have bought up several players in the SSD market or/and have started to produce SDDs themselves. As well they might. SSDs are already better in every technical aspect: they have a larger capacity, they are faster, and they are more reliable. Unlike HDDs, which have mechanical parts, there are (almost) no limits to the development of SSDs and their miniaturisation. Indeed, whilst HDD capacity appears to be capped at the 10 TB currently touted by WDC’s flagship model, Seagate unveiled a huge 60 TB SSD in August last year at the Flash Memory Summit.

Manufacturers have yet to give up on HDDs however, extending their lifespan by investing in such technology as Helium or SMR, and banking on the one very clear advantage of HDDs over SSDs – price. For now, the cost of a gigabyte of storage on HDD is about a quarter of that on SDD, and this makes it attractive to businesses who want to lower IT infrastructure costs as much as possible and do not  need the technical advantage of SSDs.

For businesses where time efficiency represents a potential cost-saving however, the move to SSD for their IT infrastructure represents a worthy operational investment, notwithstanding the cost premium. At CONTEXT, for example, we recently made the choice to transfer our main database from an all-HDD system to an all-SSD system by Q2 2017. By doing this we should save 10-15% in terms of time and resources. The savings will allow us to develop new projects but, more immediately, our reports will run faster. This means we can look to deliver our products more quickly, which is key for our clients – the earlier they have information, the more actionable it is.

Storage requirements for such things as back-up on the other hand do not need the latest speed and features, and in areas such as these HDDs will remain the go-to technology for the time being, but only as they remain the cheaper option.

Seagate is saying that HDDs will be around for the next 20 years or so, we suspect they may not last that long. Will they be gone earlier? We’ll be watching closely.

by GM

 

 

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2017 Tech Retail Trends – Omnichannel Transformation

 

Omnichannel is critical, but 40% of retailers say that they are not yet getting an ROI on their omnichannel investments

At its CES breakfast in Las Vegas, two retail CEOs presented their view of omnichannel transformation in Europe, and CONTEXT delivered the highlights of the Omnichannel Retail Survey it conducted in December 2016. The responses from 31 European technology retailers, two-thirds of them in the C-suite, illustrate dramatically the transformation of retail to omnichannel.

While the focus last week in Las Vegas was on new products, CONTEXT hosted a CES breakfast on selling technology products in an omnichannel world. Retailers clearly recognise the critical importance of omnichannel transformation – 90.3% of responses to the CONTEXT survey said that omnichannel is critical or very important to their business, but 40% also said that they are not yet getting an ROI.

“Consumers are already omnichannel, but very few retailers are, because it is really hard and expensive to become truly omnichannel,” said Oliver Meakin, CEO of Maplin, as he opened the session. “Service and advice will be the key areas of differentiation in technology retailing in the future, coupled with good old retail-tainment – people like going shopping, and, therefore, omnichannel – rather than pure clicks – will ultimately win through.”

While the investments are substantial, they appear to be worthwhile. Retailers responded that they know they have to do it. 96.8% responded that they are transforming themselves to adapt to customer behaviour. The expectation is that omnichannel customers will engage more often, purchase more, and potentially add more items to their market basket. And yet, when CONTEXT asked the top tech retailers if omnichannel customers were more profitable, the verdict was not clear:
• 40% of tech retailers said yes, omnichannel customers are more profitable
• 30% said no, omnichannel customers are not more profitable
• 30% said they do not know

This mixed set of responses is indicative of two factors. Major omnichannel investments are relatively recent, so perhaps there has not been time to measure results. Additionally, it can be challenging for retailers to measure total customer relationships across time and channels.

“Do the consultants on omnichannel realise how difficult it is?” asked Hans Carpels, President of Euronics International, Europe’s second-largest tech retailer. Mr Carpels highlighted as an example the difficulty of setting up an omnichannel returns process with stores who are not the beneficiaries of that particular online sales.

There are no end of processes which need to be addressed in order to make omnichannel work. As Dr Chris Petersen, keynote speaker and retail expert said, “The whole is greater than the sum of the parts. You may have a great click-and-collect experience online, but if you wait for ten minutes to collect your goods, or the wrong product has been picked, that one piece breaks the whole experience.”

The reality is that is that transformation to omnichannel is happening in retail. It is significant that 19.4% said that they are well prepared for omnichannel, 74.2% said that they are making considerable progress and only 6.4% owned up to being not ready.

Clearly, other than sales from social media, the majority of retailers are now offering enormous variety in how they fulfil customer orders, whatever this may cost them.

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The level of complexity is evident from the different areas of investment which retailers have made. Systems integration tops the list, as it is essential to develop the web interface and link the POS system with logistics and CRM. Only returns management scored low, with just over 20% of retailers having added new internal or external resources in that area.

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Our key takeaways

It is clear that omnichannel is not just the new normal for customers, but for retailers as well. There are some clear trends and calls to action for 2017. In the retailer transformation to omnichannel:
• Retailers will continue to invest in omnichannel but will have to manage programmes closely to ensure that they get the ROI on it, or they risk seriously weakening their financial position.
• We expect that omnichannel retailers will gain competitive advantage by increasing the number of categories and SKUs held online – in the survey, 80% said that they have already significantly increased the number of SKUs.
• Retailers will manage the inventory implications of omnichannel fulfilment by partnering with third parties such as distributors.
• Omnichannel success will be not based on one thing, but rather a collective enterprise approach involving merchandising, systems, technology, and logistics.
• Consumers do not think in terms of channels: they view their path to purchase as a seamless experience across their customer journey. As a consequence, the term omnichannel itself is no longer accurate. In 2017 omnichannel will become omniretailing.
It is a great time to be an omni-consumer and a very challenging time to transform to become an omni-retailer!

For more information about the CONTEXT Retailer Omnichannel Survey please email asimon@contextworld.com

oliver-meakin-2Oliver Meakin, CEO of Maplin speaks at CONTEXT Retail CEO Breakfast at CES, 6 January 2017

By AS

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Global Desktop 3D Printer Market Rises +27%

According to our latest figures, worldwide shipments of 3D Printers rose +25% year-to-date (YTD) through the first three quarters of 2016 thanks again to shipments of low priced Personal/Desktop 3D Printers.

Of the total 217,073 3D printers shipped year-to-date, 96% of these were Personal/Desktop printers, carrying an average price of just under $1,000.  This represents a 27% year-on-year growth for this sub-category compared to a decline in shipments of -12% YTD in the Industrial/Professional segment which saw only 7,726 units shipped through the first three quarters of 2016. While the market is still largely defined by the shipment of Industrial/Professional printers – which accounted for 78% of the global revenues – the market is clearly settling into two distinctive segments.

Vendor wise, in the Desktop/Personal 3D Printer segment, Taiwan’s XYZprinting remained the global leader so far in 2016, seeing its share grow to 22% through the first three quarters.  This side of the market saw the exit by the #3 global overall player 3D Systems and the continued repositioning of the #1 global 3D Printer market Stratasys of its MakerBot line away from the lowest end.

The Industrial/Professional segment was marked by the official entrance of HP into the space but printers did not begin shipping until the end of the year. While the Industrial/Professional segment has, in general, cooled off in the past few years, the shipment of additive manufacturing devices capable of printing in metal materials was one major bright spot within this category.  This Metal side was not immune to market changes in recent quarters either however, with a slow-down seen in this sub-segment as well in the 2nd half as General Electric (GE) acquired two of the top five metal making 3D Printer companies (Arcam and Concept Laser).

Projections for the full year 2016 remain reserved for the Industrial/Professional market and bullish for the Desktop/Personal market, largely in-line with trends seen through the first three quarters.  Forecasts turn more bullish in the Industrial/Professional sector in 2017 and beyond as the HP and GE ramp results in a return of growth; the Desktop/Personal market is expected to continue its unfettered growth.

by CC

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2016 was always going to be the year of democratised VR, not mass adoption

Estimating shipments of products in new areas of IT is a bit like being the only lighthouse in view above banks of thick fog. It’s the only light you can see, so you’ve nothing to lose heading for it. We’ve been there with pocket PCs, Smartphones and Tablets. And while the fog has cleared for these products, the true state of the market for the much anticipated Virtual Reality headsets is still shrouded in mist.

At CONTEXT, as part of the work with our VR Research Group made up of major PC, HMD, and software vendors, our first predictions estimating the total number of VR headsets shipped in 2016 are conservative compared to some estimations from this time last year. If the basic HMDs are included, the lowest possible total global shipped units start at 8.5m, with true figures probably being closer to 12m+ once the plethora of minor Chinese brands are included. Theo Valich of global consortium VR First commented: “While we are seeing that the adoption of VR is waiting on content, the growth of VR in the emerging markets in Asia-Pacific is not being properly covered. The number of VR start-ups on both the hardware and software side is almost exponential.” The shipped units for the high-end headsets such as the HTC Vive, PSVR, and Oculus Rift CV1 are <15% of the total market, but to get a true picture of what has happened in 2016 and will develop in 2017, it is important that all types of headsets are included.

There are many factors to be considered when attempting to get a handle on the true state of the VR headset market. For a start, 2016 was never going to be about mass adoption for companies such as HTC and Oculus and here are several reasons why: in terms of the headsets designed for use with a PC, a very powerful machine is required and that rules out all but the most dedicated gamers and developers. Awareness of the category is only just starting to become widespread, and even for those with the required hardware, there is a lack of major hit AAA titles to drive sales.

In a recent survey, CONTEXT showed that only 10.5% of members of the general public in the EU had heard anything significant about VR, compared to 79.9% of gamers, with 26.5% of people having not heard anything at all. The issue facing the VR industry right now is that there is a transformative effect of trying it out that needs to happen; simply describing the experience is akin to attempting to explain the taste of Cola to a Martian. As a result, even the cheaper headsets – and yes, we are including the Google Cardboard – can make a profound impact on consumers. In 2016 anyone with a Smart Phone was able to experience VR for the first time, and thanks to Google and others there is a wealth of apps to demonstrate what VR can do. In the early stages of VR, such products are vital to raise awareness. Taking the analogy to the extreme, why would anyone spend $1000 on a sound system when they’ve never heard music on a transistor radio?

In summary, CONTEXT expect VR headset shipments to increase in 2017 for all types of VR headsets, with new industry verticals opening up. We’re seeing more and more VR technologies going through the ICT sales channels into a huge variety of sectors, including healthcare, education, elderly care, military, as well as major public entertainments. With current VR price points, the democratisation – and therefore unit shipments – can only increase, and all types of headsets will continue play a significant role, not just premium products.

by JW

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Tech Predictions: 2017

Untitled.pngPC’s in 2017
In 2017 European PC sales in the business segment are likely to benefit from a gradual pick up of Windows 10 refreshes. In Western Europe in particular, the commercial PC segment is expected to also benefit from the need for enterprise mobility solutions which will be a co-driver in sales of both notebooks and mobile 2-in-1 products.

The consumer PC segment is expected to remain more challenged across Western Europe. There is a possibility that component shortages, which impacted product availability in 2H 2016, will lead to price increases in the first half of 2017which could affect demand. However, on a positive note, the market is likely to benefit from continuing high demand for gaming PCs. While this segment remains small in terms of volume, new technologies – including virtual reality – will also drive growth that will have a positive effect on revenue and margins.

From a wider, macroeconomic perspective, PC sales in a number of EMEA countries are likely to continue to be affected by uncertainties including currency fluctuations and political instability.
Marie-Christine Pygott, Senior Analyst, PCs

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View on Apple
Although you never know what Apple will pull out of the hat when launching new products, the last few years have been quite staid. The last “new” new Apple product was the Watch: but this was heavily trailered so, when it finally arrived, it wasn’t a surprise. We have waited in vain over the years for an Apple TV, and recently yawned when the new MacBook’s Touchbar was announced. In 2017 we have the prospect of yet another phone, the iPhone 8, and not much else.

Except, after much speculation, Apple has acknowledged for the first time that it is investing in autonomous car technology. In a letter to US transport regulators, Apple said the company was “excited about the potential of automated systems in many areas, including transportation”. Apple was first rumoured to be working on an autonomous vehicle in early 2015, when reports suggested that the company already had 600 employees working on an electric car design. Later that year, more rumours suggested that the company hoped to launch an electric car to the public by 2019.

So maybe Apple can surprise us next year. The race for electric vehicles is hotting up, and with the word being that Apple has been in talks to buy luxury-supercar maker McLaren, we may just see a prototype iCar roll onto the stage in 2017 after hearing those words, “one more thing”.
Jeremy Davies, CEO & Co-founder

Enterprise
CONTEXT will be closely tracking the evolution of storage systems and converged architecture: as cloud-managed wireless network service companies slowly but surely replace in-house wireless LAN appliances, we expect continued strong growth on these two fronts. Companies to watch: Cisco Meraki, Open-Mesh, Zebra (part of Extreme Networks), Ruckus.

Sales of solid-state drives (SSDs) have increased throughout 2016 and, for the first time, surpassed those of hard disk drives. As the price of SSDs fall and their capacity increases, 2017 will see this trend continue. In 2014, we predicted that 90% of storage components would be SSDs by 2020, and the industry is well on track to achieve this.
Gurvan Meyer, Senior Research Analyst, Enterprise Team

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Displays
Large Format Display sales in 2017 are expected to continue to grow strongly with demand being driven by the education and corporate sectors. For AV providers, the corporate business market continues to be a huge growth opportunity, with a big shift towards interactive products for meetings rooms, as corporates increasingly collaborate over multiple sites, with numerous remote attendees.  The education market is also expected to be a key driver of growth in the LFD segment with educational institutions increasingly adopting display solutions to change and enhance the ways they communicate with students, staff and visitors.
Lachlan Welsh, Senior Analyst, Displays

Imaging
Printer hardware sales will continue to contract overall, though some segments are expected to register growth in 2017, such as business inkjets with higher end products due to be released in 2017 to compete with laser devices. The shift from hardware to contract sales continues, therefore, the importance of partnerships and focus on channel partners will prevail. HP’s acquisition of Samsung printer business is expected to complete in the second half of 2017, as companies join their efforts aiming to disrupt the A3 copier market business.
Zivile Brazdziunaite, Senior Market Analyst, Imaging

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3D Printing
2017 will continue to see the two sides of 3D printing – the personal/desktop side (those under $5,000) and the industrial/professional side – evolve separately.  Desktop 3D printers will become even more affordable (some already cost as little as $300!) while the some of the world’s biggest brands will increase their presence in the Industrial/Professional market where technology will continue to advance and improve.

Desktop market leader XYZprinting has already expanded its brick-and-mortar retail presence – at Best Buy, Toys-R-Us, and Barnes and Noble in the US, and Darty, Dixons and Media Saturn in Europe – and it is expected to continue with aggressive price points in to promote further retail expansion around the globe. Next year will see HP fully enter the 3D printing world with the first shipments of their professional Multi-Jet Fusion 3D Printers, and a new business is to emerge from GE after their acquisition of two of the top five metal 3D printing companies in 2016.  HP and others will champion a change of focus in the plastics 3D printing market from rapid prototyping to mid-range production.
Chris Connery, Vice President Global Analysis and Research

VR & Gaming
The world of eSports will continue to grow in both popularity and recognition, as a movie is planned starring Will Ferrell on the burgeoning phenomenon. Vendors and retailers will pay more attention to PC gaming as the category offers them the chance to make up for losses in a sector which has been declining in the last few years. High average selling prices for gaming products, excellent attach rates and margins for gaming accessories, and the availability of unsecured consumer borrowing will be major drivers. Virtual reality will also continue to grow in the consumer space, although still at a modest pace. However we expect to see more HMDs going into the B2B and corporate reseller channels for which products such as the Hololens are a gift.
Jonathan Wagstaff, Country Manager UK & Ireland

Smart Home – Battle of the Giants
Back in October 2015 we predicted that new forms of control for smart home devices would stimulate growth in the market. We highlighted three: voice activation, gesture recognition and mind control. The first two are already here: voice control has exploded since Amazon launched the Echo in 2016 and 5 million devices have already been sold. We predict that this trend will grow quickly in 2017 with the Amazon Echo continuing to sell and the launch of Google Home in 2017. Google will apply a massive marketing budget – in the US they are already paying for end-of-gondola slots for Google Home devices.

With this in mind, we see four, and potentially five, giants battling for the smart home in 2017: Amazon, Google, Apple (with Homekit), Samsung (with Smart Things) and Microsoft. The ace up their sleeve for Amazon is entertainment (access to Prime Music), for Google it is search, for Apple and Samsung it is interoperability (potentially using the TV), and for Microsoft it is building out from the PC. We are optimistic that consumers will benefit: with a more coherent offer, small start-ups will no longer be able to create proprietary systems and existing systems will make themselves linkable to the big five in order to survive. It is too early to place bets on a winner, but Amazon has rapidly taken advantage of being first-mover. Gesture control will grow and develop in 2017, but mind control will need to wait for another year!
Adam Simon, Head of Retail

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Eagle Flight Over Paris

On November 29th, CONTEXT hosted a special VR breakfast in cooperation with Exertis France, AMD, MSI, Oculus, and Ubisoft in the Musée de l’Armée in les Invalides in Paris. Retailers, distributors and vendors gathered for the morning to hear the results of the latest CONTEXT European VR survey.

The VR survey was designed by members of the CONTEXT Virtual Reality Research group which includes companies such as Exertis, AMD, Oculus, John Lewis, Dell, CONTEXT, Retail Week and the University of Reading.  The research highlighted the expectations of European consumers towards VR and the potential barriers to purchase of VR products. It also showed in which channel the consumer were expecting to find VR products and how much they were ready to spend. The survey gave to the various industry players a clear understanding of what concerns they should address and what they should communicate in order to allow the technology to gain greater penetration of the market. A representative of FNAC, Laura Gaztambide, eCommerce Coordinator of Video Gaming, shared FNAC’s own experience on VR products and future plans to develop this market further.

Prior to hearing the results of the VR research, attendees watched a briefing on the European gaming market presented by Jonathan Wagstaff, UK & Ireland country manager at CONTEXT, and a detailed presentation on Ancient Rome made by university professor Matthew Nicholls who has made a full virtual reconstruction of the Eternal City, the outcome of 8 years of work. This helped the attendees to assess the educational potential and usage that VR is opening up.

Guests also had a chance to try Ubisoft’s Eagle Flight VR game flying over a virtual Paris, and were welcomed by a kind note of support for the VR industry from President Francois Hollande who was proceeding to an Army review in the Invalides on the same morning.

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by SA

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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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