We read all the predictions for 2015 and consider any salient points as we enter a time of potentially great change in European IT supply and channels 2014 was a year of greater uncertainty in the global IT industry; whether from mixed economic signals or hesitancy over the move to software as a service (SaaS) and the pace of change to cloud delivery models; the channel was left short of guidance and has plenty of questions which it still needs answered in 2015.
Vendors seemed to be waiting for something – upturn in sales or indication of customer confidence or whatever, this fed through to channel plans and programmes. Little change was seen in channel plans – recruitment was stepped up by many, but along traditional lines, even as many recognised that other channels, and the new breed of service provider were growing fast. When we spoke with Avnet's EMEA VP M&A/Business Development Dieter Lott at the end of 2014, he said that the traditional VAR segment is in decline, though to be fair, it will still make up the majority of Avnet's customer base for some time http://www.iteuropa.com/?q=consolidation-wave-expected-channel . He predicts that the channel faces a lot more consolidation in 2015.
The year 2014 started slowly for most firms; as IT Europa reported, then there was the rising pace of consolidation; companies were bought for their skills as much as their customer lists. This is set to continue; when we spoke to the ex-CIO of Boots PLC, now working at an integrator, he said he would pay a lot more to get skills in 2015 http://www.iteuropa.com/?q=expanding-integrator-will-bid-high-european-skills .
Among integrators consolidation was also a key feature, for example Atos bought Bull in an all-French IT sector deal worth €620m to create a top Europe-based cloud computing company and a major player in cybersecurity. Atos also bought a US operation which gives it a foothold there. But the whole rationale behind the integrator is changing: as blogger Mark Hillary says: “The traditional market for IT services has already changed from what we saw in the past decade. I visited IBA recently and learned how some of their projects are more valuable after deployment because they can then capture and utilise user or customer data – the real value is in the data not the fee for building the system.”
Technology-wise it was the year the PC returned – not in any great transformation, but as the work horse of the business, helped by the refresh cycles and a new version of Windows that seemed to acknowledge the desktop as still important. Mobile integration is still growing, but Europe seems unenthusiastic http://www.iteuropa.com/?q=europe-drags-down-global-mobile-service-sales perhaps because telco service is not high compared with the US, for example.
But this is not necessarily enough to help PC-chip dominator Intel. Multiple vendors, including Cavium and Applied Micro, came out with server-grade ARM chips last year. Google and Rackspace, among others, got involved with IBM’s OpenPOWER foundation, opening up the architecture and accelerating development on it. These two things will make 2015 the year alternative silicon really begins to rise, according to Rackspace CTO John Engates.
So which vendors are making the running? The ones to watch are those with a strategic long term plan; we reported in 2014 how Huawei was busy in eastern Europe in particular, and early 2015 saw a key meeting with Egypt's new president on reviving that country's previous strong record on IT investment. With some of its US business blocked for security reasons, the Chinese giant has the rest of the world to work in. Huawei Switzerland now has a distribution agreement with Ingram Micro, for example.
In May 2014 Cisco CEO John Chambers (above) predicted “brutal consolidation of the IT industry” in coming years, including the exit of many current vendors within 10 years. Hardware centric vendors face the harsh reality of software-defined IT as this technology grows more prevalent in servers, storage platforms and networking devices and the underlying hardware becomes more commoditised. Some, such as IBM, are in the middle of major transformations away from their traditional hardware selling base, while others, such as Cisco, are scrambling to implement software-defined technologies into their core hardware lines.
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