Sweet sixteen?
As we head into the new year, we ask the channel what the next 52 weeks might hold
The old joke has it that one should never make predictions - especially about the future.
But given how many people in the technology industry earn their living by forecasting what the future holds, it is easy to imagine that the channel has never paid much heed to that advice.
And a strong case can be made that the risks and rewards for getting such projections right (or wrong) are even greater for those in the business of selling IT than they are for those who analyse it. As valuable a role as the likes of Gartner, Forrester, and IDC play in the market, research houses are not averse to changing their forecasts from quarter to quarter.
While the adverse effects of such revisions might amount to little more than a slightly red face, for those that manufacture or resell IT, the consequences of making bum predictions could be damage to their reputation or financial performance, or even endangerment of their business.
As we enter a new year that promises to provide answers to some key questions for the industry, as well as posing many more, the channel will be working out where to place its bets in the next 12 months. We have assembled here the forecasts of a wide range of industry figures, and can report on what the channel thinks will set the market alight in 2016 - as well as what are likely to prove damp squibs. We also take an in-depth look at some of the major issues that will define and shape the IT industry this year, and perhaps for many years to come. Crystal balls at the ready...
Can Windows 10 boost the PC market?
The PC market has had a rollercoaster few years. After plumbing the depths in 2012 and 2013, sales rebounded in a big way in 2014. The end-of-life process for Windows XP left affected public sector bodies with little choice but to upgrade, while kick-starting refresh cycles in the corporate sector.
The XP effect seemed to wear off in a big way in the early months of 2015. But PC resellers and retailers must have been hoping that the August launch of Windows 10 would re-energise client sales in the same manner that previous iterations of the operating system have done. But in the week of the product's release, distributors across Europe sold just 150 machines running on Windows 10. Hardly the rocket fuel that the channel wanted.
Steve Nice, chief technologist at Node4, does not see the PC space returning to growth any time soon, new operating system or not.
"The PC market will continue to shrink as phones, tablets and other internet devices become more powerful and useful," he said.
While Peter Tsai, IT analyst at Spiceworks, does not think end users have a compelling enough reason to upgrade.
"Because Windows 10 runs well on older PCs already running Windows 7 or Windows 8 - the system requirements are identical - it is unlikely the PC market will see a major boost," he said.
Go all in on... industrial IoT
In 2016, the application for industrial IoT - niche consumer products and connected healthcare applications - will become very real, presenting a massive market for solution providers.
Don't believe the hype... wearables
With the lack of a killer application that drives enough business or social impact, the mass introduction of wearables is still not there from a mass market appeal.
David Fearne, technical director, Arrow ECS
Go all in on... artificial intelligence
Traditional, signature-based security is becoming irrelevant. Statisticians and mathematicians have begun to develop big data algorithms that can identify very complex behaviours and the channel will start to see a new level of security controls that can proactively find new threats in real time, without human interaction.
Don't believe the hype... Windows 10 Sense
Windows included a new wireless feature called Sense, intended to allow you to automatically connect to secure wireless networks that colleagues or acquaintances have used. Make no mistake, this is the type of ease-of-use feature that we can expect the next wireless vulnerability to originate from.
Corey Nachreiner, chief technology officer, WatchGuard
What are the M&A trends to look out for this year?
Last year brought a typically varied and hectic year of M&A activity at all levels of the channel. In vendorland the biggest news was clearly the planned union of Dell and EMC, one of the largest buyouts in the history of the IT industry. But other giants - in the shape of HP and Symantec - went in the other direction and enacted a demerger. Meanwhile, the likes of IBM, Cisco, and Microsoft added companies to their stable with characteristic frequency.
Chris Elliott, UK and Ireland country manager at Extreme Networks, believes that vendors in his firm's sector will continue to consolidate, with smaller players gobbled up by ravenous rivals.
"[This year] will continue to see the consolidation of vendors in the networking space as customers look to drive value out of a single supplier for LAN and WLAN," he explained. "The single-product niche players will be absorbed as major players look to provide the simple end-to-end connectivity customers are demanding."
In the distribution space last year Avnet returned to the European M&A scene after a three-year absence, with EMEA president Graeme Watt expressing his delight to be "back on the M&A trail". The firm's big-four rivals also continued to drive consolidation. Ingram Micro was particularly busy on this side of the Atlantic, and EMEA vice president Gerhard Schulz claimed he does not expect his firm to put on the brakes next year.
"I would say we would probably not see acquisitions slowing down," he explained. "Wherever we see white spots by country in the existing business model, we will look to close that either organically or by acquisitions. But we will not see a lot of capability-driven acquisitions. Those we have already made give us enough headroom for years to come. We will be looking at line card expansion, and geographic expansion."
Elsewhere, Rigby Private Equity's investment in both Wick Hill and Zycko could see the emergence of another buy-and-build player.
Another Rigby entity - reseller titan SCC - was among the VAR segment's busiest shoppers last year, buying or investing in three companies. The company now believes it has acquired an end-to-end technology portfolio, but chief executive James Rigby claimed that his firm is "still quite acquisitive... [and] will continue to acquire businesses that add to our existing capabilities".
"We are not going to acquire more product-reselling businesses, and we are not going to make big-bet acquisitions - we have had our fill of those in the past, and they are very difficult to consume and very difficult to integrate", he added.
Go all in on... robotic process automation
It's quick and cheap to deploy, has multiple benefits and is non-invasive, linking only with the IT application layer. But ensure you get real robotic process automation - there is a lot of mislabelling.
Do not believe the hype... artificial intelligence
Artificial intelligence and intelligent automation in the corporate workplace is mostly nowhere near mature enough for commercial use.
Professor Leslie Willcocks of the London School of Economics' Department of Management
Will the unicorn bubble burst?
The rationale for giving the title "unicorns" to start-ups valued at $1bn or more was that such firms are just about as rare as the mythical monohorned beasts. But in 2015 new unicorns were created at a rate of more than one a week, and there are currently about 150 worldwide. The UK has a fairly healthy smattering, including names such as Funding Circle, Shazam, and TransferWise.
But some have voiced fears that the proliferation of unicorns amounts to nothing more than another tech bubble, not dissimilar to the dot com boom around the turn of the century. And we all know how that ended.
But Node4's Steve Nice does not expect to see the number of unicorns declining in 2016, believing that they will continue to appear, particularly in emerging markets such as India.
Jack Bedell-Pearce, managing director at UK cloud specialist 4D, also believes the creatures will continue to multiply, even if people's doubts about their sustainability do the same.
"There are signs that the unicorn market is cooling, especially as most of them are still unprofitable," he said. "But so long as there is still an appetite to grab market share - which there will be in 2016 - there won't be a major correction."
Go all in on... securing wearables
As more devices become connected, the security implications will grow. The focus should be on effectively managing the increase in log traffic. Most of these devices will not be looked upon as a security risk, but they can - and will - be exploited like any other connected device.
Don't believe the hype... cyber insurance
Cyber insurance is an ongoing issue - for example, there is confusion over what it covers and whether it will pay out - and there will be continued hype about this with insurance companies starting to play hardball. If organisations are serious about insuring their vital assets in 2016, they must first invest in enforcing appropriate protection measures that can be demonstrated to the insurer.
Garry Sidaway, senior vice president of security strategy and alliances, NTT Com Security
Will Safe Harbour hit big public cloud players hard?
The question of whether or not European data is safe in American hands is one that has been posed a great deal in the past few years. Last year brought a definitive answer of ‘no' - at least as far as the European Court of Justice (ECJ) is concerned.
But despite the new-found apparent certainty, most in the market still seem decidedly uncertain. The ECJ's decision could, of course, have major ramifications for the public cloud giants of Microsoft, Google, and Amazon Web Services, as well as any other US firm in the business of handling transatlantic data.
David McLeman, chief executive of Google partner Ancoris, believes that the search engine giant and its cloud rivals will adapt to the new climate.
"October's annulment of the Safe Harbour agreement will have little impact on public cloud providers," he said.
"Most will adopt the stronger EU model contract clauses, if they haven't done so already, and the EU and US will ratify a general replacement for Safe Harbour early in 2016."
Jon Brooks, director at end-point data protection specialist Code42, added: "Big cloud providers may grumble, but ultimately they will change their services."
But not everyone is so confident that the market giants will adapt to the new world so easily. Geraldine Osman, vice president of marketing at enterprise file-sharing provider Connected Data, said: "Public cloud players will, at a basic level, be hit by an administrative and financial burden as they attempt to draw up the necessary model contract clauses required to transfer EU data to any of their non-EU datacentres or while they build EU datacentres.
"Where they will be hit really hard is that many organisations will decide instead that implementing their own private cloud solutions will deliver easier, quicker and far more secure mobile access to company data without the associated risks of public cloud."
Go all in on... virtualisation
The coming year will see the next phase of virtualisation as the adoption of SDx begins to expand beyond large enterprise and datacentre applications.
Don't believe all the hype... SDN
Networking hardware is still important! Yes, SDN is accelerating and enterprises are making the move to SDN. But for enterprises to really realise the true benefits, SDN needs to run on a reliable, robust and intelligent physical network.
Kristian Kerr, director, EMEA partner organisation, Brocade
Go all in on... hyper-convergence and virtualisation
So as to take advantage of the virtualisation revolution. Invest in knowledge and skills now before networking, security, storage and everything else you sell becomes soft.
Don't believe the hype... traditional vendors evolving
History doesn't lie. These big boys developing next-gen software-defined anything would be like a snake eating its tail. Would you rather sell a Dyson or someone else's version of a Dyson?
Barrie Desmond, chief operating officer, Exclusive Group
Will Lenovo shake up the server space?
Wind back half a decade and Lenovo's role in the PC market was little more than that of a cameo appearance. The Chinese player skirted around the edges of the top tier, but never looked that likely to threaten the US giants of HP and Dell that perennially headed the vendor league table.
But after several years of doggedly pursuing the top spot, Lenovo overtook HP to claim the global PC crown in 2012. Over the past three years the two firms have swapped places a few times, but as of this year's third quarter, the Asian company leads the way with a 20.3 per cent share of global sales, almost two points ahead of HP and a hefty 6.5 points in front of third-placed Dell - according to numbers from Gartner.
Prior to its acquisition of IBM's x86 business Lenovo was a minor player in the server world, but the deal has given it a foothold in the datacentre space. With a 7.9 per cent market share of worldwide server revenue in Q3 2015 - according to more Gartner figures - the firm is still something of a bit-part player, way behind HP, which accounts for 27.3 per cent of sales.
But Lenovo has made no secret of its intent to claw its way up the rankings. Few would bet against it.