Canalys: 2013 has been a year of aggression
Market watcher chief Steve Brazier outlines transformation in IT industry as new players pose increasing threat to incumbents
The IT industry is becoming more cutthroat than ever before as vendors vie for market share and continue to muscle in on each other’s domains.
That is the view of Canalys chief executive Steve Brazier, who kicked off the EMEA Canalys EMEA Channels Forum 2013 event in Barcelona with a thought-provoking keynote on the aggression between the major market players such as Microsoft, Cisco, Dell, HP, IBM, SAP, Oracle and EMC, who are all riding roughshod over 20-year-old partnerships in a quest to grab market share in new technology areas.
This is driven by the relative newcomers to the enterprise market such as Google, Facebook, Amazon and Apple, who have seen combined growth of 320 per cent over the past five years, compared with the incumbents mentioned above who have seen an average of 15 per cent growth in the same period.
“We are seeing dramatic tension increase inside the industry and the IT world is restructuring,” said Brazier. “[Vendors] are all starting to move in on each other’s territory as they look for growth.”
The threat of the Android operating system, which in the smart device market (smartphones, tablets, PCs) accounted for 57 per cent of all shipments in the past 12 months, compared with Windows' 23 per cent and Apple's 17 per cent.
“This is a dramatic change in the industry,” Brazier stated. “Apple is under pressure again and needs to react – but there is no sign it is doing that. And Microsoft needs to be loved again.”
He predicted there would be continued consolidation in the industry as the main players try to readdress the balance.
Amazon is striking fear into the industry, Brazier said, with its Amazon Web Services seeing 64 per cent growth on revenue of £3.8bn, particularly as it appears to be selling IaaS at a loss.
And he described a "devastating cost curve" going on in the cloud, as the model from two years ago already proves too expensive, and newer, more profitable models are developed.
This spells good news for the channel, he predicted.
“Cloud service providers have discovered that they cannot sell direct. They need the channel to service customers,” Brazier said.
And for the first time, government policy is starting to shape the IT industry due to the amount of regulations coming into the space.
“Data has become a big deal,” said Brazier, as he predicted three changes: firstly how some web services work and how some encryption services work, secondly a greater adoption of open source because nobody owns the code, and finally a bigger drive to "go local" as more companies will insist that their data stays in their own country.
Brazier also discussed the rise of the "spiky" employee and chief executive, those who understand what the technology actually does and means for the company and are highly skilled, versus the traditional business leaders who are more focused on cost cutting and business issues.
Other areas of opportunity he highlighted included wearable technology and 3D printing.