Archive for the ‘it spending’ Category
It’s that time of year. Google has released its 2012 Zeitgeist, telling us what’s on the minds of the world’s searchers.
Facebook, not to be out done, has released the Facebook Year In Review, “a look back at the people, moments and things that created the most buzz in 2012 among the billion people around the world on Facebook.”
Now, go and ask folks what they think about Facebook’s everchanging privacy controls, and we’ll see if the Facebook Year In Review gets soon revised.
But I’m actually more interested in a big report from a small, but growing networking software and social business upstart located right here in Austin, Texas.
Spiceworks connects 2.2 million IT professionals with more than 1,300 technology brands, and offers its IT management software through a novel ad-supported model. In turn, it claims to “help businesses to discover, buy and manage $405 billion worth of technology products and services each year.”
Spiceworks just released its semi-annual “State of SMB IT Report,” a collection of statistics, trends and opinions from small and medium business technology professionals from amongst their community.
This December’s study is the seventh edition, and claims to “keep the pulse on the happenings of small and medium business IT professionals and IT departments.”
First, I’m just happy to discover they still have a pulse.
The National Federation of Independent Business’ “Small Business Optimism Index,” which is reported monthly, indicated in its November report one of the steepest declines in its history. In fact, it has reported a lower index value only seven times since it first conducted its monthly surveys in 1986.
The Index dropped a full 5.6 points in November, bottoming out at 87.5 (In 2000, by juxtaposition, it was well above 100), indicating something was rotten in November. The Index’s own Web statement suggested “it is very clear that a stunning number of [small business] owners…expect worse business conditions in six months,” and that nearly half are certain things will be worse next year than they are now, with a head nod to the looming fiscal cliff talks, the promise of higher healthcare costs, and the “endless onslaught of new regulations.”
Chicken Little, the SMB sky is falling!
Clouds, Virtualization, And Tablets Are Driving The SMB IT Spending Bus
But fear not, the SMB adoption of new technology is riding to the small business rescue, or so suggests the Spiceworks SMB IT study.
The headlines? Though IT budgets are on the rise in the SMB, hiring new staff is at a standstill. But for those still standing, in the last six months, SMBs adopted tablets and cloud services in fast-growing numbers.
Here are the four key findings:
- Tablet adoption keeps its momentum and nears smartphone levels. Hardware maintains the lion’s share of IT spend in the SMB.
- Adoption of cloud services spikes; desktop virtualization shows strong potential. (Can you say “Go long on VMWare??”)
- IT budgets reached their highest point in the last three years, while hiring freezes are up.
- BYOD is still a hot topic, though IT pros are split on the issue.
Diving down a bit, on the subject of tablets, 53 percent of SMBs now support tablets on their network, making them almost as popular as smartphones at 59 percent.
Cloud services are now used by 62 percent of SMBs, up from 48 percent in the first half of 2012.
With respect to IT budgets, they’re on the rise, averaging $162K, up from $152K in 1H 2012. But only 26 percent plan on hiring IT staff in the second half.
And on BYOD, whlie 14 percent fully embrace the trend, 32 percent say it works well for some devices, but not for others. Digging deeper, I discovered that smartphones led with 81 percent BYOD support, while tablets only garnered 62 percent.
And somewhat ironically, there’s more support for BYOD in much smaller organizations (defined here as less than 20 employees) than larger ones (50 percent in those above 250 employees).
I would encourage you to go here and register to download the full report, but the top line is this: If you’re an IT vendor looking for budget flush at the end of 2012, desktops, laptops, and servers are certainly low-hanging fruit, with tablets bringing on the most growth.
And on the software front, be on the lookout for disaster recovery and storage solutions (an IT mainstay through downturns), cloud-based solutions, and virtualization software.
Whatever you do make, just make sure you make those new purchases with “Gangnam Style” — and if you have no idea of what I’m referring to, see above with regards to the 2012 Google Zeitgeist!
IBM’s 3Q 2012 earnings were just announced, with diluted earnings of $3.33 per share, a year-to-year increase of 4 percent, or $3.44 per share, up 8 percent excluding the impact of UK pension-related charges.
Operating (non-GAAP) diluted earnings were $3.62 per share, compared with operating diluted earnings of $3.28 per share in the third quarter of 2011, an increase of 10 percent.
Total revenues for the third quarter of 2012 of $24.7 billion were down 5 percent (down 2 percent, adjusting for currency) from the third quarter of 2011. Currency negatively impacted revenue growth by nearly $1 billion.
IBM chairman, president, and CEO Ginny Rometty had this to say about the quarter’s financial performance: “In the third quarter, we continued to drive margin, profit, and earnings growth through our focus on higher-value businesses, strategic growth initiatives, and productivity.
“Looking ahead, we see good opportunity with a strong product lineup heading into this quarter and annuity businesses that provide a solid base of revenue, profit, and cash. We are reiterating our full-year 2012 operating earnings per share expectation of at least $15.10.”
Following are further highlights from the quarter:
- GAAP: $3.33, up 4 percent; $3.44, up 8 percent excluding UK pension-related charges;
- Operating (non-GAAP): $3.62, up 10 percent;
- GAAP: $3.8 billion, flat; $3.9 billion, up 3 percent excluding UK pension-related charges;
- Operating (non-GAAP): $4.2 billion, up 5 percent;
Gross profit margin:
- GAAP: 47.4 percent, up 0.9 points;
- Operating (non-GAAP): 48.1 percent, up 1.2 points;
Revenue: $24.7 billion, down 5 percent, down 2 percent adjusting for currency;
- Negative currency impact of nearly $1 billion;
- Divestiture of Retail Store Solutions (RSS) reduced revenue by 1 percent;
Software revenue down 1 percent, up 3 percent adjusting for currency;
Services revenue down 5 percent, flat adjusting for currency;
Services backlog of $138 billion, up 1 percent;
Systems and Technology revenue down 13 percent, down 12 percent adjusting for currency;
Growth markets revenue down 1 percent, up 4 percent adjusting for currency;
- BRIC countries up 4 percent, up 11 percent adjusting for currency;
Business analytics revenue up 14 percent year to date;
Smarter Planet revenue up more than 20 percent year to date
Cloud revenue year to date has exceeded full-year 2011 revenue;
Reiterating full-year 2012 operating (non-GAAP) EPS expectation of at least $15.10.
Back in April, I blogged here about the new IBM PureSystems line of servers that have been in the works for some years and backed by $2 billion in investment by IBM.
Here we are a few short months later, and we’re seeing some substantial uptake of this new line, including in growth markets.
Just a few updates:
- Over 700 IBM Business Partners have now adopted IBM PureSystems, and 1,300 of those have completed training on the new lines
- 160+ solutions and “patterns” of expertise have been developed both by IBM and our partners across 20 industries
- New financing options now all for organizations to defer the first payment for IBM PureSystems for 30 days
Organizations around the world are increasingly looking for ways to reduce IT complexity and overcome the growing worldwide skills shortage. Today, approximately three-quarters of global employers cite a lack of experience, skills or knowledge as the primary reason for the difficulty filling IT positions.
Because of this, organizations are searching for new ways of computing that don’t require the additional commitment of significant resources or employee training to set up and maintain.
And voila, IBM PureSystems.
PureSystems meets this demand by providing patterns of expertise –- a new technology model that builds on the experience of thousands of IBM clients and radically streamlines the set-up and management of hardware and software resources.
Global Clients Embrace IBM PureSystems
Since launching in April, clients around the world are using IBM PureSystems to reduce IT cost and complexity. For example:
- BPTP, a leading Indian real estate company, selected IBM PureSystems to streamline its IT infrastructure to improve the overall home buying experience for its customers. Established in 2003, BPTP has experienced rapid growth over the last decade. Sustaining and building upon this growth required BPTP to find a better computing and storage solution. To meet these challenges, it selected IBM PureSystems for all of its processing and storage requirements.
- PCCW, a leading information technology outsourcing company based in Hong Kong, has selected IBM PureSystems as the foundation for its new Enterprise Solutions Superstore — an online environment for Independent Software Vendors (ISVs). As a result, they are now able to offer customers applications on the cloud using a Software-as-a-Service model.
- ValeCard, a multi-industry conglomerate based in Brazil, has achieved 40 percent growth annually over the past three-years. Facing rapid expansion of its business, ValeCard turned to IBM PureSystems to manage thousands of transaction records from contracts with large companies and government entities. Additionally, ValeCard is using IBM PureSystems to help it meet an increasing set of new regulations and standards for data availability.
IBM’s Partners Drive PureSystems Adoption
For IBM Business Partners, PureSystems creates a new opportunity to help clients solve the complexity of enterprise IT.
From resellers to distributors and Independent Software Vendors (ISVs), more than 700 Business Partners are supporting IBM PureSystems.
PureSystems currently run tens of thousands of existing ISV applications across four operating environments including Windows, Linux, AIX, and IBM System i.
Additionally, Business Partners have created more than 160 new solutions and applications that are optimized to run on PureSystems. These patterns of expertise, which span 20 industries, can be accessed through the IBM PureSystems Centre.
They include leading solutions from some of the world’s largest ISVs, including ERP systems and applications for the banking, marketing, healthcare and energy industries.
Numerous partners are also installing PureSystems in their own datacenters. For example Computer Gross, a managed service provider in Italy, and OneTree Solutions, an ISV from Luxembourg are both using the cloud capabilities of IBM PureSystems as a way to more easily meet the needs of their customers.
PureSystems Training, Certification, & Validation
To help address the new opportunity that PureSystems presents, IBM is also providing training, marketing, certifications and technical validation support to business partners.
For instance, dozens of IBM Innovation Centers in cities such as Bangalore, Dublin, Johannesburg and Shanghai are helping Business Partners develop and test their applications using IBM PureSystems. Business Partners can also bring their clients to IBM Innovation Centers to see PureSystems technology at work.
In addition, more 1,300 business partners — ISVs, managed service providers, resellers, system integrators and distributors — have been showing their support and interest in PureSystems by attending Business Partner Day and training events in 27 cities around the world.
PureSystems cloud capabilities are also drawing interest, with 500 developers using the PureSystems Cloud Trial to create applications through IBM’s SmartCloud that are ready to run on IBM’s new expert integrated systems.
IBM Financing For PureSystems
To help credit-qualified clients easily acquire IBM PureSystems, IBM Global Financing is making available a range of financing options.
As a result, clients will be able to avoid paying cash up-front, while lowering their total cost of ownership.
This is the first time that clients can lease the entire value of the system, including hardware and software.
Credit-qualified clients that elect financing can see immediate benefits with PureSystems while deferring their first payment for 90 days. Additionally, IBM Global Asset Recovery Services can buy back servers, including those made by HP and Oracle, for clients migrating to IBM PureSystems.
There are two models of the PureSystems family available — PureFlex System and PureApplication System.
PureFlex System enables organizations to more efficiently create and manage an infrastructure, while PureApplication System allows organizations to quickly deploy and reduce the cost and complexity of managing applications.
Both have already shipped to leading clients in 5 continents.
You can learn more about IBM PureSystems in the Expert Integrated Systems blog here.
So how was your weekend?
Roger Federer’s was pretty doggone good, having taken out Scotland’s Andy Murray yesterday in the Wimbledon finals.
South Korea’s Na Yeon Choi also had a pretty good weekend. She took victory in the U.S. Women’s Open golf championship at Blackwolf Run in Kohler, Wisconsin.
That was, by the way, the very same course where Se Ri Pak won the Open in 1998, a breakthrough that inspired a generation of South Korean women golfers (who, by the way, have won 4 out of the last 5 U.S. Opens).
Many congratulations to Na Yeon Choi on her victory.
My weekend wasn’t too bad, either. I got to play a new golf course out in the Texas hill country, in Blanco, where I also attended a benefit concert headlined by Edie Brickell and New Bohemians.
You may remember Edie and New Bohemians from their breakout 1988 hit “Shooting Rubberbands at the Stars,” but Edie and the “New Bo’s” were musical favorites in and around my hometown of Denton, Texas, long before they jetted off to musical stardom.
If you’ve not followed Edie’s own solo career, you’re missing out on some great tunes (try 2003’s “Volcano”). Hard to believe it’d been nearly a quarter-century since Edie and the New Bo’s hit the big time — we Dentonites still remember their pre-fame performance at the 1988 Fry Street Fair, with Edie’s hair blowing freely in the breeze and their lyrical music sauntering freely up Oak Street without a care in the world.
Ah, the good ol’ days.
But, Turbo, you say, please tell me something relevant about the information technology industry! It’s Monday, what’s going on?!
Okay, okay, I’m getting to that. It is Monday, and it’s summer, and I’m off to a slow start, for Pete’s sake!
First and foremost, news from Gartner this A.M. suggesting that worldwide IT spending is on pace to reach $3.6 trillion in 2012, a 3 percent increase over last year’s $3.5 trillion.
Yes, despite the woes in Europe and minor slowdown in Asia, IT spending is going up, and in fact, Gartner revised its numbers to 3 percent growth from 2.5 percent last quarter.
Gartner describes this IT spending environment as “continued caution,” but highlights some strong spots: Public cloud services, for example, which is expected to hit $109 billion in spending this year, and $207 billion by 2016.
IT services spending grew a little more anemically year-over-year, coming in at 2.3 percent to reach $864 billion this year.
Meanwhile, no major outcries from the impacts of the DNSChanger servers being run by the FBI going offline. PC World’s story this AM has the F-Secure blog estimating about 47K computers still affected in the U.S., and about 20K in India.
So, no news is good news (See more about this from last week’s blog post.)
Of course, no news may soon become a more common occurrence than we care to realize. Read this piece from the NY Times’ David Carr on the dismal outlook for daily newspapers.
Just don’t have any sharp objects close by when you do, especially if you’re a news junkie like myself.
IBM’s earnings for third quarter 2011 just came across the wire.
Here’s the topline:
- Diluted EPS:
- GAAP: $3.19, up 13 percent;
- Operating (non-GAAP): $3.28, up 15 percent;
- Revenue: $26.2 billion, up 8 percent, up 3 percent adjusting for currency;
- Net income:
- GAAP: $3.8 billion, up 7 percent;
- Operating (non-GAAP): $4.0 billion, up 9 percent;
- Pre-tax income:
- GAAP: $5.0 billion, up 7 percent;
- Operating (non-GAAP): $5.2 billion, up 10 percent;
- Gross profit margin:
- GAAP: 46.5 percent, up 1.2 points;
- Operating (non-GAAP): 46.8 percent, up 1.5 points;
- Software revenue up 13 percent, 8 percent adjusting for currency;
- Services revenue up 8 percent, 2 percent adjusting for currency;
- Services backlog of $137 billion, up $2.4 billion;
- Systems and Technology revenue up 4 percent, 1 percent adjusting for currency:
- Power Systems up 15 percent;
- Growth markets revenue up 19 percent, 13 percent adjusting for currency;
- Business analytics revenue up 19 percent year to date;
- Smarter Planet revenue up 50 percent year to date;
- Cloud revenue year to date has doubled full-year 2010 revenue;
- Full-year 2011 Operating (non-GAAP) EPS expectations raised to at least $13.35 from at least $13.25.
- Diluted EPS:
IBM today announced third-quarter 2011 diluted earnings of $3.19 per share, compared with diluted earnings of $2.82 per share in the third quarter of 2010, an increase of 13 percent. Operating (non-GAAP) diluted earnings were $3.28 per share, compared with operating diluted earnings of $2.85 per share in the third quarter of 2010, an increase of 15 percent.
Third-quarter net income was $3.8 billion compared with $3.6 billion in the third quarter of 2010, an increase of 7 percent. Operating (non-GAAP) net income was $4.0 billion compared with $3.6 billion in the third quarter of 2010, an increase of 9 percent.
Total revenues for the third quarter of 2011 of $26.2 billion increased 8 percent (3 percent, adjusting for currency) from the third quarter of 2010.
“In the third quarter, we drove revenue growth, margin expansion and increased earnings as a result of our innovation-based strategy and continued investment in growth initiatives,” said Samuel J. Palmisano, IBM chairman, president and chief executive officer. “Growth markets delivered outstanding revenue performance across software, hardware, and services and contributed to the company’s expanded margins. We also achieved strong results in Smarter Planet, business analytics and cloud.
Okay, I went back and checked my NFL playoff picks for the weekend (see my last post).
Three out of four ain’t bad, and who would have thunk the New York Jets were going to beat the New England Patriots, especially after the season Tom Brady has had.
But kudos to Mark Sanchez, Rex Ryan, and the entire Jets organization — that was a helluva win and in Foxborough no less (New England’s home turf).
After watching “60 Minutes” last night and the story on sports betting guru Billy Walters, however, I don’t think I’m quite ready to start making book at $200K+ a game!
As to spending on IT in the small- and medium-sized business market, IBM just completed a global study of more than 2,000 midsize companies representing more than 20 countries.
The verdict? More than half of midsize companies are planning to increase their IT budgets over the next 12 to 18 months.
The study, entitled “Inside the Midmarket: A 2011 Perspective,” found that 70% of midsize companies were actively pursuing analytics technology to better understand their customers, make better decisions, and become more efficient.
No shocker, the study also shows growing adoption of cloud computing among midsize firms, with two-thirds either planning or currently deploying cloud-based technologies to improve IT systems management while lowering costs.
A few other choice tidbits:
- Security (63%), customer relationship management (62%) and analytics / information management (59%) were cited as their “Most Critical IT Priorities.”
- 75% plan to upgrade their core IT systems to improve performance, security and reliability.
- Top expected benefits from cloud computing include cost reduction, better manageability of IT, improved system redundancy and availability.
- Top barriers to IT adoption cited were cost, difficulty in acquiring and deploying technology solutions, and lack of IT skills and resources.
These observations suggest a far cry from a similar survey from nearly two years back, when the conversation was dominated by cost-cutting and efficiencies, rather than business expansion and gaining greater insight.
Observed Andy Monshaw, general manager of the IBM Midmarket group, “The survey findings show that midsize firms are tackling a new set of opportunities to advance their role as engines of economic growth.”
Visit here to download the full study and learn more.
Happy New Year!
That seems to be especially the case for Facebook, which according to Dealbook, has raised $500M in additional funding from Goldman Sachs and Russian investor Digital Sky Technologies, a sum which would now value Facebook at $50 billion.
Of course, if it’s true that Facebook is about to move into Sun Microsystems’ old 150,000 square foot office space in Palo Alto, Zuckerberg’s going to need as much new scratch as he can get to remodel the place and bring back that new IPO smell once so prevalent in Silicon Valley, but which has been eroded these past eight years with the taxing shadow of Sarbanes-Oxley.
What Zuckerberg won’t need is any overhauling of the privacy mantra still haunting the hallways of the old Sun.
Remember, it was former Sun CEO Scott McNealy who informed us “You have zero privacy. Get over it.”
It seems, perhaps, he was right.
And prescient, considering he said that way back in the Jurassic age of the Dot Com boom. I wonder if his soothsaying also envisioned a 26 year-old kid taking over his campus someday??
Nahh, probably not.
While the Facebookers have been busy raising their valuation, Bloomberg is reporting that tech takeovers could pick up bigtime this year as firms like Intel, HP, and yes, even Big Blue, set off in a race to “harness surging demand for cloud computing and security services.”
That same said story has Gartner estimating global IT spend this year at around $3.4 trillion, a 3.5 increase from last year.
Me, I’m just hoping to catch a glimpse of some of the cool stuff being released at the Consumer Electronics Show this week.
Though my New Year’s resolution is still in the process of being resolved, one thing I did promise this year was not to go out and buy every new new thing the first week it’s available.
That, instead, I would demonstrate some resolve…and wait at least until the second week.
Let me quote freely from this USA Today blog post on the eve of the Microsoft Windows 7 launch that my colleague Bob Sutor Tweeted my way earlier today.
According to a survey conducted by Boston research firm Chadwick Martin Bailey, of 145 IT pros 51% plan to standardize on Windows 7 for laptops and desktops. Thirty-eight percent intend to do so with netbooks over the next couple of years.
But at what cost?
- Opting out of Windows 7 can save the typical American business with 20 or fewer employees up to $40,000.
- Government agencies crunched by budget shortfalls can save big by avoiding the switch to Windows 7; with 14.7 million state and local government employees and 2.5 million federal workers, saving up to $2,000 per employee would be a huge relief to government spending.
But as the story continues, rather than jump over Vista from XP to 7 (which in many cases will require significant hardware upgrades), why not leave the Windows merry go round, dump it altogether, and move towards a lower-cost alternative?
Say, for IBM and Linux distributor Canonicals’ new Ubuntu offering.