IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
© 2015 Emerson Network Power
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Market Pulse: #14 March 2015
13/04/2015
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
Introduction .......................................................................................................... 3
Executive Summary ............................................................................................... 3
Demographics ....................................................................................................... 5
1.
By Geography ......................................................................................... 5
2.
By Role ................................................................................................... 5
3.
Market Segments ................................................................................... 5
4.
By Scale .................................................................................................. 6
Projects ................................................................................................................. 7
1.
ICT Infrastructure Projects ..................................................................... 7
2.
ICT ONLY Infrastructure Projects: Actual Vs Forecast ........................... 8
3.
All Projects: Actual Vs Forecast .............................................................. 8
4.
ICT Infrastructure Projects: Actual Vs Forecast (End User) ................... 9
5.
ICT Infrastructure Projects: Actual Vs Forecast (Design & Construct)... 9
6.
ICT Infrastructure Projects: Actual Vs Forecast (Buy & Sell)................ 10
Project Schedules ................................................................................................ 10
1.
Current Status of Project Plans ............................................................ 11
2.
Current Status of Project Plans (U) ...................................................... 11
3.
Current Status of Project Plans (D&C) ................................................. 12
4.
Current Status of Project Plans (B&S) .................................................. 12
5.
Current Status of Project Plans (ANZ) .................................................. 13
6.
Current Status of Project Plans (Enterprise) ........................................ 15
7.
Current Status of Project Plans (Telecom) ........................................... 15
8.
Current Status of Project Plans (Industrial) ......................................... 16
Economic Outlook: Impact ................................................................................... 16
1.
Outlook Index....................................................................................... 16
2.
Economic Outlook: Impact by Geography ........................................... 17
3.
Economic Outlook: Impact by Role ...................................................... 18
Business Performance ......................................................................................... 19
1.
Business Performance Index ................................................................ 19
2.
Business Performance by Geography .................................................. 20
3.
Business Performance by Role ............................................................. 21
CAPEX & Business Performance Correlation ......................................................... 24
CAPEX ................................................................................................................. 25
1.
CAPEX Index ......................................................................................... 25
2.
CAPEX by Geography ........................................................................... 25
3.
CAPEX by Role ...................................................................................... 26
4.
CAPEX by Industry ................................................................................ 29
DCIM ................................................................................................................... 31
IT&C Concerns ..................................................................................................... 32
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Market Pulse: #14 March 2015
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
Introduction
This is the 14th edition of the Asia Market Pulse. The survey continues to follow the established
format including deployment in six languages; English, Japanese, Indonesian Bahasa, Thai, Korean
and Vietnamese.
Executive Summary
While not painting a particularly rosy picture, this edition of the Market Pulse offers a slightly more
tempered view of the market outlook than offered in the October 2014 report. The overall index has
declined, but data trends within the Economic sentiment and Business performance segments
suggest this will be a temporary dip.
Notable shift towards Infrastructure spending: as a % spread, the divergence between Core IT and
Support Infrastructure project investment continues to grow. This past survey reflects the most
polarized result with significant declines in all IT focused areas in favor of Infra related ones. Notable
mention of double digit growth of Cloud related projects. Specific Infrastructure Indices improve:
Actual deployment and forecast projects have increased, albeit at a muted rate along with an
improvement in expected schedules. Market and business performance Indices decline: Confidence
in local economies has taken a tumble and as a consequence dragged down the overall market pulse
index. CAPEX Correlation held steady but predicts further declines: the softening of CAPEX predicted
in the past survey has been reflected in this report. The correlation is such that a steeper decline in
CAPEX over the next 6 months is possible.
DCIM message has stalled: respondent data over the past few years indicates that the broader DCIM
story and message has struggled to put down deep roots. Issues and Challenges: In this report we
have taken a different look at the issues raised by respondents and hopefully offer a new
perspective on what has, at times appeared to be a static list.
Market Pulse Index: 5 component indices






Market Pulse Capex: Basic tracking determines if respondents are proceeding with CAPEX or see a risk not to
proceed. This index is a simple division of # that are proceeding, by those deemed to be at risk. As such, the higher
the number, the better.
Market Pulse Project Forecast: Respondents are asked to note project deployment schedules past and
present. This enables a simple comparison by period of how forecast and actual deployments match up. Project
numbers are normalized so as to take into account sample size and the index is determined by subtracting forecast
from actual. A positive number indicates Actual deployments exceeding the forecast for the same period.
Market Pulse Project Schedule: Respondents are asked to note the expected schedule for project
deployment. This index assumes that a shorter timeline offers less risk for cancellation or delay and categorizes
responses into firm deployment and "at risk" segments. This index is a simple division of # that are "firm" by those
deemed to be at risk. As such, the higher the number, the better.
Market Pulse Economic Sentiment: Respondents are asked to rate how the local economy is impacting on
their business prospects. Once neutral responses are removed a simple positive vs negative dataset provides the
basis for this index. Less than "1" indicates a generally negative sentiment, more than "1" indicates a positive
sentiment. As such, the higher the number, the better.
Market Pulse Business Sentiment: Respondents are asked to rate their business prospects going forward.
Once neutral responses are removed a simple positive vs negative dataset provides the basis for this index. Less than
"1" indicates a generally negative sentiment, more than "1" indicates a positive sentiment. As such, the higher the
number, the better.
Market Pulse Index: Summary Index
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
Summary Chart of previous Market Pulse Surveys & Current Trend;
Market Pulse Index
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
Demographics
1. By Geography
2. By Role
Respondents are grouped according to their relationship with Emerson. The three categories are
respondents as;
1. Users (U) of Emerson services or equipment,
2. Designers and influencers associated with specification and recommendation of Emerson
services or products who Design & Construct (D&C) projects, and
3. Those who Buy and Sell (B&S) Emerson services or products.
Demographic by Respondent role in the Emerson supply chain has remained relatively steady over
the seven years the Market Pulse survey has run.
3. Market Segments
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IT&C Market Pulse
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March 2015
4. By Scale
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IT&C Market Pulse
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March 2015
Projects
Respondents were asked to list projects that have been deployed in the past 6 months and those
scheduled for deployment in the next period. It offers insight project pipeline trends as well as the
correlation between forecast and actual deployments.
1. ICT Infrastructure Projects
Over the course of the past years, the focus of the respondents has gradually shifted away from IT
projects and towards supporting infrastructure. A column has been added to the standard table
below to illustrate where the shift in project trends is most apparent. Respondents with larger
businesses are more pronounced in their change of focus with the exception of Cloud projects. This
may indicate that much of the gains to be derived from typical IT optimization plays have been
worked through & “found” and now respondents are again facing the challenges of Infrastructure
capacity vs demand.
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
2. ICT ONLY Infrastructure Projects: Actual Vs Forecast
Respondents were asked to list projects that have been deployed in the past 6 months and those
scheduled for deployment in the next period.
Both actual projects deployed as well as forecast projects have risen in this survey 1% and 2%
respectively.
3. All Projects: Actual Vs Forecast
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
4. ICT Infrastructure Projects: Actual Vs Forecast (End User)
End User Project Deployments have risen over the past edition by 6% but with a continued softening
in forecast project numbers (-2% and -4% over the past two surveys).
5. ICT Infrastructure Projects: Actual Vs Forecast (Design & Construct)
Actual projects seen by the D&C segment have continued to slide from a peak seen in March last
year and now having dropped 9% and then 12% over the past two surveys. That said, forecast
project starts have improved by 4%, indicating that actual deployments will follow suit over the
course of the next survey period.
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
6. ICT Infrastructure Projects: Actual Vs Forecast (Buy & Sell)
A similar trend to the D&C segment is seen amongst the system integrator and reseller community
albeit with an increase in both actual and forecast deployments.
Project Schedules
In past Market Pulse reports, schedule plans were communicated based on respondents specific
feedback. While this describes the actual response, in this format the overall trend is more difficult
to grasp. In place of this an index has been created as follows; the data is segmented into two
categories. 1) "Active" category which is comprised of projects that have been accelerated or the
deployment schedule is unchanged or 2) "at risk", ie there is an expectation of delay.
Plotted as a chart, trends associated with Active and At Risk project schedules are more clearly
identified along with the trend of the index. In this case, schedules have been steadily improving in
the past 3 surveys. Left hand axis is the actual % spread of 'active" and "at risk", with the index
plotted down the left hand axis. Respondents were asked to define the likely timing of projects listed
in their pipeline.
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
1. Current Status of Project Plans
Schedule data has improved significantly over the previous edition with risk easing and active
schedules improving. As correctly noted in the past editions, “if the premise that schedule cycles are
compressing is correct, then active schedules will continue to rise and risk fall in the next survey”. This
trend is much clearer in the End User segment displayed in the chart below.
(Previous NB on this: evidence of the End User segment project cycle compressing dramatically over
the past decade as waves of new technology impact their core business position.)
2. Current Status of Project Plans (U)
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
3. Current Status of Project Plans (D&C)
As per previous interpretations of this indicator, a decline in “Active” and an increase in “At Risk”
schedules would suggest this segment is consuming capacity previously built into their project
funnel.
4. Current Status of Project Plans (B&S)
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
5. Current Status of Project Plans (ANZ)
Total Market
Design & Construct
The overall Australian market index is being dragged down by End User sentiment where the past 3
surveys have reflected an increasingly mixed (choppy) outlook. D&C respondents have shared a
similar outlook but on this occasion are seeing an improvement in schedules. Overall this indicates
an improving outlook for project schedules going forward.
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
Current Status of Project Plans (SEA)
Total Market
Design & Construct
Contrary to the ANZ market, in SEA the End Users respondents are indicating an improved schedule
environment. The D&C segment offers a clear but negative view, with “Active” schedules declining at
the same rate that projects “At Risk” are increasing. That said, the SEA market has weathered this
disconnect quite well in the past where large falls in the D&C index have only translated to smaller
drops with the End User community.
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
6. Current Status of Project Plans (Enterprise)
Enterprise as a segment is comprised of the following market segments; IT Services (Buy and Sell),
BFSI, Government, Datacom, Infra Services (Design & Construct), Education, Healthcare, Broadcast &
Communications, Other. The current survey illustrates a solid improvement in this segment with
Active projects up 12%, at risk down 15% and an improvement in the index of over 30%.
7. Current Status of Project Plans (Telecom)
Telecom has returned to H1 2014 / 2010 levels.
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
8. Current Status of Project Plans (Industrial)
Industrial as a segment is comprised of the following market segments; Manufacturing, Energy &
Utilities, Transportation, Other.
Economic Outlook: Impact
Respondents were asked to rate the impact of Asia's economic conditions on the business prospects
of their company in the near future. This is a five point scale converted to “top 2/ bottom 2” scores
(eliminating neutral) and assigns "active" and "at risk" categorizations respectively.
1. Outlook Index
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
2. Economic Outlook: Impact by Geography
Australia & New Zealand
South East Asia
Over the past 10 surveys, the "active" sentiment for Asia as a whole has remained fairly stable
(exception of H1 2009) with movement within a modest 10% window of variation. The current
survey has broken this pattern with “Active” trailing the very bottom of the spectrum and “At Risk”
at the highest. This data is weighed heavily by the ANZ sample which would seem to have finally
succumbed to the general mood of uncertainty and political impasse being endured there.
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
Design & Construct
End User
3. Economic Outlook: Impact by Role
Previous notes of caution in relation to D&C respondent data from the past survey (drop of >60%
over the running average with relation to their view of economic outlook) are tempered by the
current survey results. The overall result has pulled down the overall Market Pulse index, however
some of the more granular detail seem to indicate this as a possibly short lived impact.
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Buy & Sell
IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
Business Performance
Respondents were asked to indicate how over the next 6 months, they expect their company's
overall performance will change. This is a five point scale comprised of the following descriptions; It
will improve very much, It will improve, It will remain the same, It will worsen, It will worsen very
much. The following charts select the top 2 and bottom 2 scores (eliminating neutral) and assigns
"active" and "at risk" categorizations respectively.
1. Business Performance Index
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
2. Business Performance by Geography
Australia & New Zealand
South East Asia
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
3. Business Performance by Role
End Users
Design & Construct
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
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Buy & Sell
Business Performance by Industry
Enterprise
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
Telecom
Industrial
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
CAPEX & Business Performance Correlation
In October 2013 the correlation between Business Performance and CAPEX was noted;
Of the five indices that form the overall market Pulse index, four are leading and one is lagging. With
over five years of data collected, the survey authors are now well placed to test the correlation between
the leading and lagging data sets in an effort to test the strength of the forward view. This goes to the
central purpose of the overall study effort.
Using published definitions of strength, the correlation found to exist between “Business Sentiment” and
“Capex” indices is categorized in the highest rating band, namely a “very strong positive relationship”.
Business sentiment has risen significantly since the last survey [published in March 2013], while in the
past six months, CAPEX activity has declined. If the historical correlation between these two factors is
any indication, then I’m cautiously optimistic going into the New Year per an improvement in capital
spending
The correlation between CAPEX and Business Performance has held steady since the above was
written, remaining within a 5% range of variation. Per published definitions, it remains very strong.
October 2014 Survey noted:
The overall Business Performance index in this edition has posted a change of -8% over the running
average and -39% over the past survey, suggesting that CAPEX spending will tapper sharply in the
next 6 months.
As previously noted however, the conservative / negative sentiment out of North Asia has weighed
disproportionately in this survey and needs to be reversed to gain a more realistic view (considering
the historical bias of the survey to SEA & ANZ). With the NA data excluded, the Business Performance
index in this edition posts a rise of 28% over the running average and a decline of 10% over the past
survey. On balance, if the correlation holds true, CAPEX will soften in the 6 months ahead.
March 2015 Survey:
As predicted, CAPEX only declined by 4%, so while the North Asian sentiment weighed heavily on the
overall index, it didn’t translate to a significant fall in the CAPEX result.
That said, the index has continued to decline; -28% over the running average and -23% over the past
survey. Further to this, unlike in the previous survey, North Asia is a positive contributor to the
Business performance index, so will likely have the opposite statistical effect to the October survey.
With this also in mind, it is possible that CAPEX will fall at a greater rate in the following 6 months.
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
CAPEX
Respondents were asked to indicate how over the past 6 months they have managed CAPEX activity.
This is a six point scale comprised of the following descriptions; Accelerate Projects, No Change,
Delay by 3 months, Delay by 6 months, Delay by 9 months or more, Downsize. The following charts
note respondents who selected "Accelerate Projects or No Change" as "active" and delay or
downsize responses as "at risk".
1. CAPEX Index
2. CAPEX by Geography
Australia & New Zealand
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Bi Annual poll IT&C Infrastructure Professionals
March 2015
South East Asia
3. CAPEX by Role
End User (Asia)
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Bi Annual poll IT&C Infrastructure Professionals
March 2015
CAPEX by Role continued
End User (ANZ)
End User (SEA)
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Bi Annual poll IT&C Infrastructure Professionals
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CAPEX by Role continued
Design & Construct (Asia)
Design & Construct (ANZ)
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Bi Annual poll IT&C Infrastructure Professionals
March 2015
CAPEX by Role continued
Design & Construct (SEA)
4. CAPEX by Industry
Enterprise
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Bi Annual poll IT&C Infrastructure Professionals
March 2015
CAPEX by Industry continued
Telecom
Industrial
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
DCIM
Respondents were asked if their business has deployed (or been involved in the deployment of)
DCIM solutions in the past 6 months; is there an intention to pursue (directly or on behalf of clients)
DCIM opportunities in the next 6 months; is there sufficient information from vendors and partners
on this topic to enable informed decisions?
These four quadrants offer the following insight into how respondents consider DCIM and their
associated decision making;
1. Intend to buy and have sufficient information; Potential EMR sale where the % of
respondents in this category have remained steady within a 6% band.
2. Do not intend to buy and have sufficient information; DCIM considered but discarded…..lost
cause
3. Intend to buy but insufficient information; Opportunity to convert
4. No intend to buy but insufficient information; Opportunity to educate
5. Overall Addressable opportunity; both categories where information is considered
insufficient has remained high over the periods surveyed.
While a significant effort has been invested in promoting DCIM benefits to the market, there
remains a significant level of resistance amongst the broader IT&C community as indicated through
these results.
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
IT&C Concerns
As per previous surveys, respondents were asked to indicate their top three worries / concerns /
challenges. The first table below ranks issues in the same way offered over the previous reports,
namely from those most noted (energy efficiency) through to those least noted. There is little
change in the order of these issues over an extended period of time.
The second table ranks issues by the magnitude of change noted between the current survey result
and the running average. This offers a significantly different view of how issues and concerns
amongst the respondent group are changing.
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
March 2015
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