IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
© 2014 Emerson Network Power
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Market Pulse: #13 October 2014
23/02/2015
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
Introduction .......................................................................................................... 3
Executive Summary ............................................................................................... 3
Market Pulse Index................................................................................................ 3
Demographics ....................................................................................................... 5
1.
By Geography ......................................................................................... 5
2.
By Role ................................................................................................... 6
3.
Market Segments ................................................................................... 6
4.
By Scale .................................................................................................. 7
Projects ................................................................................................................. 8
1.
ICT Infrastructure Projects ..................................................................... 8
2.
ICT ONLY Infrastructure Projects: Actual Vs Forecast ........................... 9
3.
All Projects: Actual Vs Forecast .............................................................. 9
4.
ICT Infrastructure Projects: Actual Vs Forecast (End User) ................. 10
5.
ICT Infrastructure Projects: Actual Vs Forecast (Design & Construct) . 10
6.
ICT Infrastructure Projects: Actual Vs Forecast (Buy & Sell)................ 11
Project Schedules ................................................................................................ 11
1.
Current Status of Project Plans ............................................................ 12
2.
Current Status of Project Plans (U) ...................................................... 12
3.
Current Status of Project Plans (D&C) ................................................. 13
4.
Current Status of Project Plans (B&S) .................................................. 13
5.
Current Status of Project Plans (ANZ) .................................................. 14
6.
Current Status of Project Plans (SEA) .................................................. 15
7.
Current Status of Project Plans (Enterprise) ........................................ 16
8.
Current Status of Project Plans (Telecom) ........................................... 16
9.
Current Status of Project Plans (Industrial) ......................................... 17
Economic Outlook: Impact ................................................................................... 17
1.
Outlook Index....................................................................................... 17
2.
Economic Outlook: Impact by Geography ........................................... 18
3.
Economic Outlook: Impact by Role ...................................................... 19
Business Performance ......................................................................................... 20
1.
Business Performance Index ................................................................ 20
2.
Business Performance by Geography .................................................. 20
3.
Business Performance by Role ............................................................. 21
4.
Business Performance by Industry ...................................................... 23
CAPEX ................................................................................................................. 25
1.
CAPEX Index ......................................................................................... 25
2.
CAPEX by Geography ........................................................................... 25
3.
CAPEX by Role ...................................................................................... 26
4.
CAPEX by Industry ................................................................................ 29
DCIM ................................................................................................................... 31
DCIM Informed Decisions .................................................................... 31
IT&C Concerns ..................................................................................................... 32
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Market Pulse: #13 October 2014
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
Introduction
This is the 13th 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
This edition of the Market Pulse goes to the heart of the original objectives of the study, namely to
identify leading indicators in our industry and serviced markets. The original proposition the study
sought to investigate and understand was the idea that Consulting Engineers (in this study the group
known as Design & Construct), by virtue of their position in the market, were best placed to see
early signs of deteriorating (or improving) conditions.
This edition of the Market Pulse offers a set of results that may indicate the onset of a declining
market. Declines in several key indicators for the D&C group lend weight to this possibility; Forecast
outlook for projects, rate of deployment for current projects, potential for economic impact on their
business and business prospects all indicate either a decline in confidence or a negative sentiment.
Further to this, a correlation between Business performance (leading indicator) and CAPEX activity
(lagging indicator) that has correctly tracked improvements since 2013, now indicates a softening in
spending for the 6 months ahead. It is not a uniform decline, but a decline none the less.
In this report, I have noted the disproportionate impact of the North Asia sample on the overall
result. By example, the overall index posts a decline of 36% from the past survey and 4% over the
historical average but with NA declines only 6% on the past survey and rises 20% on the average.
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
October 2014
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
October 2014
Demographics
1. By Geography
Sentiment in North Asia relating to market conditions and associated business prospects has
traditionally been conservative, however in this edition it is significantly at odds with the rest of the
market. The impact of this (combined with a larger than usual sample percentage) is such that the
overall index results have been skewed towards an overly negative outlook. Charts below offer a
more representative picture with North Asia data excluded.
Summary Chart of previous Market Pulse Surveys & Current Trend; (Ex North Asia)
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
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
Bi Annual poll IT&C Infrastructure Professionals
October 2014
4. By Scale
The 2009 H2 survey saw the introduction of several new questions, Scale of the primary deployment
being one of them. At the time it was noted that a significant portion of respondents were defined in
the small room or network category (ie less than 30 racks).
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
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
Since the second half of 2010, the split in funding between core IT and support infrastructure has
remained fairly constant.
Please Note: in the following Project related charts, to overcome any bias caused by variations in
sample size, this data has been normalized.
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
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.
Forecast projects for the 6 month period ahead have softened by 10% from the past projects
forecast figure & 14% below current Actual deployments.
3. All Projects: Actual Vs Forecast
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
4. ICT Infrastructure Projects: Actual Vs Forecast (End User)
End User Project Deployments and Forecasts have risen over the past three editions by 3% and 5%
repectively.
5. ICT Infrastructure Projects: Actual Vs Forecast (Design & Construct)
By virtue of their position in the market, the D&C segment has visibility into projects across multiple
clients and multiple segments and as such offers a leading insight into market conditions. While
Actual Deployments posted a slight rise over the previous survey (<1%), Forecast projects have
dropped sharply by 19%. While not as dramatic as 2008 / 2009 this offers a note of caution forthe
year ahead.
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
6. ICT Infrastructure Projects: Actual Vs Forecast (Buy & Sell)
After a steady rise over several years, the B&S segment is tapering it’s forward view posting a more
cautious outlook with declines of 2% in the last survey and 18% here.
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
October 2014
1. Current Status of Project Plans
Schedules have slightly improved over the previous edition with risk easing and active schedules
improving. If the premise that schedule cycles are compressing is correct (as previously speculated),
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
October 2014
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
October 2014
5. Current Status of Project Plans (ANZ)
Total Market
Design & Construct
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
6. Current Status of Project Plans (SEA)
Total Market
Design & Construct
The index for the total markets in Australia by contrast with SEA has reflected a higher degree of
volatility. While SEA reflects a downward trend with decreases in Active projects and increases in
Risk, the index remains ahead of the historical average (4%). It should be noted that the AU index is
25% above the 6 year running average.
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
7. 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 very slight improvement in the index for
Enterprise which is 5% over the running average.
8. Current Status of Project Plans (Telecom)
The current edition reflects the most positive result to date.
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
9. Current Status of Project Plans (Industrial)
Industrial as a segment is comprised of the following market segments; Manufacturing, Energy &
Utilities, Transportation, Other. The trend noted in the past edition of Risk far out stripping active
projects has continued. The overall index has fallen to >40% below the historical average for this
segment.
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
October 2014
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 overall index
remains quite positive (high) with a solid (broad) spread between "active" and "at risk". That said,
the Australian index is notable for the volatility in results.
Notes below correlate with earlier references to caution as expressed by the D&C respondents. Over
2014 this group has posted a drop of >60% over the running average with relation to their view of
economic outlook.
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
Buy & Sell
Design & Construct
End User
3. Economic Outlook: Impact by Role
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
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
2. Business Performance by Geography
Australia & New Zealand
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
South East Asia
3. Business Performance by Role
End Users
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
Design & Construct
Buy & Sell
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
4. Business Performance by Industry
Enterprise
Telecom
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
Industrial
In contrast to the broad improvement recorded in the last edition, this survey indicates declines
across all dimensions with the exception of ANZ and the overall Telecom segment.
In October 2013 the correlation between this dimension 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 improvement in the CAPEX index in this current edition of the Market Pulse further supports this
proposition.
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.
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
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
70%
1.60
60%
1.40
1.20
50%
1.00
40%
Active
0.80
30%
0.60
20%
0.40
10%
0.20
0%
0.00
2008
2009
2010
2011
2012
2. CAPEX by Geography
Australia & New Zealand
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2013
2014 H1 2014 H2
At Risk
Index
IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
South East Asia
3. CAPEX by Role
End User (Asia)
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
CAPEX by Role continued
End User (ANZ)
End User (SEA)
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
CAPEX by Role continued
Design & Construct (Asia)
Design & Construct (ANZ)
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
CAPEX by Role continued
Design & Construct (SEA)
4. CAPEX by Industry
Enterprise
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
CAPEX by Industry continued
Telecom
Industrial
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
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?
-
DCIM Informed Decisions
H2 2012
H1 2013
H2 2013
H1 2014
H1 2014
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
IT&C Concerns
As per previous surveys, respondents were asked to indicate their top three worries / concerns /
challenges.
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IT&C Market Pulse
Bi Annual poll IT&C Infrastructure Professionals
October 2014
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