IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals October 2013

IT&C Market Pulse

Bi Annual poll IT&C Infrastructure Professionals

October 2013

© 2013 Emerson Network Power

Public Release for Distribution russell.perry@emerson.com

Market Pulse: #11 October 2013

29/11/2013

- 1 -



October 2013

Introduction .......................................................................................................... 3

Executive Summary ............................................................................................... 3

Market Pulse Index ................................................................................................ 3

Demographics ....................................................................................................... 5

1.

2.

3.

By Geography ......................................................................................... 5

By Role ................................................................................................... 5

Market Segments ................................................................................... 5

4.

By Scale .................................................................................................. 6

Projects ................................................................................................................. 7

1.

2.

ICT Infrastructure Projects ..................................................................... 7

ICT ONLY Infrastructure Projects: Actual Vs Forecast ........................... 8

3.

4.

5.

6.

All Projects: Actual Vs Forecast .............................................................. 8

ICT Infrastructure Projects: Actual Vs Forecast (End User) ................... 9

ICT Infrastructure Projects: Actual Vs Forecast (Design & Construct) ... 9

ICT Infrastructure Projects: Actual Vs Forecast (Buy & Sell) ................ 10

Project Schedules ................................................................................................ 10

1.

Current Status of Project Plans ............................................................ 11

2.

3.

Current Status of Project Plans (U) ...................................................... 11

Current Status of Project Plans (D&C) ................................................. 12

4.

5.

6.

7.

Current Status of Project Plans (B&S) .................................................. 12

Current Status of Project Plans (ANZ) .................................................. 13

Current Status of Project Plans (SEA) .................................................. 14

Current Status of Project Plans (Enterprise) ........................................ 15

8.

9.

Current Status of Project Plans (Telecom) ........................................... 15

Current Status of Project Plans (Industrial) ......................................... 16

Economic Outlook: Impact ................................................................................... 16

1.

Outlook Index ....................................................................................... 16

2.

3.

Economic Outlook: Impact by Geography ........................................... 17

Economic Outlook: Impact by Role ...................................................... 18

Business Performance ......................................................................................... 19

1.

Business Performance Index ................................................................ 19

2.

3.

Business Performance by Geography .................................................. 19

Business Performance by Role ............................................................. 20

4.

Business Performance by Industry ...................................................... 22

CAPEX ................................................................................................................. 24

1.

2.

3.

4.

CAPEX Index ......................................................................................... 24

CAPEX by Geography ........................................................................... 24

CAPEX by Role ...................................................................................... 25

CAPEX by Industry ................................................................................ 28

DCIM ................................................................................................................... 30

DCIM Informed Decisions .................................................................... 30

IT&C Concerns ..................................................................................................... 31




29/11/2013

- 2 -



October 2013

Introduction

This is the 11 th

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. Offering access to these markets in a local language version has increased the penetration of the survey into all Asia markets and helps continue to increase the response rate, as well as its relevance to the markets and respondents served. Public release versions of this report are translated and shared with all participants.

Executive Summary

The primary purpose of this research is to establish a statistical forward view that offers an insight into the direction of the critical infrastructure market in Asia. With a rich source of data at our disposal, it is now possible to start to look for meaningful correlations between leading and lagging indices as a further tool to make sense of sometimes contrary dimensions offered by the study respondents.

With this in mind, the index that has the closest correlation with CAPEX spending is Business

Sentiment. The historical correlation is 0.84 after the lagging and leading nature of each dimension is taken into account and offset accordingly. In the current context, CAPEX as a lagging indicator has declined in the past 6 months and Business Sentiment as a leading indicator has risen significantly

(>30% on the last period). The historical correlation indicates that this is a precursor to an improvement in the CAPEX going forward. This idea will be tested over the course of the following studies. Further to this, Project Forecast and Schedule have improved, so in spite of a decline in general confidence per economic conditions, the overall Market Pulse Index has risen 12%.

Market Pulse Index

There are 5 component indices that form the overall Market Pulse Index, they are as follows;













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




29/11/2013

- 3 -



October 2013

Summary Chart of previous Market Pulse Surveys & Current Trend;

Market Pulse Index




29/11/2013

- 4 -

Demographics

1.

By Geography



October 2013

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 four years the Market Pulse survey has run, however in this 11th edition, the Buy & Sell grouping has continued the trend of taking a larger share.

3.

Market Segments

Respondents are drawn from all parts of the market:

1)

BFSI - Banks, Financial Services, Insurance

2)

Communication - Broadcast, Publishing, Advertising & research

3)

Education - educational institutions

4)

Government

5)

Healthcare - Pharma, Hospitals, Medical services, Medical equipment

6)

Hosting

Facility

7)

Industrial - Manufacturing and construction

8)

Infra Services - Professional consultancies,

Installers

9)

IT - IT Hardware and software products

10)

IT Services - Network services, Outsourcing,

BPO

11)

Media & Entertainment

12)

Resources - Oil, Gas, mining, Utilities

13)

Telecom - Telecom

Operators & Technology Providers 14) Others.

The top segments participating in this survey (apart from D&C, B&S companies) are: Telecom, BFSI,

Government, Manufacturing, Education, Energy & Utilities.




29/11/2013

- 5 -



October 2013

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).




29/11/2013

- 6 -



October 2013

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.




29/11/2013

- 7 -



October 2013

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.

In contrast to the past 3 surveys, the current edition indicates Actual and Forecast deployments are on the rise. NB this chart pertains to projects specifically related to ITC support infrastructure.

3.

All Projects: Actual Vs Forecast

This increase remains evident when all projects are taken into account, albeit in a more muted manner.




29/11/2013

- 8 -



October 2013

4.

ICT Infrastructure Projects: Actual Vs Forecast (End User)

End user respondents continue to display a negative sentiment with regards to forecast activity but have indicated that actual deployments in the past 6 months have exceeded forecasts.

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. Contrary to the end user story line, D&C (largely Consultants) continue to build project funnels.




29/11/2013

- 9 -



October 2013

6.

ICT Infrastructure Projects: Actual Vs Forecast (Buy & Sell)

As the sample of respondents that are drawn from the Buy & Sell segment has steadily increased, the project data pertaining to that market has settled into a more reliable and valid insight. The last

5 surveys provide a useful view of the robust outlook into what effectively is a proxy for the infra mid market. Approximately 85% of recipients in this category primarily service infra opportunities of less than 30 racks (ie. the simplified def. for SME infra application).

Project Schedules

In past Market Pulse reports, schedule plans were communicated based on respondents specific feedback as per the table below. While this describes the specific data, in this format the overall trend is more difficult to grasp. In light of this, I have taken a different and hopefully clearer approach sharing this information.

To create the associated index, the basic data is further segmented into two categories. They are 1) an "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.




29/11/2013

- 10 -



October 2013

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.

1.

Current Status of Project Plans

2.

Current Status of Project Plans (U)

The past 5 surveys reflect a steady improvement in this index from an overall perspective. However at the End User level, the choppy nature of the project schedule outlook continues in this cycle of the survey. Respondents illustrate a picture that reflects an improvement in Active projects, and a reduction in At Risk projects. As previously noted, this aligns with anecdotal evidence of the End

User segment project cycle compressing dramatically over the past decade as waves of new technology impact their core business position.




29/11/2013

- 11 -

3.

Current Status of Project Plans (D&C)



October 2013

As per previous reports, the interpretation of this indicator and the disconnect from the end user data leads towards the conclusion that capacity is being built in the D&C funnel remains consistent, albeit at a lesser rate (spread). More projects are visible to them but are scheduled for deployment over a longer period of time (vs a short deployment that is subsequently pushed out).

4.

Current Status of Project Plans (B&S)

The Buy and Sell segment continues to align with the general trend.




29/11/2013

- 12 -

5.

Current Status of Project Plans (ANZ)

Total Market



October 2013

Design & Construct

Comments from the past report offer an interesting context. Declines in the total index continue from the past survey, with gains made in the D&C segment being reversed to 2012 H@ levels:

This revised format offers a better insight into the movements in the market. From the extreme peak of anxiety in late 2008 and early 2009, the projects at risk have steadily declined until mid 2011. This period more or less aligned with the initial debt crisis in the US and the subsequent media frenzy that accompanied that story. General tightening of funding saw a jump in project delays reflected in the

"at risk" projects. The total market has returned a steady decline in the at risk projects from that point, but Design and Construct indicates a significant shift in the last 6 months. This is consistent with anecdotal evidence in the market where D&C firms have only just started to hire again after a period of downsizing and layoffs.




29/11/2013

- 13 -

6.

Current Status of Project Plans (SEA)

Total Market



October 2013

Design & Construct

Both SEA indices are contrary to the AU index set and are improving. Historically the South East

Asian respondents have indicated that project have remained "at risk" at relatively high levels (vs the

AU index)since 2008 / 2009, however the current survey reflects the lowest “at risk” response recorded.




29/11/2013

- 14 -



October 2013

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.

8.

Current Status of Project Plans (Telecom)




29/11/2013

- 15 -



October 2013

9.

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 comprised of the following descriptions; Very Helpful, Helpful, Neutral, Harmful, Very Harmful. The following charts select the top 2 and bottom 2 scores (eliminating neutral) and assigns "active" and "at risk" categorizations respectively.

1.

Outlook Index




29/11/2013

- 16 -

2.

Economic Outlook: Impact by Geography



October 2013

Australia & New Zealand

South East Asia

Over the past 9 surveys, the "active" sentiment for Asia as a whole has remained fairly stable

(exception of H1 2009) with movement within a modest 7% window of variation. The overall index remains quite positive (high) with a solid (broad) spread between "active" and "at risk", in short the decline in the index should be considered relative to the historical condition illustrated.




29/11/2013

- 17 -

3.

Economic Outlook: Impact by Role

End Users



October 2013

Design & Construct

Buy & Sell




29/11/2013

- 18 -



October 2013

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





29/11/2013

- 19 -

South East Asia



October 2013

3.

Business Performance by Role

End Users




29/11/2013

- 20 -

Design & Construct



October 2013

Buy & Sell




29/11/2013

- 21 -

4.

Business Performance by Industry

Enterprise



October 2013

Telecom




29/11/2013

- 22 -

Industrial



October 2013

Over the past 9 surveys, the "active" sentiment for Asia as a whole has remained fairly stable

(exception of H1 2009) with movement within a 14% window of variation. The overall index remains quite positive (high) with a solid (broad) spread between "active" and "at risk", in short the decline in the index seen in the past survey has been short lived. Further to this, the current overall index is

12% above the historical average.

In every dimension, “at risk is flat or declining”. Peaks and troughs in the index are driven by respondents maintaining the direction set in the previous edition of the survey and therefore reflecting a neutral move in the structure of the index. Some 40% of current survey respondents noted a neutral outlook per the previous outlook.




29/11/2013

- 23 -



October 2013

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





29/11/2013

- 24 -

South East Asia



October 2013

3.

CAPEX by Role

End User (Asia)




29/11/2013

- 25 -

CAPEX by Role continued

End User (ANZ)



October 2013

End User (SEA)




29/11/2013

- 26 -


Design & Construct (Asia)



October 2013

Design & Construct (ANZ)




29/11/2013

- 27 -


Design & Construct (SEA)



October 2013

4.

CAPEX by Industry

Enterprise




29/11/2013

- 28 -

CAPEX by Industry continued

Telecom



October 2013

Industrial




29/11/2013

- 29 -



October 2013

DCIM

Three new questions were presented to respondents in the 9th edition that relate to DCIM. A preamble was provided to frame the subsequent question set as follows; DCIM (Data Centre

Infrastructure Management) is a relatively new focus in our market. It offers business the opportunity to truly optimize infrastructure through the structural linking and alignment of the dynamic application core and the essential support infrastructure. This leads to improved OPEX, reduced energy consumption, improved Uptime and greater utilization of critical infra. Q1) Has your business deployed (or been involved in the deployment of) DCIM solutions in the past 6 months?

Q2) Do you intend to pursue (directly or on behalf of clients) DCIM opportunities in the next 6 months? Q3) Is there sufficient information from vendors and partners on this topic to enable informed decisions?

DCIM Informed Decisions

H1 2012

No survey

H2 2012

H1 2013 H2 2013




29/11/2013

- 30 -



October 2013

IT&C Concerns

As per previous surveys, respondents were asked to indicate their top three worries / concerns / challenges.




29/11/2013

- 31 -



October 2013




29/11/2013

- 32 -

IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals October 2013

Related documents

Products

Support

IT&amp;C Market Pulse Bi Annual poll IT&amp;C Infrastructure Professionals October 2013

Related documents

Add this document to collection(s)

Add this document to saved

Suggest us how to improve StudyLib

IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals October 2013