IT&CMarketPulse
BiAnnualpollIT&CInfrastructureProfessionals
October2011
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Market Pulse: #7 October 2011 PR
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Introduction............................................................................................................3
ExecutiveSummary.................................................................................................3
Demographics.........................................................................................................5
1.
ByGeography.........................................................................................5
2.
ByRole...................................................................................................5
3.
ByIndustry.............................................................................................5
4.
ByScaleByIndustry...............................................................................6
5.
ByScaleBySampleSource....................................................................6
Projects...................................................................................................................7
1.
ICTInfrastructureProjects.....................................................................7
2.
ICTONLYInfrastructureProjects:ActualVsForecast...........................7
3.
AllProjects:ActualVsForecast..............................................................8
4.
ICTInfrastructureProjects:ActualVsForecast(U)...............................8
5.
ICTInfrastructureProjects:ActualVsForecast(D&C)...........................9
6.
ICTInfrastructureProjects:ActualVsForecast(B&S)...........................9
ProjectSchedules..................................................................................................10
1.
CurrentStatusofProjectPlans............................................................10
2.
CurrentStatusofProjectPlans(U)......................................................11
3.
CurrentStatusofProjectPlans(D&C).................................................12
4.
CurrentStatusofProjectPlans(B&S)..................................................13
5.
CurrentStatusofProjectPlans(ANZ)..................................................14
6.
CurrentStatusofProjectPlans(SEA)..................................................15
7.
CurrentStatusofProjectPlans(Enterprise)........................................16
8.
CurrentStatusofProjectPlans(Telecom)...........................................18
1.
OutlookIndex.......................................................................................19
2.
ImpactbyGeography...........................................................................19
3.
ImpactbyRole.....................................................................................20
1.
PerformanceIndex...............................................................................20
2.
ExpectedPerformancebyGeography.................................................21
3.
ExpectedPerformancebyRole............................................................21
CAPEX....................................................................................................................22
1.
CAPEXIndex.........................................................................................22
2.
PastCAPEXbyGeography....................................................................22
3.
PastCAPEXbyRole..............................................................................22
4.
PastCAPEXbyIndustry........................................................................23
IT&CConcerns.......................................................................................................24
1.
ConcernsbyGeography.......................................................................25
2.
ConcernsbyRole..................................................................................25
3.
ConcernsbyIndustry...........................................................................26
4.
ConcernsbyScale................................................................................26
5.
ConcernsbySampleSource.................................................................27
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Introduction
Thisisthe7theditionoftheMarketPulsesurveytohavebeencompleted.Thesurveycontinuesto
followtheestablishedformat;howeverthisreportvariesintwosignificantareas.Followingthe
acquisitionoftheAvocentbusinessandthesubsequentintegrationintoEmersonNetworkPowerin
Asia,thecustomerdatabasehasnowbeenconsolidated.Thisdoesaddvolumetoouroverallreach,
butmoreimportantlyextendsthissurveymoredeeplyintothecoreAvocentaudiencegroup,
namelyCIOandITprofessionals.Furthertothiswehavedeployedthissurveyinsixlanguages;
English,Japanese,IndonesianBahasa,Thai,KoreanandVietnamese.Offeringaccesstothese
marketsinalocallanguageversionhasincreasedthepenetrationofthesurveyandtogetherwith
theAvocentcontributionhasseenan80%increaseincompletionsthistimeround.
OverallthisrenditionoftheMarketPulsesurveyreturnsagloomyoutlook.Followingonfrommixed
resultsrecordedinthepastsurveyconductedinMarch,negativetendencieshavedevelopedinto
fullondeclines.CAPEXdataindicatesthattheANZmarketsoftenedaheadofSEAandcombined
withthenegativetrendsrecordedthroughouttheDesignandConstructsegment,positiveindicators
arefewandfarbetween.OveralltheMarketPulseindexhasposteditsfirstdeclineafter4
consecutiveperiodsofgrowth.TheindexhashalvedsinceMarchandretreatedtopre2009H2
levels.
ExecutiveSummary
Thereare5componentindicesthatformtheoverallMarketPulseIndex,theyareasfollows;
x MarketPulseCapex:BasictrackingdeterminesifrespondentsareproceedingwithCAPEXorseea
x
x
x
x
x
risknottoproceed.Thisindexisasimpledivisionof#thatareproceedingbythosedeemedtobeat
risk.Assuch,thehigherthenumber,thebetter.
MarketPulseProjectForecast:Respondentsareaskedtonoteprojectdeploymentschedulespast
andpresent.Thisenablesasimplecomparisonbyperiodofhowforecastandactualdeployments
matchup.Projectnumbersarenormalisedsoastotakeintoaccountsamplesizeandtheindexis
determinedbysubtractingforecastfromactual.ApositivenumberindicatesActualdeployments
exceedingtheforecastforthesameperiod.
MarketPulseProjectSchedule:Respondentsareaskedtonotetheexpectedscheduleforproject
deployment.Thisindexassumesthatashortertimelineofferslessriskforcancellationordelayand
catagorisesresponsesintofirmdeploymentand"atrisk"segments.Thisindexisasimpledivisionof#
thatare"firm"bythosedeemedtobeatrisk.Assuch,thehigherthenumber,thebetter.
MarketPulseEconomicSentiment:Respondentsareaskedtoratehowthelocaleconomyis
impactingontheirbusinessprospects.Onceneutralresponsesareremovedasimplepositivevs
negativedatasetprovidesthebasisforthisindex.Lessthan"1"indicatesagenerallynegative
sentiment,morethan"1"indicatesapositivesentiment.Assuch,thehigherthenumber,thebetter.
MarketPulseBusinessSentiment:Respondentsareaskedtoratetheirbusinessprospectsgoing
forward.Onceneutralresponsesareremovedasimplepositivevsnegativedatasetprovidesthebasis
forthisindex.Lessthan"1"indicatesagenerallynegativesentiment,morethan"1"indicatesa
positivesentiment.Assuch,thehigherthenumber,thebetter.
MarketPulseIndex:SummaryIndex
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SummaryChartofthepast7MarketPulseSurveysasfollows;
ThreeofthefivekeyindiceshaveturnedfromapositiveoutlookintheMarchSurveytoanegative
outlookinthissurvey.ThesummaryMarketPulseIndexhasturnedsignificantlynegativeinthis
currentsurvey.
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Demographics
1. ByGeography
Participationwasupbyover80%fromtheprevioussurvey.ThisisasaresultoftheAvocentDB
contributionaswellasofferingthesurveyinmultiplelanguages;
2. ByRole
RespondentsaregroupedaccordingtotheirrelationshipwithEmerson.Thethreecategoriesare
respondentsas;
1. Users(U)ofEmersonservicesorequipment,
2. DesignersandinfluencersassociatedwithspecificationandrecommendationofEmerson
servicesorproductswhoDesign&Construct(D&C)projects,and
3. thosewhoBuyandSell(B&S)Emersonservicesorproducts.
DemographicbyRespondentroleintheEmersonsupplychainhasremainedrelativelysteadyover
thethreeyearstheMarketPulsesurveyhasrun.
3. ByIndustry
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TheOctoberSurveyseesasignificantreshuffleintermsofverticalparticipationwithIndustrial
takingthelead.Thetwokeycontributorstothisshiftcanbefoundintheintroductionoflocal
languagesurvey(35%ofrespondentsintheIndustrialverticalaresourcedfromnonEnglishspeaking
countries)andfromtheintroductionoftheAvocentDB(25%ofrespondentsintheIndustrialvertical
aresourcedfromtheAvocentDB).
4. ByScaleByIndustry
The2009H2surveysawtheintroductionofseveralnewquestions,Scaleoftheprimarydeployment
beingoneofthem.Atthetimeitwasnotedthatasignificantportionofrespondentsweredefinedin
thesmallroomornetworkcategory(ielessthan30racks).Respondentshavepreviouslystabilized
aroundthe60/40mixhoweverinthissurveyheoverallsamplehasshiftedthistowardthesmaller
scale.
5. ByScaleBySampleSource
AsfurtherinsightintothecomparativedifferencesbetweentheAvocentDBandlegacysources,the
followingtablebreaksthisoutbyDBsource.
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Projects
Respondentswereaskedtolistprojectsthathavebeendeployedinthepast6monthsandthose
scheduledfordeploymentinthenextperiod.Itoffersinsightprojectpipelinetrendsaswellasthe
correlationbetweenforecastandactualdeployments.
1. ICTInfrastructureProjects
ThepastfivesurveyshavedescribedasteadyincreaseinprojectsspecifictoInfrastructurevs
generalITprojects.Inthecurrentsurvey,thisrunofimprovementhasendedwiththebasicresult
fallingbackto2010H2levels.Thisisconsistentacrossallregionssurvey.InthefollowingProject
relatedcharts,toovercomeanybiascausedbyvariationsinsamplesize,thisdatahasbeen
normalized.
2. ICTONLYInfrastructureProjects:ActualVsForecast
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H12011toH22011reflectsadecreaseinforecastprojectsfollowingthreeperiodsofgrowth.Actual
deploymentshavealsotaperedoffandreturnedtoapproximately2010H2levels.Itshouldbe
notedthatthischartpertainstoprojectsspecificallyrelatedtoITCsupportinfrastructure.
3. AllProjects:ActualVsForecast
ThesametrendscanbenotedwhenallITprojectsaretakenintoaccount.Actualdeploymentsarein
factflat,andforecastprojectsareflattolower.
4. ICTInfrastructureProjects:ActualVsForecast(U)
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EndUsersindicateasofteningintermsofactualaswellasforecastInfrastructureprojects.The
cautionnotedinthepreviousreporthashardenedintodeclinesinbothdimensions.
5. ICTInfrastructureProjects:ActualVsForecast(D&C)
Byvirtueoftheirpositioninthemarket,theD&Csegmenthasvisibilityintoprojectsacrossmultiple
clientsandmultiplesegmentsandassuchoffersaleadinginsightintomarketconditions.Adecline
inbothactualandforecastprojectsthereforesignalsafundamentalshiftintheinfrastructure
marketandindicatesaslowdowninprojectstobedeployedinthecomingyear.
6. ICTInfrastructureProjects:ActualVsForecast(B&S)
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Eventhoughthe%contributionofthissegmentremainssteady(small),duetotheincreasein
overallsamplesize,thissegmentnowrepresentsastatisticallysignificantgroup.Unlikethetrends
notedintheEndUserandDesignandConstructsegments,theBuyandSellgroupreflectpositive
trendsinbothactualandforecastdeploymentsofprojects.
ProjectSchedules
Respondentswereaskedtodefinethelikelytimingofprojectslistedintheirpipeline.
1. CurrentStatusofProjectPlans
Gainsmadeinthepastfewsurveyshavebeenreversedwiththecurrentscheduleoutlookfalling
backtoapproximatelythe2010H2position.Projectsscheduledtobedeployedwithin6months
havedeclined,withcomparablegainsinboththeover6monthcategoryaswellasinprojectsbeing
shelved(noplanfordeployment).
Thischarttakesintoaccountallrespondents.
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2. CurrentStatusofProjectPlans(U)
Asadiscretesegment,EndUsershavecontributedthesharpestdropwithregardstoprojectplans.
Shorttermplanshavedroppedby11points,whichreflectsthesameincreasemadefrom2010H2
to2011H1.Whilethisisasignificantdeterioration,EndUsersseemtobehedgingtheirbetsandnot
goingforoutrightshelvingofprojectsasseenin2008and2009.
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3. CurrentStatusofProjectPlans(D&C)
Thenegativetrendpreviouslynotedissomewhatmutedinthissegmentbutfollowsthenegative
trend.Asevenpointdropinshorttermprojectsismainlypickedupinthelongertermplanswith
projectsbeingshelvedremainingfairlystatic.
Sofarthepropositionthatthissegmentisthe“bellweather”oftheITCInfrastructureindustry
continuestoholdtrue.Thiswouldindicatethataslowdownininfrastructureprojectsacrossthe
broadermarketistobeexpected.
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4. CurrentStatusofProjectPlans(B&S)
Aspreviouslynoted,withtheincreaseinsamplesize,thissegmentnowoffersamoresubstantial
insightintotheBuyandSellsector.Iftheimprovedparticipationofthisgroupissustainedover
subsequentsurveys,thegainsshownherewillbesubstantiated.Thisresultthereforeremainsa
qualifiedhighlightfortheOctoberMarketPulsesurvey.
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5. CurrentStatusofProjectPlans(ANZ)
Asamature(andtoadegreeconservative)market,changesinANZareindicativeoflongerterm
trends.TheOctobersurveyreturnsa16pointdropinprojectstobedeployedinthenextsixmonths.
Consideringthisisonthebackofsteadyincreasesoverseveralyears(withtheexceptionofoneflat
period),thisisasignificantresult.
Theonlypositiveaspectofthisresultistheminimalgrowthintheprojectstobeshelved.
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6. CurrentStatusofProjectPlans(SEA)
SouthEastAsiareflectsquiteadifferentresulttoANZwithonlyaminimalsofteningoftheshort
termdeploymentplan.Itshouldbenotedthatbycomparison,SEAhasimprovedataslowerrateto
ANZandremainsslightlyaheadpershorttermintentions.
Notablyhowever,planstoshelveprojectshavejumpedaheadofAustraliabydouble.
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7. CurrentStatusofProjectPlans(Enterprise)
NegativetrendsintheEnterprisesegmentareconsistentwiththeoveralltrend.Itshouldbenoted
howeverthatwhentheIndustrialverticalisreversedoutfromthissegment,declinesarefarless.
Declinesspecifictotheindustrialverticalexceed20pointsinshorttermprojectplans.
Contrarytothattrendhowever,projectstobeshelvedhavegrownmoreinthenonindustrial
segmentofenterpriseby2percentagepoints.
Furtherdetailcanbefoundinthefollowingtwocharts;
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Enterprise/Industrialonly
Enterprise/Enterpriseonly
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8. CurrentStatusofProjectPlans(Telecom)
MildgainsintheTelecomsectorhaveretreatedto2008levels.Perearliercomments,theonly
positiveaspectoftheseresultsisthetendencytopushprojectsout,versesshelvingthemoutright.
TheTelecomsegmenthasupuntiltheMarchsurvey,postedmorepositiveresultsperexpected
projectdeploymentschedule(upto30%greaterthanEnterprise).Thistrendcontinues,albeitata
moremodestscale.Bothsegmentsnowhavesimilarprofilesperprojectdeploymentplans.
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EconomicOutlook:Impact
RespondentswereaskedtoratetheimpactofAsia'seconomicconditionsonthebusinessprospects
oftheircompanyinthenearfuture.
1. OutlookIndex
2. ImpactbyGeography
OverallsentimentperEconomicOutlookhasmovedfrombeingflattosignificantlynegative.Thisis
equallyreflectedinallterritories.
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3. ImpactbyRole
Contrarytopreviousdimensions,Usersentimentismildlypositive.DesignandConstructaswellas
B&Shavemaintainedanoverallnegativetrajectory.
BusinessPerformance
Respondentswereaskedtoindicatehowoverthenext6months,theyexpecttheircompany's
overallperformancewillchange,i.e.improve,worsenorremainthesame?
1. PerformanceIndex
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2. ExpectedPerformancebyGeography
3. ExpectedPerformancebyRole
Commentfromtheprevioussurveyasfollows:“Aftersolidgainspostedintheprevioussurvey,
respondentsentimentperbusinessperformanceprospectshasflattenedout.Morerespondents
fromacrosstheregionareadoptinganeutralpositionperprospects.”
Theweakeningsentimenthasdevelopedvariouslyacrossthedifferentsegmentsintodeclinesacross
theboard.
AnoverallpositivesentimentexpressedbyaTop2boxscoreof68%howevershouldbetakenin
contextofthepast6surveysandremainsarelativelyhealthyscore.
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CAPEX
Respondentswereaskedtoindicatehowoverthepast6monthstheyhavemanagedCAPEXactivity.
1. CAPEXIndex
2. PastCAPEXbyGeography
3. PastCAPEXbyRole
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Asalaggingindex,thisresultisnotablefromtheperspectivethatANZhada7pointdeclinewhile
therestofthemarketcontinuedtogrow(withrespecttoCAPEX).
Furthertothis,theDesign&Constructsegmentrecordedasharpdeclineinthesameperiod,further
strengtheningthe“bellweather”positionofthisgroup.
4. PastCAPEXbyIndustry
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IT&CConcerns
Asperprevioussurveys,respondentswereaskedtoindicatetheirtopthreeworries/concerns/
challenges.
Top3areindicatedbycolor;
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1. ConcernsbyGeography
2. ConcernsbyRole
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3. ConcernsbyIndustry
4. ConcernsbyScale
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5. ConcernsbySampleSource
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