IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 1 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 Introduction ............................................................................................................ 3 Executive Summary ................................................................................................ 3 1. By Geography ......................................................................................... 5 2. By Role ................................................................................................... 5 3. By Industry ............................................................................................. 6 4. By Scale By Industry ............................................................................... 6 Projects ................................................................................................................... 7 1. ICT Infrastructure Projects ..................................................................... 7 2. ICT ONLY Infrastructure Projects: Actual Vs Forecast ........................... 7 3. All Projects: Actual Vs Forecast .............................................................. 8 4. ICT Infrastructure Projects: Actual Vs Forecast (U) ............................... 8 5. ICT Infrastructure Projects: Actual Vs Forecast (D&C) ........................... 9 6. ICT Infrastructure Projects: Actual Vs Forecast (B&S) ........................... 9 Project Schedules .................................................................................................. 10 1. Current Status of Project Plans ............................................................ 10 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) .................................................. 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) ........................................... 17 1. Impact by Geography ........................................................................... 18 2. Impact by Role ..................................................................................... 19 1. Expected Performance by Geography ................................................. 19 2. Expected Performance by Role ............................................................ 20 CAPEX ................................................................................................................... 21 1. Past CAPEX by Geography .................................................................... 21 2. Past CAPEX by Role .............................................................................. 22 3. Past CAPEX by Industry ........................................................................ 22 IT&C Concerns ...................................................................................................... 23 1. Concerns by Geography ....................................................................... 24 2. Concerns by Role.................................................................................. 24 3. Concerns by Industry ........................................................................... 25 4. Concerns by Scale ................................................................................ 25 © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 2 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 Introduction This is the 6th edition of the Market Pulse survey to have been completed. The survey continues to follow the established format, however this report signals the introduction of a series of Indices. They are included as an enhancement that will improve understanding of key trends in our industry and the relative movement of component parts that make up the whole. Overall this rendition of the Market Pulse survey returns a positive outlook, however in the case of CAPEX and Economic Sentiment, trends are flat. The main qualification of this statement can be found in South East Asia where in terms of CAPEX, Economic and Business sentiment, SEA is at odds with the overall trend and has posted declines (in some cases significant). This has yet to make an impact on deployments in that region but this will be an area to watch going forward. Executive Summary 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 normalised 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 catagorises 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 © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 3 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 Summary Chart of the past 6 Market Pulse Surveys as follows; All indices remain positive, however in the case of CAPEX and Economic Sentiment, trends are flat. The overall outlook is best illustrated graphically by charting the Market Pulse Summary Index by the actual index number and the trend line. The index continues to improve, however the trend line is relatively flat. © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 4 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 Demographics 1. By Geography Participation was down on the previous survey. Some technical difficulties were experienced in the opening days of the deployment that led to a high number of surveys started, but then abandoned (approx 240). Additional efforts are being made to address markets where English in business is a second language, and will be in place for the next survey. This is hoped to positively impact participation in Japan, South Korea, Vietnam, Thailand and Indonesia. 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 three years the Market Pulse survey has run. © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 5 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 3. By Industry IT Services and Telecom dominate in terms of participation with the latter strengthening in this survey. BFSI and the all important Infra Services (Consultants) bell weather remain steady. 4. By Scale By Industry 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). Respondents have stabilized around the 60/40 mix. © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 6 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 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 Respondents continue to place a greater emphasis on Infrastructure projects however it should be noted that this refers to numbers of projects vs total value. This is consistent across all regions survey. In the following Project related charts, to overcome any bias caused by variations in sample size, this data has been normalized. 2. ICT ONLY Infrastructure Projects: Actual Vs Forecast © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 7 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 H2 2010 to H1 2011 continues the increased in forecast projects first noted in the previous survey. Actual deployments have increased from the previous survey in spite of the slightly negative overall trend. It should be noted that this chart pertains to projects specifically related to ITC support infrastructure. 3. All Projects: Actual Vs Forecast The same trends can be noted when all IT projects are taken into account. Actual deployments are in fact flat, and forecast projects are flat to lower. 4. ICT Infrastructure Projects: Actual Vs Forecast (U) © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 8 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 End Users indicate continued caution on Infrastructure projects both in terms of forecast and deployment. 5. ICT Infrastructure Projects: Actual Vs Forecast (D&C) By virtue of their position in the market, the D&C segment has visibility into projects across multiple clients and multiple segments. To a large degree this explains the significant delta between the chart above and that relating just to End Users of ICT infra. Responses to this survey continue the trend from the previous where both forecast and actual deployments are trending in positive directions. 6. ICT Infrastructure Projects: Actual Vs Forecast (B&S) © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 9 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 The March survey indicates a return to a negative sentiment in this segment with a sharp decline in forecast projects as well as in actual project. Project Schedules Respondents were asked to define the likely timing of projects listed in their pipeline. 1. Current Status of Project Plans Overall, plans for the deployment of projects is at an all time high with over 60% slated for implementation in the next 6 months. Projects in the 6 to 12 month category have remained fairly constant over the life of Market Pulse. Projects that have been shelved (ie no immediate plan for deployment) is also at an all time low. This chart takes into account all respondents. © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 10 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 2. Current Status of Project Plans (U) The overall positive trend continues when Users are segmented for review. Notably the percentage of projects slated to proceed in the next 6 months have jumped 12%, with a sharp contraction of the mid term pipeline (6 to 12 months) down by almost the corresponding amount. Projects that have been shelved (ie no immediate plan for deployment) remain low. © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 11 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 3. Current Status of Project Plans (D&C) The positive trends in the Design & Construct segment continued an improving streak only interrupted by a brief setback in 2010 H1. So far the proposition that this segment is the “bell weather” of the ITC Infrastructure industry continues to hold true. © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 12 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 4. Current Status of Project Plans (B&S) In spite of a weakening forecast of total projects in this segment, the profile per intended deployment is trending in a positive direction. The bumpy nature of the trends associated with B&S is most likely exaggerated by the smaller sample size. Total participation has dropped by 4% of the total since the October 2010 survey. © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 13 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 5. Current Status of Project Plans (ANZ) As a mature (and to a degree conservative) market, the positive gains in ANZ are significant and indicate continued strength in ICT infrastructure opportunities going forward. Gains in the short term plans for deployment have continued into this survey with the shelved segment at an all time low of 2%. © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 14 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 6. Current Status of Project Plans (SEA) Thre previous trend that showed a steady decrease in projects slated for deployment within 6 months has now been reversed. March Market Pulse refleccts an solid improvement in the “within 6 month” segment of 10% points. © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 15 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 7. Current Status of Project Plans (Enterprise) Positive trends have continued in this segment with an improvement on the previously best result recorded in 2009 H2. © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 16 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 8. Current Status of Project Plans (Telecom) Since the first decline recorded in last months survey, March indicates a marginal improvement with Telecom projects to be deployed within the next 6 months back to the 2009 H1 level. The Telecom segment has up until this current survey, posted more positive results per expected project deployment schedule (up to 30% greater than Enterprise). Both segments now have similar profiles per project deployment plans. © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 17 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 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. 1. Outlook Index 2. Impact by Geography Overall sentiment per Economic Outlook is flat. Improvements in Australia have been offset by renewed negative sentiment in South East Asia. © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 18 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 3. Impact by Role User sentiment has dropped markedly with a decrease in the Top Box score of over 10%. This has been offset by a similar sized increase in the Design and Construct segment. B&S has maintained an overall negative trajectory. Business Performance Respondents were asked to indicate how over the next 6 months, they expect their company's overall performance will change, i.e. improve, worsen or remain the same? 1. Performance Index © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 19 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 2. Expected Performance by Geography 3. Expected Performance by Role After solid gains posted in the previous survey, respondent sentiment per business performance prospects has flattened out. More respondents from across the region are adopting a neutral position per prospects. In a similar fashion to the previous dimension, User sentiment has retreated at the same rate D&C sentiment has improved. © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 20 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 CAPEX Respondents were asked to indicate how over the past 6 months they have managed CAPEX activity. 1. CAPEX Index 2. Past CAPEX by Geography © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 21 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 3. Past CAPEX by Role Overall this indicator has returned an improved result on the last survey result, however with some notable exceptions; o South East Asia posted an 8% point reduction over the past 6 months o The 15% improvement in Australia offset this to return a positive result o Users overall indicated a lower spend in the past 6 months (3%) o D&C flagging continued strong growth following 3 previous surveys of growth o The result for March 2011 surpasses that recorded in 2008 H2 Per the following chart, CAPEX activity in the Enterprise space has slowed after significant gains posted in the March survey. Telecom growth has slowed as well but still posted a 3% improvement on the previous survey. 4. Past CAPEX by Industry © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 22 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 IT&C Concerns As per previous surveys, respondents were asked to indicate their top three worries / concerns / challenges. Top 3 are indicated by color; © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 23 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 1. Concerns by Geography 2. Concerns by Role © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
‐ 24 ‐ IT&C Market Pulse Bi Annual poll IT&C Infrastructure Professionals March 2011 3. Concerns by Industry 4. Concerns by Scale © 2011 Emerson Network Power
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Market Pulse: #6 March 2011
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