This presentation was for Computer Brokers Europe (CBE), giving background on changes in OEM supplier policies and threats to brokers in EMEA.

1. ITCandor 2013CBE Milan
European Trends In Servers
And Storage
Martin Hingley, ITCandor
40th CBE Conference 2013, Milan

2. ITCandor 2013CBE Milan
Agenda
• Market Insights – technology trends,
market data, user spending
• What’s Happening – vertical
integration, changes in OEM policies
• Market Expectations – hardware
forecast, policy effects

3. ITCandor 2013CBE Milan
Technology trends
• Physical product reselling is being replace with
‘virtual’ services
• Cloud services and risk of channel disintermediation
• Mainframe, Unix and x86 server mix
• Converged Infrastructure and Integrated Systems
replace ‘industry standard’ components
• A shift in OEM policies threaten 3rd party maintainers
in Europe

4. ITCandor 2013CBE Milan
Server
x86 ratios increased after the Credit Crunch HP has a stronger lead in EMEA
There are 15M Servers installed in EMEA
Other
30.8%
Bull
5.0% Dell
13.8%
IBM
18.8%
HP
26.3%
<Q213 Total: €13.8B€0
€500
€1,000
€1,500
€2,000
€2,500
€3,000
Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
x86
RISC/Itanium
System z
EMEA Server Spending (€B) by Quarter 2008-2013

5. ITCandor 2013CBE Milan
Storage
EMC leads, with NetApp catching Big Arrays in decline, Innovation growing
There are 3M storage arrays installed in EMEA
EMC
19.9%
NetApp
16.5%
HP
15.4%
IBM
12.8%
Other
27.1%
<Q213 Total: €6.3B€0
€500
€1,000
€1,500
€2,000
€2,500
Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
0
10k
20k
30k
40k
50k
60k
Revenue ($m)
Unit
EMEA Storage Spending (€B) and Units - 2008-2013

6. ITCandor 2013CBE Milan
Enterprise Network
EMC maintains a substantial lead HP and others focus on Open standards
Other
39.3%
Cisco
40.4%
<Q213 Total: €14.0B
EMEA Network Spending (€B) by Quarter 2008-2013
€3,000
€3,500
€4,000
Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213

7. ITCandor 2013CBE Milan
Data Centre spending by type
• 33.2% Hardware
• 6.1% Software
(excluding tools and
applications)
• 8.3% Services
• 5.0% Power/Cooling
• 47.4% Internal Staff
• Reducing internal
spending is a key
supplier strategy
• Hardware declines
proportionately over
time
Storage
9.7%
Networking
10.1%
Internal Staff
47.4%
Server
13.4%
World <Q213
Total: $289B

8. ITCandor 2013CBE Milan
Vertical, Horizontal and Matrix
Integration
• Vertical
Integration was
killed by anti-
trust v IBM
• Horizontal
Integration
allowed more
specialisation
• Matrix
Integration
involves Open
designs and
helping
customers avoid
lock-in

9. ITCandor 2013CBE Milan
IBM Policy Changes
• Changes machine code
licenses hotly contended
by customers and 3rd
party maintainers in
Europe
• Covers System z, Power
and Storage
• System x excluded
• Protects its IP strongly
• Successful against Turbo
Hercules, Neon, T3 in
2011
• A strong move towards
integrated systems with
PureSystem
IBM EMEA System Revenues (€B) by Quarter 2008-2013
Traditionally strong 3rd party maintenance More software approaches
€0
€100
€200
€300
€400
€500
€600
Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
System z
System x
Power
Network
Storage
System

10. ITCandor 2013CBE Milan
Oracle Policy Changes
• Sues Rimini Street in US
for illegal software use
• Software maintenance
has to be through a valid
support contract
• EU held up Sun
acquisition. Especially
over MySQL and Open
Source issues
• Is focusing on workload-
optimised systems,
rather than horizontal
offerings
Sun had strong 3rd party maintenance Oracle is focused on solutions
Sun EMEA System Revenues (€B) by Quarter 2008-2013
€0
€50
€100
€150
€200
€250
€300
€350
€400
Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Sparc Server
Sun x86 Server
Storage System

11. ITCandor 2013CBE Milan
Cisco Policy Changes
• Sparing – kit only valid if
software bought from
Cisco or authorised
partner
• In EEC and Switzerland
users can buy 2nd hand if
from a Cisco (or
authorised partner)
supplied customer in the
region
• License agreement does
not transfer ownership
• Partners extensively
upstream – NetApp,
EMC, IBM, HDS, VMware
Fabric-based UCS launched in 2008 An integrated approach in servers
Cisco EMEA System Revenues (€B) by Quarter 2008-2013
€0
€200
€400
€600
€800
€1,000
€1,200
€1,400
€1,600
€1,800
Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Networking
Server

12. ITCandor 2013CBE Milan
Data Centre spending forecast
Networking will slowly overtake servers Storage will eventually recover
€1,000
€1,500
€2,000
€2,500
€3,000
€3,500
€4,000
€4,500
2008 2009 2010 2011 2012 2013 2014 2018 2016 2017 2018
Networking
Storage
Server
EMEA Data Center Product Revenue (€B) Forecast by Quarter 2008-2018

13. ITCandor 2013CBE Milan
The Effects of policy changes
on the TAM
• Data Centre strategies focus on integration, virtualisation and the Cloud
• In servers x86 chips predominate, but not all are ‘industry standard’
• Suppliers help users cut down the 47% internal staff costs through
automation
• Hardware will decline in favour of software and services
• Matrix Integration is a fundamental change in supplier strategy
• IBM, Cisco, Oracle and others are changing the concept of ownership through
license agreements with users
• The hardware market will stay strong - €34B in 2013, €33B in 2018
• Despite potential help from the EU the TAM for 3rd party maintenance will be
cut