The document summarizes the results of an annual survey of IT and service provider capital spending priorities. Key findings from the survey include: - Respondents expect only slight overall growth of around 4% for IT spending and budgets in 2013, representing weaker expectations than the previous two years. - Service provider capital expenditures are also forecast to grow 4% in 2013 but outlook varies significantly by geography and other factors. - Activity related to new projects, proposals, and RFPs remains high despite current weakness, and many contacts are optimistic about faster growth once macroeconomic and fiscal uncertainty subsides. - Federal spending in Q1 2013 likely underperformed expectations for federally-exposed suppliers and integrators, with a few

1.
IT
and
Service
Provider
Capital
Priori3es
Annual
Survey
Results
January
2013
Sales Pulse Research
Sales
Pulse
Research,
LLC
2013
All
rights
reserved

2. Sales Pulse Research
Technology Trends
About
this
Survey
and
Results
Results
are
based
on
our
end
of
year
survey
combined
with
our
on-­‐going
research
and
analysis.
Our
survey
was
designed
to
be
“high
touch”
primarily
at
the
field
level
for
a
boLoms
up
view
into
overall
spending
trends.
This
year
the
survey
was
sent
to
750+
known
industry
contacts
around
the
world
and
so
far
have
received
a
~20%
response.
The
following
disclosures
are
provided
to
survey
par3cipants:
No
company
confiden3al
informa3on
is
requested
or
will
be
knowingly
included
in
any
report
or
communica3on
associated
with
this
research.
This
research
is
NOT
an
aLempt
to
gain
insight
into
non-­‐public
company
specific
financial
data
or
any
other
confiden3al
informa3on.
The
focus
of
this
report
is
market
dynamics.
Our
goal
is
to
gain
input
across
various
geographies
and
industry
segments
to
understand
broader
industry
trends.
Par3cipants:
For
their
input,
industry
par3cipants
receive
our
reports.
This
informa3on
may
help
beLer
understand
the
industry
and
assist
with
individual
job
ac3vi3es,
or
in
some
cases
job
searches.
Par3cipants
should
not
provide
any
informa3on
that
conflicts
with
the
policies
of
the
company
they
work
for.
We
welcome
your
input
regarding
compe3tors,
customer
trends,
and
other
market
observa3ons.
Survey
par3cipants
should
decline
to
par3cipate
in
the
survey
if
par3cipa3ng
would
violate
any
confiden3ality
obliga3on.
Our
thanks
to
all
who
have
assisted
with
market
input
and
sugges3ons.
Please
call
or
email
with
any
ques3ons.
Sales
Pulse
Research,
LLC
2013
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2

3. Sales Pulse Research
Technology Trends
2013
Key
Takeaways
from
our
Survey
Results
• Overall
expecta3ons
and
survey
input
for
IT
spending
in
2013
were
less
posi*ve
when
compared
to
the
previous
2
years
indica3ng
only
slight
growth
~4%
for
the
industry
and
budgets.
Commentary
and
recent
discussions
indicate
the
nega3vity
is
a
result
of
slowing
momentum
in
Q4
and
uncertainty
for
CY
Q1
and
early
2013.
• Service
Provider
CAPEX
2013
Outlook
is
also
expected
to
improve
over
2012
with
~4%
growth
however
it
is
heavily
dependent
upon
the
geography
(NA
growth,
Asia
Pac
growth,
EMEA
stable),
macro
economies,
and
operator
priori3es
as
many
2013
budgets
are
s3ll
being
finalized.
We
are
uncovering
broad
evidence
of
growth
or
worst
case
flat
YoY
spending.
• In
contrast
to
the
current
weakness,
ac3vity
related
to
new
projects,
improving
pipelines,
proposals
and
RFP
ac3vity
remains
very
high.
Field
contacts
are
op3mis3c
and
believe
that
the
tech
industry
is
poised
for
faster
growth
based
upon
a
strong
underlying
demand
that
is
s3ll
restrained
by
macro
and
fiscal
uncertainty.
• We
believe
2013
is
off
to
a
slow
start
indica3ng
possible
risk
to
the
seasonally
weak
Q1
expecta*ons
in
spite
of
the
improving
sen*ment.
• We
believe
Federal
spending
in
FY
Q1
likely
underperformed
even
the
already
lowered
expecta*ons
for
federally
exposed
suppliers
and
integrators
with
a
few
outliers
such
as
WiFi
,
Cloud/Outsourcing
and
Security.
• Similar
to
last
year,
much
of
our
input
has
come
from
individuals
who
are
in
segments
that
they
believe
are
growing
faster
than
overall
growth
in
CAPEX.
Ver3cals
seen
as
maintaining
the
most
momentum
include
Wifi,
hosted/cloud
services,
and
network
management
tools.
Other
areas
that
are
viewed
as
growing
quickly,
but
not
immune
to
current
budget
restraints
include
storage,
security,
SaaS
and
Unified
Communica*ons.
• Hiring
was
frozen
or
had
slowed
no3ceably
in
Q4
at
several
companies
with
expecta3ons
of
improvements
in
mid
Q1
2013.
For
2013
23%
see
a
slow
down
in
hiring,
56%
report
a
pickup,
21%
see
no
change
Sales
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2013
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4. Sales Pulse Research
Technology Trends
4
Sales
Pulse
Research,
LLC
2013
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rights
reserved

5. Sales Pulse Research
Technology Trends
Results
and
Analysis
of
Enterprise
Spending
• As
discussed
in
our
summary
page,
input
has
suggested
a
slow
finish
to
2012
for
most
segments
of
enterprise
IT
spending.
A
slow
start
to
Q1
2013
is
also
expected.
Due
to
the
contrast
with
between
weak
spending
and
of
the
high
levels
of
sales
ac3vity,
we
are
working
to
monitor
spending
closely
to
see
if
/
when
we
can
recognize
signs
of
a
pickup
which
is
an3cipated
in
Q2
2013.
• More
contacts
this
year
noted
segments
where
they
believe
growth
would
be
stronger
than
overall
market
expecta3ons.
The
strongest
of
these
segments
include:
– Wireless
LAN
to
support
BYoD.
Contacts
who
are
working
directly
with
WiFi,
BYOD
,
MDM
and
Mobile
Security
solu3ons
remain
very
enthusias3c!
We
believe
this
area
was
among
the
strongest
in
Q4
and
is
likely
to
con3nue
through
2013.
– Cloud
con3nues
to
gain
momentum
with
most
contacts
seeing
con3nued
strong
growth
and
some
seeing
accelera3on.
The
implica3on
of
this
growth
is
generally
a
net
nega*ve
for
vendors
who
tradi*onally
sell
to
large
enterprises
(discussed
later
within
this
document).
– Tools
for
tes*ng,
diagnos*cs,
visualiza*on
and
network
management.
Although
this
is
a
narrow
market
we
were
surprised
at
the
number
of
contacts
who
noted
strength.
We
believe
this
trend
is
posi3ve
for
Ixia,
Gigamon,
Opnet/Riverbed
and
others.
• Our
contacts
also
see
spending
on
NGN,
Mobile/BYOD
and
Applica*on
Security
as
a
top
priority,
noted
by
38%
or
respondents,
up
from
29%
in
2010,
and
33%
in
2011.
• In
contrast,
WAN
Op*miza*on
has
fallen
from
28%
in
2010,
18%
in
2011,
now
to
13%
in
this
years
results.
Our
sampling
may
skew
these
results
to
the
downside
due
to
supplier
consolida3on
or
lack
of
focus
from
JNPR
and
CSCO.
We
believe
Riverbed
and
Silver
Peak
are
likely
to
con3nue
to
gain
share
and
to
outpace
overall
market
growth
projec3ons
of
~10%
in
their
core
business.
• Unified
Communica*ons
remains
in
the
early
stages
of
market
penetra3on
and
our
research
supports
a
mul3-­‐year
transi3on
that
is
a
top
priority
by
end
users.
Vendors
include
Broadsop,
Cisco,
Microsop,
Acme
Packet,
Sonus,
Plantronics
and
Polycom.
• Areas
of
weakness
include:
Closet
Switching,
SAN,
Legacy
Security,
Federal
spending
on
equipment
and
Systems
Integra3on.
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Pulse
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2013
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5

6. Sales Pulse Research
Technology Trends
6
Sales
Pulse
Research,
LLC
2013
All
rights
reserved

7. Sales Pulse Research
Technology Trends
Results
and
Analysis
of
Service
Provider
Spending
• Posi*ve
expecta*ons
for
Service
Provider
spending
in
2013:
-­‐
63%
indicated
a
view
that
is
consistent
with
a
forecast
for
slight
growth
of
~4%.
The
majority
of
our
research
also
highlighted
ongoing
cau3on
that
without
improving
macro
economic
condi3ons
success
based
capital
may
be
at
risk
thereby
impac3ng
overall
CAPEX.
Presently,
enterprise
customer
spending
remains
sop
and
there
is
evidence
consumers
are
beginning
to
reverse
course
with
discre3onary
services
and
bundles.
•
CAPEX
Priori*es
include:
Wireless
Mobility,
wireline
expansion,
metro/regional/core
100G
capacity
upgrades,
WiFi,
Cloud/Managed/
Hosted
Services
for
enterprise,
Home
Monitoring/Security/Automa3on,
NGN
Security,
Hosted
Unified
Communica3ons,
OSS/BSS
Upgrades/Moderniza3on,
Network
Management/Monitoring/Traffic
Visualiza3on
Tools,
and
Cloud
based
video
delivery.
• We
believe
2013
is
likely
to
be
slow
to
accelerate
with
seasonal
sopness
in
Q1,
then
improving
Q2
and
beyond
based
on
current
sen3ment
from
end
users,
operators,
field
teams,
distributors
and
Integrators.
• As
compared
to
previous
input
from
our
industry
contacts
in
the
service
provider
segment
they
remain
more
op3mis3c
about
an
increase
in
overall
CAPEX
for
2013.
This
is
based
on
mul3-­‐year
project
ini3a3ves
along
with
increasing
levels
of
ac3vity
and
growing
pipelines.
Fewer
contacts
highlighted
budget
flush
at
the
end
of
Q4
due
to
push
outs,
and
ongoing
poli3cal,
fiscal
and
macro
uncertain3es.
• Current
feedback
points
to
stabiliza3on
in
EMEA,
con3nued
growth
in
Asia
PAC
and
YoY
improvements
in
North
America
for
2013.
• We
are
uncovering
broad
based
expecta3ons
of
con3nued
co-­‐ope33on,
strategic
partnerships,
OEM’s
to
fill
product
gaps,
as
well
as
ongoing
M&A
specula3on
across
both
the
operator
and
supplier
community.
As
a
result
we
also
believe
Global
Tier
1
suppliers
are
likely
to
become
larger
and
more
strategic
integra3on
partners
for
their
customer
base
resul3ng
in
new
mul3-­‐year
contract
rela3onships
involving
mul3ple
technologies
and
companies
to
fill
product,
services
and
sopware
gaps.
• Similar
to
responses
in
enterprise
spending,
a
significant
change
is
reflected
in
response
to
the
ques3on
regarding
the
specific
segment
the
par3cular
contact
is
targe3ng.
This
year
only
21%
believe
their
segment
will
grow
faster
than
the
overall
CAPEX
forecast,
down
from
40%
last
year.
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8. Sales Pulse Research
Technology Trends
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Research,
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2013
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9. Sales Pulse Research
Technology Trends
Results
and
Analysis
of
Priority
Trends
by
Segment
–
Cloud,
WiFi
• Cloud
-­‐
Most
contacts
(70%)
see
con3nued
and
steady
growth.
Otherwise,
more
see
accelera3on
(17%)
vs.
slowing
(12%).
– Cloud
Frameworks
remain
fragmented
with
AWS,
Azure,
OpenStack,
CloudStack,
Vcloud…
– Service
Providers
con*nue
to
shiW
investment
to
infrastructure
for
cloud
services,
via
purchase
of
servers,
storage,
data
center
fabrics
and
sopware.
Strategic
partnerships
are
also
expected
to
accelerate
geographic
reach
and
offerings.
– As
expected,
vendors
are
making
moves
through
partnerships
and
M&A
to
fill
out
product
stacks
for
cloud
solu3ons
as
vendors
seek
alignment
of
network,
server,
storage,
virtualiza3on
sopware
and
management
tools.
Even
more
aggressive
moves
are
expected
in
2013.
– The
ship
of
spending
by
enterprises
to
cloud
services
moves
spending
away
from
higher
margin
servers,
network
and
storage
to
the
more
commodity
products
and
components
purchased
by
large
service
providers,
resul3ng
in
a
growing
head
wind
for
vendors
who
sell
into
large
enterprises
(ie
NetApp,
EMC,
Cisco,
HP,
IBM,
Dell
and
others).
– For
private
clouds,
enterprises
are
increasingly
choosing
bundled
solu*ons
such
as
Flexpod
(NetApp),
Vblock
/
Vspex
(EMC),
PureSystems
and
PureFlex
(IBM)
to
shorten
the
3me
required
to
deploy
systems
and
reduce
demand
for
scarce
exper3se.
– Companies
best
posi3oned
to
benefit
include:
VMware,
Rackspace,
Verizon,
Citrix,
Microsop,
FusionIO.
• WiFi
–
Input
on
WiFi
growth
remains
very
strong
driven
by
BYOD,
tablets,
DoD,
customer
reten3on
strategies
and
the
increasingly
mobile
workforce.
– Based
upon
recent
input,
we
believe
that
demand
for
WiFi
has
held
up
beLer
than
just
about
any
other
segment
due
to
the
strong
BYOD
trend
and
assisted
by
the
fact
that
the
size
of
many
WiFi
projects
and
orders
are
smaller
than
other
IT
projects.
– Cellular
offload
and
Service
Provider
WiFi
blanket
coverage
is
accelera3ng
into
a
3-­‐5
year
deployment
cycle.
We
are
following
several
very
large
(~$300m
to
over
$1B)
deployment
ini3a3ves
on
a
global
basis.
Cisco
remains
the
market
share
leader
in
this
market,
followed
by
Ruckus
and
Bel
Air/Ericsson.
Aruba
is
having
some
success
in
public
venues.
– WiLan
solu3on
providers
are
offering
new
higher
margin
sopware
based
features
and
offerings
for
policy
enforcement,
DPI,
Security,
Mobile
Device
Management
that
should
help
offset
margin
pressures
for
the
commodity
AP’s.
Aruba
and
Ruckus
are
expected
to
see
improving
demand
in
2013
for
their
SW
based
solu3ons.
– Companies
best
posi3oned
to
benefit
include
Aruba,
Ruckus,
Cisco,
Meru,
and
Xirrus
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10. Sales Pulse Research
Technology Trends
Results
and
Analysis
of
Priority
Trends
by
Segment
Data
Centers,
Storage
• Investment
in
Data
Centers
con3nues
to
rank
among
the
highest
priori3es
for
Government,
Web
2.0,
Enterprises
and
Service
Providers.
Unified
Compute
and
Unified
Storage
architectures
leveraging
sopware
integra3on
are
also
gaining
momentum.
– Cisco
con3nues
to
gain
momentum
with
UCS
and
Nexus.
– Brocade
is
also
benefiyng
as
those
refreshing
SANs
are
staying
commiLed
to
tradi3onal
Fiber
Channel
vs.
FCoE.
Addi3onally,
Brocade
con3nues
to
lead
the
switching
segment
with
their
SDN
strategy
and
Fabric
solu3ons.
– Juniper’s
PTX
product
is
winning
business
in
large
enterprises,
Web
2.0
as
well
as
in
the
Service
Provider
markets.
– Infiniband
con3nues
to
grow
as
an
interconnect
technology
in
HPC
and
Web
Scale
data
centers.
Although
demand
is
lumpy,
as
seen
in
Mellanox’
results,
the
niche
market
for
IB
con3nues
to
expand.
– There
is
a
high
level
of
an3cipa3on
for
the
next
genera3on
of
servers
and
processor
architectures
from
Intel,
AMD
and
ARM
from
vendors
like
Quanta,
SuperMicro,
Calxeda...
In
addi3on
to
delivering
low
power,
higher
performing
denser
compute,
these
systems
provide
for
high
speed
interconnect
on
and
between
motherboards
and
processors.
Implementa3on
of
these
systems
is
expected
to
drive
network
upgrades,
however
they
are
also
expected
to
reduce
the
#
of
required
VM’s
and
reduce
port
requirements
for
Top
of
Rack
switches
which
will
impact
the
switching
vendors.
– Enterprises
prefer
bundled
solu3ons
and/or
reference
architectures
(as
discussed
under
Cloud)
to
achieve
faster
deployment
3mes
and
reduce
resources
needed
for
integra3on,
tes3ng
and
support.
– Companies
best
posi3oned
to
benefit
include:
Cisco,
Brocade,
Juniper,
F5,
Arista,
Citrix,
and
IBM.
• Storage
con3nues
to
be
highlighted
as
an
ongoing
area
of
priority
however
the
ship
to
SSD
and
commodity
disk
is
impac3ng
the
tradi3onal
suppliers
high
margin
HW
businesses.
Newer
SW
and
feature
integra3on
efforts
are
priority
#1
leading
to
Unified
Storage.
– This
year
much
of
the
posi3ve
comments
were
from
VARs
who
men3oned
smaller
vendors
like
Nimble,
Tegile,
Tintri,
NextGen,
Fusion
IO,
Nimbus,
Pure,
Violin,
and
WhipTail.
Although
the
majority
of
spending
remains
with
incumbent
vendors,
end
users
are
more
frequently
making
tac3cal
choices
to
find
lower
cost
and/or
higher
performance
storage
solu3ons
for
new
applica3on
deployments.
SSD
arrays
have
broadened
the
deployment
op3ons
for
end
users.
– As
in
other
segments,
end
users
are
breaking
up
projects
and
releasing
smaller
orders
only
to
meet
short
term
requirements.
Storage
appears
to
be
an
area
of
pent
up
demand
that
is
poised
to
accelerate
with
a
more
favorable
economic
outlook.
Sales
Pulse
Research,
LLC
2013
All
rights
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10

11. Sales Pulse Research
Technology Trends
Results
and
Analysis
of
Priority
Trends
by
Segment
VoIP
/
UC,
WAN
Op3miza3on,
Virtual
Desktop
• VoIP/Unified
Communica*ons/Infrastructure/SIP
Trunking
(SBC)
–
Due
to
the
posi3ve
ROI,
this
segment
remains
on
an
accelera3ng
growth
trajectory,
although
we
uncovered
evidence
of
temporary
weakness
due
to
EoY
budget
constraints.
– Based
upon
survey
input
we
believe
that
we
are
s3ll
early
in
the
mul3-­‐year
UC
market
adop3on
curve
and
we
expect
investment
in
infrastructure
to
support
SIP
trunks
and
voice
transforma3on
projects
to
remain
high
priori3es
in
2013.
– Contacts
highlight
Microsop
as
gaining
more
share,
others
view
Cisco
as
the
biggest
winner
and
remain
consistent
in
repor3ng
share
loss
by
Avaya.
Broadsop’s
BroadCloud
hosted
UC
is
gaining
support
of
several
Tier1/2
service
providers.
– Regarding
Enterprise
SBC’s
we
con3nue
to
uncover
wins
by
Acme,
Cisco,
with
improving
demand
for
Sonus
and
Audiocodes.
– Vendors
best
posi3oned
to
benefit
include:
Plantronics,
Polycom,
Shortel,
Acme
Packet,
Sonus,
Cisco,
Broadsop,
Audiocodes.
• WAN
Op*miza*on
–
Input
on
the
growth
of
the
WAN
Op3miza3on
market
remains
mixed.
– Some
see
con3nued
growth
while
others
see
growth
slowing.
All
agree
however,
that
Riverbed
con3nues
to
lead
and
gain
market
share
and
likely
to
outpace
the
overall
growth
expecta3ons
of
~10%.
– Silver
Peak
also
con3nues
to
gain,
as
Cisco,
and
Juniper
give
up
market
share.
Exinda
is
geyng
some
aLen3on
with
their
lower
cost
solu3on.
– New
applica3on
use
cases,
integrated
security/NGFW
partnerships,
and
CSP/Telco
channels
are
contributors
for
accelerated
growth
in
2013.
• Virtual
Desktop
and
End
User
Compu*ng–
Aper
a
slow
and
open
uncertain
start,
input
is
more
posi3ve
regarding
the
adop3on
curve
of
VDI
in
large
enterprises,
financials,
government,
healthcare
and
service
providers
for
2013.
– Microsop,
Citrix,
VMware,
and
Dell
are
seeing
improving
demand
for
their
respec3ve
VDI
solu3ons
as
organiza3ons
move
towards
EUC.
– Although
the
ROI
on
VDI
is
s3ll
not
as
straight
forward
as
for
server
virtualiza3on,
VDI
elements
have
become
more
mature
and
easier
to
implement
and
manage
especially
with
the
con3nued
adop3on
of
servers
with
integrated
SSD.
Sales
Pulse
Research,
LLC
2013
All
rights
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11

12. Sales Pulse Research
Technology Trends
Results
and
Analysis
of
Priority
Trends
by
Segment
Applica3on
Delivery,
Security
• Applica*on
Delivery
Controllers
–
We
believe
that
this
market
segment
remains
a
priority
and
will
see
con3nued
growth
above
10%,
although
we
uncovered
temporary
weakness
in
Q4
which
is
likely
to
con3nue
into
Q1
2013.
– We
see
no
challenge
to
F5s
leadership
in
the
near
term,
however
startups
like
Embrane,
Linerate
Systems
and
VMWare
and
Riverbed’s
SW
based
approaches
are
gaining
mindshare.
– Survey
input
also
highlights
a
resurgence
in
Brocade’s
ADC
business.
The
BRCD
ADC
scrip3ng
is
very
easy
to
configure,
customize
and
support.
It
is
being
adopted
in
mul3-­‐tenant
environments
by
CSP’s
and
Tier1
Service
Providers.
– Radware
is
doing
well
in
some
geographies,
although
input
suggests
that
their
security
solu3on
is
driving
more
of
their
growth.
– Citrix’
success
appears
to
remain
limited
with
exis3ng
accounts
and
to
new
opportuni3es
that
are
driven
by
their
sopware.
One
area
of
growth
has
been
in
healthcare,
where
Epic
Sopware
is
domina3ng
and
Citrix
has
been
part
of
the
standard
configura3on.
• Security
–
Evidence
points
to
con3nued
replacement
of
legacy
firewalls
with
Next
Gen
Firewall
(NGFW)
solu3ons
and
UTM
devices.
– We
believe
security
momentum
slowed
in
Q4
and
likely
Q1
due
to
budget
constraints
but
is
expected
to
reaccelerate
in
2013.
– Palo
Alto
con3nues
to
disrupt
the
marketplace
although
their
aggressive
expansion
has
caused
some
conflict
among
channel
partners.
– Cisco
and
Juniper
are
most
open
men3oned
as
losing
share
and
are
expected
to
add/upgrade
their
product
lines
this
year.
– We
expect
security
vendors
to
introduce
new,
lower
cost/Mb
very
high
performance
NGFWs
pla{orms
this
year
leveraging
solu3ons
from
Cavium
,
Netronome
and
Intel
based
architectures.
– We
expect
2013
to
be
an
interes3ng
year
as
Palo
Alto’s
mindshare
and
market
share
growth
is
challenged
by
Sourcefire
and
For3net
as
well
as
from
new
offerings
from
Cisco,
Sonic
Wall/Dell,
Juniper
and
perhaps
F5.
Sales
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13. Sales Pulse Research
Technology Trends
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2013
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14. Sales Pulse Research
Technology Trends
Impact
of
SDN
on
IT
Spending
in
2013
SoWware
Defined
Networking
(SDN)
and
the
SoWware
Defined
Data
Center
remain
a
mul*-­‐year
Evolu*onary
End
User
Transforma*on
• Enterprise/IT
and
Data
Center
contacts
an3cipate
early
adop3on
this
year
with
liLle
impact
on
mainstream
IT
in
2013.
Research
supports
the
disrup3ve
evolu3onary
trend
playing
out
over
the
next
several
years
while
impac3ng
current
design
decisions
and
architectural
strategies.
• Contacts
in
the
service
provider,
CSP
markets
indicate
that
2013
will
see
pilot
projects
and
evalua3ons
and
highlighted
accelera3ng
ac3vity
and
expect
significant
changes
as
the
SDN
market
matures…
• We
are
con3nuing
to
follow
the
complex
web
of
public
and
private
companies
in
addi3on
to
the
changing
percep3ons
regarding
orchestra3on,
customiza3on,
integra3on,
configura3on,
workflow
placement
and
automa3on
along
with
the
rumina3on
that
coincides
with
the
hype
cycle
we
are
currently
experiencing.
One
thing
is
for
certain
based
on
our
ongoing
research,
hardware
based
approaches
in
networking
for
the
data
center
are
a
commodity
and
every
supplier
has
no
uncertain
percep3on
the
game
has
changed
and
they
may
not
even
be
in
the
playbook.
• Our
research
points
to
further
consolida3on
and
expansion
of
supplier
partnerships
with
open
SDN
controller
approaches
for
the
likes
of
EMC/VMware,
IBM,
Microsop,
Oracle,
Cisco,
Brocade,
HP,
Citrix,
NEC,
Dell...
We
con3nue
to
follow
Cisco’s
evolving
marke3ng
efforts
to
stem
mindshare
losses
while
protec3ng
their
legacy
HW
business.
Cisco’s
SDN
story
has
notably
improved
over
the
past
few
months
based
upon
input
from
industry
contacts
and
end
users.
• We
remain
surprised
as
to
how
quickly
the
industry
has
adopted
the
SDN
philosophy
across
nearly
every
infrastructure
and
IT
ver3cal.
Our
ongoing
research
is
focused
on
the
progress
that
includes
emerging
business
models,
use
cases
and
secular
changes
that
are
occurring
with
service
providers,
Web
2.0,
government
and
large
enterprises.
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2013
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15. Sales Pulse Research
Technology Trends
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16. Sales Pulse Research
Technology Trends
Results
and
Analysis
of
the
Ship
to
the
Cloud
• Most
contacts
(70%)
see
con3nued
steady
growth
in
spending
on
Cloud
services.
Otherwise,
more
see
accelera3on
(15%)
vs.
slowing
(10%).
Comments
indicate
the
usual
considera3ons
including
security
and
selec3vely
choosing
apps
for
to
move
to
the
cloud.
The
benefits
of
lower
CAPEX,
reduced
need
for
expensive
personnel
and
flexibility
outweigh
the
nega3ves.
Most
see
organiza3ons
developing
cloud
strategies
that
includes
Hybrid
clouds
and
various
selec3ons
of
Sopware
(SaaS),
Pla{orm
(PaaS),
and
Infrastructure
(IaaS)
services.
• As
spending
ships
from
the
enterprise
to
the
cloud,
margins
for
hardware
and
most
soWware
vendors
are
reduced.
In
some
cases
equipment
requirements
are
reduced
due
to
more
dense
sharing
of
components
of
the
infrastructure.
Service
providers
tend
to
buy
more
commodity
components;
they
leverage
more
open
source
sopware
and
they
achieve
larger
discounts
through
higher
volume
purchases.
• Quote
from
a
mid
sized
channel
partner:
“We
recently
provided
a
quote
for
a
opportunity
that
included
900
servers.
In
the
past,
we
would
have
been
fully
engaged
in
the
sales
cycle
for
this
size
opportunity,
from
discussing
the
requirements,
designing
a
solu3on
to
providing
detailed
configura3ons
and
a
proposal,
with
plenty
of
face
3me
with
the
end
user
and
maybe
an
execu3ve
briefing.
Now
more
customers
have
the
resources
to
do
all
this
themselves.
In
this
case
they
just
sent
us
their
detailed
configura3ons
and
asked
for
our
best
price.”
• The
overall
impact
of
the
shiW
of
spending
to
cloud
providers
is
a
nega*ve
headwind
for
vendors
who
have
historically
sold
on-­‐
premise
based
enterprise
solu3ons,
including
Cisco,
EMC,
Netapp,
Oracle,
HP,
Dell…
However,
the
ship
represents
new
opportuni3es
for
the
same
companies
as
well
as
emerging
companies
not
tradi3onally
considered
on
the
hosted
side
when
decisions
on
RFP’s
and
infrastructure
is
built
to
support
the
move
off
premises.
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2013
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17. Sales Pulse Research
Technology Trends
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2013
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18. Sales Pulse Research
Technology Trends
Impact
of
Cloud
spending
on
VARs
and
SIs
• 70%
of
respondents
believe
that
the
ship
towards
Cloud
and
managed
services
represents
a
significant
opportunity
for
VARs
and
System
Integrators
to
add
value
to
their
customer
base…
however,
follow
up
discussions
suggest
the
changing
business
models
and
the
move
from
transac3on
to
recurring
revenue
is
proving
a
more
difficult
transi3on
due
to
the
lower
human
resource
element
of
cloud/
managed/hosted
services
vs.
on-­‐premise
support.
• In
addi3on
to
resale
of
managed
services,
opportuni3es
exist
for
support
services,
online/onsite
training,
and
the
integra3on
of
reference
architectures
and
the
support
legacy
Tier1
applica3ons.
• Several
survey
respondents
noted
that
Cloud
channel
programs
are
just
emerging
and
s3ll
not
well
formed
in
terms
of
a
WIN/WIN
for
both
SaaS/PaaS
providers
and
frontline
VARs.
• Contacts
also
highlighted
that
VARs
will
need
to
evolve
their
primary
business
models
to
take
advantage
of
the
Cloud.
Their
challenge
is
to
offer
a
compe33ve
advantage
by
developing
an
understanding
of
cloud
architectures
and
the
ability
to
design
or
have
partners
design
secure
Cloud
systems.
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Pulse
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2013
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rights
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19. Sales Pulse Research
Technology Trends
Private
Company
Views
Private
Vendors
receiving
posi1ve
comments
(We
are
happy
to
discuss
in
further
detail
if
interest
exists):
Arista
-­‐
Growth
con3nues
for
sopware
defined
networking
and
large
cloud/data
center
deployments.
Embrane
–
Distributed
SDN
for
on-­‐demand
services.
Silver
Peak
-­‐
Technology
leadership
via
scalability
along
with
strategic
partnerships
con3nue
to
support
market
share
gains
in
the
WAN
op3miza3on
market.
Cyan
-­‐
Tier2/3
Telco
and
MSO
share
gains
for
access
and
converged
metro
transport
applica3ons.
Ac*ve
Video
–
Cloud
based
video
delivery
framework
likely
being
adopted
by
Tier
1
Service
Providers.
Fireeye
–
is
a
leader
in
next
gen
security
targe3ng
advanced
malware,
zero-­‐day
and
targeted
APT
aLacks
Gigamon
–
is
growing
quickly
providing
traffic
monitoring
solu3ons.
We
are
an3cipa3ng
con3nued
growing
demand
and
a
posi3ve
IPO
recep3on.
Veeam
–
is
gaining
share
in
the
backup
and
replica3on
market
including
virtual
environments.
Netronome’s
network
flow
processing
is
under
the
covers
in
a
growing
number
of
security
and
DPI
devices.
Avere
–
leverages
solid
state
disk
and
real-­‐3me
3ering
to
reduce
cost
and
op3mize
storage
performance.
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2013
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20. Sales Pulse Research
Technology Trends
Private
Company
Views
Private
Vendors
receiving
posi1ve
comments
(We
are
happy
to
discuss
in
further
detail
if
interest
exists):
Linerate
Systems
–
an
SDN
oriented
early
stage
company
providing
L7+
policy-­‐based
traffic
management
using
off
the
shelf
hardware.
Jeda
Networks
–
is
developing
Sopware
Defined
Storage
Networks
to
leverage
the
opera3onal
and
cost
advantage
of
SDN
to
storage.
Plum
Grid
–
Network
virtualiza3on
for
sopware
defined
data
center.
Plexxi
–
recently
out
of
stealth
–
delivering
a
SDN
switch
with
integrated
op3cal
technology
Forescout
–
provides
network
access
control;
seeing
a
boost
in
demand
from
the
BYoD
trend.
Sales
Pulse
Research,
LLC
2013
All
rights
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21. Sales Pulse Research
Technology Trends
For
more
informa3on
contact:
Williams
C.
Hay
Tom
Morphis
404-­‐229-­‐4995
404-­‐217-­‐7626
williams@salespulse.net
tom@salespulse.net
Copyright
2013,
Sales
Pulse
Research,
LLC
®
All
rights
reserved.
Important
Disclosures:
Facts
and
the
other
informa3on
contained
in
this
report
have
been
obtained
from
public
sources
considered
reliable
but
are
not
guaranteed
in
any
way.
No
independent
confirma3on
of
the
truth,
correctness
or
accuracy
of
the
informa3on
presented
has
been
made
by
Sales
Pulse
Research,
LLC.
This
report
is
published
solely
for
informa3on
purposes
and
is
not
an
offer
to
buy
or
sell
or
a
solicita3on
of
an
offer
to
buy
or
sell
any
security
or
deriva3ve.
Sales
Pulse
Research,
LLC
accepts
no
responsibility
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loss
or
damage
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by
any
person
or
en3ty
as
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any
such
person's
or
en3ty's
reliance
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informa3on
presented
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report.
Opinions
and
es3mates
expressed
herein
cons3tute
judgments
as
of
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date
appearing
on
the
report
and
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subject
to
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Research,
LLC
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in
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All
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and
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and
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in
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accurately
reflect
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of
Sales
Pulse
Research,
LLC.
No
part
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compensa3on
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is,
or
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or
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research
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No
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Research,
LLC.
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herein
has
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obtained
from
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believed
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but
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it
not
necessarily
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and
accuracy
is
not
guaranteed.
Confiden3ality
No3ce:
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is
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or
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