Goldman Sachs' latest IT spending survey is out and it looks a tech-spending recovery is on the way for 2010. To a large extent, the data suggests not so much that spending is dramatically higher, but that it has normalized at pre-recessionary growth rates, rather than contracting as it has over the past several months.
Goldman is cautiously optimistic about 2010 spending, noting that much of it depends on the macro-economic environment driving more business spending. And while most areas will see growth counter to 2009's downward spiral, some areas such as off-shore development will feel significant retraction.
Regardless, the sentiments are positive and dramatically different than Goldman's report from November 2008 where IT spending was in a total death spiral. What a difference a year makes.
A few key points from the report:
- With recessionary buying cycle clearly through the trough, the remaining question centers on the pace of recovery for 2010.
- Infrastructure, application development, and systems integration remain top spending areas, especially as CIOs start to consider newer technologies such as virtualization and cloud computing.
- There is pent-up demand in hardware most notable, positive for storage and server/PC refresh.
- The appetite for offshore services appears to be below trend at current levels.
- HP, NetApp, CommVault, Red Hat, Riverbed, and Salesforce.com are notable names showing positive upward momentum in our latest survey.
In software, Red Hat and Salesforce.com showed strengthened results with VMware and Citrix remaining top of mind, which Goldman believes to be a good indication of internal and external cloud deployments gaining momentum.
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The Nintendo Wii remains a force to be reckoned with in the video game world and new survey statistics along with new revenue streams suggest that Nintendo has still has something up it's sleeve.
New survey data from Lottay, an online wish-list and gift giving site, shows that the Wii and its associated accessories will regain momentum during this year's holiday season.
The Wii and Wii-related gear were wished for twice as much as the Sony PS3 and Xbox 360 combined though 38 percent of people wanted something other than products--namely cash, and in one case, Satan (I assume for a visit, not as a full-time family member.)
And while a wish, or a request for a gift, is no guarantee that a product will actually sell, there is a dearth of exciting gifts for this holiday season, leaving room for the Wii and other less-new products to be successful.
Just a few weeks ago, Electronic Arts CEO John Riccitiello commented that the "Wii platform has been a little weaker than we had anticipated" but Nintendo of America's executive vice president of sales and marketing Cammie Dunaway was extremely positive about the current sales and the future growth.
But, the focus in the U.S. remains on selling more titles and accessories, not branching out into additional services such as we've seen with Microsoft's Xbox Live, which provides access to Facebook, Twitter, and Last.fm through the console.
Services supporting the Wii are much more sophisticated in Nintendo's home country of Japan, where the company previously launched an advertising program to turn family time into a commercial endeavor and a catering channel that lets users order food from a variety of vendors directly through the console, delivered directly to their front door.
This weekend Nintendo added to the Wii's variety of interactive offerings, with a paid video download service for Japan. "Theater no Ma" will offer a range of movies, anime and other paid content from providers including Walt Disney and Sesame Workshop.
Downloading rental content onto game consoles and set-top boxes has been common in the U.S for awhile, but the reason this service could prove meaningful in Japan is because Nintendo researchers previously found that 87 percent of Wii users use the console on the biggest screen in the house, which is still the one in the living room.
My previous post about mobile data sync brought in several public comments and many more private e-mails from various companies asking for perspective on how the leading mobile platforms will compete in the sync space and whether or not start-ups like Funambol can compete.
More than anything else, the leading mobile devices--the iPhone and BlackBerry, are marketed more effectively than any other platform, especially Windows Mobile, which by all counts should be the leader.
It's not that Windows Mobile is so terrible (you can decide for yourself), but that Microsoft hasn't done enough to make users want to use it.
In a conversation today, I learned a bit about Microsoft's My Phone service, which I had previously never heard of, and also a bit about Palm's strategy in relation to making the Pixi a device of choice for the younger set. Minutes later, the two worlds collided when I hit the My Phone site and came across this image of bitter irony.
It's an ad for a Palm product that doesn't run Windows Mobile, or work with the Microsoft service, running on the MSN ad network, prominently displayed on the My Phone page. It confused me so much that I actually clicked on the ad to see if the services were somehow related.
There definitely is some logic from the Palm side--i.e. getting users to their devices, but this is an interesting failure of contextual advertising for Microsoft, allowing a direct competitor dominate the banner ad on their service page. Really, neither side benefits from the ad placement and considering the woeful state of both businesses, one would hope they care enough to not embarrass themselves and at least keep competitor ads off of their own sites.
While neither Windows Mobile nor Palm will be totally dead any time soon, if I'm on Apple's iPhone team, or working on Android, I wouldn't be too worried.
As consumers increasingly purchase sophisticated smartphones such as the iPhone, BlackBerry, and Droid, they are developing expectations for how these phones allow contacts, calendars, e-mail, and social networks to remain in sync across all their devices.
One of the big challenges is that users don't always maintain the same source of inputting data--they switch from browser to desktop application to smartphone as their data access and entry point, introducing many variables into the data chain. And data integrity will only get more complicated as more applications become browser-based and keep no local data storage.
Most enterprise users have a local store in addition to the cloud storage, something that I still find puzzling from the T-mobile Sidekick outage, where consumer data that should have been in multiple locations (or at least present on the device) was thought to be lost.
The most common sync services are not provided directly by the mobile operator. Generally this is a good thing, as the more you can dis-intermediate the carrier, the more control you have over your data. But because the sync services are provided by others--notably Microsoft, Google, and Apple--you end up locked-in to their data structures as well as whatever privacy and data management issues that might arise in relation to advertising or other usage of your information.
Today, you can fairly easily sync your mobile device with most common online e-mail and PIM services although the BlackBerry, Droid, and the iPhone differ in their approaches--or at least in the visibility of how they work. For example, you can sync with Gmail and other services on the iPhone, but it rather perversely requires the Microsoft ActiveSync protocol.
By controlling the address book, Google and Apple effectively lock-in users to their sync service, leaving the carriers and devices to be easily replaced (minus the cancellation charges.) The user would barely notice the difference, aside from the sticker on his phone that says AT&T or Verizon.
Mobile operators do not want to cede control of the address book to Google or Apple, but they are late to the game and do not yet have sync solutions of their own. As a result, they are scrambling to add this functionality, but building a sync solution that works with all different devices and email services is no easy task, thanks to the widespread problem of device fragmentation in the industry.
One option is to deploy a white label solution, like the open mobile cloud sync offered by Funambol. Funambol CEO Fabrizio Capobianco told me the company has been approached by many of the top mobile operators, with several of them looking to setup sync services for their customers. They all recognize the issue, and according to Capobianco can turn to Funambol as a way to quickly bring a high-quality solution to market.
With all the different players in mobile sync, users will begin to question who owns their data. Enterprise users, in particular, should have privacy concerns about trusting their data to someone else. In the case of Android users, there is a growing anti-Google sentiment, and if Google already owns your email, calendar, and search queries, do you really want them to own your phone contacts as well?
Microsoft released on Thursday a new position paper, "Privacy in the Cloud Computing Era: A Microsoft Perspective," that includes information about the remote storage and processing of personal information.
Privacy and security concerns continue to be a primary argument that cloud naysayers use against storing data and applications on the Internet. Big IT vendors and service providers like Microsoft and Hewlett-Packard will sooner or later be forced to take the cloud seriously or risk missing out on the whole next wave of IT consumption. And their large enterprise customers will expect them to offer cloud services with the appropriate levels of privacy and security measures in line with their business needs.
The interesting thing about this paper is that Microsoft takes surprisingly minimal responsibility for the data it will manage:
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With the launch of Windows 7 many signs point to the fact that Microsoft seems to have gotten its operating system engineering in order. That's obviously good news for its OS business unit and also good news for PC manufacturers and software companies that develop for Windows.
A rising tide of Windows adoption is not a bad thing for the technology industry in economic terms but it doesn't yet do a lot to enhance the way we use computers and applications in our every day lives.
The main problem is that Windows 7 reinforces a desktop centric-paradigm for 93 percent of the market and continues to exert a certain level of misguided design principles in the way the system handles data and file structures. And while it's a giant leap forward in terms of customization, visual effects, and security there is a missed opportunity in the cross-border approach of combining the desktop and cloud services.
Cloud-based applications and storage are still so nascent that Microsoft could jump in and usurp much of the power and market share while shoring up its cloud story for the future. Having the dominant desktop landing pad gives Microsoft a huge advantage over upstarts--even Google and Apple, if it can focus on integrating the services.
Here are a few ways Microsoft could assert its dominant desktop position to compete with Google and Amazon as a cloud player:
... Read moreIBM and Canonical, the commercial entity behind Ubuntu Linux, on Tuesday are launching a combined cloud and Linux desktop package designed for Netbooks and low-end PCs.
For those of us still waiting for Linux to hit the desktop, this type of packaging may be exactly how the move from Windows starts to pick up steam.
The IBM Client for Smart Work was first launched in South Africa in September and was initially geared toward emerging markets. IBM found that there was strong interest in the U.S. and other markets that had aging PC infrastructure and little desire for continued Windows upgrades.
The U.S. version of the package contains a number of IBM products including word processing and spreadsheets via Lotus Symphony, e-mail via Lotus Notes or LotusLive iNotes, and collaboration tools from LotusLive.com. As with the previously launched initiative, the package runs on Ubuntu Linux.
Bob Sutor, IBM's vice president of Linux and open source, told me that the target is not a drop-in replacement scenario, but rather something for IT shops that don't want to be stuck in an endless cycle of upgrading desktop operating systems and applications.
This is an interesting development for multiple reasons:
- IBM and Canonical are teaming up to bring Linux to the desktop, offering what could be considered a next-generation thin-client that relies on cloud services but remains based on an actual operating system rather than just running in a Web browser.
- IBM is targeting Windows installations in the co-opetition model the company excels in--effectively insulating itself regardless of who wins the desktop.
- Canonical is building a channel to deliver solutions rather than depend on individuals and organizations to roll their own.
As market research firm NPD Group prepares to release sales data data for the U.S. game market next Thursday, other analysts have predicted a return to double-digit growth after six months of decline.
According to Edge Online, Wedbush Morgan Securities analyst Michael Pachter and Electronic Entertainment Design and Research's Jesse Divnich expect monthly software sales of $750 million (up 21 percent year over year) and $715 million (up 16 percent), respectively. And while these are still just estimates, it shows that consumers are still willing to spend on high-quality new games.
EEDAR's top 10 forecast:
Halo 3: ODST (360, Microsoft) - 1,800,000
Wii Sports Resort (Wii, Nintendo) - 500,000
The Beatles: Rock Band (Wii, EA) - 350,000
The Beatles: Rock Band (360, EA) - 325,000
Marvel: Ultimate Alliance 2 (360, Activision) - 300,000
Madden NFL 10 (360, EA) - 275,000
Batman: Arkham Asylum (360, Eidos) - 250,000
Batman: Arkham Asylum (PS3, Eidos) - 250,000
Guitar Hero 5 (360, Activision) - 250,000
Guitar Hero 5 (Wii, Activision) - 200,000
One interesting note on the top 10 list is that it contains only seven titles, which shows the importance of supporting multiple consoles.
If recent research is any indication, Amazon.com and Google are winning the cloud game.
Evans Data on Tuesday released a report (registration required) on how developers perceive cloud service providers related to cloud services offerings, including their completeness and the companies' ability to execute on the vision.
Janel Garvin, the founder of Evans Data and the author of the report, provides excellent insight into the current state of the market and how quickly things could change, if certain large vendors (notably AT&T and Microsoft) got their acts together more quickly.
Given their robust services, it isn't surprising that Amazon and Google top the list. And although IBM, VMware, and Microsoft trail, each offers important components of cloud infrastructure.
... Read moreMicrosoft's launch party videos have proven to be entertaining to viewers even if not for the reasons for the marketing department had hoped for. There were a great many comments on my post that provided context to their release, but generally speaking most industry-watchers have been confused as to the goals behind the program, questioning the target audience not just for the videos, but for the launch parties as well.
I reached out to Microsoft for comment but they withheld at this time as the videos are apparently just one step in a much larger integrated marketing campaign.
I personally found the most recent video weird, but after thinking through things a bit I think this is a case of a good idea hampered by poor execution. The videos are well-done and professional and try to connect with consumers in a humanistic tone. The fact that it feels like you stumbled into a shiny-happy Windows world filled with sit-com throwaways is the problem. Even if this is a training video to show others how to throw a launch party, it's hard to connect with the vapid characterizations of party guests.
This is the crux of Microsoft's marketing problems. It's not that they aren't good at technical marketing issues, it's that the brand itself is so voluminous, it's very hard for people to connect to specific products like Windows. And the efforts to persuade consumers isolate the tech media and confuse IT shops.
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