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Executive Summary Latest News Executive Summary Business tablets; UK in the news Is the enterprise reclaiming the tablet market? There had been some concerns that the large numbers of tablet-sized devices sold at low prices to consumers would skew the business and tablet development, but the latest research shows that higher specification tablets, with better connectivity, are winning through. The enterprise market is seeing a lot of use of these sorts of application-driven solutions, which is all good news for channels and developers. There was more good news for Europe in Cisco's results; the return to positive numbers, particularly in the north is encouraging; it may mean that some of the investment moves back to Europe after being positioned for emerging areas. Russia, where Cisco planned to spend a billion dollars, was a bit worrying with a 28% fall, but anyone who knows this market recognises what an up-down switchback of a ride it usually is. The UK was in the news twice this week - first for the merger of two large retailers to form a major phones to IT outlet, Carphone Dixons. And again with major eastern European developer Luxoft moving its tax base from Cyprus to London. Both moves, coming on top of good UK economic figures, mean the industry can feel a bit more confident about channels and business confidence generally. Latest News Nimble Storage signs Ingram Micro Europe Nimble Storage has announced a distribution deal with Ingram Micro Europe. Under the terms of a deal, Ingram has become a distie for Nimble Storage’s portfolio of flash storage arrays. Also, Ingram Micro Europe’s Advanced Division Solutions will start offering Nimble’s SmartStack converged infrastructure solutions to partners and resellers across Europe, it says. Nimble has developed SmartStack, built on Cisco UCS and pre-validated through ecosystem including VMware, Citrix and Microsoft. According to Ingram, the company plans to use its strong relationships with Cisco’s channel in Europe to make Nimble’s SmartStack solutions available to providers. Additionally, Ingram has invested in its Advanced Solutions Division to strengthen its channel offering. Investments cover pre-sales, technical expertise and reseller enablement services, among others. “Ingram Micro has significant channel and market presence in the storage market. By partnering with Ingram Micro we are providing another avenue for partners to procure our flash storage solutions globally. Further, we believe Ingram Micro’s strong relationships with our alliance partners, Cisco and Citrix, make this partnership even more beneficial for resellers seeking our converged infrastructure solution,” says Kristin Carnes, director of channel sales, Nimble Storage. Tablets move up-market Tablet sales are moving up-market, with modem connections becoming more popular and prices rising. Apple and Samsung combined for 71% of the 41.3 million branded tablets in the first calendar quarter of 2014, according to early vendor shipment share estimates from market intelligence firm ABI Research. This is the closest the two leading vendors have come to date and the pair remains well-ahead the rest of the pack. “Despite questions remaining about data disclosure in 2010 and 2011, Samsung’s release of tablet sales data this past quarter is a good sign for the mobile computing market,” says senior practice director Jeff Orr. “Whether due to its confidence in the economy, its own business, or a combination of reasons, Samsung continues to demonstrate tablet growth as its 2013 retail push in North America and Western Europe pays off.” The first three months of the year remain a seasonal low-point for tablets as with other computing and CE markets. Apple's share dropped 10.1% with 16.4 million units, as Samsung rose 11% to 13 million units. The mix of tablet operating systems is also showing signs of stability with only minor changes in shipment share. Android continues to lead new tablet shipments at 56.3% for 1Q 2014 followed by iOS at 39.6% and Windows 8/RT at 4.1% with an accuracy of +/- 3% due to vendors yet to report. A bright spot in the quarter was the tablet attach rate level of mobile broadband modems (3G and 4G). Some 22% shipped with an embedded modem, which is the highest penetration seen since the September quarter of 2011. “As major advanced markets become saturated, buyers are expanding their tablet use case, which is also pushing up the ASP in these markets,” adds Orr. Europe returns to positive for Cisco Cisco sees "continued stabilisation" across Europe with order strength in the UK up 7%, Germany up 5%, and northern Europe as a whole up 4%. It has just reported Q3 FY '14, where it says it “executed well as we managed through the transitions in our business and markets, resulting in our financial performance above our expectations”. From a top and bottom line perspective, total revenue was $11.5bn, down 5%. Router revenue fell 10%, but orders were nearly flat. Switch sales fell 6%. Orders in our emerging markets declined 7% with the BRICs plus Mexico down 13%. "As we said for several quarters, we expect these challenges to continue. The challenges we saw included Brazil, down 27% and Russia down 28%." John Chambers once more states Cisco is seeing price pressure in markets such as campus switching (Huawei and HP are competing aggressively here), but insists software-defined networking (SDN) isn't a factor. Switching, emerging markets, and carrier sales are expected to stay pressured near-term. The market is changing, and Cisco is evolving to match it, it says. Robert Lloyd, President, Development and Sales: “We are seeing a number of our customers of all types begin to look at not just recurring revenue, but kind of a pay-as-you-go or pay-as-you-drink type of approach. We've closed a number of key deals and these are $100 million type of deal this quarter alone that we'll see the results on over the next three to five years, but it shows very little impact in terms of this quarter.” Data center (UCS server) sales remain strong, growing 29% Y/Y with market share gains against Dell, HP and IBM). But service provider video sales, down -26% remain weak. On the data centre business, UCS, Robert Lloyd feels “candidly, very comfortable with us continuing to beat our competition, IBM, HP and Dell. “Our growth of 29% against, I think, the three of them added together which might have shown negative growth in terms of Blade servers. Our real competition here is white label. We saw this coming three to four years ago. We're going to sell architectures in the white label approach as opposed to standalone products. I personally believe standalone products from any company, whether its standalone switch or a standalone server will get squeezed pretty hard. And so our competition there is architecture and how you bring compute and network and storage together, how you bring that together with application-centric infrastructure and bring it down the environment.” ShoreTel names Sales Head in Europe ShoreTel has announced it has appointed Georges Millet as its new European Sales Director. He will be based in Germany from where he will drive European revenue growth and partner acquisition in the investments regions including the UK, France, Germany and Spain. Millet joins from LifeSize-Logitech where he served as EMEA channel and alliances director and regional sales director for mature European markets. He has over 20 years of sales and channel experience and his previous works include Autodesk and McAfee, where Millet was vice president of EMEA channels. “Georges’ experience and past achievements make him uniquely qualified to help strengthen ShoreTel’s presence in EMEA and drive brand awareness in the region. The appointment of Georges also further highlights the emphasis ShoreTel is placing on businesses in EMEA, and the company’s desire to further expand and deliver growth throughout Europe,” says Adrian Hipkiss, vice president and managing director of EMEA at ShoreTel. Mitel updates portfolio UC solutions specialist Mitel has announced a change in its portfolio as a result of a merger with Aastra Technologies, acquired by the end of 2013. Mitel plans to focus on regional market requirements, delivering protection of investments of existing customers and common desktop communications solutions, with a migration path to cloud communications. What is more, Mintel wants to continue development of its common desktop portfolio with the new investments targeted for mid-2015. The company will also keep on investing in its applications portfolio with first feature integration expected in 2014. With a strong focus on communication and collaboration, the company also supports open standards and major industry frameworks such as Google and Microsoft, it says. Some other enhancements include solutions that offer integrated business communications and applications so they add value to Microsoft Lync-based solutions. Mintel also plans to increase contact centre capabilities. “Our product integration strategy reflects our commitment to customers and channel partners, designed to ensure we can continue to support their businesses and protect their investment in us. The combined Mitel and Aastra portfolio is used by over 60 million people worldwide, so we have to ensure that while our integration strategy has a common goal, it still delivers against specific regional requirements and market dynamics,” comments Rich McBee, CEO, Mitel. Luxoft continues growth, moves tax regime to UK Luxoft's Q1 saw its GAAP revenue at $106.3 million, an increase of 23.7% year-over-year and a decrease of 3.9% sequentially. There have been concerns because much of its work is done in Ukraine, but a statement by its CEO in March helped reassure customers.
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