How channels win selling cloud Again the transition in the industry is apparent in this week's news - on top of the publication of falling PC shipments in Europe comes the revelation from Europe's biggest software business, SAP that half its sales in two years' time will be cloud products. SAP has been one of the more conservative forces in the industry - its customers in manufacturing are as well. For cloud to win here really shows a dramatic change. And because this is all so new, there is no real long term history or usage to draw on, hence our other key report this week with an expert saying that it is essential for those selling private cloud to develop case studies and a narrative to go with their sales processes. UK, SPAIN LEAD PC SALES IMPROVEMENT IN CHANNEL PC sales through Western European distributors were slightly better in the final quarter of 2015 according to data published by researcher CONTEXT. Unit sales for the quarter remained almost flat, falling at only -0.1%, compared to the previous year, compared to a -3% decline in Q3 2015. This contrasts with shipment figures produced a few days ago by IDC. “The improvement was driven by consumer-targeted PCs, which returned to growth during the holiday season despite a strong prior-year comparison period”, said Marie-Christine Pygott, senior analyst at CONTEXT. “Consumer PCs were up by +3% year-on-year in Q4 2015 as sales of detachable and convertible mobile devices increased.” Business-targeted PCs declined by -5% year-on-year in the final quarter of 2015. The decline came on the back of good growth in the same period in the previous year, when business sales were benefitting from the last XP migration projects and were also being pushed by the use of Microsoft’s Windows with Bing in the commercial space. The final quarter of 2015 was characterized by strong efforts to clear excess PC channel inventory, and distributors in most countries commented on seeing stock levels go down to more acceptable levels over the quarter. In line with the progressive depletion of old PC stock in the channel, the transition to Windows 10 accelerated significantly during Q4 2015. While Windows 10 Home accounted for only 44% of Windows Home PC sales by Western European distributors in October, the figure went up to 69% in November and to 80% in the final month of the year. Country break-down: Q4/2015 year-on-year Germany -3.5% UK 10.0% Italy -3.3% Spain 8.3% France -9.2% Netherlands 2.0% Sweden -16.3% Switzerland 5.9% Austria -3.3% Poland -5.3% SOROS-BACKED DEVELOPER OPENS OFFICES IN POLAND, SPAIN Ciklum, a global Software Engineering and Solutions business, has continued to expand its global delivery footprint in Poland and Spain with the opening of new offices in Gdansk, Wroclaw, and Malaga. These new locations will offer the incoming and existing clients the choice in terms of the development team location and currency preference, it says. The reason for the entities in the new countries is to provide services to the EU in addition to the Eastern European delivery locations. Together with 14 operating offices in three continents, these will provide more mobility opportunities in case the client requires multiple locations for the teams, it says. "It is an exciting period in our development and is in line with our strategy of continued expansion of our global delivery ability and fulfilment of services across borders. Ciklum has offices from the West Coast in the US to EMEA, and we are pleased to welcome our Polish and Spanish colleagues with these additions. We are now truly viewed as a Global Technology Partner in our market. I look forward to meeting more clients in these new locations, and the outlook for 2016 is extremely positive," says Craig Wilson, Chief Revenue Officer, Ciklum. The year of 2015 brought milestone developments for Ciklum as a global company, with support from the George Soros's fund. It now has 2500+ developers located in the Delivery Centres working on Extended Software development, Quality Assurance, R&D, IoT, Big Data, Product development and Engineering Consulting. USE PUBLICITY TO WIN IN CLOUD, SAYS EXPERT The private cloud, though smaller than public cloud, is seen as better from a security point of view, and many enterprises are choosing it as a stepping stone or pilot. It will be those companies that can demonstrate success through marketing and case studies who will win, says one expert. According to Technology Business Research, (TBR) and its 3Q15 Hosted Private Cloud Benchmark, even the largest enterprises with stringent governance policies are likely to adopt private cloud solutions as the first step to transitioning from traditional to truly hybrid IT environments, driving the total market opportunity to an estimated $44bn by 2020. “The best way to win in this market in 2016 will be to promote relatable success stories and case studies that showcase the added efficiencies and cost savings associated with hosted cloud environments as well as the security benefits of deploying workloads in hosted private cloud environments,” said TBR Cloud Analyst Cassandra Mooshian. Although small compared to the expansive public cloud market, the hosted private cloud market is growing. As the market lacks one clear leader, time and space remain for small vendors to catch up to front-runner IBM. The private cloud market is unique, with independent software vendors, systems integrators, born-on-the-cloud vendors and hosting companies all investing to gain market share, it says. The benchmark and TBR’s 2H15 Private Cloud Customer Research, which highlights hosted private cloud and self-built private cloud adoption, found 71% of private cloud users view private cloud as superior to public cloud based on security. A shift in customers’ investments over the past six months from development (PaaS) to production (IaaS and SaaS), noticeably impacted the market; although, IaaS remains the largest segment in the private cloud market as enterprise value dedicated cloud instances. If you have not yet entered, there is still just time to get your case studies and entries into the European IT & Software Excellence Awards, but the deadline is fast approaching. Free to enter, they give a real boost to publicity and an opportunity to engage with the wider European market. With a huge gala dinner and presentations, they give a massive opportunity for publicity across dozens of categories and show what ISVs, solution providers, VARs, distributors, suppliers and IT support businesses can do. Do not miss this opportunity; deadline is February 12. Register and enter here EMEA PC SHIPMENTS DOWN 18% IN Q4 PC shipments in EMEA reached 20.8 million units in the fourth quarter of 2015 — an 18.2% decrease year on year, according to IDC. After a strong shipment push of devices under Microsoft’s Bing promotion from summer 2014 to January 2015, the focus for hardware manufacturers and their channel partners has been to deplete stock, leading to an 18% contraction for 2015 with 76.3 million PCs shipped in EMEA. In 2014 PC shipments were driven in commercial by the end of Windows XP support as well as the need to renew the first Windows 7 portables four years after their deployment, while in the consumer segment Bing successfully targeted the needs of price sensitive users. The strengthening of the dollar also led partners to gamble on cheap products in the fourth quarter of 2014. But 2015 turned into a very costly year for all of them as inventory clearing not only took eleven months but also strong promotions and price reductions. Year on year comparisons were therefore unfavourable during 2015 and the introduction of new technologies such as Windows 10 or new CPUs failed to reverse the trend. But it is not all bad news— as there are some signs of stabilisation and 2015 results will support a more positive comparison in 2016. "The market contraction was to be expected," said Chrystelle Labesque, associate director, IDC EMEA Personal Computing. The combination of various economic and political factors led all three sub-regions to contract in 2015Q4. Western Europe declined by 13.1%, while in line with expectations, Central and Eastern Europe (CEE) contracted 24.7%. In Western Europe, the U.K. consumer market reported the best result, while in the commercial segment some public spending in particular in Austria and Italy supported shipment volumes. A sharp decline in oil prices together with currency and political instabilities affected the CEMA region in particular, while the slowdown in the Chinese economy is worsening the business outlook in export-oriented Western European countries. Looking at the full 2015 performance, Western Europe was down by 13.8% over 2014, and market consolidation becomes more obvious as the top 3 players (HP, Lenovo, Dell) accounted for 54% of the market in 2015 vs 50% in 2014. "2015 was clearly a very difficult year for the PC market. Demand remained weak across all four quarters with double-digit contractions in CEE and MEA," said Stefania Lorenz, associate VP, IDC CEMA. "The CEE region contracted by 26.4% year-on-year in 2015. The region was negatively affected by the devaluations of local currencies and high PC inventory levels left from 2014. The worst impact on purchasing power was felt in the Eastern part of the region: Russia, Ukraine, Kazakhstan as well as the Rest of CEE subregion. Other factors that prevented the market from rebounding in the commercial space included government budget freezes." "In Q4 2015 the PC market in the CEE region was in line with the forecast at -24.7% year-on-year," said Nikolina Jurisic, product manager, IDC CEMA.