HPE buys Simplivity – winners, losers and implications


Last week HP announced that it is acquiring Simplivity – a leading independent supplier of HyperConverged Infrastructure (HCI) appliances and software for $650m. In this post I look at the winners and losers and implications for server users. Read more »

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When to buy and sell ITC companies

I’ve been thinking a lot about HP’s decision to buy Simplivity this week; in the process I’ve come across and issue which I’ve never heard discussed before. There’s a 3-year cycle in net profit for the whole industry, which I show – together with my forecast – in this Figure. It has implications for buying and selling IT and Communications suppliers, whether shares or entire companies. I’m sure those of you looking at M&A activity and in the financial community will want to think more about it as you do your forecasts for coming quarters and years. Read more »

ITCandor 2017 predictions – political and social uncertainty limit ITC market growth

cropped-monopoly1.jpgMy (somewhat dystopian) view of 2017 – it will be a year of modest growth despite major social, political and economic changes which will make doing business more complicated. To make the most of the opportunities suppliers should launch Blockchain and virtual reality offerings, look to oil-producing countries for growth, replace their (increasingly irrelevant) marketing themes, restructure to address core business and manage profitability more than revenue growth. I encourage you to build stronger corporate and social responsibility (CSR) strategies, which should include where and how much corporation tax you pay; you should try to emulate the large Japanese corporations who include their workers and families as stakeholders alongside their owners and shareholders.

My 2017 predictions are:

  1. The ITC market will grow by 1.5% in 2017 to reach $6.3T.
  2. ITC spending growth will grow considerably in oil producing countries as oil production is restricted, raising prices.
  3. Suppliers will address product and services markets in genuinely innovative ways, while redefining their core businesses.
  4. Blockchain systems will create significant changes in the way citizens, consumers and businesses exchange and pay for products.
  5. Virtual and augmented reality will be widely adopted by businesses at an industry sector and specialised application levels.
  6. Growing business uncertainty and the reduction of the number and scope of free trade zones across the world will impact ITC sales negatively.
  7. New and more useful marketing campaigns will replace the current (increasingly irrelevant) Cloud, IoT, IoE and Big Data themes.
  8. Internet usage will continue to expand despite major failures to protect business, customer and citizen data in 2017.
  9. Cisco will restructure itself in a major way in 2017 in order to compete more effectively with other leading ITC suppliers.
  10. Growing nationalism and protectionism will have a measurable and significant negative impact, making our skills shortages even worse.

Vendors will have to work harder to stay in the same place financially, which is excellent news for customers, who will get more ‘bang for bucks’ through the increasing commoditisation of ITC offerings.

Thank you once more to all of my fabulous friends and colleagues who have guided my thoughts published here. Of course this research is designed to demonstrate my expertise in understanding and predicting market growth – let me know whether you agree, disagree and find this of useful or not.

Navigate my predictions – overview 1 2 3 4 5 6 7 8 9 10

2017 prediction 1 – more market growth, more commoditisation

My first prediction is that the ITC market will grow by 1.5% in 2017 to reach $6.3T.

This will be less than in 2016 and there will be much more commoditisation, which will be great for users; like swans kicking hard underwater, suppliers (see Figure 1 for the leaders) will need to do a lot of unseen things to maintain slow forward momentum.

Figure 1 – the leading ITC suppliers


Source: ITCandor, 2017

Net profit will be harder to find than revenues – I expect the total to decline by 0.4% to reach $585B. For the fourth year in a row total vendor headcount will grow – unlike those industries which they supply, who will shed thousands of jobs through automation and digital transformation; in 2017 total employment in the ITC industry will grow 1.0% to 19.3M worldwide.

Navigate my predictions – overview 1 2 3 4 5 6 7 8 9 10