Comms Dealer

Data centre operator Next Generation Data (NGD) and channel distribution partner Exertis UK have introduced a data centre as a service (DCaaS) bundling deal designed to enable low risk, high margin business opportunities for resellers with customers taking first steps into cloud, unified communications hosting, disaster recovery management and many more applications.

Exertis will offer resellers rack server hardware including Dell, Lenovo and Fujitsu bundled with NGD's Data Cube ready-to-run DCaaS hosting platform.

This comprises a quarter rack configuration, connectivity, power supply, cooling infrastructure, and a wide range of high speed network connectivity options.

Half rack and full racks are also available. This is run through Exertis' own billing system which allows resellers to bill end users with their own logo and headers without needing to invest in a platform of their own.

"Our data centre infrastructure package allows resellers easy access to high margin annuity revenues plus additional product and accessories sales opportunities, all with the peace of mind that comes with having NGD's secure, resilient data centre facilities and engineering support services behind them," said Gareth Bray, head of commerical enterprise Exertis.

Ben Senouillet, NGD's client account manager, added: "Exertis channel partners can use NGD's data centre to develop their own- label private and hybrid cloud services, offering all the benefits of the cloud to their customers while keeping keep control of the infrastructure."

NGD's 750,000 sq ft facility was opened six years ago and so far the company has invested over £30m in its campus.

The Tier 3 facility features 100% green and carbon tax exempt power supply, multiple low latency carrier and ISP connectivity options, and meeting and conference facilities. Some of its major international customers include BT, CGI, IBM and Wipro.

intY has joined the Microsoft Cloud Solution Provider Programme, enabling it to distribute and provide direct billing, sell combined offers and services, as well as directly provision, manage and support Microsoft cloud offerings to Partners and Customers.

Following the link-up, intY owns the customer lifecycle, allowing it to sell Office 365 plus additional Microsoft services.

"We are excited about the opportunity that we can bring to the channel by becoming a Multi-Tier Distributor under the Microsoft CSP Programme," said Craig Joseph, Chief Operating Officer at intY.

Phil Sorgen, corporate vice president, Worldwide Partner Group at Microsoft, said: "By joining the Microsoft Cloud Solution Provider Program, partners will deepen customer relationships and expand business opportunities in the cloud."

Pangea has launched a new partner programme and manifesto that, says the firm, puts partnerships and collaboration top of the agenda.

Dan Cunliffe (left), Managing Director of Pangea, said: "We don't just want to be an M2M and IoT connectivity provider, we want to bring value to our partners by working towards a shared goal, helping them devise business strategies that help them get ahead of the competition, and providing training to help them win more business.

"Our job is to ensure our partners can provide a best in class IoT service and offer bespoke commercials to help win more business."

Operations Director Chris Romeika (left) added: "We are a relatively young company, but we have a proven and successful track record. Also, the nature of our company allows us to be adaptable to our clients' needs and celebrate their achievements with them."

Avnet has reported Q3 2016 (ending at the end of March 2016) revenues down, though within its expected range even as the sequential decline was slightly below normal seasonality given an expected drop in select high volume supply chain engagements at EMEA, Asia and weaker than expected demand in certain legacy technologies at Technology Solutions (TS).

Revenue of $6.2bn represented a decline of 10% sequentially as compared with the usual seasonal range of down 9% to down 5%. On a year-over-year basis organic revenue decreased 7.2% in constant currency as TS was down 13.6% and EM (the components business) declined 3.3%. Gross profit margin increased 57 basis points sequentially and 44 basis points year-over-year with both operating groups contributing to these improvements.

CEO Rick Hamada said: "TS revenue came in at the low-end of our expectation as all three regions experienced weaker than expected demand in select areas of legacy data centre products which resulted in organic revenue declining 22% in constant currency as compared with the typical seasonal range of down 19% to down 16%. All three regions were experiencing a double-digit decline".

Year-over-year growth in networking and services was offset by declines in storage, servers and software. Gross profit margin increased year-over-year and all three regions were driven by portfolio actions and product mix.

"Despite the double-digit decline in certain legacy technologies, TS delivered significant growth in areas where we have been investing, such as our all flash array storage business, which grew over 40% and our converged infrastructure solutions business which we were up nearly 20% from a year ago quarter."

The traditional hard drive, the 'spinning disk storage environment', is declining by more than 20%, but about 40% of Avnet's revenue is in the hybrid and all flash array where it sees hybrid arrays growing 15% and all-flash arrays growing at more than 40%. "But net-net that whole storage package for us is down year-on-year, because of that mix today".

Rick Hamada added: "The the area of biggest gap to our expectations was in the north, primarily in the UK. Central region, Eastern region and actually the Southern region are still performing to what we expect."

Ingram Micro's Q1 saw the effects of a poor start to the year. The global giant, whose sale to a Chinese conglomerate is on track to finalise in the second half of the year, shows signs of clearing the decks for the event, boosting margins and making investments.

"We saw stabilisation of global IT demand in March, which has continued into April, however, IT spending was muted in the first two months of the year, particularly for high volume categories including PCs, smartphones, servers and storage," said Alain Monié, Ingram Micro CEO.

"While we did not capture the full revenue and operating income opportunity available to us in the quarter, our focus on higher value business continues to show results as we delivered a 97 basis point increase in consolidated gross margin, buoyed by strong improvement across all regions.

"We have also increased the pace of some of our strategic investment as we focus on building and enhancing the global capabilities that will support our mid- and longer-term business objectives."

Worldwide 2016 first quarter sales decreased 12% in dollar terms to $9.3bn, with gross margin of 6.77%. This compares to sales of $10.6bn with gross margin of 5.80% in the 2015 first quarter.

The translation of foreign currencies versus last year had a negative impact of 3 percentage points on worldwide sales.

Approximately $200m, or 2%, of the reduction in 2016 first quarter worldwide sales was related to the company negotiating 'a favourable change in contract terms' with some customers in Europe, as highlighted last quarter, which leads to recognising these sales on a net basis versus a gross basis as the company did in the first quarter of last year.

Additionally, last year's first quarter benefited from approximately $100m, or 1%, in North American mobility distribution business that the company elected to exit this year due to profitability levels that did not meet the company's objectives.

The remaining sales decline of 6% was primarily related to soft demand for high volume product categories, particularly in consumer markets, which was consistent with the broader overall IT market demand in the quarter.

Significantly higher gross margin was the result of a focus on driving a better mix of higher value sales and solid returns on invested capital, as well as recent acquisitions, it says.

During a round table discussion at the recent European Software and Services Summit in London, Kevin Sparks, EMC channel head UK&I, expressed strong views on the role of partnerships and alliances.

"Not every application should sit in the cloud, we need to be careful when 70% of the IT budget is still spent on traditional computing," he said.

"Compliance also means access to data in a common format, in order to get the data access. We also talked about the use of service providers to get the mix of on-premise and off-premise IT modernisation. There is an opportunity to use service providers to do the analytics built on that data."

There was much discussion around co-opetition - working with partnerships of various types. The reality is that there is new world and lots of different opportunities.

People working in the cloud may want to bring it back in-house for data compliance or cost reasons; we have customers who want to put just certain applications in the cloud. A lot of this relies on transformation skills, we know there are shortages in certain areas."

And the value of this sort of event? "The whole bringing people together helps them realise they are not alone; there are opportunities to partner, there is a broader ecosystem there and it is not just necessarily about a product, piece of software, or services, but potentially the whole thing - how they bring it together and leverage those partners.

IBM is set to make this the year of mainstream adoption of its cloud analytics tool Watson.

In a push to ISVs and developers, it is adding all major European languages this year and claims some 80,000 developers world-wide.

It has also signed deals with major integrators such as KPMG and other European vendors such as SAP. It indicates that having invested heavily in managing the early uptake with a good deal of hand-on time with partners, it expects cognitive computing become pervasive and deployed at scale.

"We are finding that it is not necessary for developers to build new apps - rather it is infusing Watson into existing solutions," says Phil Westcott, who manages the Watson ecosystem programme across Europe.

"We have reduced the barriers to entry, make delivery cost-efficient and seen a step change in its adoption. Watson is being used in a wider range of solutions, since, for example, the APIs have increased quarter on quarter, with new ones being added weekly"

For users, the effect of wider deployment should go un-noticed. "Watson is embedded naturally; it becomes the engine room, while capable of producing more elegant solutions."

The major verticals seem to be retail, healthcare and financial services, with education also a surprisingly strong area, but since it is applicable anywhere where there is unstructured data, it can go anywhere.

"The cognitive era has arrived," said Lynne Doughtie, KPMG LLP Chairman and CEO. "KPMG's use of IBM Watson technology will help advance our team's ability to analyse and act on the core financial and operational data so central to the health of organisations and the capital markets. In addition to the possibilities for enhancing quality, the potential for cognitive and related technologies to help us pursue new business offerings is extraordinary."

One current initiative is focused on employing supervised cognitive capabilities to analyse much larger volumes of structured and unstructured data related to a company's financial information, as auditors "teach" the technology how to fine-tune assessments over time. This enables audit teams to have faster access to increasingly precise measurements that help them analyse anomalies and assess whether additional steps are necessary.

One limiting factor is the available skills in working with unstructured data; IBM has been working with universities across Europe to boost students' exposure to cognitive computing systems, but the cutting edge will remain with the ISVs and developers, particularly those looking to add it to existing solutions.

In the wider aspect Aberdeen University has just become one of only four UK Institutions to have access to the Watson Engagement Advisor solution and its experts. It will initially be used by students undertaking the Department of Computing Science's Semantic Web Engineering module. It will eventually be offered more widely across a range of relevant programmes. Academics at the University are already undertaking cutting-edge cognitive computing research using Watson.

Researchers are collaborating with a team of IBM scientists on the EU Marie Curie K-Drive project, which investigates ways of understanding and utilising big data and knowledge graphs for applications, such as those in the treatment of cancers. This involves using IBM Watson's question & answering, knowledge representation and dialogue capabilities. The results of the work will also form the basis of new research proposals from the University for the EU Horizon 2020 Programme.

As Paul Chong, Head of the IBM Watson Group for EMEA told last month's European Software and Solutions Summit in London, "We are moving systems that determine the response using rules-based solutions, to a probabilistic state. This reflects the way humans think."

Although Huawei reported 37% revenue growth in local currency year-to-year for 2015 and is on track to capture the top spot over rival Ericsson (which just announced a 1Q16 revenue decline and major reorganisation), the company unveiled a strategy shift at its recent annual analyst conference.

Rather than focusing only on the network, Huawei Rotating CEO Eric Xu declared that the company will go full-cloud - placing its bets behind a unifying transformation of all parts of the company to cloud solutions for service providers and enterprises.

The move is spurred by Huawei's growth problems. Namely, with the near completion of the last major LTE radio network rollout in China on the horizon, Huawei must look elsewhere to fuel its Carrier Network business growth, which comprises 59% of the company's revenue.

Huawei has already taken steps to diversify - growing its Enterprise business to 7% of revenue and its Consumer Devices business to 33% of revenue - but the company cannot build additional revenue streams fast enough to compensate for its slowing carrier business.

Like its peers in information and communications technology (ICT), Huawei faces the major challenge of transitioning from a hardware-oriented manufacturing firm to a proactive, services-led, software-centric firm.

Huawei needs to make this shift to adjust to its customers' changing business models, which increasingly rely on software-defined digital services. This transition will not be easy and will take several years to unfold, but Huawei's management seems unified in its belief that cloud, or 'cloudification' as Huawei terms it, is the answer. The company demonstrated meaningful progress on its journey and trajectory toward achieving this goal at the analyst summit.

While analyst TBR believes Huawei has chosen its new direction wisely (a move validated by Ericsson's reorganisation, which will focus on cloud solutions as well), the company needs to accelerate its transition. One way to do so is to address the separations that exist between Huawei business and product units.

For example, although Huawei has a complete and maturing IT portfolio within its Enterprise Business Group, this solution is only gradually being introduced within the Carrier Group, largely toward data centre opportunities and often only through the Global Technical Services solution team.

The Enterprise Group maintains a separate services and solutions team with independent goals. The company could advance its scale in IT solutions and cloud faster if it moved beyond network- and carrier-focused strategies and began to operate more as an IT company, addressing multiple verticals with a larger investment of resources, says TBR.

Truffle's study of the French software business shows that sales are growing for the 8th consecutive year, up to €12.8bn, with a jump in profits to €1.1bn.

R&D investments are on the rise again, reaching €1.2bn with developments driven by the SaaS and cloud computing revolution.

"2015 was a good year: Revenues grew by 9%, profits almost doubled, R&D investments increased by 15%, a lot of skilled jobs were created and the total industry workforce expanded to 107,000 employees, with a very low propensity for churn.

"French software publishers are leading by example, driving the economy forward and proving that entrepreneurial spirit, risk-taking and a commitment to innovation are crucial factors to success and growth. They uphold our country's position on the world stage and contribute to the French Tech sector's reputation," said Bernard-Louis Roques, Co-founder and CEO of Truffle Capital.

Talking to IT Europa, he said: "A number of sectors have resisted the SaaS transformation for the past 4 to 5 years for various reasons, including data privacy, security, extended duration for amortization of past IT investment (both software end hardware) in client/server, or even aversion to change.

"The public sector was notably resistant to SaaS. As the vendors have reassured those sectors with appropriate solutions to their concerns and usage has swiftly gained ground with new generations of CIOs gaining access to decision making positions, the SaaS wave has overflowed all resistances. Over the past two years SaaS solutions have represented a big share of new sales, which doesn't yet translate into the same proportion in overall sales as the inventory is vastly license based."

The main issue for the software industry in France lies in the scarcity of financing available through capital markets were vendors tend to be undervalued in comparison with other international capital markets, particularly the US. The difference in valuation creates arbitrage opportunities. It might trigger a wave of M&A transactions, an example being the recently announced take over bid on Cegid, number six on the Truffle 100 list, led by Private Equity funds.

The revolution brought by SaaS and cloud computing solutions continues to strongly impact the industry. In order to keep adapting to customers' changing habits and demand growth, 74% of the top 100 French software companies now offer SaaS solutions (compared to 68% last year). 64% of the companies believe that this trend will continue to greatly influence the market, which is also driven by mobile applications (61%) and big data (33%).

"The digital sector is doing well and is getting better every year, " says Axelle Lemaire, Secretary of State for digital technology at the Ministry of Economy, Industry and Digital technology.

"These figures attest that the French economy has taken the right path, guided by the French government which has provided an unfailing support to innovating stakeholders at the forefront of the digital transformation with the aim of accompanying and fostering the digital transformation of our economic and industrial landscape.

"For over two years now, the success of the French Tech initiative has enlightened the strength of innovating digital ecosystems located in Paris (40 incubators, 80 collaborative workspaces, 20 digital fabrication workshops and around 1,500 startups) and in the 13 major cities with the French Tech label gathered within one national network.

"This cartography of French innovation will soon be completed by the launch of thematic networks allowing other territories to join the French Tech dynamism,"

Laurent Calot, CXP Group CEO, added: "French companies are now more mature and are gearing up to a mutation into the digital era. In nearly all sectors.

"They have to adapt to new uses of their customers but also to business needs expressed by their employees, he says. Business models are deeply impacted. In Sales and Marketing, Omni channel management and social networks deeply change the customer experience.

"And the Internet of Things is emerging in some more technical fields (industry, automotive, health, Smart Cities etc). HRD are implementing social collaboration tools, open mobility solutions and analytic approaches that improve talent management and boost company competitiveness.

"Software writers can be confident for the future: trends linked to the digital revolution will most certainly keep on driving the software industry in several years to come."

True Telecom has reported the most profitable start to a year in its history after surging sales and the introduction of a field sales operation in January helped its first quarter revenue to rise over 300%.

The jump in figures mainly reflect continuing record sales across all parts of the business from direct sales to channel.

The company benefitted from its strong position in the market due to the growing popularity of SIP, hosted VoIP, mobile, fibre, broadband and traditional lines and calls, with the addition of merchant services to its portfolio also gaining traction and performing well.

Stuart Griffiths, Chief Executive, called the results 'a giant leap' towards achieving True Telecom's ambition to become one of the largest SME suppliers in the market, hailing Q1 2016 as the start of a 'very special and exciting time' for the company which now has 'all bases covered'.

"Our performance in the first three months of 2016 puts us in a prime position to post yet another record period," said Griffiths.

"True is on course for an all-time record month in April and on target for a new record quarter in Q2."

As well as establishing field operations Griffiths said the positive results also reflect the company's focus on growing its outbound teams and improving profitability through rapid customer adoption.

"Within the next quarter we are aiming to add 2,000 small to medium enterprises per month from our direct outbound teams alone," added Griffiths.

Director Mark Baines is also upbeat about the outlook for 2016 and beyond, saying the company's 'dedicated and diligent' approach to breaking sales records will continue to raise expectations.

"We are executing our growth strategy well," he said. "It's a great time to be involved in such an exciting business, and with a great team driving True Telecom forward we are confident that the records will continue to tumble."