Monday Morning Impact – August 18

By Ken Presti, Senior Consultant, Channel Impact

Forrester Slashes IT Spending Forecast

Forrester Research, a prominent IT market research house, has cut its worldwide IT spending forecast by nearly half, according to the IDG News Service.

According to the report, the company now predicts growth of 3.3 percent in US dollars, representing $2.2 trillion. The company had previously anticipated growth of 6.2 percent.

Blaming a weak first half, the report suggests that business is expected to accelerate in the coming months, based largely on increasing demand in both the United States and the United Kingdom, as well as accelerated demand for CRM, marketing automation, SaaS, as well as other services and applications focused on customer processes.

Nearly 50 percent of spending on customer-process technologies is expected to take place in the U.S.

Technology related to business applications, PCs, tablets, smartphones and related consulting services, is expected to increase by 2.3 percent at a global level to $1 trillion while IT infrastructure spending is predicted to post a 2.5 percent gain, reaching $917 billion.

Channel Impact:
These numbers tend to reinforce the industry trend towards services, which often come at the expense of large-scale infrastructure spending. Look for partners focused on key areas to weather the storm more successfully than those more focused on traditional infrastructure.

Cisco to Cut Workforce by 6,000

Cisco has announced plans to eliminate another 6,000 jobs over the next year as part of a restructuring effort to keep the company competitive amid market shifts toward the cloud and software defined networking.

During a conference call, CEO John Chambers said that the San Jose-based networking giant needs to change or get left behind, and further suggested that at least part of the headcount reduction will be redeployed toward critical technologies where Cisco sees the strongest opportunity for growth.

The company announced the move on a conference call detailing its financial performance for its recently ended quarter, in which revenue and profit were basically in line with the year-ago quarter. Cisco is seeing an uptick in its software, switching and server product lines, but router sales were in decline, as were sales to emerging markets and the service provider sector.

Channel Impact:
Despite the downturn in certain sections of its core business, there were bright spots in the sales patterns that could translate to additional success for channel partners; especially those evolving towards emerging technologies and evolving business models.

Infoblox Training Program Passes Milestone

Infoblox, a Santa Clara, Calif.-based network control company has announced that 900 pre-sales engineers have now been trained and certified as Infoblox Automation Solutions Architects (IASAs), in less than two and a half years since the program’s launch.

The training program includes a two-day workshop, typically at the channel partner’s site, which is customized to target the particular partner’s customer base. The objective is to help pre-sales engineers and solution architects to better understand the Infoblox portfolio and overall value proposition. In addition, the workshops provide certification on skills such as best practices for Domain Name System (DNS) deployment, DNS security, and IPv6 essentials.

The company has also added a new certification level known as the DNS Security Expert (DSE), which is essentially an advanced version of the IASA certification.

Channel Impact:
Vendors of all sizes are turning towards education and certification programs as a means of boosting sales and promoting channel loyalty. While education is always a positive opportunity, the workloads of most channel partners often forces them to make choices based on the criticality of the technology, vendor prominence, and the depth of the training that is being offered.