Monday Morning Impact – December 12

Gartner Forecasts Worldwide Semiconductor Revenue Growth to Decline 3.6% in 2023

Global semiconductor revenue is projected to decline 3.6% in 2023, according to the latest forecast from Gartner. Global semiconductor revenue is forecast to total $596 billion in 2023, down from the previous forecast of $623 billion. In 2022, the market is on pace to grow 4% and total $618 billion.

“The short-term outlook for semiconductor revenue has worsened,” said Richard Gordon, Practice Vice President at Gartner. “Rapid deterioration in the global economy and weakening consumer demand will negatively impact the semiconductor market in 2023.”

Currently, the semiconductor market is polarized between the consumer-driven markets and enterprise-driven markets, according to Gartner. Weakness in the consumer-driven markets is being driven largely by the decline in disposable income caused by rising inflation and interest rates, but also by the reprioritization of consumer discretionary spending to other areas such as travel, leisure, and entertainment, which are having a negative knock-on effect on technology purchases.

On the other hand, the enterprise-driven markets, such as enterprise networking, enterprise compute, industrial, medical, and commercial transportation, have, so far, been relatively resilient despite looming macro-economic slowdown and geopolitical concerns.

“The relative strength in the enterprise-driven markets comes from strategic investments by corporations that are looking to strengthen their infrastructure to continue supporting their work from home workforce, business expansion plans and ongoing digitalization strategies,” said Gordon.

The worsening economic outlook is negatively impacting smartphone, PC and consumer electronics production which is positioning the DRAM market for oversupply for the remainder of 2022 and the first three quarters of 2023. Gartner analysts foresee DRAM revenue to decrease 2.6% to reach $90.5 billion in 2022 and will further decline 18% in 2023, to total $74.2 billion.

“While the deterioration in the macroeconomic environment will weaken consumer demand, we expect relatively better semiconductor consumption from business investments. Consequently, markets such as industrial, telecom infrastructure and data center will be less impacted by consumer sentiment and spending in the short term,” added Gordon.

Gartner clients can read more in “Forecast Analysis: Semiconductors and Electronics Worldwide.”

Channel Impact^®
Oversupply appears tied to worsening economic conditions.

AWS and Atos Form New Strategic Partnership for Infrastructure Outsourcing

Amazon Web Services and Atos, a Paris-based company specializing in digital transformation, high performance computing and IT infrastructure, have rolled out a global agreement that enables Atos customers with large-scale infrastructure outsourcing contracts to accelerate workload migrations to the AWS cloud. The move extends the existing relationship between Atos and AWS, with Atos selecting AWS as its preferred enterprise cloud provider and AWS naming Atos as a strategic partner for IT outsourcing and data center transformation.

As part of the agreement, Atos will proactively consult with more than 800 managed infrastructure services customers to offer a new managed, hybrid-cloud service portfolio that features the option to move selected workloads to AWS. The offering will include highly industrialized migration methodology, solution accelerators, and the companies’ combined expertise in large-scale cloud migrations.

As part of the strategic partnership, Atos’ employees will also be trained on AWS, scaling up their skills and knowledge to continue supporting customers on their digital transformation journeys. Over the next three years, Atos plans to train its employees to achieve more than 20,000 AWS certifications in order to expedite customers’ cloud adoption and help them leverage the advantages of the cloud.

“We are proud to strengthen our partnership with AWS in a first-of-its-kind collaboration, which is transformational in both its approach and its impact on our customers and the IT outsourcing industry,” said Nourdine Bihmane, Co-CEO in charge of the Tech Foundations business line at Atos. “As a trusted partner, we are offering our customers the opportunity to accelerate their migration to AWS’s powerful, proven, cost-effective, and scalable cloud infrastructure, while supporting them in their digital transformation journey.”

“Through our collaboration, Atos’ customers will be able to realize the benefits of moving to the cloud, including reduced operating costs and carbon emissions, as well as increased business value and accelerated digital innovation,” said Ruba Borno, vice president, Worldwide Channels & Alliances at AWS. “We’re excited at the opportunity to work with Atos to upskill their workforce, helping to expand their expertise in cloud technologies so they can enable customers to build, develop, and innovate on the world’s leading cloud.”

Channel Impact^®
The alliance combines AWS’s portfolio of services—including analytics, compute, databases, machine learning, and storage—and Atos’ expertise as a Global Systems Integrator in a unified approach to digital transformation.

NetApp Announces New Partner Program with NetApp Partner Sphere

NetApp has announced its intent to launch a new partner program in NetApp fiscal year 2024 (FY’24). The forthcoming NetApp Partner Sphere program is expected to offer upgraded training and support while also rewarding partners’ investments in competencies and services.

The program is intended to provide simplified, flexible, progressive tiering that includes Approved, Preferred, Prestige, and Prestige Plus levels. Advancement is based in large part on partner value and competencies. Benefits and support will grow as partners ascend tiers, with the partners generating the most impact seeing the broadest and most customized benefits, including solution specific marketing campaigns and enablement, proposal-based market development funds, and preferred value-based incentives.

“NetApp is committed to driving a partner-first culture, and the strategy behind our new partner program brings that commitment to life,” said Jenni Flinders, SVP of NetApp’s Worldwide Partner Organization. “With NetApp Partner Sphere, we’re accelerating growth and customer success across our partner ecosystem by extending their reach into the cloud and offering more business opportunities with our industry-leading portfolio and flexible consumption models.”

As part of these strategic changes NetApp will shift away from Specializations to identify partner capabilities and utilize Solution Competencies aligned to key NetApp focus areas – Cloud Solutions, Hybrid Cloud and AI & Analytics. These competencies will be included in the NetApp Partner Sphere program requirements. Partners will be able to begin earning associated competencies within each category, showcasing their ability to deliver customer success across the NetApp portfolio by the end of the calendar year.

Channel Impact^®
Partners that can drive digital and cloud transformation and come to the table with highly specialized services and capabilities are best positioned for the new program. However, a wide range of partner business models are expected to be included.