U.S. Tech Market Will Grow by 6.2% in 2013 and 6.8% in 2014

No one would claim that the US tech market is booming.  With Europe still mired in recession and debt problems, US economic growth looking soft, and business and consumer worries about the US government raising tax rates and cutting Federal spending, it is not surprising that businesses and governments are being cautious in their purchases of technology goods and services.  But we think the fear is overblown.  Forrester's forecast for the US tech market in 2013 and 2014 -- published as "US Tech MarketOutlook For 2013 And 2014: Better Times Ahead" -- projects a 6.2% rise in 2013 and a 6.8% growth in 2014 in US business and government purchases of computer equipment, communications equipment, software, IT consulting and systems integration services, and IT outsourcing.  Adding in slow growing telecommunications services pulls growth down to 5.7% in 2013 and 6.1% in 2014. That may not be a boom, but it is certainly not a bust.

While CIOs are cautious in their tech buying -- and in the case of the Federal government, actually cutting back -- that caution has and will show up mostly in reduced spending on computer and communications equipment (with the exception of tablets).  CIOs will be most aggressive in software, especially for SaaS apps, analytics, and mobile apps. IT outsourcing will see good growth in 2013 as the result of 2012 selection decisions, while IT consulting and systems integration will come on strong in 2014.  Business and government purchases of telecommunications services will continue to grow at a slower rate than the overall tech market.  

Construction, transportation, education, and healthcare will grow their IT budgets the fastest in 2013. CIOs in these industries will increase their IT spending due to better business conditions (construction, transportation) or market pressures (education and healthcare). CIOs in manufacturing will turn more cautious, and those in the federal government will have to reduce their tech buying in the face of mandated budget cutbacks. 

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Big Data, Analytics, and Cloud Drove Enterprise Software Growth in 2012

International Data Corporation (IDC) released the latest results from the WorldwideSemiannual Software Tracker. For 2012, the worldwide software market grew 3.6% year over year reaching a total market size of $342 billion, which was in line with IDC's previous forecast of 3.4% and less than half the growth rate experienced in 2010 and 2011. In that sense, 2012 confirms the beginning of a more conservative growth period. In the middle of this scenario, there are faster growing market segments, such as Data Access, Analysis and Delivery, Collaborative Applications, CRM Applications, Security Software, and System and Network Management Software. Every one of these markets grew in the 6-7% range, about double the rate for enterprise software as a whole.

Three primary segments comprise the total software market in IDC's software taxonomy: Applications; Application Development & Deployment (AD&D); and Systems Infrastructure Software. Among the three primary segments, the AD&D segment, which comprised nearly 24% of total software revenues in 2012, was the fastest growing market with a 4.6% year-over-year growth rate. Growth in the AD&D segment was largely driven by the performance of the Data Access, Analysis, and Delivery and the Structured Data Management secondary markets with 6.0% and 5.9% growth rates, respectively. Business Intelligence and Relational Database Management Systems (RDBMS) solutions are pushing the growing trend for these markets because of widening Big Data and Analytics adoption. Big data and analytics are also closely tied to the fast growth social business software markets, where the combination of contextual data and the "right" expertise is becoming critical for supporting enterprise decision making and data driven customer experience solutions.

In the Applications primary market segment, which comprised 49% of total software revenue, year-over-year growth for 2012 was 3.3%, which is slightly lower than for software overall. Within this market segment, CRM and Collaborative Applications stood out with year-over-year growth rates near 7%. While the former is driven by the cloud migration trend and the large investments by businesses to deliver a better customer experience to the "social customer", the latter is largely driven by the Enterprise Social Software market, which grew at 24.8% year over year and gained more than 5 points of market share over three years. Mobile, while not a direct enterprise applications driver, is however a contributing factor and driver for businesses moving to newer and more mobile device agnostic enterprise software..

The third primary segment of the software market is System Infrastructure Software, which comprised 27% of total software revenue and grew 3.3% year over year in 2012. The Security Software and System/Network Management Software secondary segments both grew more than 6% year over year as these solutions provide the infrastructure - whether in the cloud or on-premise - to support the 3rd Platform. Although the other two System Infrastructure Software secondary segment (Storage Software and System Software) had flat growth in 2012, the Virtualization sub-segments had double-digit growth rates.

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Email and Co-Workers Among the Biggest Distractions at Work

Just how distracting are unnecessary emails and chatty coworkers in the workplace? A new survey from JiveSoftware, Inc. found nearly four out of every five workers (79 percent) in the U.S. spend time during their workday checking emails when that time could be used towards something more productive. And, more than one-third of workers (36 percent) say the people they work with are their biggest distraction on the job.

Key findings from the survey include:

Time Wasted by American Workers on Email When They Could Be Doing Something More Productive:

-- 79 percent say they waste time checking emails

-- 18 percent spend more than a quarter of their workday checking irrelevant emails.

-- On average, American workers employed full time, part-time or self-employed spend 16 percent of a workday checking irrelevant email.

The Biggest Distractions at Work:

-- 36 percent of employed Americans said coworkers are their biggest distraction at work.

-- 20 percent said email was their biggest distraction during the workday.

-- 19 percent said that meetings are the most distracting during the workday.

Finding Work/Life Balance:

-- Close to half (48 percent) of employed Americans report working when on vacation.

-- Almost one fifth (19 percent) of employed Americans are more overwhelmed by technology at work now compared to five years ago.

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PC Shipments Post the Steepest Decline Ever in a Single Quarter, According to IDC

Worldwide PC shipments totaled 76.3 million units in the first quarter of 2013 (1Q13), down -13.9% compared to the same quarter in 2012 and worse than the forecast decline of -7.7%, according to the International Data Corporation (IDC) WorldwideQuarterly PC Tracker. The extent of the year-on-year contraction marked the worst quarter since IDC began tracking the PC market quarterly in 1994. The results also marked the fourth consecutive quarter of year-on-year shipment declines.

Despite some mild improvement in the economic environment and some new PC models offering Windows 8, PC shipments were down significantly across all regions compared to a year ago. Fading Mini Notebook shipments have taken a big chunk out of the low-end market while tablets and smartphones continue to divert consumer spending. PC industry efforts to offer touch capabilities and ultraslim systems have been hampered by traditional barriers of price and component supply, as well as a weak reception for Windows 8. The PC industry is struggling to identify innovations that differentiate PCs from other products and inspire consumers to buy, and instead is meeting significant resistance to changes perceived as cumbersome or costly.

Regional Highlights

United States – The U.S. market had another dismal quarter in 1Q13, contracting -12.7% year on year, with a drop of -18.3% compared to the fourth quarter of 2012. With total volume falling to 14.2 million, quarterly shipments reached their lowest level since the first quarter of 2006. With this latest figure, the U.S. is now in its tenth consecutive quarter of year-on-year contraction (excluding a brief moment of growth – less than 2% year on year – in 3Q11).

EMEA – As expected, Europe, Middle East and Africa (EMEA) remained constrained, posting a stronger double-digit decline than anticipated in the first quarter of 2013. Results fell short of expectations in the consumer segment as softness in demand persisted amid a continued shift to tablets and ongoing budget pressures. Meanwhile, the market response to Windows 8 and touch-enabled devices remained slow, leading to cautious sell-in from most vendors. Shipments in the commercial market remained constrained as predicted, following continued economic pressure and lack of major IT renewals.

Japan – PC shipments were in line with expectations in the first quarter. Some economic improvement is helping to support commercial replacement demand ahead of the scheduled end of support for Windows XP next year. However, consumer shipments remained very weak.

Asia/Pacific (excluding Japan) (APeJ) – PC shipments in APeJ declined sharply, dropping a record -12.7% year on year, the first time the region has experienced a double-digit decline. Although much of the earlier Windows 7 stock had cleared, a lukewarm reception toward Windows 8 hampered new shipments. China's inactivity contributed heavily to the decline, as public sector spending continued to be constrained.

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Research Demonstrates Happy Customer Service Agents Positively Impact Customer Experience

LiveOps, Inc., a provider of cloud contact center and customer service solutions, announced the findings of research that provides a holistic view into the state of today’s customer service. LiveOps evaluated the inter-dependency between the agent experience, customer experience and business bottom line. The research revealed four key points that are supported by the data:

1. Happy Agents Equal Happy Customers: 92 percent of consumers surveyed report that a customer service agent’s perceived “happiness” has a direct impact on their customer experience with the brand.

2. Integrating Social Channels on the Agent Desktop Is a Requirement: 85 percent of consumers surveyed feel that how a brand handles issues on their website or on social channels, like Facebook or Twitter, is a good indicator of a brand’s ability to deliver customer satisfaction and quality of support.

3. Most Brands Fail to Provide Consistent Service Across Multiple Channels: 89 percent of consumers surveyed believe it is important to be able to communicate with companies by any channel, including social media, and still receive the same quality and efficiency of response. Furthermore, 61 percent of social media users feel that brands do not effectively communicate with them on these channels.

4. Live Agent Service, Regardless of Channel, Is Preferred Over Self-service: 90 percent of customers surveyed value the ability to communicate with a live person on any channel--voice, email, chat, SMS or social.

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Study Reveals That 83% of Knowledge Workers Lose Time to Document Versioning Issues Each Day

Poor document collaboration practices are very expensive, time-consuming and the source of much frustration, according to Perforce Software, which commissioned an independent survey of business professionals. Conducted online by Harris Interactive, the survey of 1,004 knowledge workers in the United States and United Kingdom shows that document collaboration problems in the workplace are pervasive, frustrating and the cause of costly productivity issues—even when document sharing tools are in place. It also indicates that these issues have far-reaching consequences, including missed business opportunities, damaged reputations and poor impressions on colleagues and customers.

Known by Few, Felt by Most

While less than half (45 percent) of knowledge workers are familiar with the term “version issues,” the survey found that more than four in five (83 percent) lose or waste time each day from these problems.

Issues include:

-- Searching their hard drives or email inboxes for the most up-to-date or correct file (73 percent)

-- Having to wait while someone else finishes working on a document (59 percent)

-- Manually reviewing documents to sort out the changes from one or more contributors (56 percent)

-- Working on a document, only to realize after some time that it was the wrong or outdated file (47 percent)

Interestingly, of the 69 percent of knowledge workers whose companies use a document management or file sharing service, about 9 in 10 still experience document versioning issues (86 percent and 90 percent, respectively), indicating that existing solutions do little to solve these problems.

More Time-Consuming than Spam, More Frustrating than Parking Tickets

The survey found that document versioning issues are productivity killers. They combine (75 percent) to have an impact on productivity for a higher percentage of knowledge workers than:

-- Not having network access (71 percent)

-- Dealing with spam and junk mail (59 percent)

-- Leaving a mobile phone at home (34 percent)

In addition, 81 percent report having worked on the wrong version of a document or spent too much time looking for the right file. Of those, 29 percent stop working on a project altogether or leave work early when they realize all the time they’ve wasted. Other startling responses include:

-- Yell at their computers (33 percent)

-- Think about heading to the nearest bar or pub (21 percent)

-- Throw something (12 percent)

-- Banged their heads against their desks (12 percent)

 

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