Confidence in place of optimism

Pro

The business of the leading IT systems builders has changed dramatically over the past few years. Once the companies that defined their own proprietary standards with which to address the industry, they have increasingly been forced to accept open systems and to change the focus of their offerings accordingly.

No two companies have adopted exactly the same approach. Some remain resolutely committed to product delivery only, maintaining a direct relationship with the end user and leaving matters like integration and support to others. Some retain a vestigial commitment to a proprietary installed base while offering integration and consultancy services to customers. And others favour an approach somewhere between the two.

As ComputerScope went to press news was just breaking of IBM’s sale of its PC business, the third largest in the world, to Chinese manufacturer Lenovo. It does not mean that Big Blue has left the business completely; it will continue to sell badged PCs made by its new partner. All of the companies featured here have made some commitment to Intel-compatible hardware, even though Sun, the last to falter, prefers to build its low-cost systems around AMD’s chips.

All IT systems eventually have to be deployed on the sort of products made by the companies represented in this section. Here’s what they had to say.

Q1 This time last year, many of you were optimistic that 2004 would be a good year for the IT business. Did it meet your expectations and what were the factors that affected your business for better or worse this year?

Martin Murphy, HP
HP has reinforced its position as Ireland’s largest IT and Services company, meeting and exceeding all of its expectations in 2004.

This company’s strength is its breadth of portfolio to deliver services and solutions. Every division of HP Ireland has posted near record growth this year with HP Services up over 40 per cent (managed services up 70 per cent) and hardware showing a 46 per cent increase year on year.

Niamh Spelman, Fujitsu Siemens
Fujitsu Siemens set ambitous goals for itself in the last year, particularly in the areas of mobility and our enterprise product suites.
We have been more than pleased with the results, having achieved the targets set and showing growth ahead of the overall market results. The shift to mobility was ahead of analyst forecasts but interestingly, the increase in mobile units had little effect on overall desktop results ie this is incremental growth in the market.
The take-up in mobile devices is across all form-factors including tablet and PDA. The tablet is establishing its own market with new users, particularly ‘on the road’ sales forces. In terms of enterprise, our position has been bolstered by our alliance with Sun in the SPARC mid-range and high-end arena.

Brian Jordan, Sun Microsystems
Sun’s fiscal year end completed in June 2004. Sun finished the fiscal with a very strong balance sheet, and a huge amount of free cash flow which allows us reinvest in the business. Our solution portfolio has been totally refreshed with a new Sparc hardware range, a new AMD hardware range, an industry leading web services software stack and a real alternative to Microsoft technologies on the desktop.
In Ireland, Sun’s enterprise and public sector business achieved 40 per cent growth compared to the previous fiscal.

Tim McCarthy, Dell
2004 was a great year for Dell and in fact exceeded our expectations on many fronts—particularly in relation to demand for servers and storage. Our third quarter worldwide shipment growth of 22 per cent, highlighted by a 35 per cent increase in notebook computer volumes, was double the rate of the industry, excluding Dell. Third-quarter shipments in EMEA, based on systems shipped from Dell’s Limerick manufacturing facility—were up 31 per cent, a 15-point premium to the rest of the market*

Strong customer demand has the company on track to exceed 5m printers and generating more than $1 billion in imaging and printing revenue this year.

In Ireland, 2004 has been a great year with the market growing faster than I have seen in the previous three or four years.

Q2 There has been some scepticism from analysts and academics about the competitive advantage provided by IT to today’s business. Do you meet such scepticism in the marketplace today and how do you counter it?

Martin Murphy, HP
The technology market in Ireland has changed and more companies are looking for a single solution provider. For example the growth we have seen in our managed services and outsourcing business is a clear indicator of customers’ confidence and need for technology within their own businesses. 

Niamh Spelman, Fujitsu Siemens
There has been much talk about a white paper which emanated from the Harvard Business School which considered the role of IT in business. We have found little evidence of this causing scepticism by the decision makers we deal with. We find that they are driven by business need and return on investment to their core business. Any scepticism is then neutralised at the outset.
In other words, while it may be a consideration by certain academics it is not impacting practical business.

Brian Jordan, Sun Microsystems
IT is fundamental to running a successful business. The current focus on corporate governance sweeping the world will totally rely on IT solutions to store, retrieve and secure business data in a controlled fashion. Without utilising IT solutions businesses will struggle to comply and will lose competitiveness.

Tim McCarthy, Dell
In the immediate aftermath of the dotcom years there was quite a lot of scepticism in the marketplace which had a downward effect on demand across all parts of the industry. I think, however that reality is now back in the market—both on the side of the buyer and the seller.

There continues to be an onus on technology companies to prove return on investment and to highlight the value and the competitive advantage that our products and services deliver. The opportunity lies with all of us in the industry to demonstrate that.

In addition to providing hardware, the provision of increasingly sophisticated support and services for customers has been a feature for businesses in recent years. A single point of accountability is one of Dell’s core philosophies and our solutions are resulting in less down time for organisations and lower maintenance costs, which is another competitive advantage for our customers: delivering revenue to the bottom line.

Q3 The last few years has seen accelerated consolidation around the Intel platform and the emergence of Linux as a serious enterprise option.
a) Is there a place for alternative hardware platforms in the enterprise computing space over the coming year?

b) How does your company intend to differentiate itself from competitors in this increasingly standardised market?

Martin Murphy, HP
Our high-end Unix business has remained strong in the past year. We are now beginning to see greater adoption of Linux, and to an extent Windows based Intel servers in the mission-critical enterprise space. This is a trend that we are driving with the committed support for the Open Source community and our partnership with Microsoft.

With such a broad product portfolio we have a unique position in providing customers with industry-leading technology and services to satisfy the needs of everyone from the home-user to large enterprises. We also set ourselves apart through our ability to partner with leading integrators and application providers to continually offer best of breed solutions.

Niamh Spelman, Fujitsu Siemens
Innovation with business application is a driving force in our industry—where a product offers value to a customer it will find its place in the market.
Technology leadership is at the core of Fujitsu Siemens—while there is standardisation in the broadest terms, we focus on our core business through quality, R&D, strategic partnerships with other industry leaders, and maintaining a close relationship with key customers to deliver against their specific needs.

Brian Jordan, Sun Microsystems
Sun has just announced Solaris 10, free and open source. To solve the challenge of having a proven, resilient, secure and scalable operating system available for most hardware, we now support Solaris on Intel hardware environments. Sun’s own Sparc hardware solutions continue to offer advantages in terms of resilience, performance, and scalability.
Customers can now choose either the features of an Intel hardware server environment or the advanced features of the Sparc server environment and still deploy their business applications on the most advanced operating system available in the marketplace.

Our products are built on standardised components delivering solutions that can help drive cost and complexity out of the business. We continually add innovation and return much of this innovation back to the industry either through future standardisation or contributions to the Open Source world. Our goal is to ensure that any of our offerings have the quality assurance of extensive development, extensive testing and are supported by best of breed services for our customers. Sun is the second largest contributor to the Open Source world after Berkeley University. The whole Java community process is facilitated by Sun.

Tim McCarthy, Dell
Dell’s model is to enter a market when the market has already been created. This has worked well for us in the past and has helped to deliver value and competition on behalf of our customers. On this basis, we will continue to evaluate the trends that are emerging in the enterprise space and will ensure that we are ready to compete as and when new trends or markets emerge.
An example of this has been customer movement from proprietary Unix solutions to Linux environments. This is one of the fastest growing markets at the moment based on reliability, scalability and the cost savings to the customer.
 
It is our view that the standards-based hardware platforms available now meet the needs and demands of the vast majority of enterprise customers and that through a range of different software partners they can continue to meet this need into the future.

As in the past, our direct model differentiates us from our competitors. We are also constantly collaborating with partners to produce new and innovative products and services that drive competitive advantage for our customers at every level.

Q4 What are the compelling technologies and/or services that will drive your company’s business in 2005?

Martin Murphy, HP
We believe that we have a great deal to offer the Irish marketplace in 2005 as we have done this year with projects such as Classroom 2000 and the Bank of Ireland outsourcing deal. We are working to ensure that this business will continue to generate considerable growth next year.
Our Blade technologies and integrated storage is continuing to generate interest among our enterprise customers and we are expecting to see growth next year as business strives to consolidate and improve the management of these environments.  
The paradigm shift in printing is already happening and we expect to see momentum for this grow as demand for colour and multifunction devices that print, scan and copy, further develops. With this technological shift comes a need to manage the use of these devices. HP offers services that will help reduce IT/Procurement resource around these products and also provide a balanced approach to how a print/copier environment should look for an SMB or corporate customer.
Our notebook business is likely to see very healthy growth. Customers from the home to the corporate market are increasingly asking for thinner and thinner personal computers and we are expecting our business to benefit as customers migrate from desktops to notebooks.
It’s been a big year for mobility with the increased adoption of 3G and wireless by businesses and individuals. As the market continues to develop we envisage considerable growth for our handheld devices.
There are many emerging technologies in the enterprise space of which virtualisation is likely to be the most prominent.

Niamh Spelman, Fujitsu Siemens
For the last four years, Fujitsu Siemens has built its strategy around mobility and business critical computing. We remain committed to these core deliverables to ensure that our technology is giving the customer the level of flexibility that their business requires and at the same time ensuring that they have a robust infrastructure capable of managing that diverse client base.

Brian Jordan, Sun Microsystems
Solaris 10 is our most important and significant announcement for fice years that will drive the growth of Sun throughout 2005. It is now available on hardware from over 270 vendors. Every Irish business can evaluate their current environments and decide on the potential returns in changing to Solaris.

Our Java Enterprise System (Web Services Solutions) and Java Desktop System (Desktop Alternative to Microsoft) continue to gain market share,

Earlier this year, Allied Irish Bank committed to the Java Desktop System for the services delivered to its branches. A number of enterprises in the telecommunications sector have adopted the Java Enterprise System technologies.

From a hardware perspective, Sun now delivers an extensive range of desktops and server technologies based on Sparc and AMD Opteron. We are experiencing exciting growth with both technologies.

There will be other key events in 2005 that will include the availability of Solaris 10 as an open source product, continued enhancements of our subscription based approaches to acquiring our Java Enterprise System and Java Desktop System, and further development of the next generation of  hardware products based on Sparc and AMD.

Tim McCarthy, Dell
The year 2004 saw Dell’s enhanced-services business continue to grow strongly, with a year-on-year revenue increase of 32 per cent. Combined enhanced-services revenue for EMEA and APJ grew almost 60 per cent.