Tech: AI innovations, market disruptions and emerging opportunities
Technology
The themes SPR will be focusing on in 2025 include 1) AI related: (a) AI applications move to the edge - benefitting the likes of Ciena, Arista and Crown Castle. (b) AI networking transition to ethernet vs. InfiniBand, benefitting Arista, Cisco, Juniper and Extreme. (c) AI use cases that are delivering strong ROI vs. others that are not, despite strong sales efforts by vendors - impacting renewals for Salesforce, ServiceNow, and others. 2) In cyber security, areas of growing priority include SOC automation and Next Generation SIEM. 3) More vendors bypass distribution and sell via the CSP marketplace or direct, negatively impacting large distributors. 4) BEAD - despite delays, this program will drive meaningful revenue. 5) Vendors benefitting from the rapid growth in DevOps / DevSecOp.
Edition: 202
- 10 January, 2025
IT Spending: Sentiment weaker than last quarter
Technology
SPR’s latest channel checks reveal disappointment that the second half pick up that many expected has not materialised. Stock specific feedback includes: ServiceNow - all very positive - probably the strongest indications for any vendor. Crowdstrike channels and end users see the vendor moving quickly past its recent crash. SPR has picked up mixed feedback re. Fortinet’s recent security breach and whether it negatively impacted Sept Qtr end deal flow. Outside of security, the vendors seeing an increase in positive comments include IBM, Oracle, Microsoft, Arista and Juniper/Mist. It has been easy to pick up comments on share loss by Cisco.
Edition: 197
- 18 October, 2024
Security Spending: Trends remain healthy
Technology
Key takeaways from SPR’s latest field work include: CrowdStrike - seeing some deal slippage, but most respondents believe few customers will actually switch vendors following the global IT outage. SPR has heard of renewal discounts that include buy 3-yr and get 1-yr free. SentinelOne - benefitted from winning more deals at the end of the quarter, assisted by CRWD’s crash. Zscaler - mostly positive input but some concern re. the maturing of the SASE market and possible disruption to sales from the shuffling of sales personnel between ZS to Wiz and from ServiceNow to ZS. Fortinet - industry contacts are positive about its acquisition of NextDLP but less enthusiastic about Laceworks.
Edition: 193
- 23 August, 2024
Technology
Andrew Freedman sees a limited growth market, pricing pushback on renewals and underwhelming AI debut as key concerns. His view is supported by a detailed TAM analysis where he estimates / aggregates the ACV for ~20,000 global customer / prospects based on SKU level pricing information. Additionally, his primary research efforts suggest NOW's "assertive" pricing and bundling tactics will be met with greater pushback as the company attempts to pass through another ~30% price increase onto existing customers. Even though there is much left on the AI product roadmap in 2024 and beyond, Andrew believes investors will be disappointed in NOW's ability to monetise. 30% downside.
Edition: 179
- 09 February, 2024
Technology
According to Verbatim’s latest channel checks, 1Q24 sales trends are significantly stronger on a y/y basis. This strength stems from Cloud migration, ESM projects and Jira Work Management, while larger deal sizes are driving q/q trends. The 2Q24 outlook for TEAM is also stronger on both a y/y and q/q basis. Close rate continues to remain steady according to 100% of their respondents and the flow of new leads is mostly increasing. Also noteworthy, ServiceNow is losing market share to TEAM, but price increases are leading to competition from emerging vendors such as Monday.
Edition: 172
- 27 October, 2023
Technology
Q3 trends are strong as net new customer business grows - 100% of respondents to Verbatim’s latest channel checks tell them that they are meeting their internal sales targets. The outlook for Q4 is also positive due to ongoing price increases and a strong sales pipeline. FY23 is expected to be up significantly Y/Y (by 20% on average). TEAM continues to gain market share (particularly from ServiceNow) as they maintain best-of-breed products and customer experience. Respondents expect project management software growth to be dramatic over the next 12 months as a large push for the Jira line of products helps drive big licensing sales.
Edition: 159
- 28 April, 2023
Rapidly detecting meaningful language changes in 10Qs / 10Ks
HII: Takeover interest? The following wording has been removed from its 2022 10K vs. last year, "These provisions may discourage acquisition proposals or delay or prevent a change in control, which could reduce our stock price". General Motors: China rethink? “Pursuing opportunities in the Chinese market is an important component of our global growth strategy”, has now been removed from its 10K. ServiceNow: Brighter growth rate outlook; dividends set to resume; strategic transactions? US Steel: Covenant concerns; customer payment delays? Brinker International: Missing performance targets.
Edition: 154
- 17 February, 2023
IT Spending & Cyber Security
Technology
As always, SPR will be tracking the trajectory of IT spending, changing priorities and competitive dynamics for the segments and vendors they follow. Key questions / themes for 2023 include: IT Spending: 1) Which vendors are seeing more than anticipated pressure from reduction in seats and end user efforts to contain costs? 2) Vendors benefitting from the rapid growth in DevOps / DevSecOps. Cyber Security: 3) Which vendors are executing well with XDR solutions, capturing share and potentially disrupting existing vendors? 4) Maturing of the End Point Protection market. 5) Growth for Zero Trust Network Architectures. Additional Themes: 6) Vendors successfully leveraging AI / ML. 7) M&A speculation.
Positive views include: Palo Alto, Cyberark, Five9, Snowflake, Ciena, Datadog. Cautious: ServiceNow, Salesforce, Tenable.
Edition: 151
- 06 January, 2023