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Marching Orders 2016: Intro and the IT Landscape

One of our most popular recurring features over the years has been "Marching Orders," a collection of advice and predictions from channel luminaries about what to do and what to expect in the year ahead.

For 2016, we'll be running individual Marching Orders entries all through the month of January. Check back often for updates. This week look for entries from other 1105 Media editors from RCP's sister publications, including Redmond, Virtualization Review and MSDN. Next week, we'll carve out space for RCP columnists and contributors. The following week, Microsoft and other channel executives will weigh in. In the last week of the month, we'll hear from partners, analysts and other industry experts.

This first installment of Marching Orders is a look at some of the handrails that could help you plan for the coming year. Historically, the health of the Microsoft channel has tracked a few macro indicators, primarily sales of PCs, servers and storage. Mobility and cloud have become critical more recently. Last month, market researchers at IDC released Q3 2015 results, projections for the full year and some expectations for 2016. It's a very mixed bag.

  • PCs: Following a dismal year, which saw PC shipment volumes drop a projected 10.3 percent, IDC is looking for the bleeding to slow in 2016. IDC still expects a soft market in the first half of the year, with a tailwind of commercial replacements and Windows 10 business upgrades in the second half. Still, the net effect is for a slight drop in shipments for 2016 from already low levels. A bright spot that the Framingham, Mass.-based analyst house sees is in detachable systems, such as the Microsoft Surface and its clones. Counting detachables as part of the PC market might be enough to flip a slight fall in shipments into a slight increase.

  • Servers: Last year was a relatively strong year for server sales. The third quarter (the most recent available) marked the sixth consecutive quarter of year-over-year revenue growth. The biggest boost was earlier in the year with the combination of Windows Server 2003 end of support and Intel Grantley platform refreshes. More opportunities for growth of the modest, single-digit variety exist in early 2016 with the end of support for SQL Server 2005 on April 16. IDC estimates that there are 800,000 servers globally running SQL Server 2005. As you'd expect, most growth is happening in the rack-optimized, blade and density-optimized sectors, with towers on the decline. A lot of those rack-and-blade-style servers are going to the cloud megavendors, rather than to more traditional server customers.

  • Storage: The picture for disk-based storage is similar to that for servers. Overall, the market is growing, but slight declines in enterprise shipments are masked by booming growth in shipments direct to hyperscale datacenters.

  • Smartphones: Looking at smartphones as a proxy for mobility, there's no question that mobility continues to be a huge market force, but the go-go period where vendors rushed to fill every hand with a smartphone appears to have run the most profitable part of its course. IDC expects that when all the data is in, 2015 will prove to be the first year of merely single-digit growth in worldwide smartphone sales, albeit high single digits (9.8 percent). While that's a challenge for carriers and handset manufacturers, it speaks to the ongoing huge opportunities for the channel in enabling mobility, helping manage devices and creating cloud-based applications that help customers get the most business value out of their devices.

As with almost every year since the Great Recession started almost a decade ago, the core technology infrastructure business has problems but seems able to float traditional Microsoft partner infrastructure businesses for another year. The real growth, though, as in most of the last few years, appears to be available only to those partners who can harness the trickier opportunities in cloud and mobility.

More Marching Orders 2016:

Posted by Scott Bekker on January 04, 2016