Canalys Forum, Highlights Blog

I’m going to open this blog with possibly the least original statement ever – we’re living in a time of immense change. Politics, economics, pandemics, sustainability, technology – it’s everywhere, from the moment you log-on in the morning to the moment you log off in the evening. It’s well documented, high-speed, often depressing and nothing new. Neither is predicting the future, but it’s certainly getting harder. That’s where the analysts come in.

Every year senior leaders from across the IT industry descend on a major European city (in this case Barcelona) for the Canalys Forums, an event designed to do exactly that. Hosted by its parent company Canalys, the stated aim is to provide the IT channel with independent and impartial content while creating a platform for vendors to educate the channel. Spread across three days and incorporating two main stage sessions and around 20 breakout sessions, the role of the team at Canalys is to use the events of today to anticipate impact and trends in the IT industry tomorrow. As you’d expect there were several recurring themes across the event which were effectively summarised in five main predictions. Let’s dive into them:

Expect public cloud prices in Europe to increase by 30% in 2023.

Unfortunately this is based on sound economic theory – Canalys is predicting energy costs to double as the situation in Ukraine drags on, which combined with inflation at 4% (conservative), and the reality that the world’s largest hypervisors are all US businesses trading in the strong dollar rather than the weak pound, means significant price rises are all but inevitable. Whilst price increases are unlikely to be a surprise to anyone, the magnitude of these is unprecedented and certainly reinforces the importance of optimisation and planning when it comes to where customers provision their infrastructure.

By 2025 AWS Marketplace will become a top 10 distributor in EMEA, as marketplace sales of third-party technologies, sold via channel partners, accelerate rapidly.

Growth in cyber-security, cloud and software will lead to marketplaces becoming more prevalent, with AWS Marketplace already having the head start in this space. These marketplaces in themselves are nothing new but up until now procurement through them has been limited, with the vast majority taking place via the traditional Partner -> Distributor -> Vendor model. With the rise of marketplaces such as the Apple AppStore in our consumer lives, alongside the growth of millennials in the workforce and their subsequent procurement expectations, Canalys is predicting a 56% compound annual growth rate (CAGR) over the next five years, with “super marketplaces” such as the AWS Marketplace, the Azure Marketplace and the Google Cloud taking the lead on this, with  other “niche marketplaces” focussing around more specific areas also having their share too. This is an emerging area and customers will look to partners to help them navigate this procurement model (something we’ve been seeing already).

By 2027, subscription, consumption, PLG and aaS models (combined) will make up less than a third of the global IT Market.

This was a surprising prediction (especially given the direction of travel of most vendors), but it makes sense with qualification. This isn’t to say spending in these areas will reduce (unlikely), more that the increase in Managed Service spend will dilute the proportional distribution here. 30% of organisations today outsource some or all of their IT, and driven by the importance of focus and the ever-widening skills gap, Canalys is expecting to see the value of that spend increase in EMEA by nearly 50% over the next three years (from $121B today to $175B by 2025).

No company will make a profit from Metaverse hardware and software within four years, with most projects shuttered by 2025.

This was a controversial one as a previous panel of senior executives had all anticipated the exact opposite. My personal view would be to exercise caution in this space. The Metaverse has potential to be an absolute gamechanger but the technology is still relatively embryonic compared to what it could be in the future and timing (as we know all too well) can be as important as good judgement when it comes to technology investments.

In 2023 we will see a record number of corporate bankruptcies.

Not the most optimistic of predictions (and one I wholeheartedly hope is wrong) but, as the old saying goes, “hope for the best, plan for the worst”. More than ever, it’s imperative organisations make smart investments in technology to accelerate their digitisation, employee efficiency and customer experience, all whilst retaining a secure environment. The key word in all of this is “smart” though – we are far beyond the days of throwing technology at a problem and hoping it goes away. More than ever it’s critical that IT budgets are spread as effectively as possible to ensure maximum business value is eked out of every single pound.

What surprised me more than anything at the event was the overwhelming sense of optimism. Yes, there’s a lot wrong with the world today and yes it’s more than likely we’ve got some painful decisions and an awful lot of hard work ahead. But actually as a sector, technology once again has the unique opportunity (as it did in the pandemic) to reduce some of that pain, relieve some of those challenges and ultimately come out the other side stronger and more robust than ever. IT will be part of the solution, not the problem, and with every new challenge comes opportunity. I’m looking forward to continuing to work with our partners and customers as we navigate this changing world together.