Enterprise tech survivors: 2011's winners and losers so far

Enterprise tech survivors: 2011's winners and losers so far

Summary: There's a lot of volatility among technology suppliers and that fact can make life difficult for IT buyers. Here's a look at the winners and losers in business tech so far in 2011.

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The following is a post I put together based on a talk I gave at TechRepublic's community powwow last week in Louisville. The mission: Handicap the business technology winners and losers so far in 2011.

As I thought through the winners and losers---I'm a financial nerd more than a tech one so I incorporated a lot of earnings conference calls---it became apparent that 2011 was really a year of massive shifts. Like the stock market, the tech vendor landscape has been volatile. As an IT buyer, that volatility can be downright alarming. Why? You could buy gear from a vendor headed for the dustbin, or what IBM CEO Sam Palmisano called the boneyard of tech.

Credit: CBS

With that said, here's a look at how I went about selecting key winners and losers so far this year. We'll start by sector working from inside the data center and going out from there.

Data center guts (servers, storage, networking, integrators):

Winners: IBM, EMC, NetApp, Intel

  • IBM is riding a mainframe cycle, new Power systems and managed to get a lot of PR out of its Watson Jeopardy showdown. Now baby Watsons are going to be used in call centers, hospitals and other areas. Those headlines manage to pull a lot of software, hardware and services along with it.
  • As for EMC and NetApp, recent months have featured a run on storage acquisitions. HP and Dell have both pulled the trigger on storage acquisitions, but pure plays still rule the roost. EMC and NetApp continue to thrive. After all virtualization needs a lot of storage.
  • Intel's Xeon franchise is surging in servers. Even though Intel faces questions about the tablet and smartphone market, the data center market is locked down.

Losers: HP, Cisco, Oracle

The loser category may both feature turnaround stories in the not too distant future. HP has been a mess for three quarters and enterprise buyers have to be wary. The PC business is being spun off, HP is overpaying for Autonomy and the TouchPad is dead. It's a soap opera not an IT giant.

  • Cisco took its body blows early due to slowing sales and a bad turn in the consumer business. However, it got focused quickly, fixed costs and now is looking to punch HP in the mouth after months of networking pain. My guess is Cisco won't be in the loser category too much longer.
  • Sun customers at TechRepublic Live were not big fans of the Oracle acquisition. Customers panned the lack of support for Sun gear. Oracle has been focusing its hardware efforts on the high end and neglecting those who bought Sun commodity gear. Although Exadata may be a big hit for Oracle, former Sun customers appear to be stuck.

Work in progress: Dell

As for Dell, I like what the company is building with its SaaS acquisitions. Sure, Dell is building a stack of stuff and would love to sell you servers, storage and networking like everyone else, but its open architecture message makes sense. And it is leaving its SaaS acquisitions alone to grow.

Enterprise software:

Winners: VMware, Oracle, SAP, Microsoft, Red Hat

  • VMware continues to dominate the virtualization model and is moving up the software stack. In many respects, VMware reminds me of the company it derides---Microsoft. VMware wants to be the cloud OS and has other lines with it---Zimbra, SpringSource etc. I can find customers worried about lock-in, but they don't seem to be running for the exits.
  • Oracle is well, just Oracle. The company's margins are stellar, it has promising hardware with Exadata and could theoretically punch IBM in the mouth someday. Customers may be wary of Oracle and the licensing model, but they stay.
  • SAP is the application king and after a few years of turmoil with Leo Apotheker, the company is singing a nice mobile tune. I'm surprised how well Sybase has worked out for SAP.
  • Microsoft is driven by its business software unit, notably Office and SharePoint. All you have to do is look at the earnings report and you realize that enterprises are fueling Microsoft right now. Azure also looks promising.
  • Red Hat is on track to be the first $1 billion open source software company. JBoss looks strong, Red Hat enterprise Linux thrives and there's not much you can complain about.

Losers: CA, Sage

In the loser bin, the biggest odd duck I had was CA. The problem for CA is the same one it has had for years: It's cobbled together and management can't outline a vision. CA may have a vision, but it certainly can't communicate it. The results are plodding.

The audience at TechRepublic Live 2011 also added Sage to the loser category. A few folks said Sage was just as cobbled together and being tossed.

Cloud:

Winners: Amazon Web Services, Salesforce.com, NetSuite, Workday, SuccessFactors

  • Amazon Web Services will be Amazon's largest business and if it can ever figure out how to do enterprise agreements and play the account management game it will be very dangerous. AWS is good enough for government work and probably your shop too.
  • Salesforce.com continues to gain traction and I think it's on to something with this social enterprise argument. Chatter could become a standard.
  • NetSuite continues to land ERP accounts. Most likely outcome for NetSuite is that it continues to grow and then Larry Ellison, who already owns half the company buys the rest and makes it an Oracle unit.
  • Workday is the company that scares SAP and others. For services companies, ERP may mean Workday. Workday is primarily all about HR today, but watch its foray into financials very closely. There's a 2012 IPO on deck.
  • SuccessFactors is another HR play that is installed everywhere. The business execution vision is interesting and has promise.

Losers: The market is doing too well for now, but a shakeout looms.

Work in progress: Google Apps

As for the work in progress, Google Apps appears to be focused on the midmarket these days. Google Apps is now commonplace, but I want to see what's next.

PCs

Winners: Lenovo, Apple, Dell

  • Lenovo's gains of late have been nothing short of stunning as it rides the enterprise upgrade cycle. I like the ThinkPad tablet for uniqueness---I have no idea how it'll sell though.
  • Apple: Macs are increasingly in the enterprise and I suspect that there will be more of them. Tim Cook, Apple's new CEO, seems much more enterprise friendly than Steve Jobs, who allowed the company to sell into corporate accounts, but basically was all about the consumer play.
  • Dell: Dell is selling into the corporate PC upgrade cycle too and generally doing well. Profitability leaves something to be desired for the PC business. Dell could---arguably should---drop the consumer fascination.

Losers: Acer

Acer was about netbooks only is halfway interested in tablets and it's questionable where this brand heads.

Work in progress: HP

HP is the second most profitable PC maker behind Apple so you can't call it a loser. However, the PC spin-off communication was botched and uncertainty rules. Until HP clarifies its plans, HP's PC unit may struggle.

Mobile

Winners: Samsung, Google, Apple, HTC, Verizon, AT&T

I lumped hardware, software and carriers together here.

Clearly Android is a key winner. Android is dominant and carries Google services and a few hardware makers along for the ride. Samsung and HTC are the top dogs in the Android world. It's quite an Android army. One nit: Android feels to geeky to me. In fact, it reminds me of a mobile Windows 3.1.

Apple as a winner is a no brainer. The iPhone and iPad dominate. In fact, no other tablet maker has come close to denting the iPad. Frankly, it's sad that Apple caught the industry so flat-footed that rivals haven't been able to close the gap for years.

At the beginning of 2011, it looked like Verizon and AT&T were going to kill each other once Verizon got the iPhone. Nothing happened. The two companies own U.S. wireless service.

Losers: RIM, Nokia, Microsoft

As for the losers, RIM strikes me as a mess. The PlayBook is troubled. RIM overpromises and underdelivers. I need to see a few quarters of sustained BlackBerry 7 device sales before I even consider thinking differently about RIM.

Nokia and Microsoft are losers until proven otherwise. Nokia is a mess and is betting on Windows Phone 7, which hasn't really gained much traction. Windows Phone 7 is a sweet OS and arguably second only to Apple's iOS. The problem is no one is buying Windows Phone 7 devices in volume. That's where Nokia comes in. Both companies have to prove they can compete as a unit. And don't get me started on Microsoft's continued no-show in the tablet market.

Works in progress: Sprint

And finally, Sprint is an interesting work in progress. Customer service has improved and the budget pricing is easy to understand. However, Sprint has a garbled network vision with WiMax and LTE and a balance sheet time bomb via its Clearwire partnership. On the bright side, Sprint is getting the iPhone. If the network holds up, Sprint may be up for renewal.

Companies worth watching:

Here are a few companies I find interesting to watch:

  • Citrix: An interesting mobile story and desktop virtualization play. One thing to watch regarding Citrix is the costs involved on the back end if you use it for desktop virtualization. Ditto for VMware. Moka Five has good story to tell about local/cloud and inexpensive implementations relative to the bigger dogs.
  • Riverbed: WAN optimization could go mainstream. The company is chugging along nicely.
  • Zoho: This SaaS vendor has a wide selection of apps and is one of the few companies that hasn't shunned the SMB market. Many vendors start SMB and then move up the food chain. Zoho is worth a close look and is a bit of an odd duck: The company has been bootstrapped from the beginning and has no interest in selling out. Operates out of India and Austin, Texas with an office for looks in the Valley.
  • Fusion-io: I like its SSD approach to the data center, but need to see more traction.
  • Sea Micro: Here's a company that builds kick-ass servers with Atom chips. It also builds and engineers its systems in the U.S. What's not to love?

Topics: Emerging Tech, Apple, Tablets, Storage, Oracle, Mobility, Microsoft, Laptops, Hewlett-Packard, Hardware, Enterprise Software, Dell, Cloud, Banking, Telcos

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22 comments
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  • One more to watch: ARM

    The chip designer is a hidden beneficiary of the explosion in mobile and now also has its sights set on the low-power server market in cloud data centers. ARM is Intel's biggest threat long-term.
    philwainewright
    • RE: Enterprise tech survivors: 2011's winners and losers so far

      @philwainewright - as HTML5 is Flash's long-term threat.<br><br>Like Adobe, Intel will adapt. <br><br>And, if HTML5 will fragment which in turn defeats the purpose of an "open standard", ARM will prove that a billion quad core ARM CPUs may still prove less powerful than a million quad core Intel CPUs. And not run 64-bit, which is not exactly useless for meaningless processes such as... well, anything with numbers (databases, spreadsheets, and other useless things...)
      HypnoToad72
  • RE: Enterprise tech survivors: 2011's winners and losers so far

    [i]Nokia and Microsoft are losers until proven otherwise. [/i]
    Guilty until proven innocent? Seems to me that there has been a lot of interest in Nokia and Microsoft, more so Microsoft now that android is filled with legal troubles. I'm going to go ahead and correct you and put Microsoft in the winners list.
    LoverockDavidson_-24231404894599612871915491754222
    • RE: Enterprise tech survivors: 2011's winners and losers so far

      @LoverockDavidson_ Agreed. Microsoft is the winner. If <a href="http://www.webmastersitesi.com/programlama-dilleri/88440-oracle-nedir-kavramsal-ozellikleri.htm" rel="muse" title="oracle">oracle</a> win the case against google which started lately oracle will be my real winner.
      oyna
      • RE: Enterprise tech survivors: 2011's winners and losers so far

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    • Oh, please. Winning/Losing is about data and sales ...

      @LoverockDavidson_ ... not opinion and bluster, nor guilt and innocence (nor what your portfolio or self-esteem are base on). He's correct, based on data and sales, they're a loser.

      As is Linux on the desktop (I'll say it for you).

      It isn't a statement about potential, nor quality.
      daboochmeister
      • RE: Enterprise tech survivors: 2011's winners and losers so far

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  • How are they going to Impact Federal Contracts

    I am not sure which software is going to be adopted in the Federal Government Environments. Looks like amazon has leg up

    www.Sf86jobs.com
    sivaselva
    • RE: Enterprise tech survivors: 2011's winners and losers so far

      @sivaselva ZDNet should have removed this spam garbage by now.
      TigerRaptorFX
  • RE: Enterprise tech survivors: 2011's winners and losers so far

    http://url7.me/Vlk4
    lsiehi
  • RE: Enterprise tech survivors: 2011's winners and losers so far

    http://url7.me/Vlk4
    lsiehi
  • So NOT a MS nor RIM fan. Still I'm curious

    as to just how these two have lost? They are still up and running... The same can be said for Nokia as well. Ms certainly has the revenue sources to continue this fight for a long time to come. RIM has less income perhaps but has a strong base of enterprise accounts providing it with revenue that will allow it to continue the fight. Same can be said for Nokia at least in terms of revenue to continue if not enterprise accounts. Each was caught flat footed I'll grant you but MS has been caught flat footed before like say the whole internet thing and Netscape and look how that turned out. Business is not a one punch and your out thing like rockem sockem robots. No business is a hard fought 12 round boxing match in which you can look great for the first 8 rounds even 11 but if you don't have the wind to last all 12 no matter how many points you score in the first rounds that knockout is certain to catch you in the 12th.<br><br>Pagan jim
    James Quinn
    • RE: Enterprise tech survivors: 2011's winners and losers so far

      @James Quinn Nokia is hemorrhaging money almost as fast as they are losing market share. Windows phones are not exactly flying off the shelves. In this world of how much can I make overnight, these two are not showing anything the investors want to see. Microsoft should have just announced the acquisition of Nokia outright, instead of Nokia being beholden to Microsoft, while remaining independent.
      Rick_Kl
  • HP??

    How can HP be a loser in the data center piece when a) it is jettisoning its non-data center related PC business b) is only one of the few companies on your list that actually sell data center services and c) the reasons cited have nothing to do with the enterprise space?

    If anything you cited a repositioning of HP to become *stronger* in the data center market.
    Your Non Advocate
  • RE: Enterprise tech survivors: 2011's winners and losers so far

    Only thing i would have changed with that list is Move Microsoft and Nokia to work in progress for mobile, they have potential they just have to prove it.
    Gavello
  • RE: Enterprise tech survivors: 2011's winners and losers so far

    http://url7.me/T0i4
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    kingsain
  • Windows phone 7 loser ???

    The windows 7 phone OS is not even 1 years old !!!

    Lets see in the next couple years. Windows phone Os is the only OS with RIM who can offer real complet business solution. So i suspect it will slowly gain some market share over the next couple years.
    SylvainT
  • Microsoft and Nokia? And where is this &quot;Tablet Market&quot; of which you speak?

    I would say that both Nokia and MS are not winners, nor losers, as less then a yearr ago Microsoft launched WP7 in what I would describve as a soft opening.

    No one is buying as Microsoft has not started advertising to the level and expense that both Google and Apple have.

    Smartphones have been around for 5 years or more, PC even longer. Apple (or anyone) has yet to prove that tablets are here for the long haul, so to talk about the tablet market as something already won or lost is "jumping the gun" as you would say.
    :|
    Tim Cook
    • I agree, Spock

      @Mister Spock
      [i]Apple (or anyone) has yet to prove that tablets are here for the long haul, so to talk about the tablet market as something already won or lost is "jumping the gun" as you would[/i]
      William Farrell
  • RE: Enterprise tech survivors: 2011's winners and losers so far

    I dunno about the part that the HP TouchPad is dead. I have one, just got it in the employee purchase program (apparently about equivalent to the fire-sale graymarket) and the unit seems very much alive. But it needs a real browser, not the dumb one that comes with the unit, and it needs a real command line that does things. At HP, they also need to stop making stupid public statements like "spinning off the PC business" when they do not already have a buyer lined up. Inside the company, last I looked, people are still using PC's and they do not get their jobs done with Android phones.
    And I'd like to throw in a praise for Amazon. The Kindle appears to be a success. My domestic partner loves hers, and she is not that easy to impress.
    tavent