Canalys CEO warns digital giants now face disruption

06 DEC 2017

CANALYS CHANNELS FORUM, PERTH, AUSTRALIA: The great disrupters in the west have disrupted themselves during 2017 as fears digital platform giants are forging monopolies grow, ‪Canalys‪ CEO Steve Brazier told delegates.

In his opening keynote, Brazier (pictured) noted the tide is turning against large web companies including Google and Facebook, citing the hammering they are taking over tax issues as an example.

“By not paying tax, say in the retail example, they’re forcing local businesses out of business. It’s not a level playing field, and people are beginning to protest in the streets about these issues and governments are starting to react.”

In June, the European Commission fined Google a record €2.42 billion for biasing its search results to favour its own shopping comparison service, while Facebook is facing trouble in the region regarding the sharing of WhatApp users’ data.

“You [channel partners] have lost money as a result of this transformation,” Brazier said.

The change in public and government positions opens up opportunities, he said, but added digital transformation requires companies to have the right skillsets, which always remains the biggest challenge.

“You will need to do more specialisation by understanding your customers, the industry sector, the regulations and the security implications that different customers face,” he explained.

Brazier also believes Intel is in big trouble as it missed the smartphone wave and its processors aren’t well suited for drones because of the energy consumption. He expects an aggressive approach to acquire the chipmaker by 2021, if not sooner.

Cloud wars
Amazon, Microsoft and Google, which Brazier referred to as the big three cloud providers, are now buying more servers per quarter than HP Enterprise or Dell sell worldwide over the same period. The scale of capital investment is simply enormous and component suppliers are responding to this, he said.

Microsoft, Google and Lenovo are rapidly expanding their cloud offerings, while Tencent and Alibaba in China are expanding overseas: Canalys expects to see the companies in most countries in the Asia Pacific region in 12 to 18 months.

The Canalys chief explained the leading seven IT players (the big three cloud companies plus Facebook, Alibaba, Tencent and Baidu) are changing the structure of the industry, and the priorities of component vendors and their sales teams.

However, the seven companies face a massive capex challenge: Microsoft and Amazon are each spending $2 billion to $3 billion a quarter on building data centres, with total spending by the pair to date in the region of $20 billion, Brazier said.


Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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