巴克莱-美股-软件行业-美国软件业12月VAR调查-2019.1.17-27页.pdf

Equity Research 17 January 2019 CORE Barclays Capital Inc.and/or one of its affiliates does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.PLEASE SEE ANALYST CERTIFICATION(S)AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 18.U.S.Software December VAR Survey December VAR Survey:We present our VAR Survey for the December quarter-end,which covers Microsoft,Citrix,and Symantec.Healthy Q4,but Diverging Outlook:Software spending remained healthy in Q4,with 85%of respondents reporting some form of spending growth.The VARs expectations for spending over the next three months also came in strong,with 81%of respondents expecting some growth(vs.82%in our last survey).However,the long-term outlook was more mixed with 15%of VARs expecting a lower spending environment due to macroeconomic factors in the coming 12 months(up from 0%last quarter,and 4%one year earlier).Microsoft VAR Survey Shows Strong Demand through Year End:Despite the noise around negative macro data points and stock market volatility,VARs saw solid demand during calendar Q4(weighted average outperformance of 6.7%).However,expectations are moderating for the next quarter,with 42%of resellers now looking for double-digit growth over the next three months(down from 73%in June and 50%last quarter).On the product side,the survey continues to show strong demand for Azure,as premium mix stayed high this quarter and resellers continue to see Azure workloads as incremental(3rd quarter in a row)to on-premise infrastructure.Citrix Mixed VAR Survey:This quarters survey came back mostly mixed for Citrix,with VARs seeing somewhat diverging trends in their Citrix-related business.Despite the three most recent surveys being positive,we highlight that responses have been getting incrementally less upbeat.The majority of respondents reported performance ahead of expectations,but some resellers saw the quarter miss their internal expectations.VARs continue to expect positive growth for the next quarter.Product-wise,it seems that Citrix continues to lag peers when looking at functionalities in its mobility suite,but the gap does not appear to be getting wider.Finally,competition in the desktop virtualization market(namely VMware)as well as the lack of catalysts for adoption continues to be top of mind for customers as the resellers surveyed continue to highlight those as the biggest threat to Citrixs growth.Symantec Mixed VAR Survey on Dispersed Results.The percentage of VARs that were above plan increased to 30%,which is slightly better than last quarter but so did the percentage of VARs that were slightly below plan,which is why we call these results dispersed.The percentage of VARs expecting growth next quarter is lower than what we have seen in prior surveys,with only 33%of VARs expecting y/y growth next quarter,compared to 75%in prior quarters this aligns with our billings estimates,which are not calling for growth.The discounting environment looked slightly better,which is encouraging.All together,we call these VAR results mixed.SECTOR UPDATE U.S.Software POSITIVE Unchanged U.S.Software Raimo Lenschow,CFA+1 212 526 2712 BCI,US Saket Kalia,CFA+1 212 526 8465 BCI,US Pree Gadey+1 212 526 3156 BCI,US David Rainville+1 212 526 9318 BCI,US Mohit Gogia+1 212 526 1053 BCI,US David Fisher+1 212 526 7126 BCI,US Andrew Thomas+1 212 526 8081 BCI,US Michael Maguire+1 212 526-8682 BCI,US Barclays|U.S.Software 17 January 2019 2 December VAR Survey Results As usual,in conjunction with our quarterly earnings preview and upcoming results season,we asked a range of software value-added resellers(VAR)and other partners for their views on the performance of individual companies under our coverage,as well as their opinion on the broader spending environment.This survey covers the enterprise software names that have somewhat of a meaningful channel business and a December quarter end,which includes Microsoft,Citrix,and Symantec.Healthy Q4 But Diverging Outlook All partners were asked the same top-down related questions,and we have aggregated the responses in the charts below.The first question asks how general software spending was over the past three months(Figure 1).Data for the December quarter came in healthy with 85%of respondents seeing some growth(up from 77%in September),while no respondents saw declines in Q4 y/y(vs.5%in Q3).We also note that 50%of VARs saw improvements over the prior quarter vs.68%in our September survey(see Figure 2).However,15%noted a worse quarter(up from 9%last quarter).FIGURE 1 How was software spending,y/y,over the past 3 months?FIGURE 2 How does the current quarter compare to the prior quarter?Source:Barclays Research Source:Barclays Research We also asked resellers the rate they expect software spending to grow by,on a y/y basis,over the next three months(Figure 3).The short-term spending outlook came out especially positive this quarter.81%of respondents are expecting positive growth for the next three months(vs.82%in September),while none of the VARs expect declining spending.We also asked the direction that software spending could move over the next twelve months.Here,we saw a mixed long-term outlook with 46%of VARs expecting higher spending over the coming 12 months(down from 64%last quarter,but in line with the June quarter).15%of the VARs expect the spending environment to get worse(vs.0%last quarter).0%10%20%30%40%50%60%Up+5%Up 0-5%FlatDown 0-5%Down 5%+MarJunSepDec0%10%20%30%40%50%60%70%80%BetterUnchangedWorseMarJunSepDecBarclays|U.S.Software 17 January 2019 3 FIGURE 3 What is software spending,y/y,expected to be over the next 3 months?FIGURE 4 In what direction could software spending more likely move over the next 12 months due to the economy/confidence?Source:Barclays Research Source:Barclays Research Microsoft:Another Positive Survey We received responses from 12 Microsoft partners who generate around$947mn of Microsoft related revenue on an annual basis.The first question we asked VARs was how performance compared relative to their internal expectations or plan.The responses show weighted average outperformance of 6.7%compared to the 4.8%in our December survey last year(and vs.5.8%in Sep.2018).We also note that none of the VARs we surveyed saw flat-to-down performance vs.expectations.FIGURE 5 How did your Microsoft business perform in the current quarter vs.expectations?Source:Barclays Research We followed with a question targeting large deals versus expectations.Of the VAR surveyed,42%saw better-than-expected large deal activity,in-line with the previous quarter.0%10%20%30%40%50%60%70%Up+5%Up 0-5%FlatDown 0-5%MarJunSepDec0%10%20%30%40%50%60%70%HigherUnchangedLowerMarJunSepDec0%10%20%30%40%50%60%Up 10%Up 6-10%Up 1-5%Flat(in-line)Down 1-5%Down 6-10%Down 10%MarJuneSepDecBarclays|U.S.Software 17 January 2019 4 FIGURE 6 How did large deal activity(deals over$100k)come in vs.your expectations?Source:Barclays Research Next,we asked resellers what the growth of their Microsoft business over the prior three months was and what they expect growth to be for the next three months.For the last three months,resellers reported a strong view of spending from a year-over-year perspective,with 100%of participants reporting growth for the quarter(same as last quarter).FIGURE 7 What was Microsofts overall growth,y/y,for the prior 3 months?Source:Barclays Research Expectations for next quarter were solid,with no resellers expecting a decline,but 42%of resellers are looking for double digit growth(on a y/y basis)versus 50%last quarter and 73%in the June quarter.0%10%20%30%40%50%60%70%Much better than expectedBetter than expectedIn-lineWorse than expectedMuch worse than expectedMarJunSepDec0%10%20%30%40%50%60%70%Up 20%Up 10-20%Up 1-10%Flat(in-line)Down 1-10%Down 10%Mar(%)Jun(%)Sep(%)Dec(%)Barclays|U.S.Software 17 January 2019 5 FIGURE 8 What is Your Microsoft related expected revenue growth,y/y,for next 3 months?Source:Barclays Research We view ASPs as an important part of the Office 365 story.Therefore,we asked resellers about interest in the various Office 365 SKUs.Responses showed that 75%of respondents were seeing interest in the E3/E5 offerings versus 92%in September.However,interest in E5 increased this quarter.While data here seem to be fluctuating,we think the main driver for ASP increases is E3 and E5 and is still in the very early stages of adoption.FIGURE 9 Which Office 365 SKUs are you seeing the most customer interest?Source:Barclays Research SQL Server 2016 is another major product release we are tracking.All resellers continue to see moderate to significant interest in the product.However,Windows Server 2016 interest was slightly worse this quarter with 75%of respondents saying customer interest in the product was moderate,versus 83%in September.0%10%20%30%40%50%60%70%Up 20%Up 10-20%Up 1-10%Flat(in-line)Down 1-10%Down 10%Mar(%)Jun(%)Sep(%)Dec(%)0%10%20%30%40%50%60%70%80%90%100%E1E3E5MarJunSepDecBarclays|U.S.Software 17 January 2019 6 FIGURE 10 How much customer interest do you receive regarding SQL Server 2016?FIGURE 11 How much customer interest do you receive regarding Windows Server 2016?Source:Barclays Research Source:Barclays Research Azure is a key piece of the Microsoft investment case,so we asked partners about adoption and the kinds of workloads that are moving over.Of the respondents,60%see 40-80%adoption within the next twelve months,up from 50%adoption in the previous quarter.FIGURE 12 How many of your clients are using or planning on using Azure within the next twelve months?Source:Barclays Research Microsoft has described its opportunity for Azure as incremental to its existing server tools business,unlike Office 365,which is a straight replacement.Respondents historically viewed these workloads as mostly cannibalistic to on-prem workloads,however only 17%of respondent in our latest survey seem to agree with this(down from 73%in December of last year).Furthermore,50%of respondent believe that Azure workloads are somewhat incremental to on-prem workloads(3rd quarter in a row that we have seen this).0%10%20%30%40%50%60%70%Significant interestModerate interestLittle interestNo interestMarJunSepDec0%10%20%30%40%50%60%70%80%90%Significant interestModerate interestLittle interestNo interestMarJunSepDec0%10%20%30%40%50%60%70%0-20%20-40%40-60%60-80%80-100%MarJunSepDecBarclays|U.S.Software 17 January 2019 7 FIGURE 13 Of the workloads you see moving to Azure,how many are incremental Microsoft workloads versus cannibalistic of existing Microsoft on-prem workloads?Source:Barclays Research For the fourth quarter,we asked respondents about the mix of spend between basic and premium services on Azure and what type of premium services customers are interested in.This is an important metric to track as premium services will have a large impact on commercial cloud margins,which is a growing focus for the company.Despite only having a few data points,it seems that premium services mix is increasing.The most popular premium services continue to center around security and intelligence,but all the services we surveyed seem to attract at least some attention.FIGURE 14 Of your clients that are using Azure,what is the percentage split between spend on Basic and Premium Services?FIGURE 15 Which of Azures Premium Services are you seeing the most interest from customers?Source:Barclays Research Source:Barclays Research 0%10%20%30%40%50%60%70%80%Mostly cannibalisticSomewhat more cannibalisticEvenly splitSomewhat more incrementalMostly incrementalDecMarJunDec0%10%20%30%40%50%60%100%Basic to 0%Premium75%Basic to 25%Premium50%Basic to 50%Premium25%Basic to 75%Premium0%Basic to 100%PremiumMarJunSepDec0%5%10%15%20%25%30%35%40%Monitoring&Mngmt.DatabaseIntelligence&AnalyticsSecurity&IdentityDeveloper ServicesMarJunSepDecBarclays|U.S.Software 17 January 2019 8 Citrix:Mixed Survey Results For Citrix,we received responses from 12 partners who generate roughly$278 million of Citrix related revenue on an annual basis.The first question we asked VARs was how their Citrix business performed relative to their internal expectations.The results show a notable deceleration from previous quarter,with the most common answer being an“in-line”quarter(33%vs.27%last quarter)followed closely by“down 1-5%”(25%vs.18%last quarter).However,we note that 17%of resellers saw a quarter of 10%vs.expectations(vs.0%in the past 3 surveys).FIGURE 16 How did your Citrix business perform in the current quarter vs.your plan?Source:Barclays Research Next,we asked resellers what the growth of their Citrix business was over the prior three months and what they expect growth to be for the next three months.17%of the resellers saw a down quarter y/y(up from 9%in the September survey),while 8%noted 10%growth y/y(vs.18%last quarter)in their Citrix business.Expectations for the next three months came in slightly better than previous quarters with 83%of VARs expecting at least some growth(up from 64%).0%5%10%15%20%25%30%35%40%45%50%Up 10%Up 6-10%Up 1-5%Flat(in-line)Down 1-5%Down 6-10%Down 10%MarJunSepDecBarclays|U.S.Software 17 January 2019 9 FIGURE 17 What was Citrixs growth,y/y,for the prior 3 months?FIGURE 18 What is Citrixs expected growth,y/y,for the next 3 months?Source:Barclays Research Source:Barclays Research We highlight discounting and deal size changes over the last three months in the figures below.This survey came back with 50%of respondents reporting a normal environment for discounting and 58%for deal sizes.25%of respondents noted greater than normal discounting activities(up from 9%)which could be driven by larger deal activity ticking up.FIGURE 19 How was the discounting environment for Citrix for the prior three months?FIGURE 20 How have average deal sizes changed over the past 3 months?Source:Barclays Research Source:Barclays Research We asked resellers whether they believe Citrixs desktop business can recover as this is a major bear point to the investment thesis.Reseller responses show that sentiment improved for the second consecutive quarter with 75%of respondents expecting a recovery in the business(up from 64%last quarter,and 50%before that).0%10%20%30%40%50%60%70%Up 10%Up 1-10%Flat(in-line)Down 1-10%Down 10%MarJunSepDec0%10%20%30%40%50%60%70%80%90%Up 10%Up 1-10%Flat(in-line)Down 1-10%Down 10%MarJunSepDec0%10%20%30%40%50%60%70%80%a.Greater discounting than normalb.Normalc.Less discounting than normalMarJunSepDec0%10%20%30%40%50%60%70%80%90%a.Meaningfully larger(+5%)b.Somewhat larger(+1 to+5%)c.No noticeably changes to deal sizesd.Somewhat smaller(-1 to-5%)e.Meaningfully smaller(-5%)MarJunSepDecBarclays|U.S.Software 17 January 2019 10 FIGURE 21 Do you believe Citrixs desktop business can continue to recover?Source:Barclays Research We also asked