IT Hardware Responding To Cloud Model
Large installed bases can drive substantial services revenue, supporting continued solid gross profit, FCF, and funding investments in future technologies. The recent availability of Infrastructure as a Service (IaaS) offerings by hardware companies finally offers enterprise customers attractive alternatives for both business model (ratable, use base operating costs) and functionality (usage, performance) to public cloud vendors.
Further supporting demand for IT Hardware, the benefits of hybrid cloud architectures are growing given cost, security, and data sovereignty concerns. While additional infrastructure demand is coming from edge to cloud deployments. This move requires upgraded hardware, increased data storage, and solutions expertise.
Recent supply chain challenges and geopolitical issues have increased customer and investor interest in 3D printing/AM and outsourced manufacturing. Earlier 3D printing investor enthusiasm cycles have been driven by unrealistic expectations for consumer printing (2013) and aggressive 2025 revenue targets provided during SPAC transactions in 2020 and 2021. However, the industry is shifting to industrial and production applications that can drive higher-margin equipment sales and recurring materials revenue.
Large multi-national corporations are leading the near-term growth of 3D printing; however, we expect long-term support from adoption by small and medium-sized manufacturers over the coming years.
