EquityResearch17January2019COREBarclaysCapitalInc.and/oroneofitsaffiliatesdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.PLEASESEEANALYSTCERTIFICATION(S)ANDIMPORTANTDISCLOSURESBEGINNINGONPAGE18.U.S.SoftwareDecemberVARSurveyDecemberVARSurvey:WepresentourVARSurveyfortheDecemberquarter-end,whichcoversMicrosoft,Citrix,andSymantec.HealthyQ4,butDivergingOutlook:SoftwarespendingremainedhealthyinQ4,with~85%ofrespondentsreportingsomeformofspendinggrowth.TheVARs’expectationsforspendingoverthenextthreemonthsalsocameinstrong,with81%ofrespondentsexpectingsomegrowth(vs.82%inourlastsurvey).However,thelong-termoutlookwasmoremixedwith15%ofVARsexpectingalowerspendingenvironmentduetomacroeconomicfactorsinthecoming12months(upfrom0%lastquarter,and4%oneyearearlier).Microsoft–VARSurveyShowsStrongDemandthroughYearEnd:Despitethenoisearoundnegativemacrodatapointsandstockmarketvolatility,VARssawsoliddemandduringcalendarQ4(weightedaverageoutperformanceof6.7%).However,expectationsaremoderatingforthenextquarter,with42%ofresellersnowlookingfordouble-digitgrowthoverthenextthreemonths(downfrom73%inJuneand50%lastquarter).Ontheproductside,thesurveycontinuestoshowstrongdemandforAzure,aspremiummixstayedhighthisquarterandresellerscontinuetoseeAzureworkloadsasincremental(3rdquarterinarow)toon-premiseinfrastructure.Citrix–MixedVARSurvey:Thisquarter’ssurveycamebackmostlymixedforCitrix,withVARsseeingsomewhatdivergingtrendsintheirCitrix-relatedbusiness.Despitethethreemostrecentsurveysbeingpositive,wehighlightthatresponseshavebeengettingincrementallylessupbeat.Themajorityofrespondentsreportedperformanceaheadofexpectations,butsomeresellerssawthequartermisstheirinternalexpectations.VARscontinuetoexpectpositivegrowthforthenextquarter.Product-wise,itseemsthatCitrixcontinuestolagpeerswhenlookingatf...
