SAN FRANCISCO (Reuters) - Economic troubles in the United States and Europe are making customers of Emerson Electric Co’s data center management business reluctant to make big purchases as the company prepares to launch a major new platform.
Steve Hassell, head of Avocent, part of Emerson’s network power segment, said on Monday that IT executives were reconsidering their short-term spending plans due to economic uncertainty and a deepening financial crisis in Europe.
“You have people that have needs that are just saying, ‘I want to wait and see,'” Hassell said. “There’s uncertainty out there due to a whole lot of different economic pieces and it’s making everything murky.”
Speaking to Reuters at Oracle’s annual OpenWorld conference in San Francisco, Hassell said about 10 major “early adopter” customers were using Emerson’s new Trellis platform, which manages demand and resources in data centers to improve their efficiency.
When Trellis is launched early next year, he said, customers can easily adopt portions of it gradually rather than the entire system all at once, making the transition less expensive.
“We’re going to be a substantial player in the DCIM (data center infrastructure management) market place,” Hassell said when asked about revenue targets for Trellis.
The outlook for worldwide technology spending has darkened in recent months, with warnings by major technology vendors from Dell Inc to Cisco Systems Inc. Governments are scaling back purchases to reduce deficits while corporations are tightening budgets to cope with an uncertain economic picture.
St. Louis-based Emerson in the last decade has transformed itself from an old-line maker of motors to a high-tech supplier of power and cooling systems for corporate computer centers.
Trellis is Emerson’s big bet in the small but growing data center infrastructure management market. The platform lets companies cut their energy bills and infrastructure spending, and better allocate staff at the giant server farms that manage everything from bank transactions to corporate payrolls.
The 2009 acquisition of Avocent, a maker of access and control systems, for $1.2 billion provided the technology Emerson needed to develop Trellis.
Reporting by Noel Randewich; Editing by Richard Chang