。Barclays | U.S. Software17 January 2019 2December 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 viewson the performance of individual companies under our coverage, as well as their opinion onthe broader spending environment. This survey covers the enterprise software names thathave somewhat of a meaningful channel business and a December quarter end, whichincludes Microsoft, Citrix, and Symantec. Healthy Q4 But Diverging OutlookAll partners were asked the same top-down related questions, and we have aggregated theresponses in the charts below. The first question asks how general software spending wasover the past three months (Figure 1). Data for the December quarter came in healthy with85% of respondents seeing some growth (up from 77% in September), while norespondents saw declines in Q4 y/y (vs. 5% in Q3). We also note that 50% of VARs sawimprovements 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 monthsFIGURE 2 How does the current quarter compare to the prior quarterSource: Barclays Research Source: Barclays ResearchWe 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 outespecially positive this quarter. 81% of respondents are expecting positive growth for thenext three months (vs. 82% in September), while none of the VARs expect decliningspending. We also asked the direction that software spending could move over the next twelvemonths. Here, we saw a mixed long-term outlook with 46% of VARs expecting higherspending over the coming 12 months (down from 64% last quarter, but in line with the Junequarter). 15% of the VARs expect the spending environment to get worse (vs. 0% lastquarter). 0% 10% 20% 30% 40% 50% 60% Up +5%Up 0-5%FlatDown 0-5%Down 5%+ MarJunSepDec 0% 10% 20% 30% 40% 50% 60% 70% 80% BetterUnchangedWorse MarJunSepDec Barclays | U.S. Software17 January 2019 3FIGURE 3 What is software spending, y/y, expected to be over the next3 monthsFIGURE 4 In what direction could software spending more likely moveover the next 12 months due to the economy/confidence Source: Barclays ResearchSource: Barclays ResearchMicrosoft: Another Positive SurveyWe received responses from 12 Microsoft partners who generate around $947mn ofMicrosoft related revenue on an annual basis. The first question we asked VARs was howperformance compared relative to their internal expectations or plan. The responses showweighted average outperformance of 6.7% compared to the 4.8% in our December surveylast year (and vs. 5.8% in Sep. 2018). We also note that none of the VARs we surveyed sawflat-to-down performance vs. expectations. FIGURE 5 How did your Microsoft business perform in the current quarter vs. expectationsSource: Barclays ResearchWe followed with a question targeting large deals versus expectations. Of the VARsurveyed, 42% saw better-than-expected large deal activity, in-line with the previousquarter.0% 10% 20% 30% 40% 50% 60% 70% Up +5%Up 0-5%FlatDown 0-5% MarJunSepDec 0% 10% 20% 30% 40% 50% 60% 70% HigherUnchangedLower MarJunSepDec 0% 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% MarJuneSepDec Barclays | U.S. Software17 January 2019 4FIGURE 6 How did large deal activity (deals over $100k) come in vs. your expectationsSource: Barclays ResearchNext, we asked resellers what the growth of their Microsoft business over the prior threemonths was and what they expect growth to be for the next three months. For the lastthree months, resellers reported a strong view of spending from a year-over-yearperspective, with 100% of participants reporting growth for the quarter (same as lastquarter). FIGURE 7 What was Microsoft’s overall growth, y/y, for the prior 3 monthsSource: Barclays ResearchExpectations for next quarter were solid, with no resellers expecting a decline, but 42% ofresellers are looking for double digit growth (on a y/y basis) versus 50% last quarter and73% in the June quarter. 0% 10% 20% 30% 40% 50% 60% 70% Much better thanexpected Better thanexpected In-lineWorse thanexpected Much worse thanexpected MarJunSepDec 0% 10% 20% 30% 40% 50% 60% 70% Up20%Up 10-20%Up 1-10%Flat (in-line)Down 1-10%Down 10% Mar (%)Jun (%)Sep (%)Dec (%) 。。。。。。