Research Highlights and Outlook Focus on Managed Private-Cloud Services

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Research Highlights and Outlook Focus on Managed Private-Cloud Services

  1. 1. TBR’s Cloud Program Managed Private & Professional Services Cloud Benchmark Research Highlights and Outlook Focus on Managed Private Cloud Services Technology Business Research Webinar Series Oct. 24, 2013
  2. 2. Cloud Business Research Highlights and Outlook: Webinar Presenter Ramunas Svarcas Senior Analyst and Engagement Manager, Professional Services Practice ramunas.svarcas@tbri.com @rjsTBR 2 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  3. 3. TBR Cloud Research Overview TBR Cloud Program — Portfolio Product Descriptions Cloud Business Reports Cloud Benchmarks Cloud Customer Research Tracks 3 Vendor Reports: Reports analyzing vendors’ cloud businesses cover all relevant segments and track performance across cloud-driven metrics including operating expenses, operating profit, headcount breakouts and geographic breakouts Benchmarks: TBR’s benchmark reports provide analysis through qualitative and metricbased comparisons of key vendors in a market segment. Cloud data models are included with the benchmarks; this TBR research and analysis is built from the ground up based on 15+ years of vendor-centric financial models. Customer and Competitor Reports: TBR cloud customer reports provide primary research-based insights into purchasing behavior, vendor adoption, satisfaction and demand across multiple cloud offerings and professional services segments. TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  4. 4. TBR Cloud Research Overview TBR Cloud Program — Portfolio Product Overview OUR FOCUS TODAY Cloud Business Reports Cloud Benchmarks Cloud Customer Research Tracks 4 Accenture Amazon Atos Capgemini Cognizant CSC Dell Deloitte Fujitsu Google HP IBM Infosys Microsoft Public Cloud Benchmark Oracle Rackspace Salesforce SAP ServiceNow Verizon Tata Managed Private Cloud and Professional Services Benchmark Wipro Workday *Plans in place for additional vendors Cloud Components Benchmark Topical Cloud Reports: 2013 reports include Cloud Security and Orchestration Private Cloud Customer and Competitor Report Hybrid Cloud Customer and Competitor Report Cloud Prof. Services Customer and Competitor Report TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  5. 5. Managed Private Cloud Taxonomy Cloud Business Quarterly: Cloud Benchmark Definitions SOURCE: TBR 5 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  6. 6. CLBQ Research Highlights and Outlook Managed Private Cloud 6 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  7. 7. The cloud computing delivery model is not an anomaly, rather a continuously evolving mechanism for providing IT services Managed Private Cloud Market Summary What is happening in the managed private cloud market? What segment of managed private cloud services is seeing the highest demand? What segment of managed private cloud services is seeing the greatest growth? 7 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  8. 8. TBR Position Total IT services revenue growth continues to decline, but cloud-related revenues continue to expand as clients search for IT cost savings Managed Private Cloud Market Summary What is Happening? As services portfolios expanded to include managed private cloud services, revenue for managed private cloud services grew 45% in 1Q13. Continued interest in cloud solutions is expected to result in an $18 billion market for cloud managed private services at the end of 2013 and double in size again to $37 billion by 2018. Largest sub-segment? Industry-specific, vertical-focused solutions coupled with the transition of core products to new business models is enabling vendors to ride the rising wave of cloud “as a Service” offerings. Infrastructure as a Service dominates managed private cloud services revenues as clients convert capital costs to operating expenses. Greatest Growth? The fastest-growing managed service market, Business Process as a Service is evolving as vendors create differentiated solutions that leverage legacy strengths with unique cloud IP and assets. Increased value is generated by the application of analytics to data created through the outsourcing of business processes. 8 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  9. 9. Cloud Market Sizing and Forecast Managed private and professional services revenues are expected to grow hand-in-hand as clients continue to leverage vendors for assistance Managed Private and Professional Services Cloud Market Will Double led Doub 9 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  10. 10. Managed Private Cloud Revenue Growth Managed private cloud revenue growth is outperforming total services growth as clients embrace the cost savings of hosted cloud services Managed Private Cloud Services Revenue Growth Managed Private Cloud Revenue Growth Outperforming Total Service Revenue Growth From the 2013 TBR Private Cloud Customer Survey, clients interested in cloud are choosing to build their own private clouds 30% of the time, while system integrators host and manage their cloud environments 70% of the time. 10 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  11. 11. TBR Position IaaS solutions are the prevalent approach in reducing IT infrastructure cost Managed Private Cloud Market Summary What is Happening? As services portfolios expanded to include managed private cloud services, revenue for managed private cloud services grew 45% in 1Q13. Continued interest in cloud solutions is expected to result in an $18 billion market for cloud managed private services at the end of 2013 and double in size again to $37 billion by 2018. Largest sub-segment? Industry-specific, vertical-focused solutions coupled with the transition of core products to new business models is enabling vendors to ride the rising wave of cloud “as a Service” offerings. Infrastructure as a Service dominates managed private cloud services revenues as clients convert capital costs to operating expenses. Greatest Growth? The fastest-growing managed service market, Business Process as a Service is evolving as vendors create differentiated solutions that leverage legacy strengths with unique cloud IP and assets. Increased value is generated by the application of analytics to data created through the outsourcing of business processes. 11 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  12. 12. Segment Growth While managing hardware infrastructure dominates revenues, business platforms incorporating new solutions led managed services growth Managed Private Cloud Market Segments CLOUD REVENUES BY SEGMENT AMONG VENDORS COVERED IN MANAGED PRIVATE CLOUD MARKET BENCHMARK $3,000 Total 1Q13 YTY Growth: 44.6% $2,500 $2,296 $2,084 $2,000 $1,500 ) s o l M $ i ( u n v e R $1,000 $500 $1,001 $29 $161 $346 $1,094 $31 $183 $367 $1,204 $34 $203 $416 $1,374 $36 $234 $509 $1,587 $51 $284 $1,650 $53 $293 $557 $581 $1,765 $59 $316 $615 $98 $374 $767 $117 $418 $851 $2,415 $155 $423 $901 1Q13 Growth YTY: Business Platforms: 128.8% PaaS: 47.2% Dynamic Apps: 52.7% IaaS: 30.7% $551 $695 $723 $775 $845 $464 $513 $596 $909 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 $936 2Q13E $0 SOURCE: TBR ESTIMATES Private Dynamic Applications, or Software as a Service (SaaS), and Infrastructure as a Service (IaaS) dominate the landscape and accounted for 37% and 40%, respectively, of total managed private cloud services revenue in 1Q13. 12 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  13. 13. Private Cloud IaaS: Growth Leaders IT services vendors are re-engineering portfolios, replacing traditional ITO with Cloud IaaS offerings Private IaaS Revenue Growth: Percentage and Dollar Growth Revenue Leaders Within the cloud market, initial engagements are small test cases; successfully implemented will lead to additional opportunities and revenues. Up-and-coming Players The up-and-coming players are focusing on developing human capital resources and expanding portfolio offerings to effectively compete with the established revenue leaders who began embracing “as a Service” offerings in the early stages of adoption of cloud computing. 13 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  14. 14. Private Cloud IaaS: Growth Leaders The bevy of data centers enable dollar growth leadership in managed private IaaS as clients look to reduce capital infrastructure costs Private IaaS Revenue Growth: Percentage and Dollar Growth Revenue Leaders Leaders, except Rackspace, are cannibalizing legacy-hosted, infrastructuremanaged services and replacing them with cloud IaaS services. Up-and-coming Players The 2013 TBR Private Cloud Customer Survey also indicates that reduction of total cost of ownership is the second most perceived benefit of moving to a managed private cloud. 14 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  15. 15. Private Cloud IaaS: Growth Leaders Industry-specific solutions help services firms rapidly expand managed services revenues Private IaaS Revenue Growth: Percentage and Dollar Growth Revenue Leaders Up-and-comers are relying on legacy expertise and strengths to create offerings for the financial, retail, healthcare and manufacturing verticals. Up-and-coming Players With virtualization an old concept, vendors such as VMware are expanding services offerings to include managed IaaS offerings to accommodate the growing trend to host and then manage IT infrastructure. 15 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  16. 16. TBR Position The merging of analytics with BPO on the cloud is generating high interest from clients and driving demand growth for vendors Managed Private Cloud Market Summary What is Happening? As services portfolios expanded to include managed private cloud services, revenue for managed private cloud services grew 45% in 1Q13. Continued interest in cloud solutions is expected to result in an $18 billion market for cloud managed private services at the end of 2013 and double in size again to $37 billion by 2018. Largest sub-segment? Industry-specific, vertical-focused solutions coupled with the transition of core products to new business models is enabling vendors to ride the rising wave of cloud “as a Service” offerings. Infrastructure as a Service dominates managed private cloud services revenues as clients convert capital costs to operating expenses. Greatest Growth? The fastest-growing managed service market, Business Process as a Service is evolving as vendors create differentiated solutions that leverage legacy strengths with unique cloud IP and assets. Increased value is generated by the application of analytics to data created through the outsourcing of business processes. 16 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  17. 17. Private Cloud BPaaS: Growth Leaders Niche BPaaS solutions in industry verticals and analytics capabilities are driving growth leadership in the BPaaS market Private BPaaS Revenue Growth versus Total Cloud Revenue Growth Leaders The number of vendors competing in the managed private cloud BPaaS market is considerably smaller than for other cloud services, as BPO has become a commodity service with low profitability. Adding capabilities, and thus value, to the service is re-energizing the market. 17 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  18. 18. Private Cloud BPaaS: Growth Leaders Dollar revenue growth leadership tracks closely to revenue growth as BPO vendors add value to offerings Private BPaaS Revenue Growth: Percentage and Dollar Growth Leaders Many enterprises have outsourced their business processes. The additional value with automation, cloud delivery and coupling of analytics with BPO has yet to be fully demonstrated, resulting in BPaaS recording the lowest dollar revenue growth of all managed private cloud services. 18 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  19. 19. Private Cloud BPaaS: Portfolio Expansion Applying analytics to business process outsourced services is key to creating value for clients and generating revenue growth for vendors Vendor Offering Description TCS E-commerce Platform Provides clients managed commerce business service, including merchandising and content management, order life cycle management, campaign management, site operations, analytics and Web operations, through a hosted private cloud delivery model Infosys BigdataEdge Applies analytics to data acquired from multiple sources including business process outsourcing operations; the solution is designed to improve business efficiency for clients, enabling them to pursue growth initiatives faster. Xerox ConnectKey Leverages a software platform that integrates with Xerox multifunction printers to provide cloud-based services, back-office process automation and document management HP Customer Engagement as a Service (CEaaS) Provides clients with a set of cloud-based contact center tools that help deliver customer service in a single platform through enhanced features such as social media marketing, mobile integration and customer analytics While BPO enables companies to reduce operational costs by having others execute daily business processes, the application of analytics enables information to be derived from the data collected through outsourced activities, leading to better business execution decisions and resulting in improved operations. 19 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  20. 20. TBR Position Managed private cloud revenues continue to expand as clients search for IT cost savings Managed Private Cloud Market Summary What is Happening? Managed private cloud services growth will continue to expand at double-digit rates, resulting in a $37 billion market by 2018. Largest sub-segment? Infrastructure as a Service and switching from capex to opex costing models to provide IT services will continue to dominate the market. Greatest Growth? Business Process as a Service will continue to expand, providing to clients improved operational efficiency and enlightened decisionmaking capabilities through the application of analytics. 20 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  21. 21. Questions? 21 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  22. 22. TBR Cloud Research Overview TBR Cloud Program — Upcoming Webinars Cloud Program Webinar Focus Tract Cloud Benchmarks Managed Public and Professional Services Cloud Benchmark: Professional Services Cloud Focus Cloud Components Benchmark Public Cloud Benchmark Private Cloud Cloud Customer Cloud Professional Services Research Hybrid Cloud 22 Webinar Date 11/7/2013 TBD January, 2014 11/14/2013 December, 2013 January, 2013 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  23. 23. Cloud Business Quarterly Research Highlights and Outlook: Webinar Presenters For additional information, please contact: Ramunas Svarcas Senior Analyst and Engagement Manager, Professional Services Practice ramunas.svarcas@tbri.com @rjsTBR Twitter: @TBRinc SlideShare: www.slideshare.net/TBR_Market_Insight YouTube: www.youtube.com/user/TBRIChannel LinkedIn: http://www.linkedin.com/company/technology-business-research 23 TBR Quarterly Webinar Series | 10.24.13 | www.tbri.com | ©2013 Technology Business Research Inc.
  24. 24. About Us Contact Us Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, telecom and enterprise network vendors, and operators. 1.603.929.1166 info@tbri.com www.tbri.com 11 Merrill Drive Hampton, NH 03842 USA Serving a global clientele, TBR provides timely and actionable market research and business intelligence in formats that are tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis. TBR has been empowering corporate decision makers since 1996. To learn how our analysts can address your unique business needs, please visit our website or contact us today. This report is based on information made available to the public by the vendor and other public sources. No representation is made that this information is accurate or complete. Technology Business Research will not be held liable or responsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is not and should not be construed to be investment advice. TBR does not make any recommendations or provide any advice regarding the value, purchase, sale or retention of securities. This report is copyright-protected and supplied for the sole use of the recipient. Contact Technology Business Research, Inc. for permission to reproduce.
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