2014 itc markets - the innovation group
TRANSCRIPT
Predictions 2014
2014 IT and Communications Markets
What’s Growing, What’s Not?
Martin Hingley
CEO, ITCandor
Predictions 2014
Methodology
• Tracking data
quarterly from
2003
•Currently analysing
135 suppliers
•Looking at
revenue, net profit
and headcount
•5 years of
predictions
Industry Sector
Cloud/Traditional
VendorCategory/Offering
Channel
Country/Continent/Region
Consumer/Business Size
Industry Sector
Cloud/Traditional
VendorCategory/Offering
Channel
Country/Continent/Region
Consumer/Business Size
Predictions 2014
Agenda
• Geography
• Offerings
• Customer Size and Type
• Industry Sector
• Matrix Integration
Predictions 2014
The ITC Market Grows 1.4% To $6.7 Trillion – A Post-
Recession Year
•Revenue
grows 1.4%
to $6.7T
•Net profit
grows 6.7%
to $693B
•Telecom is
the largest
component
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018$100
$200
$300
$400
$500
$600
$700
$800
Revenue
Net Profit IT Service
24.1%
Hardware
19.3%
Telecom
42.8%
Software
13.8%
2014: $6.7T
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018$100
$200
$300
$400
$500
$600
$700
$800
Revenue
Net Profit
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20182003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018$100
$200
$300
$400
$500
$600
$700
$800
$100
$200
$300
$400
$500
$600
$700
$800
Revenue
Net Profit IT Service
24.1%
Hardware
19.3%
Telecom
42.8%
Software
13.8%
2014: $6.7T
IT Service
24.1%
Hardware
19.3%
Telecom
42.8%
Software
13.8%
IT Service
24.1%
Hardware
19.3%
Telecom
42.8%
Software
13.8%
2014: $6.7T
Predictions 2014
Over 20 Country Markets Grow
Growth by Country, Leading Countries
•Southern
Europe –
including
Italy – decline
slightly
•Africa and
Latin America
do well
-6% -4% -2% 0% 2% 4% 6% 8%
Ireland
Portugal
Belgium
Denmark
FinlandJapan
France
Greece
Bulgaria
SpainRomaniaIranItaly
Czech Republic
NetherlandsUK
CanadaUSA
SwedenIsrael
GermanyRussia
AustraliaHungary
WorldBrazil
PolandMexico
ChinaIndia
NorwayAustria
SwitzerlandUAE
NigeriaTurkey
EgyptSouth Africa
USA
24.3%
Japan
8.6%
China
5.3%
Germ
any 4.9%
UK
4.3
%
Fra
nce
3. 6
%
Bra
zil 3
.1%
Other
45.8%
2014: $6.7T
-6% -4% -2% 0% 2% 4% 6% 8%
Ireland
Portugal
Belgium
Denmark
FinlandJapan
France
Greece
Bulgaria
SpainRomaniaIranItaly
Czech Republic
NetherlandsUK
CanadaUSA
SwedenIsrael
GermanyRussia
AustraliaHungary
WorldBrazil
PolandMexico
ChinaIndia
NorwayAustria
SwitzerlandUAE
NigeriaTurkey
EgyptSouth Africa
-6% -4% -2% 0% 2% 4% 6% 8%
Ireland
Portugal
Belgium
Denmark
FinlandJapan
France
Greece
Bulgaria
SpainRomaniaIranItaly
Czech Republic
NetherlandsUK
Canada
Ireland
Portugal
Belgium
Denmark
FinlandJapan
France
Greece
Bulgaria
SpainRomaniaIranItaly
Czech Republic
NetherlandsUK
CanadaUSA
SwedenIsrael
GermanyRussia
AustraliaHungary
WorldBrazil
PolandMexico
ChinaIndia
NorwayAustria
SwitzerlandUAE
NigeriaTurkey
EgyptSouth Africa
USASweden
IsraelGermany
RussiaAustraliaHungary
WorldBrazil
PolandMexico
ChinaIndia
NorwayAustria
SwitzerlandUAE
NigeriaTurkey
EgyptSouth Africa
USA
24.3%
Japan
8.6%
China
5.3%
Germ
any 4.9%
UK
4.3
%
Fra
nce
3. 6
%
Bra
zil 3
.1%
Other
45.8%
2014: $6.7T
USA
24.3%
Japan
8.6%
China
5.3%
Germ
any 4.9%
UK
4.3
%
Fra
nce
3. 6
%
Bra
zil 3
.1%
Other
45.8%
USA
24.3%
Japan
8.6%
China
5.3%
Germ
any 4.9%
UK
4.3
%
Fra
nce
3. 6
%
Bra
zil 3
.1%
Other
45.8%
2014: $6.7T
Predictions 2014
SaaS and Converged Devices Grow, PCs Fall
Growth by Offering, Leading Offerings
•SaaS, Smart Phones and Tablets, Infrastructure Software grow
•PCs, Fixed Line, Outsourcing decline
•In-Memory Databases Strong
•Multi-channel sales and marketing strong
-10% -5% 0% 5% 10% 15% 20% 25%
PC
Fixed Line
Outsourcing
Broadband
Server
Storage System
Application Software
Networking
Peripheral
Custom Software
World
Implementation
Operating System
Hardware Maintenance
Wireless
Software Maintenance
Internet Service
Infrastructure Software
Converged Device
Software as a Service
Gaming Console
Other
27.1%
Implementation 4.0%
Broadband 4.8%
Inte
rnet
Ser
vice
5.6
%H
/W M
ain
t. 5
.8%
Co
nve
rge
d D
evi
ce6
.3% Application
8.3%
Fixed Line
17.0%
Wireless
21.0%
2014: $6.7T
-10% -5% 0% 5% 10% 15% 20% 25%-10% -5% 0% 5% 10% 15% 20% 25%
PC
Fixed Line
Outsourcing
Broadband
PC
Fixed Line
Outsourcing
Broadband
Server
Storage System
Application Software
Networking
Peripheral
Custom Software
World
Implementation
Operating System
Hardware Maintenance
Wireless
Software Maintenance
Internet Service
Infrastructure Software
Converged Device
Software as a Service
Gaming Console
Server
Storage System
Application Software
Networking
Peripheral
Custom Software
World
Implementation
Operating System
Hardware Maintenance
Wireless
Software Maintenance
Internet Service
Infrastructure Software
Converged Device
Software as a Service
Gaming Console
Other
27.1%
Implementation 4.0%
Broadband 4.8%
Inte
rnet
Ser
vice
5.6
%H
/W M
ain
t. 5
.8%
Co
nve
rge
d D
evi
ce6
.3% Application
8.3%
Fixed Line
17.0%
Wireless
21.0%
2014: $6.7T
Other
27.1%
Implementation 4.0%
Broadband 4.8%
Inte
rnet
Ser
vice
5.6
%H
/W M
ain
t. 5
.8%
Co
nve
rge
d D
evi
ce6
.3% Application
8.3%
Fixed Line
17.0%
Wireless
21.0%Other
27.1%
Implementation 4.0%
Broadband 4.8%
Inte
rnet
Ser
vice
5.6
%H
/W M
ain
t. 5
.8%
Co
nve
rge
d D
evi
ce6
.3% Application
8.3%
Fixed Line
17.0%
Wireless
21.0%
2014: $6.7T
Predictions 2014
Cloud Computing Grows 6.3% To $1.6 Trillion
Cloud v Traditional, Cloud Categories
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Traditional
Cloud
IT Service
45.0%
Telecom
34.0%
Software
11.6%
Hardware
9.3%
Cloud 2014: $1.6T
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Traditional
Cloud
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20182003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Traditional
Cloud
IT Service
45.0%
Telecom
34.0%
Software
11.6%
Hardware
9.3%
Cloud 2014: $1.6TIT Service
45.0%
Telecom
34.0%
Software
11.6%
Hardware
9.3%
IT Service
45.0%
Telecom
34.0%
Software
11.6%
Hardware
9.3%
Cloud 2014: $1.6T
•Cloud
Computing
grows
6.3% in
2014
•IT and
Telecom
Services
dominate
Predictions 2014
Business Stronger Than Consumer Demand
Growth by Customer Type And Size
•Larger
businesses
will grow
most,
consumer
spend in
decline in
2014
•The
picture is
reversed by
2016
-10%
-5%
0%
5%
10%
15%
2012 2013 2014 2015 2016 2017 2018
Consumer
Large (>1k)
Medium
(100-1k)
Small (<100)
World
-10%
-5%
0%
5%
10%
15%
-10%
-5%
0%
5%
10%
15%
2012 2013 2014 2015 2016 2017 20182012 2013 2014 2015 2016 2017 2018
Consumer
Large (>1k)
Medium
(100-1k)
Small (<100)
World
Predictions 2014
All Industry Sectors (But Central Government) Grow
Growth by Vertical Market and Shares
•The business market is worth $3.6T
•Manufac-turing is largest, with Retail catching
•Health and Education are fastest growing, but smallest
•Central government in decline
-4% -2% 0% 2% 4% 6% 8% 10%
Central Government
Other
Local Government
Manufacturing
Finance
All VM
Agriculture/Mining/Construct.
Transport/Comms
Business Service
Retail/Wholesale
Health
Education
Oth
er 2
.7%
Ed
ucatio
n 2
.7%
Manufacturing
19.3%
Retail/Wholesale
18.5%
Finance
12.8%
Local
Government
9.5%
Business
Service
8.5%.
Central
Government
7.9%
Transport/Comms 6.3%
Ag/Min/Con 60%
Health
5.7%
VM 2014: $3.6T
-4% -2% 0% 2% 4% 6% 8% 10%-4% -2% 0% 2% 4% 6% 8% 10%
Central Government
Other
Local Government
Manufacturing
Finance
All VM
Agriculture/Mining/Construct.
Transport/Comms
Business Service
Retail/Wholesale
Health
Education
Other
Local Government
Manufacturing
Finance
All VM
Agriculture/Mining/Construct.
Transport/Comms
Business Service
Retail/Wholesale
Health
Education
Oth
er 2
.7%
Ed
ucatio
n 2
.7%
Manufacturing
19.3%
Retail/Wholesale
18.5%
Finance
12.8%
Local
Government
9.5%
Business
Service
8.5%.
Central
Government
7.9%
Transport/Comms 6.3%
Ag/Min/Con 60%
Health
5.7%
VM 2014: $3.6T
Oth
er 2
.7%
Ed
ucatio
n 2
.7%
Manufacturing
19.3%
Retail/Wholesale
18.5%
Finance
12.8%
Local
Government
9.5%
Business
Service
8.5%.
Central
Government
7.9%
Transport/Comms 6.3%
Ag/Min/Con 60%
Health
5.7%
Oth
er 2
.7%
Ed
ucatio
n 2
.7%
Manufacturing
19.3%
Retail/Wholesale
18.5%
Finance
12.8%
Local
Government
9.5%
Business
Service
8.5%.
Central
Government
7.9%
Transport/Comms 6.3%
Ag/Min/Con 60%
Health
5.7%
VM 2014: $3.6T
Predictions 2014
Multi-Channel Marketing Takes Over
Channel Forecast by Revenue ($US T)
•Direct Internet, indirect 2-tier grow
•Direct outbound, indirect single-tier fall
•Big suppliers understand Social Business
•Highly integrated marketing can be creepy
$0.5
$1.0
$1.5
$2.0
$2.5
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Direct
Internet
Direct
Outbound
Indirect
Single Tier
Indirect
Two Tier
$0.5
$1.0
$1.5
$2.0
$2.5
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Direct
Internet
Direct
Outbound
Indirect
Single Tier
Indirect
Two Tier
$0.5
$1.0
$1.5
$2.0
$2.5
$0.5
$1.0
$1.5
$2.0
$2.5
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20182003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Direct
Internet
Direct
Outbound
Indirect
Single Tier
Indirect
Two Tier
Predictions 2014
In-Memory Databases Define Big Data Success
Database Multiple-Choice
•SAP HANA is a
marketing
success
•Hadoop is a
market success
•In-memory
databases turbo-
charge
performance
•More scale-up
than scale out in
2014
Predictions 2014
Suppliers Embrace Matrix Integration
IBM
Burroughs
Univac
NCR
CDC
Honeywell
ICL
1970-1980
Vertical Integration
Processor
Operating System
Databases
Network
Application
Peripheral
Server
1980-2000
Horizontal Integration
Apple
Cisco
HP
EMC
IBM
Oracle
Microsoft
2000-2020
Matrix Integration
IBM
Burroughs
Univac
NCR
CDC
Honeywell
ICL
1970-1980
Vertical Integration
IBM
Burroughs
Univac
NCR
CDC
Honeywell
ICL
IBM
Burroughs
Univac
NCR
CDC
Honeywell
ICL
1970-1980
Vertical Integration
Processor
Operating System
Databases
Network
Application
Peripheral
Server
1980-2000
Horizontal Integration
Processor
Operating System
Databases
Network
Application
Peripheral
Server
Processor
Operating System
Databases
Network
Application
Peripheral
Server
1980-2000
Horizontal Integration
Apple
Cisco
HP
EMC
IBM
Oracle
Microsoft
2000-2020
Matrix Integration
Apple
Cisco
HP
EMC
IBM
Oracle
Microsoft
Apple
Cisco
HP
EMC
IBM
Oracle
Microsoft
2000-2020
Matrix Integration
•Matrix Integration includes an Open and standards basis and must avoid customer lock-in
Predictions 2014
Some Conclusions – What’s Growing, What’s Not?
• 2014 will be a post-Recession year
• Not Growing
– Consumer and central government spending
– PCs, fixed line telecom, outsourcing
– Traditional ITC
– Half of Europe – especially the South
• Growing
– Africa and Latin America
– Cloud ITC and most Verticals
• Multi-channel marketing, in-memory databases and Matrix Integration will help you succeed
• Best of Luck in 2014!