will the it services market remain tightly knit, slowly growing and competitive?
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TBR
T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .
TBR’s Professional Services Business QuarterlySM
Research Highlights and Outlook
Will the IT services market remain tightly knit, slowly growing and competitive? Insights from TBR’s IT Services Vendor Benchmark Technology Business Research (TBR) Quarterly Webinar Series
Oct. 15, 2014
TBR
2 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSBQ Research Highlights: Webinar Presenters
Kevin Collupy
Research Analyst
Email: kevin.collupy@tbri.com
Twitter: @kevin_TBR
Patrick Heffernan
IT Services Practice Manager and Principal Analyst
Email: patrick.heffernan@tbri.com
Twitter: @TBR_PatrickH
Ramunas Svarcas
Professional Services Principal Analyst
Email: ramunas.svarcas@tbri.com
Twitter: @rjsTBR
TBR
3 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
• TBR’s Professional Services Practice provides continual coverage of 33 vendors in published quarterly and semiannual reports.
• Of those vendors, 30 are included in our IT Services Vendor Benchmark.
o TBR reports are unique for their deep, holistic analysis of leading vendor businesses.
o Financial modeling and TBR insights help customers gain a better understanding of vendor business models.
o TBR reports and webinars are responsive to client timelines, clear and concise, and provide insights across multiple layers of a vendor’s organization and infrastructure.
o TBR’s strategic assessment provides an impartial check on a vendor’s progress toward its strategic objectives.
Clients are gaining advantages and better understanding revenue opportunities through our
reports and their personal relationships with TBR
PSBQ Research Highlights: Webinar Overview
TBR’s IT Services Vendor Benchmark delivers unique insight and value through in-depth analysis in a concise, consumable format
TBR Professional Services Business Quarterly (PSBQ) Portfolio
TBR
T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .
PROFESSIONAL SERVICES BUSINESS QUARTERLYSM
IT Services Vendor BenchmarkSecond Calendar Quarter 2014
Publish Date: Sept. 26, 2014
Authors:
John Caucis, Professional Services Senior Analyst;
Stephanie Artigliere, Elitsa Bakalova, Jennifer Hamel, Boz Hristov, Sebastian Lagana and Cassandra Mooshian, Professional Services Analysts;
Jacob Gordon, Kevin Collupy, Deleon Narcisse, Meaghan McGrath, Allison Mulligan and Kelsey Mason, Research Analysts
Content Editor:
Patrick Heffernan (patrick.heffernan@tbri.com), IT Services Manager/Principal Analyst
TBR
4 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSBQ 2Q14 Research Highlights: Key Trends
Professional Services Vendor Trends for 2Q14
Quarterly Focus: Vendors integrate industry expertise
with IP-rich offerings, make the business case around
cybersecurity and expand in LATAM to bolster revenues.
Active vendors: To accelerate their revenue growth,
vendors transform their business models and invest in
disruptive technologies and industry-oriented consulting.
IT Services Performance: IT services revenue growth was
in the low single digits in 2Q14 and TBR expects the
sluggish growth trend will continue in 2H14.
Vendors’ investments in disruptive technologies have yet to scale up to positively affect the tight and slowly growing IT services market
SOURCE: WWW.PPTBACKGROUNDS.NET
SOURCE: WWW.FOTOSEARCH.COM
SOURCE: WWW.FOTOSEARCH.COM
TBR
5 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
Active vendors: To accelerate their revenue growth,
vendors transform their business models and invest in
disruptive technologies and industry-oriented consulting.
PSBQ 2Q14 Research Highlights: Key Trends
Professional Services Vendor Trends for 2Q14
Quarterly Focus: Vendors integrate industry expertise
with IP-rich offerings, make the business case around
cybersecurity and expand in LATAM to bolster revenues.
IT Services Performance: IT services revenue growth was
in the low single digits in 2Q14 and TBR expects the
sluggish growth trend will continue in 2H14.
Vendors’ investments in disruptive technologies have yet to scale up to positively affect the tight and slowly growing IT services market
SOURCE: WWW.PPTBACKGROUNDS.NET
SOURCE: WWW.FOTOSEARCH.COM
SOURCE: WWW.FOTOSEARCH.COM
TBR
6 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSBQ 2Q14 Research Highlights: IT Services Performance
IT services market growth remained in the low single digits in 2Q14, and TBR expects this trend to continue into 2H14
Note: Includes average trailing 12-month service line revenues for the 30 vendors covered in TBR’s IT Services Vendor Benchmark; not
representative of a total global market view
IT Services Market Overview
TBR
7 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
C&SI Cloud, big data and analytics, mobility, social, security, and digital drive demand for consulting and integration services.
BPO Vendors provide business outcomes and cost savings through horizontal and industry-specific services, automation and platform-based solutions, and integration of analytics and cloud into BPO solutions.
AO Vendors develop solutions designed for clients to transform their business models while modernizing their application infrastructures.
ITO Vendors adapt traditional ITO service delivery to cloud-based platforms to match the demand for cloud-enabled managed services and offset decelerating ITO revenue growth.
PSBQ 2Q14 Research Highlights: IT Services Performance
BPO remains more resilient to decelerating IT services industry growth than other service lines due to its favorable value proposition
SOURCE: TBR RESEARCH AND ESTIMATES; COMPANY DATA AND ESTIMATES
Note: Dots indicate year-to-year growth, and arrows indicate directional
change relative to the year-ago quarter. Includes average trailing 12-month
service line revenues from TBR’s IT Services Vendor Benchmark; not
representative of a total global market view
Service Line Performance and Strategies
TBR
8 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
Americas Vendors continue to compete for engagements in the U.S. in healthcare, financial services and retail industries. Companies invest in Canada and LATAM to diversify their Americas revenues and expand their nearshore delivery resources.
EMEA Vendor’s EMEA revenues benefit from increasing interest in outsourcing in continental Europe and vendors’ investments in disruptive technologies and security.
APAC Vendors leverage transformational, consulting-led solutions and vertical-specific offerings to strengthen their positions.
PSBQ 2Q14 Research Highlights: IT Services Performance
European recovery drives revenue higher for vendors in EMEA, while China is a pain point of vendors looking to grow APAC revenues
SOURCE: TBR RESEARCH AND ESTIMATES; COMPANY DATA AND ESTIMATES
Note: Dots indicate year-to-year growth, and arrows indicate directional
change relative to the year-ago quarter. Includes average trailing 12-month
service line revenues from TBR’s IT Services Vendor Benchmark; not
representative of a total global market view
Geographic Performance and Strategies
TBR
9 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSBQ 2Q14 Research Highlights: IT Services Performance
IT services vendors such as Capita and Convergys expand with inorganic investments, while India-centric vendors cut costs to improve margins
Growing through acquisitions
India-centric vendors lead in revenue growth and profitability
Benefits from improved efficiency in service delivery
SOURCE: TBR RESEARCH AND ESTIMATES; COMPANY DATA AND ESTIMATES
Note: Sphere size reflects volume of TTM revenue. Includes average trailing 12-month service line revenues from TBR’s IT Services Vendor
Benchmark; not representative of a total global market view
TBR
10 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
Active vendors: To accelerate their revenue growth,
vendors transform their business models and invest in
disruptive technologies and industry-oriented consulting.
PSBQ 2Q14 Research Highlights: Key Trends
Professional Services Vendor Trends for 2Q14
Quarterly Focus: Vendors integrate industry expertise
with IP-rich offerings, make the business case around
cybersecurity and expand in LATAM to bolster revenues.
IT Services Performance: IT services revenue growth was
in the low single digits in 2Q14 and TBR expects the
sluggish growth trend will continue in 2H14.
Vendors’ investments in disruptive technologies have yet to scale up to positively affect the tight and slowly growing IT services market
SOURCE: WWW.PPTBACKGROUNDS.NET
SOURCE: WWW.FOTOSEARCH.COM
SOURCE: WWW.FOTOSEARCH.COM
TBR
11 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSBQ 2Q14 Research Highlights: Quarterly Focus — Industry-specific IP
Investments in IP-rich industry offerings, with a layer of analytics and cloud, will support vendors’ efforts to provide high-value solutions
Focus on Outcomes
Accelerating Analytics, Cloud,
Mobility Adoption
Integration of Process
and Technology
Smaller, Shorter Contracts Shift from Labor Arbitrage to
Blended Global Delivery
TBR
• Vendors invest in resources, utilize partners and make acquisitions to build out their IP-based solutions.
• Vendors invest in growing industries such as retail, manufacturing, and energy and utilities along with enterprise-based business capabilities.
Scouts for strategic acquisitions to gain cloud and analytics experts and tools to develop high-margin IP and products
Expands IP portfolio, investing in proprietary and codeveloped industry-specific solutions
Invests in R&D centers throughout emerging markets, positioning as a rising contender in IP-specific solutions
Accenture
TCS
Industry-specific IP
Xerox
TBR
12 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSBQ 2Q14 Research Highlights: Quarterly Focus — Security, Compliance, Governance
Growth opportunities exist for vendors with broad, business-driven security portfolios as cybersecurity remains a top priority for clients
TBR
• Vendors bundle security around transformational offerings and platforms, enabling companies to better reach their business goals.
• Vendors build out cloud portfolios with security capabilities to better enable users to customize solutions to their specific business needs.
The Critical Data Protection Program enhances IBM’s data security services with consulting to assess and monitor the security of critical business data.
Three new security-centric cloud solutions launched in 2Q14 highlight CSC’s cybersecurity technologies.
Cybersecurity gained through the Bull acquisition and organic investments in offerings will help Atos grow.
IBM GS
Security, Compliance, Governance
Atos
CSC
TBR
13 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
Vendors with a LATAM presence can address demand for disruptive technologies that have yet to see widespread adoption in the region
PSBQ 2Q14 Research Highlights: Quarterly Focus — LATAM
TBR
• Vendors invest in LATAM to reduce delivery costs and gain exposure in new geographies.
• Weak product sales in LATAM negatively impact product-related IT services revenues in the region, pushing vendors to focus on transformational and consulting-led cloud, mobility and analytics.
Expands delivery investments in SoftLayer data centers and security operations centers in LATAM
Increases its emphasis on user needs, such as people computing and offerings for “personas,” to add value to its offerings
Addresses demand for IT modernization and transformation services and digital solutions
IBM GS
LATAM
TCS
Unisys
TBR
14 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
Human capital management helps vendors innovate their portfolios and improve their leadership, utilization and attrition
PSBQ 2Q14 Research Highlights: Quarterly Focus — Talent Management
Capgemini uses human capital management to improve its cost structure and support its strategic growth initiatives.
A talent program nurtures entrepreneurship and helps Atos identify high-performing individuals who make things happen.
A digitally enabled training program helps TCS improve in-demand capabilities and accelerate freshers’ time to market.
• Linking business and talent management provides visibility into career development, succession planning and staffing trends.
• The scarcity of skilled talent forces vendors to seek alternative channels to attain, train and retain a workforce with in-demand skills.
TBR
Capgemini
Talent Management
TCS
Atos
TBR
15 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSBQ 2Q14 Research Highlights: Key Trends
Professional Services Vendor Trends for 2Q14
Quarterly Focus: Vendors integrate industry expertise
with IP-rich offerings, make the business case around
cybersecurity and expand in LATAM to bolster revenues.
Active vendors: To accelerate their revenue growth,
vendors transform their business models and invest in
disruptive technologies and industry-oriented consulting.
IT Services Performance: IT services revenue growth was
in the low single digits in 2Q14 and TBR expects the
sluggish growth trend will continue in 2H14.
Vendors’ investments in disruptive technologies have yet to scale up to positively affect the tight and slowly growing IT services market
SOURCE: WWW.PPTBACKGROUNDS.NET
SOURCE: WWW.FOTOSEARCH.COM
SOURCE: WWW.FOTOSEARCH.COM
TBR
16 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSBQ 2Q14 Research Highlights: IBM Global Services
Restructuring and pricing pressure will weigh on revenue growth through 2014, but strategy-led digital solutions position IBM for long-term profits
IBM GS Strengths IBM GS Initiatives IBM GS Opportunities
• IBM has access to and offerings designed for C-Suite buyers beyond the CIO, a market that TBR believes the company is best positioned to serve.
• IBM skillfully integrates acquired and organically developed capabilities into differentiated solutions.
• IBM is shifting away from low-margin businesses such as customer-care BPO toward higher-value digital front-office solutions.
• Aggressive investments in cloud, analytics, mobility and security agendas, led by strategy consulting, help IBM fend off competition.
• Sustain profit expansion through 2H14, despite revenue declines, as the mix of high-margin digital offerings increases.
• Package industry-oriented consulting with analytics-enabled software to deliver differentiated, outcomes-focused solutions.
SOURCE: WWW.FOTOSEARCH.COM SOURCE: WWW.FOTOSEARCH.COM SOURCE: WWW.FOTOSEARCH.COM
TBR
17 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSBQ 2Q14 Research Highlights: Accenture
A rebound in consulting, momentum in outsourcing sales and execution of growth strategies support Accenture’s better-than-expected results
Accenture Strengths Accenture Initiatives Accenture Opportunities
• Accenture grows in outsourcing by infusing its vertical offerings with analytics and industry-specific consulting expertise.
• Accenture stays ahead of the competition due to its industry, functional and technology expertise and ability to assist clients with business transformation through consulting.
• Investments in its Global Delivery Network and industrialized delivery support the company’s cost structure.
• The company combines organic investments in cloud, mobility and analytics with strategic acquisitions to expand its offerings and industry-specific capabilities and support growth.
• Capitalize on the demand for cost take-out and operational efficiency services in traditional and managed cloud outsourcing.
• Address transformative needs of C-Suite buyers through growth platforms such as Accenture Strategy.
SOURCE: WWW.FOTOSEARCH.COM SOURCE: WWW.FOTOSEARCH.COM SOURCE: WWW.FOTOSEARCH.COM
TBR
18 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSBQ 2Q14 Research Highlights: TCS
Investments in digital offerings and low-cost delivery position TCS to gain IT services market share; limited security capabilities could hinder pace
TCS Strengths TCS Initiatives TCS Opportunities
• TCS differentiates from competitors through automation framework and deep legacy and industry knowledge.
• TCS is experienced in training and expanding its global workforce, with a variety of programs catered to freshers and laterals.
• The company develops domain-specific, platform-agnostic solutions with embedded technical capabilities to address clients’ architectures.
• TCS’ high profitability generates the cash for its digitally enabled, vertical-specific investments and geographic expansion.
• Attract clients with an outcome-based value proposition to move away from the traditional low-cost outsourcer status.
• Invest in security solutions to enhance the value of product and service offerings.
SOURCE: WWW.FOTOSEARCH.COM SOURCE: WWW.FOTOSEARCH.COM SOURCE: WWW.FOTOSEARCH.COM
TBR
19 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSBQ 2Q14 Research Highlights: Key Trends
Professional Services Vendor Trends for 2Q14
Quarterly Focus: Vendors integrate industry expertise
with IP-rich offerings, make the business case around
cybersecurity and expand in LATAM to bolster revenues.
Active vendors: To accelerate their revenue growth,
vendors transform their business models and invest in
disruptive technologies and industry-oriented consulting.
IT Services Performance: IT services revenue growth was
in the low single digits in 2Q14 and TBR expects the
sluggish growth trend will continue in 2H14.
Vendors’ investments in disruptive technologies have yet to scale up to positively affect the tight and slowly growing IT services market
SOURCE: WWW.PPTBACKGROUNDS.NET
SOURCE: WWW.FOTOSEARCH.COM
SOURCE: WWW.FOTOSEARCH.COM
TBR
20 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSP Research Current Topics 3Q14 Report Key Themes • Select Vendor Reports: o Accenture o Atos o Capgemini o Cisco Services o Cognizant o CSC o Dell Services o Fujitsu o HP Services o IBM Global Services o Infosys o TCS o T-Systems o Wipro ITS o Xerox
• Select Benchmarks: Business Intelligence Professional Services Vendor, Global Delivery, Healthcare IT Services, IT Services Vendor, Management Consulting, Public Sector IT Services, Managed Private & Professional Services Cloud
Analyze how IT services vendors position themselves to address clients’ need to convert data into insights for business improvement. Assess vendors’ analytics offerings (e.g., BI capabilities, predictive, prescriptive and cognitive analytics) and how offerings are scaled.
Analyze acquisition strategies by key IT service providers and the type of acquisition activity, such as large-scale mergers or small-scale tuck-in acquisitions. Analyze areas of service, industry, geographic and delivery resource expansion through M&A activity. Are vendors paying the right price and how are acquisitions financed? Highlight successes and challenges during acquisition integration.
Analyze alliance strategies by key IT service providers. Assess partners’ contributions and benefits of the collaboration, including positive effects for clients. Understand key areas of emphasis for SAP and Oracle partnerships by key IT service providers. Assess IT service vendors’ relationship history with SAP and Oracle, how it has evolved, differentiators gained and key challenges or threats.
Analytics
Acquisitions
Alliances
PSBQ Research Highlights: 3Q14 Key Topics
TBR will analyze IT services vendors’ strategies to expand their analytics portfolios and engage in acquisitions and alliances to support growth
TBR
21 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
Questions?
PSBQ 2Q14 Research Highlights
TBR
22 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
James McIlroy Vice President of Sales Email: mcilroy@tbri.com Telephone: 603.929.1166
TBR IT Services Vendor Benchmark Webinar Contact Information
Twitter: @TBRinc SlideShare: www.slideshare.net/TBR_Market_Insight YouTube: www.youtube.com/user/TBRIChannel LinkedIn: www.linkedin.com/company/technology-business-research
Elitsa Bakalova
Professional Services Analyst
Email: elitsa.bakalova@tbri.com
Twitter: @ElitsaBakalova
Telephone: 603.929.1166
Patrick Heffernan
IT Services Practice Manager and Principal Analyst
Email: patrick.heffernan@tbri.com
Twitter: @TBR_PatrickH
Telephone: 603.758.1834
Ramunas Svarcas
Professional Services Principal Analyst
Email: ramunas.svarcas@tbri.com
Twitter: @rjsTBR
Telephone: 603.758.1833
Kevin Collupy
Research Analyst
Email: kevin.collupy@tbri.com
Twitter: @kevin_TBR
Telephone: 603.758.1879
TBR
23 TBR Quarterly Webinar Series | 10.15.14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSP Syndicated Research Coverage
TBR Professional Services Practice Syndicated Coverage
*Semiannual publication
IT Services Vendors Public Sector Vendors Benchmarks (Benchmark XLS data also available)
• Accenture • Atos • Capgemini • CGI* • Cisco • Cognizant • CSC • Dell • Fujitsu • HCL Technologies • HP • IBM Global Services • Infosys • Tata Consultancy Services • T-Systems • Unisys • Wipro IT Services • Xerox
• Booz Allen Hamilton* • CACI International* • General Dynamics IS&T* • L-3 Communications* • Leidos* • Lockheed Martin IS&GS* • ManTech* • Northrop Grumman IS&TS* • Raytheon Intelligence, Information
& Services* • SAIC*
• Global Delivery Benchmark* • Healthcare IT Services Vendor
Benchmark • IT Services Vendor Benchmark • Management Consulting Benchmark* • Public Sector IT Services Benchmark • BI Services Benchmark* • Managed Private & Professional Services
Cloud Benchmark
Management Consulting Vendors
• Bain & Company* • Boston Consulting Group* • Deloitte Consulting* • McKinsey & Co.* • PwC*
Healthcare IT Services Vendors
• Accenture Healthcare IT Services* • CSC Healthcare IT Services* • Dell Healthcare IT Services* • HP Healthcare IT Services* • IBM Healthcare IT Services*
TBR
T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .
About TBR 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. 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.
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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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