bi and hybrid it adoption fuel consistent demand for cloud professional services
TRANSCRIPT
TBR
T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .
BI and hybrid IT adoption fuel consistent demand for cloud professional services Technology Business Research Webinar Series July 30, 2015
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Presenters
Cassandra Mooshian
Cloud and Professional Services Analyst
Email: [email protected]
Twitter: @cmooshian
Allan Krans
Practice Manager, Cloud
Email: [email protected]
Twitter: @AllanKrans
Ramunas Svarcas
Principal Analyst, Professional Services
Email: [email protected]
Twitter: @rjsTBR
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TBR Cloud Taxonomy Overview
TBR Cloud Definitions
TBR defines cloud computing as the business application of multiple existing technologies. These technologies include grid computing, utility computing, virtualization, automation, services-oriented architectures, multitenancy architectures and Web 2.0. The ultimate goal is to deliver computing power flexibly and dynamically for running applications, storing data and developing software to improve business operations.
Professional & Managed Services
Hybrid Cloud
Public Cloud
Components
Private Cloud
Software Hardware
Public Private
Hosted SaaS, PaaS, IaaS, BPaaS
Hosted SaaS, PaaS, IaaS, BPaaS
Public Private
Non-cloud IT & Services
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TBR Cloud Taxonomy
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TBR Cloud Definitions
Cloud professional and managed services assist customers with the evaluation, implementation and use of cloud services. The professional services include consulting, systems integration, implementation, application development and maintenance, and cloud operations, management and maintenance. These services can be delivered via public, private or hybrid cloud environments.
Consulting Provide strategic and tactical advice in a particular area of expertise for the use of cloud computing services. Consulting includes selection of a cloud environment, planning and design of private clouds as well as cloud brokerage services.
Systems Integration Offer assistance in making diverse components, such as infrastructure (hardware and software) or cloud services, work together in the cloud environment.
Application Development and Maintenance
Software development that encompasses requirements of engineering, design, implementation, testing and maintenance to construct software for cloud computing. Software maintenance concerns all activities needed to keep the system operational after it has been delivered to the user for cloud computing.
Managed Services
The delivery and/or management of public, private and/or hybrid cloud “as a Service” offerings by a third party; managed cloud services include the integration, maintenance, monitoring and management of cloud environments spanning the hardware and software components layers through the individual “as a Service” solutions and can be delivered on-site or remotely. Managed cloud services may include cloud orchestration, security services, and/or service and application cataloguing. Managed private cloud includes offerings that provide physical dedication of cloud resources for end customers, but not virtually dedicated services, which are included in TBR’s public cloud definition. Pricing schemas such as reserved instance pricing do not impact the categorization of cloud services as either public or managed private.
Cloud Professional and Managed Services Definitions
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Research Highlights and Outlook:
Cloud Professional Services
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TBR Position on Market Trends
Cloud professional services vendors embrace enterprises’ struggles with cloud sprawl and turn them into long-term revenue generation
Cloud professional services adoption remains above 80%, and the total market opportunity continues to grow, generating strong revenue growth for leading cloud professional services vendors as cloud environments become more complex. The onslaught of BI solutions, shadow IT, and the integration of cloud and noncloud solutions triggers increasing demand for professional services.
Managed services continues to gain popularity as cloud sprawl necessitates vendor management and support of complex, multivendor cloud environments. Systems integrators (SIs) such as IBM and HP stand out in this segment due to their strong IT management capabilities and robust cloud portfolios.
Traditional cloud professional services leaders such as IBM, Accenture and HP face pressure from ISVs such as Microsoft and SAP as the latter use security software expertise and orchestration capabilities to gain traction and leadership parity with SIs.
Opportunity
Market Overview
Vendor Landscape
Cloud Professional Services Key Takeaways
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TBR Position on Market Trends
BI and shadow IT in the enterprise force IT departments to embrace hybrid cloud and hybrid IT, bringing forth integration challenges
Cloud professional services adoption remains above 80%, and the total market opportunity continues to grow, generating strong revenue growth for leading cloud professional services vendors as cloud environments become more complex. The onslaught of BI solutions, shadow IT, and the integration of cloud and noncloud solutions triggers increasing demand for professional services.
Managed services continues to gain popularity as cloud sprawl necessitates vendor management and support of complex, multivendor cloud environments. SIs such as IBM and HP stand out in this segment due to their strong IT management capabilities and robust cloud portfolios.
Traditional cloud professional services leaders such as IBM, Accenture and HP face pressure from ISVs such as Microsoft and SAP as the latter use security software expertise and orchestration capabilities to gain traction and leadership parity with SIs.
Opportunity
Market Overview
Vendor Landscape
Cloud Professional Services Key Takeaways
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Cloud professional services growth continues at a decelerated rate as the market matures and the need for improved efficiency persists
2015:
$35 billion
2020:
$55 billion
2010:
$5 billion
Downward Pressure: • Budget constraints • Security and data
privacy • IT budget dollars being
allocated to other emerging technologies
Upward Momentum: • Hybrid integration and BI & analytics add
complexity, often necessitating third-party involvement.
• Efficiency gains, both business and IT • Faster implementation and app conversion
Cloud Professional Services Market Forecast
Market Sizing
~NEW~
~NEW~
9% CAGR
48% CAGR
~NEW~
~NEW~
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Professional Services Cloud Market Forecast
Demand for managed services increased drastically over the past 3 years and will continue to do so as cloud environments mature
Market Sizing
$5.4
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Professional services precede cloud services as enterprises seek advisory and integration support in the early stages of each cloud adoption wave
Enterprise Adoption
1. The first step in cloud exploration and designing and
implementing cloud environments is professional services.
2. Public cloud and private cloud purchasing is the logical second step in
building cloud environments.
3. Integration to form hybrid cloud is the last step in building cloud
environments.
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Cloud software and services are viewed as ‘better together’ as vendors educate enterprises on the benefits of hybrid IT
Cloud professional services users’ cloud “as a Service” adoption: Public Cloud: 46% Private Cloud: 51% Hybrid Cloud: 26%
Enterprise Adoption
Cloud professional services adopters
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Early demand for cloud design and build-outs drove continued adoption of ADM and management services globally in recent years Cloud Professional Services Segment Adoption
<- Mature ->
<- Maturing ->
“Design” “Build” “Customize” “Run”
Enterprise Adoption
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Cloud brokerage and orchestration are gaining
mindshare among enterprises as hybrid IT
complexity requires advanced IT skill sets.
Professional services adoption goes hand-in-hand with hybrid and third-party-delivered private cloud adoption
Enterprise Adoption
Public Cloud Adoption
• Shadow IT purchasing
• Fragmented management
• Self-service
Private Cloud Adoption
• IT-driven purchasing
• Traditional management • Professional services
vendor involvement (hosting, management)
Hybrid Adoption
• IT and LOB purchasing
• Modern management • Professional services
vendor involvement (integration, management)
Technology-focused
Adoption
Outcome-based
Adoption
Pendulum of Cloud Adoption
Data ownership and privacy are the
second- and third-biggest concerns of cloud professional
services buyers.
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Vendor Performance
Cloud Professional Services Revenue Growth
Multilines HP and IBM offer end-to-end IT solutions and services, challenging SIs for cloud professional services revenue growth
Despite experiencing recent growth in cloud professional services, Oracle lags behind other multiline vendors in the segment. Making diverse components work together in a cloud environment will continue to be necessary as customers transition to cloud.
Multiline
Software
SI
Telco/Hosting
Consultancy
Undisputed leader
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Vendor Leaderboards
Cloud professional services leaders take vertical approaches with the help of their partner ecosystems to evolve their cloud portfolios
Color Key Multiline Software Systems Integrator Telco/Hosting Consultancy
Professional Services Cloud Leaders
Key Strategies
Rev
en
ue
HP $833M
Build upon strengths in SI, systems management and technology consulting to promote cloud professional services portfolio.
IBM $764M
Utilize IBM’s GBS and GTS expertise and cloud-focused teams to push cloud professional services to market; cross and up-sell cloud with traditional and existing contracts.
Accenture $571M
Rely on consulting expertise, vertical focus areas and key partnerships to help with digital and cloud transformations; capitalize on position as a business consultant with increasing IT consulting expertise.
Year
-to
-ye
ar G
row
th
%
IBM 89%
Combine traditional portfolio and expertise with innovative cloud solutions.
TCS 55%
Use digital transformation focus to help clients migrate to cloud.
T-Systems 39%
Utilize partners to help bring its professional services to the market and generate next-generation cloud engagements.
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TBR Position on Market Trends
Enterprise cloud environments are maturing, with slower additions of net new solutions, bringing managed services to the forefront
Cloud professional services adoption remains above 80%, and the total market opportunity continues to grow, generating strong revenue growth for leading cloud professional services vendors as cloud environments become more complex. The onslaught of BI solutions, shadow IT, and the integration of cloud and noncloud solutions triggers increasing demand for professional services.
Managed services continues to gain popularity as cloud sprawl necessitates vendor management and support of complex, multivendor cloud environments. SIs such as IBM and HP stand out in this segment due to their strong IT management capabilities and robust cloud portfolios.
Traditional cloud professional services leaders such as IBM, Accenture and HP face pressure from ISVs such as Microsoft and SAP as the latter use security software expertise and orchestration capabilities to gain traction and leadership parity with SIs.
Opportunity
Market Overview
Vendor Landscape
Cloud Professional Services Key Takeaways
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Professional Services Cloud Market Segments
Cloud hosting and management are adopted to combat cloud sprawl, driving strong managed services and SI revenue and growth
Vendor Revenue in Aggregate
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Segment Highlight: Managed Services
HP and IBM vie for growth and revenue top spots in managed services while SI peers such as Accenture and TCS begin to imitate their strategies
Multiline
Software
SI
Telco/Hosting
Consultancy
IBM and HP dominate the managed services market.
Many vendors started to build out their managed services capabilities — all vying for the same deals.
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Managed Cloud Services Leaders
Key Strategies
Rev
en
ue
IBM $283M
Continue to build out cloud professional services portfolio, including brokerage, but lead with consulting.
HP $236M
Leverage status as IT outsourcing leader to upsell managed cloud business.
Accenture $154M
Managed services are increasingly important to Accenture’s overall cloud strategy as it promotes its Accenture Cloud Platform.
Year
-to
-ye
ar G
row
th %
HP 64%
Incorporate hardware and software strengths with Helion and Eucalyptus offerings.
TCS 57%
Use managed services solutions to create and bring to market vertically oriented solutions.
IBM 55%
Tailor cloud portfolio for industries via the value-add managed services layer.
Color Key Multiline Software Systems Integrator Telco/Hosting Consultancy
Managed Cloud Services: Leaderboards
With end-to-end IT services capabilities and growing cloud presence, IBM and HP top leaderboards in managed cloud services
TBR
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TBR Position on Market Trends
Cloud professional services adoption remains above 80%, and the total market opportunity continues to grow, generating strong revenue growth for leading cloud professional services vendors as cloud environments become more complex. The onslaught of BI solutions, shadow IT, and the integration of cloud and noncloud solutions triggers increasing demand for professional services.
Managed services continues to gain popularity as cloud sprawl necessitates vendor management and support of complex, multivendor cloud environments. SIs such as IBM and HP stand out in this segment due to their strong IT management capabilities and robust cloud portfolios.
Traditional cloud professional services leaders such as IBM, Accenture and HP face pressure from ISVs such as Microsoft and SAP as the latter use security software expertise and orchestration capabilities to gain traction and leadership parity with SIs.
Opportunity
Market Overview
Vendor Landscape
Cloud Professional Services Key Takeaways
Though global SIs are perceived as the incumbent leaders in cloud professional services, ISVs are challenging SIs for leadership positions
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As the number of small, niche cloud vendors continues to grow, larger vendors acquire more often to add pointed capabilities quickly
Trend: M&A Activity
Acquisition Focus Areas
Vertical Expansion
Open Source
Big Data and
Analytics
Security
Recent Mergers and Acquisitions Focused on: • Vertical expansion — Vendors
such as IBM, Accenture and CSC are delving deeper into the regulation-ridden government and healthcare sectors with cloud.
• Open source — IBM and Cisco each recently acquired OpenStack-based cloud vendors to capitalize on the recent uptick in enterprise demand for OpenStack.
• Big data and analytics — Microsoft attracts developers to its platforms by acquiring DataZen, while Accenture adds advanced analytics services with Gapso.
• Security — HP and EMC are bolstering cloud security in areas such as data encryption.
Key Recent Cloud Mergers and Acquisitions
HP (Voltage Security), EMC (Cloudlink): Security and encryption
Microsoft (DataZen): Mobile business intelligence and data visualization Accenture (Gapso): Analytics
IBM (Blue Box), Cisco (Piston Cloud): OpenStack
IBM (Explorys, Phytel): Healthcare intelligence Accenture (Agilex), CSC (Autonomic Resources): Public sector
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Trend: Hybrid IT
Incumbent vendors are in front of hybrid IT environments, while most pure plays rely on integration capabilities Vendors’ Hybrid IT Strategies
Vendor Hybrid Strategy
Microsoft Run Azure-developed applications on public cloud, private cloud or on-premises environments.
IBM Leverage broad portfolio spanning public and private cloud as well as SaaS, PaaS, IaaS and professional services to tailor to customer needs.
Salesforce Partner with companies like MuleSoft to launch prebuilt integration connectors between Salesforce and other popular applications.
Google Support OpenStack and Docker to enable Google-built applications to run across environments.
AWS Directly connect over fiber to data centers and enable integrations. The company will lag behind competition.
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Customer purchasing plans indicate accelerating demand for hybrid cloud solutions during 2015
48% 43% 27%
BI SOFTWARE CLOUD DEPLOYMENT ADOPTION
Currently in use:
Plan to purchase in the next year:
Private Cloud
32%
Public Cloud
25%
Hybrid Cloud
42% SOURCE: TBR n = 450
Trend: BI Adoption
TBR
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TBR Position on Market Trends
BI and hybrid IT adoption fuel persistent demand for cloud professional services
Cloud professional services adoption remains above 80%, and the total market opportunity continues to grow, generating strong revenue growth for leading cloud professional services vendors as cloud environments become more complex. The onslaught of BI solutions, shadow IT, and the integration of cloud and noncloud solutions triggers increasing demand for professional services.
Managed services continues to gain popularity as cloud sprawl necessitates vendor management and support of complex, multivendor cloud environments. SIs such as IBM and HP stand out in this segment due to their strong IT management capabilities and robust cloud portfolios.
Traditional cloud professional services leaders such as IBM, Accenture and HP face pressure from ISVs such as Microsoft and SAP as the latter use security software expertise and orchestration capabilities to gain traction and leadership parity with SIs.
Opportunity
Market Overview
Vendor Landscape
Cloud Professional Services Key Takeaways
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Questions?
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Cloud Business Quarterly Research Highlights and Outlook: Contact Information
James McIlroy Vice President of Sales Email: [email protected] Telephone: 603.929.1166
Twitter: @TBRinc SlideShare: www.slideshare.net/TBR_Market_Insight YouTube: www.youtube.com/user/TBRIChannel LinkedIn: www.linkedin.com/company/technology-business-research
Cassandra Mooshian
Cloud and Professional Services Analyst
Email: [email protected]
Twitter: @cmooshian
Allan Krans
Practice Manager, Cloud
Email: [email protected]
Twitter: @AllanKrans
Ramunas Svarcas
Principal Analyst, Professional Services
Email: [email protected]
Twitter: @rjsTBR
TBR
T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .
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