The IT market has started a period of accelerated change and innovation in how IT is applied and delivered to businesses and consumers. New technologies, such as virtualization; new delivery approaches, such as SaaS; and billions of dollars of investments in online services and cloud infrastructure from IT and Internet powerhouses point to IT progressively being delivered as a service, possibly as a utility and eventually "out of the cloud.“
Chasing the long tail comprising of SMBs has never been an easy task for large IT vendors and SPs. However, Mid Market (Medium Small, Medium Large & Large) alone, if targeted properly, can generate significant revenue - $280B in 2010 (48% of the WW IT Services spend)
A major challenge of the mid market for technology providers is that it is diversified and fragmented. It requires a certain amount of standardization to go to market and keep the cost of sales low.
Industry analysts (Gartner/ IDC) believe Industrialized IT Services will be able to penetrate the SMB Market. Modular solutions with a low-cost entry point make it easy for customers to buy, integrate and manage.
Although SMBs are comfortable buying hardware direct from the manufacturer or online, this has not translated into similar purchasing behavior for IT services. The diverse nature of SMB customers requires multiple routes to market will typically be appropriate.
Accelerating Services Productization is a strategic priority for HP Services. IBM’s IP led approach focuses on standardized services modules.
IBM & HP continue their effort to improve penetration into the midmarket businesses (100 to 999 employees) with specific products and programs.
Saturday, January 30, 2010
Mobile Device Market – Trends …Gartner
Gartner expects the following five key trends to impact the mobile device market during the next 18 months:
• As established vendors consolidate, new entrants will join the fray. New device
vendors such as Apple and Garmin are looking to differentiate themselves, while big name vendors like Motorola face pressure as market shares decline and design
innovation becomes more challenging.
• Device vendors will build out ecosystems. Pressure from operators to lower the price of devices will drive some established players such as Nokia and Sony Ericsson to seek out new sources of revenue from content and services sold to end users.
• More devices will focus on removing complexity for the user. Increasing device
functionality and a need for differentiation will drive demand to simplify the user interface
and service experience.
• Mobile devices will increasingly become lifestyle statements. Style will play more of a role across the range of devices, driven not only by fashion trends but also by
consumers' desire to reinforce their lifestyle choices.
• More high-end mobile devices will feature "field-refreshable" platforms. As cellular technologies become part of increasingly expensive consumer devices, vendors must manage ongoing support, upgrades and enhancement of devices.
• As established vendors consolidate, new entrants will join the fray. New device
vendors such as Apple and Garmin are looking to differentiate themselves, while big name vendors like Motorola face pressure as market shares decline and design
innovation becomes more challenging.
• Device vendors will build out ecosystems. Pressure from operators to lower the price of devices will drive some established players such as Nokia and Sony Ericsson to seek out new sources of revenue from content and services sold to end users.
• More devices will focus on removing complexity for the user. Increasing device
functionality and a need for differentiation will drive demand to simplify the user interface
and service experience.
• Mobile devices will increasingly become lifestyle statements. Style will play more of a role across the range of devices, driven not only by fashion trends but also by
consumers' desire to reinforce their lifestyle choices.
• More high-end mobile devices will feature "field-refreshable" platforms. As cellular technologies become part of increasingly expensive consumer devices, vendors must manage ongoing support, upgrades and enhancement of devices.
Worldwide Consumer Electronics Market Size and Trends – Towards Greater Mobility
According to CEA (Consumer Electronics Association), said worldwide consumer electronics sales are expected to hit 724 billion dollars in 2009. (Up 4.3 percent from the 694 billion dollars in 2008 but a steep drop from the 13.7 percent growth posted last year and the double-digit growth rates of previous years.)
Mobile phones accounted for 26.7 percent of total revenue last year but sales are expected to slow in 2009, the CEA forecast, growing by just 2.1 percent this year over last year to 1.2 billion units.
Mobile phone sales grew by 13 percent in 2008 and by 15.4 percent in 2007.
Television sales are expected to grow by 2.6 percent in 2009 to 232 million units, down from the 10.5 percent and 9.1 percent growth rates of the previous two years.
The CEA's 2009 outlook for computer sales is somewhat better, with growth forecast at 8.2 percent over 2008 but still a significant drop from the 17.8 percent growth of last year.
One bright spot is laptops. - The ratio of laptop PC sales to desktop PC sales is expected to continue to widen this year with 63 percent of the computers sold in 2009 expected to be laptops, the CEA said.
The CEA said MP3/digital media players were expected to generate "strong sales" in 2009 along with portable navigation GPS units.
It said the game console market is expected to grow by 5.4 percent in units and 1.1 percent in revenue in 2009.
Mobile phones accounted for 26.7 percent of total revenue last year but sales are expected to slow in 2009, the CEA forecast, growing by just 2.1 percent this year over last year to 1.2 billion units.
Mobile phone sales grew by 13 percent in 2008 and by 15.4 percent in 2007.
Television sales are expected to grow by 2.6 percent in 2009 to 232 million units, down from the 10.5 percent and 9.1 percent growth rates of the previous two years.
The CEA's 2009 outlook for computer sales is somewhat better, with growth forecast at 8.2 percent over 2008 but still a significant drop from the 17.8 percent growth of last year.
One bright spot is laptops. - The ratio of laptop PC sales to desktop PC sales is expected to continue to widen this year with 63 percent of the computers sold in 2009 expected to be laptops, the CEA said.
The CEA said MP3/digital media players were expected to generate "strong sales" in 2009 along with portable navigation GPS units.
It said the game console market is expected to grow by 5.4 percent in units and 1.1 percent in revenue in 2009.
Domestic IT services market in India to have substantial growth
Domestic IT services market in India to have substantial growth:
The domestic IT services market in India is estimated to grow to $12.8 billion in 2013 from $5.7 billion in 2008-09, representing a compounded annual growth rate (CAGR) of 18.6% from 2008 to 2013, according to a report from Springboard Research, a IT Market Research firm. The report predicts the Indian IT Services market will be dominated by IT infrastructure management services, which are expected to reach $7.2B in 2013 reflecting a steady 53% market share, and a CAGR of 18.1% from 2008 to 2013. However, applications services with a growth rate of 19.6% are expected to remain the fastest growing market segment. IT Consulting Services will remain the smallest segment, with an expected market share of 5% and a growth rate of 16.4%. Banking, financial services & insurance (BFSI) lead the IT services market with a 21.5% market share, followed by the public sector and telecom. However energy & utilities, followed by healthcare remain the fastest growing vertical industries. The report however, reveals that infrastructure hosting services showed the highest growth over the period among the infrastructure services category with a CAGR of 23.4%, closely followed by enterprise IT outsourcing, network integration and network management.
Key Insights : India has been one of the least affected country across the globe when it comes to domestic IT services consumption. Interestingly, domestic IT services average gross margin is quite comparable to international levels (according to report). It is no surprise that key IT services vendors have increased focus on India for its domestic IT services market. Dell’s recent launch of cloud services in India fits well in this opportunity.
The domestic IT services market in India is estimated to grow to $12.8 billion in 2013 from $5.7 billion in 2008-09, representing a compounded annual growth rate (CAGR) of 18.6% from 2008 to 2013, according to a report from Springboard Research, a IT Market Research firm. The report predicts the Indian IT Services market will be dominated by IT infrastructure management services, which are expected to reach $7.2B in 2013 reflecting a steady 53% market share, and a CAGR of 18.1% from 2008 to 2013. However, applications services with a growth rate of 19.6% are expected to remain the fastest growing market segment. IT Consulting Services will remain the smallest segment, with an expected market share of 5% and a growth rate of 16.4%. Banking, financial services & insurance (BFSI) lead the IT services market with a 21.5% market share, followed by the public sector and telecom. However energy & utilities, followed by healthcare remain the fastest growing vertical industries. The report however, reveals that infrastructure hosting services showed the highest growth over the period among the infrastructure services category with a CAGR of 23.4%, closely followed by enterprise IT outsourcing, network integration and network management.
Key Insights : India has been one of the least affected country across the globe when it comes to domestic IT services consumption. Interestingly, domestic IT services average gross margin is quite comparable to international levels (according to report). It is no surprise that key IT services vendors have increased focus on India for its domestic IT services market. Dell’s recent launch of cloud services in India fits well in this opportunity.
Cloud Computing and India
Dell India Offers SaaS Applications on the Cloud:
Dell India (6th January 2010) launched its portfolio of Software-as-a-Service (SaaS) applications for large enterprises, small and medium businesses across the country. The new SaaS applications provide customers with cloud-based IT services that help simplify and automate IT management and reduce overall IT costs. Dell’s cloud-based application is currently doing pilot projects for 10 customers in India and the company hopes to bag its first customer this January. Sameer Garde, managing director & GM-large enterprises, said with Dell’s new IT services, enterprises can leverage SaaS to solve key issues around distributed device management, remote infrastructure monitoring and business continuity and compliance. The platform offers configurable, flexible options with minimal upfront costs for customers and channel partners to quickly deploy just the applications and managed services they need to achieve superior IT business impact. Dell is offering a broad portfolio of new SaaS applications across three key IT infrastructure management areas: Client device management; Remote Infrastructure monitoring and Continuity and Compliance management.
Insights : This is a well timed move by Dell to increase presence in Indian domestic IT Services market. Major IT services vendors IBM, as well as domestic low cost IT services companies like Infosys, Wipro and TCS are increasing their footprint in this country with a sizable SME market.
Dell India (6th January 2010) launched its portfolio of Software-as-a-Service (SaaS) applications for large enterprises, small and medium businesses across the country. The new SaaS applications provide customers with cloud-based IT services that help simplify and automate IT management and reduce overall IT costs. Dell’s cloud-based application is currently doing pilot projects for 10 customers in India and the company hopes to bag its first customer this January. Sameer Garde, managing director & GM-large enterprises, said with Dell’s new IT services, enterprises can leverage SaaS to solve key issues around distributed device management, remote infrastructure monitoring and business continuity and compliance. The platform offers configurable, flexible options with minimal upfront costs for customers and channel partners to quickly deploy just the applications and managed services they need to achieve superior IT business impact. Dell is offering a broad portfolio of new SaaS applications across three key IT infrastructure management areas: Client device management; Remote Infrastructure monitoring and Continuity and Compliance management.
Insights : This is a well timed move by Dell to increase presence in Indian domestic IT Services market. Major IT services vendors IBM, as well as domestic low cost IT services companies like Infosys, Wipro and TCS are increasing their footprint in this country with a sizable SME market.
IT Trends 2010
Besides widely acknowledged trends (2010) like increasing adoption of SaaS, managed services, virtualization and mobile applications; AMI Partner’s team of go-to-market analysts have identified few trends that the industry hasn’t fully explored.
Summary
With economic upturn, SMBs will tentatively transition out of survival mode and focus on opportunities for business expansion. SMBs are now looking to enhance existing customer relationships, improve business efficiencies, grow revenue etc. Technology wise this equates to - collaborative tools, improved networking and disaster recovery plans. Due to economic downturn, business decision-makers (BDMs) are much more involved in the purchase process of ICT. Phrases such as “save time” and “save money” will need to be heavily supported with hard numbers and proof of outcome. Though cloud computing in increasingly being ubiquitous in IT marketplace, small businesses in particular will require extra handholding in 2010 to fully understand the specifics of how their businesses can benefit from flexible payment terms, scalable solutions, and other inherent benefits, amplifying the need for channel partners to clearly communicate their value proposition and continue efforts to educate SMB customers. Consolidation in the IT industry, convergence between hardware, software and services, and economic pressures are forcing channel partners to find new revenue streams, leading to the growth of “Total” IT solution providers in the SMB market. Over the past 3 - 4 years, the first wave of MSPs have undergone significant trial and error in the technical, operations and sales/ marketing of their managed services business. As a result, influential MSPs are refining their business model and approach to better serve SMBs’ needs. In addition, SMBs have a preference for a single end-to-end provider, instead of out-tasking parts of their IT needs to different providers.
In order to tap SMB IT services market opportunities Dell needs to
- Increase focus for services it can provide around – collaboration tools, networking, disaster recovery
- Have more clear/direct value proposition time/cost saving – more proof points required to sell services to SMBs – selling more to business (than IT) customer/departments
- Remote Managed IT Services (RMITS) market picked up considerably in 2009 – note that customer need more of an end-to-end solution.
- Cloud is gaining momentum – but it’s time to take lead on educating customer on how it can benefit their business.
Summary
With economic upturn, SMBs will tentatively transition out of survival mode and focus on opportunities for business expansion. SMBs are now looking to enhance existing customer relationships, improve business efficiencies, grow revenue etc. Technology wise this equates to - collaborative tools, improved networking and disaster recovery plans. Due to economic downturn, business decision-makers (BDMs) are much more involved in the purchase process of ICT. Phrases such as “save time” and “save money” will need to be heavily supported with hard numbers and proof of outcome. Though cloud computing in increasingly being ubiquitous in IT marketplace, small businesses in particular will require extra handholding in 2010 to fully understand the specifics of how their businesses can benefit from flexible payment terms, scalable solutions, and other inherent benefits, amplifying the need for channel partners to clearly communicate their value proposition and continue efforts to educate SMB customers. Consolidation in the IT industry, convergence between hardware, software and services, and economic pressures are forcing channel partners to find new revenue streams, leading to the growth of “Total” IT solution providers in the SMB market. Over the past 3 - 4 years, the first wave of MSPs have undergone significant trial and error in the technical, operations and sales/ marketing of their managed services business. As a result, influential MSPs are refining their business model and approach to better serve SMBs’ needs. In addition, SMBs have a preference for a single end-to-end provider, instead of out-tasking parts of their IT needs to different providers.
In order to tap SMB IT services market opportunities Dell needs to
- Increase focus for services it can provide around – collaboration tools, networking, disaster recovery
- Have more clear/direct value proposition time/cost saving – more proof points required to sell services to SMBs – selling more to business (than IT) customer/departments
- Remote Managed IT Services (RMITS) market picked up considerably in 2009 – note that customer need more of an end-to-end solution.
- Cloud is gaining momentum – but it’s time to take lead on educating customer on how it can benefit their business.
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