Productization of IT Services

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.