Research Highlights and Outlook Focus on Cloud Professional Services

TBR

TECHNOLOGY BUSINESS RESEARCH, INC.

Managed Private & Professional Services Cloud Benchmark: Research Highlights and Outlook Focus on Cloud Professional Services

Nov. 7, 2013

TBR’s Cloud Professional ServicesSM Webinar

TBR

2 TBR Quarterly Webinar Series | 11.07.13 | www.tbri.com | ©2013 Technology Business Research Inc.

Cloud Business Research Highlights and Outlook: Webinar Presenter

Ramunas SvarcasSenior Analyst and Engagement Manager,Professional Services [email protected]@rjsTBR

TBR


TBR Cloud Program — Portfolio Product Descriptions

Customer and Competitor Reports:TBR cloud customer reports provide primary research-based insights into purchasing behavior, vendor adoption, satisfaction and demand across multiple cloud offerings and professional services segments.

Benchmarks:TBR’s benchmark reports provide analysis through qualitative and metric-based comparisons of key vendors in a market segment. Cloud data models are included with the benchmarks; this TBR research and analysis is built from the ground up based on 15-plus years of vendor-centric financial models.

Vendor Reports:Reports analyzing vendors’ cloud businesses cover all relevant segments and track performance across cloud-driven metrics including operating expenses, operating profit, headcount breakouts and geographic breakouts.

TBR Cloud Research Overview

Cloud Benchmarks

Cloud Business Reports

Cloud Customer Research

Tracks

TBR


Cloud Benchmarks

Public Cloud Benchmark

Managed Private Cloud and Professional Services

Benchmark

Cloud Business Reports

Accenture AmazonAtosCapgeminiCognizantCSC Dell

DeloitteFujitsuGoogleHPIBM InfosysMicrosoft

OracleRackspaceSalesforceSAPServiceNowVerizonTata

WiproWorkday

*Plans in place for additional vendors

Cloud Components Benchmark


Tracks

TBR Cloud Program — Portfolio Product Overview

Private Cloud Customer and

Competitor Report

Hybrid Cloud Customer and Competitor Report

Cloud Prof. Services Customer and

Competitor Report

Topical Cloud Reports: 2013 reports include Cloud Security and Orchestration

TBR Cloud Research Overview

OUR FOCUS TODAY

TBR


Cloud Business Quarterly: Cloud Benchmark Definitions

SOURCE: TBR

Professional Services Cloud Taxonomy

TBR


Cloud Business Quarterly: Cloud Benchmark Definitions

SOURCE: TBR

Managed Private Cloud Taxonomy

TBR


CLBQ Research Highlights and Outlook

Cloud Professional Services

TBR


Cloud Professional Services Market Discussion

While overall IT services revenue growth is lackluster, TBR estimates total cloud-related revenue doubled over the last 2 years

What is happening in the cloud professional services market?

What segment of cloud professional services is providing the most revenues for services vendors?

What are vendors doing to meet demand and partake in revenue growth?

TBR Position

TBR


TBR Position


The complexity of cloud computing services necessitates assistance from IT services vendors

What is Happening? Two Steps forward: Managed Private Cloud and Professional Services growAs IT service vendors add managed private cloud services to portfolios, cloud professional services continues to grow at double-digit rates. The result: an $18 billion market for cloud professional services at the end of 2013 and a forecast to nearly double by 2018 to $30 billion.

Largest subsegment?Consulting and systems integration currently dominate the cloud professional services revenue in size, while application development is dominating growth as need for enabling workload to function in the cloud environment expands.

Meeting demand? One step back: Investing for a future that is already upon usIndustry-specific, vertical-focused solutions that address immediate needs regarding cloud computing are requiring professional services vendors to expand their portfolios with cloud-savvy personnel and unique IP developed through partnerships to diversify portfolios.

TBR


Managed Private and Professional Services Cloud Market

Cloud Market Sizing and Forecast

Managed private and professional services revenues are expected to double again in the next 5 years

Doubled

Almost Double

TBR


Segment Growth

Despite overtaking professional services revenue growth, managed services expansion of offerings begets consulting opportunitiesManaged Private and Professional Services Cloud Benchmark Vendor Performance

As managed private cloud services grew at 45%, cloud-related professional services grew at 30% in 1Q13 and will continue to expand as more managed services offerings are created, necessitating a thorough

understanding of capabilities and risks by clients to solve IT-related challenges.

TBR


Segment Growth

Early days of advisory services led to the success in managed services, which continues to foster need for consulting and system integrationManaged Private and Professional Services Cloud Benchmark Vendor Performance

While professional services took a back seat to managed services in total cloud revenues, the continued creation of new solutions will require guidance, advice and assistance with

implementation from professional services vendors.

Consulting-led growth

Managed Services-led growth

TBR


Cloud Professional Services Growth

Industry-specific solutions help services firms rapidly expand cloud professional services revenues while total services growth stagnates

Cloud Professional Services: Growth Leaders

For vendors, cloud-related revenue growth is outpacing total services growth, with cloud professional services expanding anywhere from five to six times faster than their total services.

TBR


TBR Position


With clients at different stages in their cloud journey, cloud professional services continues to see demand growth

What is Happening? Two Steps forward: Managed Private Cloud and Professional Services growAs IT service vendors add managed private cloud services to portfolios, cloud professional services continues to grow at double digit rates . The result: an $18 billion market for cloud professional services at the end of 2013 and a forecast to nearly double by 2018 to $30 billion.



TBR


$1,001 $1,094 $1,204 $1,374 $1,587 $1,650 $1,765$2,084 $2,296 $2,415$457 $488 $519

$540$614 $666 $699

$777$787 $818

$402 $437$452

$491$597 $633

$656

$735$772

$818

$172 $185

$193 $213

$226 $244

$256

$285 $307

$324

$2,032$2,204

$2,367$2,619

$3,024$3,193

$3,376

$3,882$4,161

$4,374

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13E

Reve

nue

(in $

Mill

ions

)

CLOUD REVENUES BY SEGMENT AMONG VENDORS COVERED IN MANAGED PRIVATE AND PROFESSIONAL SERVICES CLOUD MARKET BENCHMARK

ADM: 35.7%

Consulting: 29.3%

SI: 28.2%

Managed Services: 44.6%

TBR

SOURCE: TBR ESTIMATES

Total 1Q13 YTY Growth: 37.6%

1Q13 Growth YTY:

Professional Services Segment Growth

While cloud managed services revenue leads revenue growth, cloud professional services continue to enjoy 30% growthManaged Private and Professional Services Cloud Market Segments

Recognizing the limitations and security issues with public cloud offerings, customers engage vendors for consulting, implementation and new applications to accommodate the move to private cloud environments.

Professional Services

TBR


Cloud Consulting Services: Growth Leaders

Cloud Consulting Revenue Growth versus Total Cloud Revenue Growth

All vendors are reassessing their consulting capabilities for the cloud market, with leaders expanding human capital resources

Laggards, lacking sufficient consulting staff to meet demand, leverage channel partners and continue to focus on hardware and software revenues.

Leaders

Laggards

TBR


Cloud Systems Integration Services: Growth Leaders

A focus on private cloud environments enables cloud SI leaders to continue to expand revenues above the average cloud growth of 27%

Enterprise customers are holding back investment in infrastructure improvements while searching for clarity on cloud capabilities. Clients who are making changes are working with vendors that focus on building private and hybrid cloud environments. The resulting average growth for cloud system integration for the 29 vendors

examined is 27% — below overall growth for all cloud private and professional services.

Cloud SI Revenue Growth versus Total Cloud Revenue Growth

Leaders

TBR


Cloud ADM Services: Growth Leaders

Leaders in cloud application development are vendors with strong historical participation in traditional applications development

Laggards

Laggards are predominately application vendors with horizontal products already geared for the cloud environment that now must be customized for specific industries, or firms not historically known for their applications

development prowess. Wipro, the one exception, chose to focus on consulting for private cloud migration with limited success.

Cloud ADM Revenue Growth versus Total Cloud Revenue Growth

Leaders

TBR


TBR Position


To accommodate demand for cloud professional services, vendors need to expand and re-engineer their portfolios with cloud-specific offerings


Largest subsegment?Consulting and system integration currently dominate the cloud professional services revenue in size, while application development is dominating growth as need for enabling workload to function in the cloud environment expands.


TBR


116.0%

95.1%101.0%

93.5%

36.3%40.7% 43.5% 42.9% 39.7%

30.1%

0%

20%

40%

60%

80%

100%

120%

140%

1Q12 2Q12 3Q12 4Q12 1Q13

YTY

Perc

ent

Gro

wth

Total Cloud Revenue and Headcount Growth

Total Cloud Revenue Growth YTY (19 Vendors) Total Cloud Headcount Growth YTY (19 Vendors)

TBR

SOURCE: TBR ESTIMATES AND COMPANY DATA NOTE: DATA AVAILABLE FOR ONLY 19 OF THE 29 VENDORS IN THE TBR MANAGED PRIVATE AND PROFESSIONAL SERVICES CLOUD BENCHMARK, WHICH ACCOUNTED FOR 70% OF THE TOTAL CLOUD REVENUES IN 1Q13.

Cloud Headcount Growth

Headcount growth is outpacing revenue growth as vendors continue to staff to meet expanding demand for cloud solutions

Headcount growth and total cloud revenue growth curves are converging as vendors succeed in addressing growing cloud computing and accompanying cloud professional services demand. Firms are hiring cloud experts,

retraining sales organizations to sell cloud and expanding delivery staffs with cloud-savvy personnel.

TBR


Alliance Activity

Transitioning business models challenge vendors — requiring vendors to form and strengthen alliances and develop intellectual property

• Hardware- and software-agnostic system integrators and cash-rich vendors leverage alliances to expand addressable market and evaluate potential acquisition candidates.

• Challenged, cash-strapped vendors or conservative investors focus on building alliances to augment cloud portfolio offerings and fill solution gaps through newly developed intellectual property.

Partnering

SOURCE: TBR AND COMPANY DATANote: Not all alliances have been identified for all vendors.

TBR

TBR


TBR Position


The complexity of cloud computing services necessitates assistance from IT services vendors




TBR


Questions?

TBR


TBR Cloud Program — Upcoming Cloud WebinarsTBR Cloud Research Overview

Cloud Program Tract Webinar Focus Webinar Date

Cloud Benchmarks

Cloud Components Benchmark TBD

Public Cloud Benchmark January 2014


Private Cloud Nov. 14, 2013

Cloud Professional Services December 2013

Hybrid Cloud January 2013

TBR


For additional information, please contact:

Cloud Business Quarterly Research Highlights and Outlook: Webinar Presenters

Twitter: @TBRincSlideShare: www.slideshare.net/TBR_Market_InsightYouTube: www.youtube.com/user/TBRIChannelLinkedIn: http://www.linkedin.com/company/technology-business-research

Ramunas SvarcasSenior Analyst and Engagement Manager,Professional Services [email protected]@rjsTBR

About Us

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.

Contact Us

[email protected] Merrill DriveHampton, NH 03842USA

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.

Research Highlights and Outlook Focus on Cloud Professional Services

Business

Transcript of Research Highlights and Outlook Focus on Cloud Professional Services