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A Report for

Microsoft

Office 365 Industry Addressability Study

Gartner Consulting Report

03 July 2017

Engagement: 330043507

2 © Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a trademark of Gartner, Inc. or its affiliates.

Table of Contents 1. Introduction ........................................................................................................................................................... 3

2. Financial Services ................................................................................................................................................... 7

3. Healthcare ............................................................................................................................................................ 11

4. Manufacturing ..................................................................................................................................................... 15

5. Transportation ..................................................................................................................................................... 19

6. Retail .................................................................................................................................................................... 23

7. Government ......................................................................................................................................................... 26

8. Hospitality ............................................................................................................................................................ 31

9. Appendix .............................................................................................................................................................. 35


1. Introduction This document, which is an overview of the findings from

a study by Gartner Consulting and commissioned by

Microsoft, provides insights into trends, solutions, and

strategic areas of focus in order to accelerate Office 365

adoption and penetration globally. The report is divided

into several main sections, beginning with an overview of

the project, Office 365-related market trends, summary of

study findings, and industry deep dives. The industry deep

dives provide details on industry-specific trends,

addressable markets, IT and software spend, as well as key

solutions.

Background Microsoft engaged Gartner to identify key regions and

industries that could provide significant growth

opportunities for Office 365. In order to identify these

opportunities, Gartner started with a hypothesis:

regulated industries and firstline workers are markets

with relatively low adoption rates that could potentially

drive significant growth. Firstline workers are defined as

employees, staff, team members or the workforce itself,

that serve as the first point of contact between

companies, their customers / products / suppliers and the

market. These workers are often in roles that directly

impact the customer experience and the delivery and

development of products and services. On the other hand,

knowledge workers are involved in non-routine tasks that

require industry / solution-specific expertise. Knowledge

workers are often a dispersed workforce, thereby needing

collaboration tools in order to share knowledge and

project progress.

Methodology Using a multi-step approach, Gartner developed an

outside-in market perspective on Office 365’s

Addressability. The analysis was conducted on a regional-

level and included Asia / Pacific, Canada, Central and

Eastern Europe, France, Greater China Region, Germany,

India, Japan, Latin America, Middle East and Africa, United

Kingdom, United States, and Western Europe. The

industries included in the analysis were Government,

Healthcare, Financial Services, Manufacturing, Retail,

Hospitality, and Transportation. The regions and

industries are further defined in the Appendix. Through

the analysis the regions and industries were assessed on

four key categories – Investments and Regulatory

1 Knowledge and firstline worker definitions included in appendix

Environment, Microsoft Friendliness, Digital Maturity, and

Partner Ecosystem. The regions and industries were

scored on these categories through quantitative and

qualitative analysis in order to determine Microsoft’s

ability to address the Office 365 opportunity through

partners. In conjunction with the Microsoft Addressability

score that was developed, the total addressable markets

(TAdM) for knowledge workers (KW TAdM) and firstline

workers (FW TAdM) were determined1. The two

components of the analysis were combined and graphed

in order to arrive at strategic recommendations.

Additionally, heat maps and solution maps were created

to pinpoint bright spots within verticals for Office 365

interactions with vertical specific software and use cases.

Sources The qualitative and quantitative analysis and total

addressable market estimates were determined through

the use of published Gartner forecast data, Gartner

analyst discussions, Gartner CIO survey data, and Gartner

published research. Gartner conducted additional

qualitative analysis through secondary research to

supplement Gartner data.

Research Summary

Partner Impact Gartner views organizational-centric digital roadmaps as

an impediment to the impact of digital transformation.

Digital ecosystems, which include participants from a wide

range of industries who provide a wide range of solutions

to deliver value throughout the ecosystem, will drive

significant growth for the participants. Microsoft partners

are well-positioned to succeed in the growing Office 365

ecosystem by creating and delivering integrated solutions.

These integrated solutions have not emerged organically

but rather as a result of partner collaboration and

intervention in the Office 365 ecosystem.

High-Level Country Analysis Regional differences on digital maturity, Microsoft

friendliness, investment and regulatory environment, and

partner ecosystems are the driving force behind the

Harvey Ball ratings for Microsoft Addressability in Figure

1.1. Overall, highly-developed regions were found to be

the most aligned, while regions with developing

economies were on the lower-end of the ratings

spectrum. However, even within the lower-rated regions,


there are strategic opportunities and pockets of growth

with large addressable markets that should not be

ignored.

The output: The United States, Canada, and United

Kingdom are the regions with the highest addressability

scores, primarily driven by heavy investment in SaaS office

suites to date, and interest in continued investment in

SaaS office suites, BI / analytics, collaboration tools, and

other cloud services.

Figure 1.1: Microsoft Addressability Region Rankings, 2017

Table 1.1 provides the global Total Addressable Market for

firms with more than 100 employees.

Table 1.1: Global TAdM for 100+ Employee Firms

Source: Gartner Consulting, Estimates in Millions

High-Level Vertical Analysis The verticals, rated on the same metrics as the regions,

can be seen ranked in order of Microsoft Addressability in

Figure 1.2.

Figure 1.2: Microsoft Addressability Industry Rankings, 2017

Financial Services scored the highest primarily due to the

industry’s high digital maturity, Microsoft friendliness,

and digitalization initiatives driven by innovation.

Financial Services is followed by Healthcare,

Manufacturing, and Transportation respectively. The

Healthcare industry is investing heavily in digital

initiatives, and, like Financial Services, has high Microsoft

friendliness due to its focus on security and need to meet

stringent regulations. As globalization and cost reduction

initiatives are putting pressure on organizations to

become more efficient and deliver products and services

to customers faster, Manufacturing and Transportation

are both undergoing digital transformations in order to

remain competitive.

Retail, Government, and Hospitality lag behind the other

industries, but still have significant alignment to

Microsoft. Retail is undergoing a significant

transformation – there is a push to become more digital,

but organizational barriers and tight budgets will continue

to hinder Retailer’s efforts to help struggling brick-and-

mortar locations compete. The Government, while highly

Microsoft friendly (especially in the US due to the

dedicated Microsoft cloud services available), is slow to

adopt cloud and move away from legacy systems. Outside

the US there is hesitation to use cloud services from a

foreign entities. The Hospitality industry relies heavily on

vertical specific software (VSS). When this aspect is

combined with tight IT budgets, many Hospitality

organizations find it hard to invest in innovative / digital

solutions, however, organizations are finding it

increasingly more important to invest in technology in

United States

4

United Kingdom

4Canada

4

Latin America (LATAM)

1 Middle East & Africa (MEA)

1

India

2

Greater China Region (GCR)

2

Asia-Pacific (APAC)

3

Germany

3France

2

Western Europe (WE)

3Central & Eastern

Europe (CEE)

1

Japan

2

Workers Knowledge Firstline

APAC 31.3 71.1

Canada 3.5 1.6

CEE 36.3 30.5

France 5.0 3.1

GCR 26.5 80.2

Germany 7.5 3.5

India 34.0 31.7

Japan 8.9 5.2

LATAM 15.1 17.8

MEA 27.6 52.1

United Kingdom 7.3 3.0

United States 21.9 12.1

WE 14.8 8.4

Total 239.9 320.3

Hospitality7

Financial Services1

Healthcare2

Retail5

Government

Manufacturing

6

3Transportation

4


order to improve customer service and remain

competitive.

As demonstrated on Table 1.2, there are key solutions that

represent bright spots or target areas in which Microsoft

Office 365 could provide significant value to organizations

within specific verticals. These are detailed in the vertical

chapters, but should be considered when engaging in

discussions with organizations in each of the industries.

Table 1.2: High-Level Solutions by Industry

Table 1.3 presents the total addressable markets for

knowledge workers and firstline workers for the industries

profiled in this study.

Table 1.3: Global TAdM for 100+ Employee Firms in Key Industries


Gartner Microsoft Office 365 Overview This section covers trends in adoption of Office 365 and

Team-Oriented Messaging Collaboration Tools.

Office 365 Adoption Office 365 adoption and plans for adoption have

continued to increase over the years. From 2014 to 2016

all organizations using or planning to use Office 365

increased from 65% to 78% as shown in Figure 1.3.

Figure 1.3: Change in Office 365 Adoption, 2014 to 2016

The biggest hesitations to adopt Office 365, as seen in

Figure 1.4, include security concerns, cost, and competive

offerings. It is important to be aware of these challenges

as they can be overcome through highlighting the right

use cases, and having appropriate meaningful

conversations about security and functionality.

Overall, while cloud adoption is growing, the top reason

for not using public cloud services is security and / or

privacy concerns. Many of these concerns may stem from

outdated perspectives based on assumptions that have

been disproven, or the gap between what providers are

delivering to address organizations’ needs. Providers need

to provide sufficient information regarding the security

record of the services in order to help customers move

beyond these general security concerns (security is listed

as the second highest cloud deployed application). With

growing regulations including the EU’s GDPR, security is

top of mind for many CIOs. Microsoft is continuously

working to address these challenges organizations are

facing (i.e. Microsoft Cloud will provide GDPR compliance)

and there are an increasing number of security and

compliance capabilities being built into Office 365 which

can provide value to many organizations.

Vertical Key Solutions

Financial Services

Case Management: Claims Processing / Underwriting Agent / Broker Portals Doc/Contract Management/Case Management/Loan

Origination (Coordination)

Healthcare Virtual Health / Remote Patient Monitoring (Telemedicine) Care Coordination Medical Data Storage

Manufacturing Product Lifecycle Management (PLM) Content Management / Document & Records Management Knowledge Management (Troubleshooting)

Transportation Mobile Technology Scheduling / Carrier Tendering Disruption Management (Irregular Operations)

Retail Workforce Management Internal Communication & Collaboration Customer Service & Support (Unified Commerce)

Government

Citizen Services (Citizen Engagement) Case Management Regulatory, Licensing, & Permitting / Planning (Community

Dev.)

Hospitality Hotel Operations Customer Service & Support Restaurant Operations


Financial Services 22.3 23.0

Healthcare 23.7 26.7

Manufacturing 88.3 114.8

Transportation 15.0 26.3

Retail 24.2 39.8

Government 59.1 80.5

Hospitality 7.2 9.2

Total 239.9 320.3

No Plans for Office 365

35%Currently Using or Planning to Use Office 365

65%

2014

No Plans for Office 365

22%

Currently Using or Planning to Use Office 365

78%

2016


Figure 1.4: Reason for “No plans for Office 365” (2016)

Email and Calendar represent the most popular Office 365

services and, consequently, Exchange Online is the tip of

the spear for Office 365 adoption. With a significant

portion of the market considering adoption, there is a

significant opportunity for partners, especially IT service

providers (Managed Service Providers, Systems

Integrators, Value Added Resellers, etc), to help end-

buyers adopt the basic workloads, as well as to upsell

advanced workloads and add-on solutions / services.

Additionally, as customers look to maximize the value of

their investments to deliver new business value and digital

workplace initiatives IT service providers figure to play a

significant role.

Figure 1.5: Enterprises Ranked Interest for Office 365, 2016 Services

Figure 1.6 shows the breakdown of public cloud email for

Microsoft compared to other public cloud services, by

industry. The industries with the highest percentage using

Microsoft cloud-deployed Office 365 Healthcare,

Pharmaceuticals and Life Sciences, IT Software and

Hardware Services, and Aerospace. The industries with

the lowest adoption include Financial Services (Banking &

Securities and Insurance) and Industrial Manufacturing;

these industries have been slower to move to the cloud

due to regulations and the desire to protect IP / keep data

on-premises.

Figure 1.6: Public Cloud Email – Public Companies Using Microsoft Office 365 vs. Other, 2016

Additionally, the industries that have been the biggest

adopters of Google’s G Suite are those that have large

numbers of firstline workers (e.g. manufacturing, retail,

transportation). Microsoft has a chance to gain

momentum and market share in these markets with its

new competitive firstline worker offering.

Team-Oriented Messaging Collaboration Tools While email will continue to be a mission-critical

application, its utilization may be partially reduced as

more organizations run team-oriented collaboration tools

(e.g., Slack, Teams, Google Hangouts Chat, etc.) in parallel.

Given the aggressive market transition to cloud delivery,

these tools will be pushed to a broad swath of the global

IT buying community. For some, the tools will just be an

added benefit, however, for select IT buyers, they will be

a value driver for acquiring a cloud office suite and a point

of differentiation.

Figure 1.7 shows that the team-oriented messaging

collaboration tool market is expected to grow to nearly

$5B worldwide by 2021, growing at an astonishing 96%

CAGR. A significant portion of the market will be due to

the inclusion of collaboration tools within bundled office

suites.

Currently Using or Planning to Use Office 365

78%

Legal or Business Concerns About

information Security5%

Cost of Licenses or Migration

4%

All Other Reasons13%

No Plans to Use Office 36522%

50%

9%

13%

8%

5%

12%

17%

27%

14%

14%

8%

23%

6%

19%

16%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Email and Calendar (Exchange Online)

OneDrive for Business

Office 365 ProPlus

Office 365 SharePoint Online

Skype for Business Online

Yammer

Power BI

Project Online or Project Pro for Office 365

Rank 1 Rank 2 Rank 3Percentage of Respondents

19%

18%

15%

11%

12%

11%

10.5%

10.5%

8%

9%

8%

10%

9.5%

8%

7%

81%

82%

85%

89%

88%

89%

90%

90%

92%

91%

92%

90%

91%

92%

93%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Pharmaceuticals and Life Sciences

Healthcare Providers

Energy (Utilities or Oil & Gas)

Travel and Hospitality

Construction Materials and Natural Resources

Transport and Logistics

Food and Beverage Processing

Retail and Wholesale Trade

Consumer Products

Chemicals

Industrial Manufacturing

Automotive

Industrial Electronics and Electrical Equipment

Insurance Services

Banking and Financial Services

Microsoft Office 365 Other (Including Private Cloud, Hybrid, and On-Premises)


Figure 1.7: Team-Oriented Messaging Collaboration Tools, Worldwide, 2016 and 2021

The value proposition of this segment of collaboration

tools is they improve business team coordination and

performance — for example, by responding to RFPs faster,

rolling out corporate IT DevOps processes, requiring fewer

employees to run customer service, improving customer

satisfaction levels, enabling better decisions by including

subject matter experts, and/or reducing product

development time. Within target knowledge and firstline

worker segments, opportunities exist to address and

improve vertical specific processes such as Loan

Coordination in financial services (Knowledge) or Irregular

Operations in transportation (Firstline) As team-oriented

messaging collaboration tools are being used to address

industry-specific use-cases, there are opportunities to

increase share of wallet outside of core IT and tap into

larger budgets of established business buyers.

2. Financial Services

Overview: Innovation to serve customer needs is driving industry

digitalization initiatives. Institutions are starting to

overcome regulatory obstacles and invest more heavily in

cloud, resulting in a higher demand for collaboration and

the next wave of SaaS investment. The two main segments

within the financial services industry are Banking &

Securities and Insurance.

Figure 2.1 shows Microsoft's Addressability score plotted

against the approximate knowledge worker market and


against the approximate addressable firstline worker

market.

While the US remains the dominant market opportunity

for Office 365 in terms of addressability, Canada, Asia-

Pacific, and Western Europe are all considered strong

opportunities. The UK also remains a strong opportunity,

however, Gartner expects some slow down as a result of

Brexit. Furthermore, Gartner forecasts a corresponding

advancement in Western Europe as Germany, France, and

Spain all try to capture opportunities as organizations exit

the UK due to market uncertainty. Australia, the emerging

economies in Greater China, India, Latin America

(specifically Brazil and Mexico) as well as South Africa lead

the way in terms of FinTech / InsureTech adoption as a

means to increase accessibility to financial services.

Helping to enable this digital / tech innovation is an

opportunity to increase Office 365 adoption. While the

FinTech market is booming in mature economies, it

represents a relatively small overall opportunity. One of

the keys to driving Office 365 addressability is through

customer success at major financial institutions (both

Banking and Insurance). As Office 365 is adopted by top

tier institutions, smaller, regional organizations will

understand that regulatory hurdles can be cleared,

thereby driving a second wave of adoption.

Figure 2.1: Microsoft Addressability vs. Knowledge Worker TAdM for Financial Services

Collaborative technologies such as content management,

secure file sharing, and communications tools are

$2,075

$160

$1,966

$10

$869

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

2016 2021

Bundled with Office Suites Stand-Alone, Special-Purpose

Bundled with UC


expected to have a positive impact on improving customer

service / responsiveness while driving down the cost to

serve for both knowledge workers and firstline workers.

These goals can be accomplished by empowering firstline

workers (tellers / agents) with additional information /

context for customer interactions and knowledge workers

with the tools for improved coordination for loan

applications / service and claims management.

Figure 2.2: Microsoft Addressability vs. Firstline Worker TAdM for Financial Services

Banking & Securities – While there is a significant amount

of hype regarding FinTech (7 out of 10 CIOs consider

digital entrants a larger threat than traditional

competitors), the impact has yet to materialize. As

organizations prepare to deal with this new reality,

“digital” to deliver business agility and innovation

becomes a matter of when and not if. In order to manage

these forces, Banking & Securities CIOs are prioritizing BI /

analytics, digitalization / digital marketing, and

Infrastructure / datacenter investments to improve

collaboration and innovation while helping to manage

digital change and improve market competitiveness.

Organizations are enthusiastic about the potential of

cloud in their industry, however, adoption remains

relatively slow. Cloud adoption is primarily driven by the

need for automation, cost-efficiency, agility, and

innovation and is most heavily utilized in ERP, HR and

service desks; “core” functions (those that link to the GL)

such as trade finance or treasury are much slower to

adopt the cloud. Additionally, Banks are increasingly

deploying security and compliance solutions in the cloud

as they struggle to keep pace with market, regulatory, and

customer expectations around fraud detection and the

management of DDoS attacks.

Insurance – Regulatory, political, and social factors exert

a strong influence on the degree of market volatility with

which Life and Property & Casualty (P&C) Insurance

companies need to cope. Seventy percent of Insurance IT

leaders consider their companies to be average at best

when it comes to embracing digital transformation. Many

business and IT leaders see the lack of digital maturity as

a growing risk and are concerned about the entrance of

new competitors such as InsureTechs or companies from

other industries. Regulation and compliance —

particularly Own Risk Solvency Assessment (ORSA) in the

US and International Financial Reporting Standards (IFRS)

4 globally — continue to drive Insurers' investment in

technology and services. As a result, digital transformation

has become a point of emphasis, however, legacy

technologies still persist. Insurance CIOs are prioritizing BI

/ analytics, cloud services / solutions, and digitalization /

digital marketing.

According to an August 2016 Gartner Survey, Insurance

technology leaders claim to have a cloud first strategy

(95% of respondents), yet cloud penetration remains low.

These lofty expectations indicate that cloud has reached a

tipping point and adoption will increase.

Total Addressable Market Segments The Financial Services Industry accounts for ~7.4% of the

total available market (TAM), 9.3% of the total knowledge

worker addressable market (KW TAdM), and 7.2% of the

total firstline worker addressable market (FW TAdM) for

organizations with over 100+ employees for the 7 verticals

analyzed. Knowledge workers engage in non-routine work

types (e.g., financial modeling, risk analysis, claims / case

management) while the firstline segment is expected to

perform client-facing tasks such as customer service and

retail banking.


Table 2.1: Financial Services Knowledge Worker TAdM and Firstline Worker TAdM by Region (100+ Employee Firms)


Spending: CIOs from Banking & Securities have demonstrated an

increasing budget for formal IT. A large portion of this

budget will go toward investing in FinTech players through

incubators and accelerators, which will increase the

growth rate of IT spending. Overall Financial Services IT

spend totals $746B, and the breakdown can be seen in

Figure 2.3. The largest category of IT spending in 2016 was

on IT services, followed by Telecom and internal services.

The fastest growing segment is software with an expected

CAGR of 7.6% through 2021 which will put it as the second

highest IT spend segment in 2021 for Financial Services.

Figure 2.3: Financial Services IT Spend by Category, 2016 to 2021

Source: Gartner Vertical IT Spend Forecast, $Millions

The financial services industry has the largest vertical specific / enterprise application spending, with organizations spending significantly more on vertical specific software (VSS) than legacy systems. Evolving business and technical requirements will lead to increased investments in risk analytics and reporting software, and risk-related managed services, contributing to continued strong growth in "other software" and outsourcing services. IFRS 4 will also drive investments in ERP systems, and therefore growth in the "ERP / SCM / CRM" category of software, and related consulting / implementation services. Within the software category (as seen in Figure 2.4),

infrastructure and VSS represent the two highest spend

categories and are forecasted to be the top through 2021.

ERP / SCM / CRM and Desktop (which includes office

suites) are the fastest two growing segments with an

11.3% and 8.1% CAGR respectively through 2021.


APAC 2.47 5.79

Canada 0.46 0.14

CEE 2.99 1.90

France 0.41 0.14

GCR 2.05 4.71

Germany 0.93 0.29

India 3.41 3.48

Japan 0.87 0.29

LATAM 1.07 1.41

MEA 2.34 3.09



WE 1.17 0.44

Total 22.35 23.03


Figure 2.4: Financial Services Software Spend by Segment, 2016 to 2021


Solutions The top three solutions for the Financial Services industry

that have high alignment to Microsoft Office 365

workloads are case management, agent / broker portals,

and Loan Coordination (Document / Contract

Management). Table 2.2 shows the key solutions in the

industry, the aligned Office 365 workloads, and the

potential interactions of these workloads with key vertical

specific software.

Table 2.2: Financial Services Key Solutions and Applicable Office 365 Workloads and VSS Interactions

Case Management: Claims Processing / Underwriting –

Organizations are trying to eliminate the manual

processes and paper-based documentation / back-office

functions involved in the claims management and

underwriting process. In order to breakdown

organizational silos, improve collaboration, and provide a

customizable document management platform to

improve the case management process improving

operational efficiency and reducing cost, organizations are

leveraging SharePoint, Skype for Business, and / or Teams.

Industry estimates suggest that automation may reduce

time to serve by as much as 90%.

Agent / Broker Portals – According to a Gartner survey

from October 2016, 73% of Insurers stated they believe

the degree of e-service adoption via portals or mobile

apps is low, and most reported that the majority (>60%)

of their business processes are still paper-based. More

than ever Insurers need to prove that they are “easy to do

business with” to drive customer loyalty. As a result, many

traditional vendors are adding portal functionality to core

modules, however, they often lack the user friendliness of

stand-alone offerings. The combination of Skype for

Business and/or SharePoint to improve agent, broker, and

customer collaboration could help fill industry gaps.

Loan Coordination (Document / Contract Management)

– The lending process remains largely paper-based and is

powered by legacy technologies that are, in some cases,

as much as 20 years old. While customers have changed

the way they search and shop for loans, the process itself

has failed to keep pace. Helping to digitize the loan

process, from digital document submission (Exchange)

and storage (SharePoint) to a more collaborative

Key SolutionsKey Microsoft Office 365

WorkloadsKey Vertical Specific Software

(VSS) Interactions

Case Management: Claims Processing / Underwriting

SharePoint Skype for Business Exchange Teams

Life Insurance Admin. Systems

P&C and Life Insurance Billing/Collection Mgmt.

Reinsurance

Agent / Broker Portals

SharePoint Skype for Business Exchange Teams

Life Insurance Admin. Systems

P&C and Life Insurance Billing/Collection Management

Reinsurance

Loan Coordination (Document / Contract Mgmt.

SharePoint Skype for Business Teams Exchange

Retail Core Banking Unified Digital Banking Islamic Core Banking


origination and servicing environment (Teams, Yammer,

Skype) has the potential to not only improve the customer

experience but generate significant cost and time savings

for both customers and loan originators.

3. Healthcare

Overview: The Healthcare industry is investing heavily in digital

workplace initiatives and analytics focused on reducing

cost to serve while providing differentiated, patient-

centric care, population health management, and

precision medicine. When all of these factors are

combined, Healthcare is a strong and growing

opportunity. The development and orchestration of

digital business / societal ecosystems are becoming critical

success factors in solving challenges related to

coordinating care delivery across settings and services

within the continually evolving landscape of Medical / Life

Sciences Discovery, Healthcare Delivery, Insurance and

Payment. Solutions and workflows will be enabled by

collaboration tools, communication tools, and increased

content management and sharing. The main two sub-

segments within Healthcare are Hospital & Integrated

Delivery Network and Physician Practice.





market.

In Healthcare, digital readiness is linked to electronic

health record (EHR) investment / adoption. North America

(US and Canada) and Western Europe (Denmark, Finland,

the Netherlands, France, and the UK) lead the way in

digital initiatives. In order to achieve these digital

initiatives, governments around the world have taken two

key paths to incentivize adoption: a top down,

government run approach (Canada, Australia, UK, and

France) and a regulatory requirements / incentives

approach (United States). Regardless if national EHR

guidelines are in place to drive adoption, Microsoft is well

positioned in Healthcare and the value proposition for

Office 365 improves due to its ability to handle sensitive

data and the potential to break down organizational silos

that inhibit collaboration.

The second major indicator of Microsoft’s ability to

address the healthcare vertical is the government

regulatory environment. Whereas countries like the US

present a significant opportunity, largely because of

government mandates to drive down the cost of

Healthcare, country and state privacy laws create a

complex environment in which technology vendors need

to operate. On the other hand, in the European Union,

where EHR and legally protected privacy were adopted at

the same time, the regulatory environment is much less

complex. Gartner expects the next wave of Healthcare

digitalization, and opportunity for Office 365, to come

from emerging economies focused on improving access to

Healthcare as populations skyrocket. India is increasing

public spending on Healthcare by 6x and is growing

vertical specific healthcare investments by almost 8% per

year, while China has increased spending by more than

$500B over the last decade and is expected to grow

investment in Healthcare software by more than 8%

through 2020.

Figure 3.1: Microsoft Addressability vs. Knowledge Worker TAdM for Healthcare


Figure 3.2: Microsoft Addressability vs. Firstline Worker TAdM for Healthcare

Digital transformation in Healthcare is driving

addressability among knowledge and firstline workers. As

doctors, patients, and hospital administrators become

increasingly connected and collaborative, organizational

silos are broken down, enabling Healthcare organizations

to innovate. This innovation, paired with improved access

to data, facilitates the next generation of solutions such as

improved care coordination and virtual health initiatives

such as improving patient access, satisfaction and

outcomes.

Hospital / Integrated Delivery Network (IDN) – Despite

rising healthcare demands from aging populations and

new procedures, revenue is constrained by large public

and private payer controls on payment rates. Also, moves

toward value-based (instead of activity-based) funding

models keep revenue growth constrained, especially for

hospitals. IT as a percent of the total operating budget has

nearly doubled from the pre-EHR to the post-EHR

environment. The potential impacts on operating costs,

revenue capture and patient safety are substantial, but

few Healthcare Delivery Organizations (HDOs) have come

close to optimizing the system's potential.

Digitalization in Healthcare will take several years, and

many organizations have yet to fully flesh out digital

strategies beyond incumbent vendor-provided roadmaps,

however, HDOs are projected to spend 24% of overall

budget on digital initiatives by 2018 (up from 15% in

2016). In the years to come, HDOs and their physicians will

again be upended by efforts to pull the explosion of

medical discoveries into treatment faster, emphasizing

the need for IT to create an architecture and workflow

management model that permits real-time data and

decision support exchanges. Substantial efforts are

required to modernize legacy systems to postmodern ERP

suites and / or replace EHR systems that are not achieving

business outcomes.

The top technology investments include BI / analytics,

cyber / information security, and industry-specific

applications. EHR has also been called out as a top priority

by 25% of Healthcare CIOs, while many CIOs with EHRs in

place recognize this as the trigger to incorporate clinical

data into data warehouse, population health

management and real-time health systems (RTHS)

analytics plans.

Cloud adoption has been historically hindered by

regulation / compliance issues for healthcare providers

(e.g., PHI, HIPAA). However, with Healthcare-specific

cloud offerings like Microsoft Azure, Healthcare providers

understand that cloud infrastructure and applications

actually improves the providers’ ability to remain within

regulatory / compliance guidelines while also enhancing

cyber / information security. Healthcare’s recognition for

the need of real-time solutions is an indicator of the need

for more significant cloud adoption.

Other than strict regulation / compliance measures,

Healthcare CIOs face additional challenges such as funding

/ budgets for digital transformation and a lack of skills /

resources, particularly regarding health data analytics.

Total Addressable Market Segments The Healthcare Industry accounts for ~7.5% of the total

available market (TAM), 9.9% of the total knowledge




analyzed. Knowledge workers engage in medical

treatment and hospital / office administrative work types,

while the firstline segment is expected to perform tasks

such as nursing, home / home healthcare nursing, and

maintenance / facilities.


Table 3.1: Healthcare Industry Knowledge Worker TAdM and Firstline Worker TAdM by Region (100+ Employee Firms)


Spending: Growth of Digital Healthcare is creating opportunities in

the traditional IT domain, such as software, services and

infrastructure. The Healthcare industry's total IT spend for

2016 was approximately $115B. As shown in Figure 3.3,

the largest spend categories were for IT services and

internal services. The software category is expected to

have the highest growth over the next 4 years with an

expected 7.9% CAGR through 2021.

Figure 3.3: Healthcare IT Spend by Category, 2016 to 2021


Within the Software category vertical specific software is

the largest segment and is expected to grow at an 8.5% to

approximately $14.2B in 2021. Figure 3.4 shows spending

for all of the different software categories. The segment

with the fastest expected growth is ERP / SCM / CRM with

an expected 11.2% CAGR through 2021.


APAC 2.35 4.69

Canada 0.36 0.20

CEE 3.04 2.63

France 0.64 0.38

GCR 1.83 5.92

Germany 1.15 0.63

India 3.51 3.37

Japan 1.52 0.98

LATAM 1.42 1.57

MEA 1.08 2.10



WE 1.82 1.14

Total 23.73 26.71


Figure 3.4: Healthcare Software Spend by Segment, 2016 to 2021


Solutions The top three solutions for the Healthcare Industry that

have high alignment to Microsoft Office 365 workloads

are Virtual Health / Remote Patient Monitoring, Care

Coordination, and Medical Data Storage. Table 3.2 shows

the key industry solutions, the aligned Office 365

workloads, and the potential interactions of these

workloads with key vertical specific software (VSS).

Table 3.2: Healthcare Key Solutions and Applicable Office 365 Workloads and VSS Interactions, 2016

Virtual Health / Remote Patient Monitoring

(Telemedicine) – A lack of awareness about telemedicine

and virtual care is an impediment to the wide adoption of

such systems in care processes, as is the lack of clarity on

payer payments. Solutions for HDOs need to start with

educating the buyers with a specific focus on answering

questions relevant to their roles (e.g., for IT: what

infrastructure is required to enable virtual care /

telemedicine?); for solution providers focused on the

physician practice segment, target those with high

percentages of rural patients who will adopt virtual care

to streamline the care process and ease the burden of

going to a physical office. Implementing and managing

EHRs with virtual care / telemedicine and collaboration

tools such as Skype for Business and Skype for Business

Cloud PBX / PSTN Conferencing will be major growth areas

for service and solution providers.

Care Coordination – Care coordination includes workflow

and decision support applications for the emerging care

coordinator and navigator roles HDOs operating under

population health management with payers. As care

coordinator and navigator roles increase in prominence

within HDOs, and HDOs are increasingly focused on

delivering better patient outcomes, care coordination

applications and interest in digitally enabled workflows

will grow. While CIOs in different countries and regions

operate under different payment or funding models, they

share a common need to leverage technology to support

care delivery, care coordination across agencies and the

administration of healthcare. The single most important

thing the CIO must do to make care coordination

successful is to transform from an independent physician-

centric culture to a care team and integrated health

system culture. This will be enabled through integration of

key workloads such as SharePoint (enables secure,

internal collaboration among groups), Skype for Business

& Skype for Business Cloud PBX / PSTN Conferencing

(enables communication between on-site medical staff

with firstline home care nurses to deliver improved

diagnoses and treatment management) and Teams

(enables continuum of care during shift changes).

Medical Data Storage – Medical data storage originated

as a technical response to the prodigious storage growth

associated with picture archiving and communication

systems (PACSs), and the cost and complexity of PACS

migrations, however, the value proposition has evolved to

include standards-based image access and sharing, EHR

integration, universal image viewing and support for



(VSS) Interactions

Virtual Health / Remote Patient Monitoring (Telemedicine)

Skype for Business Skype for Business Cloud

PBX / PSTN Conferencing

Electronic Health Records Imaging Patient Engagement &

Persuasion

Care Coordination

SharePoint Skype for Business Skype for Business Cloud

PBX / PSTN Conferencing Teams

Electronic Health Records Imaging Patient Engagement &

Persuasion

Medical Data Storage

SharePoint Electronic Health Records Imaging Precision Medicine


mobile applications. With a significant portion of data

from EHRs represented as unstructured data, along with

the increased use of analytics to drive more efficient and

profitable operations and value-based care initiatives,

healthcare providers will begin to invest more aggressively

in vendor-neutral medical data storage. This trend will

create opportunities for Microsoft partners, particularly

those focused on integrating and developing solutions

based on SharePoint.

4. Manufacturing

Overview: Within the Manufacturing industry, digital initiatives are

underway in order to keep up with globalization and

competition. Large investments are expected for smart

machining, IoT, and advanced analytics. The industry’s

digital business initiatives can be enabled through the use

of collaboration tools and connecting firstline workers to

upper management in order to increase efficiency. The

main two segments within manufacturing are process

manufacturing and discrete manufacturing.





market. Within the knowledge worker segment, the

United States represents the best opportunity for the

Manufacturing industry. The combination of the large

economy of the US, mature digital ecosystem, and overall

Microsoft friendliness, means there are strong

opportunities with US manufacturers. The UK and Canada

follow in terms of addressability, but are much smaller

markets. Germany, APAC, and WE are the next best

aligned. Germany manufacturing is a leader in

manufacturing digitalization in Europe. In 2011 the

German government established the initiative Industrie

4.0 with the aim to secure manufacturing jobs and growth

for Germany by developing a competitive advantage

through digitalization. This has influenced other countries

to follow suite, e.g. the 2016 joint collaboration

agreement between the governments of Germany and

Japan to develop global standardization for Industrie 4.0

and IoT. Industrie 4.0 as a model for CIOs undergoing

digital transformation is now a widely accepted

framework, especially in discrete manufacturing.

Figure 4.1: Microsoft Addressability vs. Knowledge Worker TAdM for Manufacturing

Figure 4.2: Microsoft Addressability vs. Firstline Worker TAdM for Manufacturing

Microsoft products are used widely by knowledge workers

within manufacturing, from documentation and manual

data analysis through productivity suites to

communication through email. But there is an additional

opportunity to meet the needs of knowledge workers

through collaboration tools specifically to support product

lifecycle management processes (e.g. product

development and cross department collaboration). The


IoT integration for the pursuit of Industrie 4.0 opens

opportunities for the need of collaboration tools and

connecting firstline workers to upper management in

order to increase efficiency (i.e. troubleshooting).

Process Manufacturing – Although regulations in the

process manufacturing industry (e.g. natural resources /

minerals, energy resources / processing, and bulk goods

such as chemicals, paint, ink etc.) are considered more

lenient in comparison to other verticals, new, more strict,

regulations are driving the innovation and adoption of IT /

OT convergence and alignment due to the requirements

for increased visibility and traceability, accelerated time to

market, and mitigating product risk and recalls for the

industry. Another driving force for innovation is the

demand for differentiated products, which has pushed

technologies like unique device identification and track-

and-trace serialization further along the adoption curve.

Leadership is investing in cloud solutions to enable

collaboration across the organization to improve both

operational capability and performance management.

Furthermore, CIOs are prioritizing investments in BI /

analytics, ERP, cloud services and infrastructure. As the

volume of data in manufacturing operations grow, the

focus of cloud includes applications and infrastructure.

Cloud is expanding in manufacturing, with new

subscription-based cloud offerings for design, engineering

and PLM. Gartner predicts that Digital Factories will lead

IoT disruption over the next 3-8 years.

While cloud adoption is increasing, Gartner expects cloud-

based applications to take longer to reach mainstream

adoption due to the level of implementation difficulty and

perceived business disruption. Other challenges for

process manufacturers include harmonizing the PLM

platform with legacy systems (ERP, supply chain

management, and manufacturing execution systems), a

shortage of digital skills / resources and balancing

customization demands with compliance.

Discrete Manufacturing – Discrete manufacturers (e.g.

automotive, consumer goods, heavy industry, IT

hardware, etc.) are evolving to an Industrie 4.0 vision,

which involves a projection of digital business into

manufacturing. This transition impacts business

performance metrics, roles, skills, organizations, practices

and processes for designing, producing and servicing

products. This new generation of design and

manufacturing software is being built as cloud-based

"product innovation platforms" and "manufacturing

process management" platforms. The next generation of

digital manufacturing is expected to lead to increasingly

connected assets. As these connected products are

deployed, a corresponding rise in field services

opportunities is expected to emerge. Gartner expects this

to lead to additional opportunities to connect field

employees, improve workforce management, and deploy

tools that increase collaboration.

CIOs from discrete manufacturers are focused on driving

capabilities / solutions for advanced analytics, IoT and

autonomous vehicles. In order to enable these areas of

focus, investments are grounded in BI / analytics, ERP,

cloud services / solutions, and infrastructure & data

center.

Initially, cloud adoption in discrete manufacturing was

hindered due to the need to protect IP at all costs.

However, cloud adoption in discrete manufacturing is

more mature compared to process manufacturing due to

the need to demonstrate agility / nimbleness and keep up

with customer demand.

Total Addressable Market Segments The Manufacturing Industry accounts for ~42.6% of the

total available market (TAM), 36.8% of the total

knowledge worker addressable market (KW TAdM), and

35.8% of the total firstline worker addressable market (FW

TAdM) for organizations with over 100+ employees for the

seven verticals analyzed. Knowledge workers engage in

business analytics, manufacturing process design, and

engineering, while the firstline segment engages in tasks

such as field service, firstline assembly / packaging, and

machine operation / fabrication.


Table 4.1: Manufacturing Industry Knowledge Worker TAdM and Firstline Worker TAdM by Region (100+ Employee Firms)


Spending: Through 2018, the Global Manufacturing Purchasing

Managers' Index (PMI) will remain above 50, signaling an

expansion of IT purchasing in the global market. Figure 4.3

shows the overall IT spend by the Manufacturing industry,

which totaled approximately $539B in 2016. The largest

category within IT spend was IT services followed by

internal services in 2016; however in 2021 spending on

software is expected to surpass the internal services

spend due to its expected 8.5% CAGR, which is the fastest

growth among all categories.

Figure 4.3: Manufacturing IT Spend by Category, 2016 to 2021


With the positive index for employment and the

expansion of jobs, demand is expected to improve for

purchases of desktop and business applications including

ERP, supply chain management (SCM), CRM, mobile

devices and mobile telecommunications services. Figure

4.5 shows the segments within software. ERP / SCM / CRM

and vertical specific software are growing the fastest with

expected CAGR of 11.7% and 8.0% respectively through

2021. The focus of spend will remain on infrastructure and

ERP / SCM / CRM segments.


APAC 12.71 23.27

Canada 0.83 0.41

CEE 10.84 7.75

France 1.15 0.60

GCR 14.34 38.63

Germany 1.73 0.86

India 17.66 13.71

Japan 2.89 1.62

LATAM 5.34 4.66

MEA 11.33 18.14



WE 3.42 1.87

Total 88.27 114.81


Figure 4.4: Manufacturing Software Spend by Segment, 2016 to 2021


Solutions The top 3 solutions for the Manufacturing Industry that


are Product Lifecycle Management (PLM), Content

Management / Document & Records Management, and

Knowledge Management (Troubleshooting). Table 4.2

shows the key industry solutions, the aligned Office 365

workloads, and the potential interactions of these


Table 4.2: Manufacturing Key Solutions and Applicable Office 365 Workloads and VSS Interactions

Product Lifecycle Management (PLM) – New product

failures heavily impact both manufacturers and retailers.

Communication between retailers and manufacturers will

be vital to take advantage of innovative data such as

image recognition for product tracking and trend analysis.

Collaboration tools that can bridge groups such as

Microsoft Teams, Yammer and OneDrive, can help teams

track trends and react swiftly to changing demands.

Additional opportunities exist for service providers and

ISVs exist to integrate the vast VSS solutions deployed by

manufacturers with PLM platforms (which are increasingly

cloud-based).

Content Management / Document & Records

Management – Gartner is expecting more than half of

ECM vendors to re-architect their offerings to cloud-based

platforms, which will create services and integration

opportunities for Exchange, SharePoint and Yammer.

Canada, India, Italy, Japan, US, and UK are all more

interested in enterprise content management tools than

other regions and may represent a greater proportion of

net new accounts or transitioning Office 365 accounts.

Knowledge Management (Troubleshooting) – IT / OT

convergence and alignment has exposed gaps in

knowledge management such as processes, standards,

and documentation. Knowledge management will be

transformed by chatbots, deep learning, natural-language

processing, all of which require cloud-based advanced

analytics. Manufacturing productivity can benefit from

Office 365, through collaboration integrated (e.g.

SharePoint, Teams, Yammer) with operational systems to

drive collaboration among suppliers, partners and

engineering teams and control of tacit knowledge



(VSS) Interactions

Product LifecycleManagement (PLM)

SharePoint Exchange Office 365 ProPlus Skype for Business Yammer Teams

Product Lifecycle Management (PLM)

ContentManagement / Document & Records Management

SharePoint Exchange Teams

Product Lifecycle Management (PLM)

Product Data Mgmt. (PDM) Enterprise Manufacturing

Intelligence (EMI)

Knowledge Management (Troubleshooting)

SharePoint Teams Yammer

Product Data Mgmt (PDM) Enterprise Manufacturing

Intelligence (EMI) Product Lifecycle Mgmt.

(PLM)


management. In particular, the use case of

troubleshooting is extremely relevant to the

manufacturing industry; workers often find themselves

out in the field, on client sites, or on the manufacturing

floor, performing non-routine servicing of machinery and

in need of an extra set of eyes. In these cases peer-to-peer

communication through Teams and Yammer can be

valuable in order to reduce downtime and utilize internal

expertise. In the case of routine machinery servicing and

maintenance, the ability to access SharePoint and

previously documented cases, can increase productivity

through empowering workers.

5. Transportation

Overview: Transportation logistics, as well as airlines, are actively

seeking solutions and digital initiatives to help control

costs, improve customer service, and connect with sizable

firstline workforces. These forces are aligning the industry

to mobile and collaboration tools that enable

communication and workflow efficiencies. Due to a heavy

reliance on vertical specific software and proprietary /

legacy systems, opportunities in transportation for Office

365 partners are not as strong as other verticals. For the

purpose of this report, transportation is divided into two

major sub-segments: logistics and passenger travel.

Figure 5.1: Microsoft Addressability vs. Knowledge Worker TAdM for Transportation

Figure 5.2: Microsoft Addressability vs. Firstline Worker TAdM for Transportation





market.

Within the Transportation industry, organizations in the

United States, United Kingdom, and Canada are most

aligned to Microsoft Office 365 products. These regions,

particularly the US, are most likely to be interested in (and

have available funds for) investing in solutions for the

growing firstline workforce. Germany, Greater China

Region, Asia / Pacific, and Western Europe are the next

most aligned, followed by India, Japan, and France. India

has historically been more Google friendly than other

regions due to its preference for dispersed architectures

which helps with its connectivity issues. APAC and GCR are

both growing rapidly and increasing investment in

transportation software and technologies. Due to the

sheer volume of vehicles used in these regions, there are

a growing number of opportunities for vendors to address

through fleet services.

Logistics – According to a 2016 survey by Gartner, logistics

CIOs are pushing for organizational adoption of advanced

analytics and business algorithms to drive better business

outcomes and clearly link the value of IT to these

outcomes. Technology investments are focused on

advanced analytics, cloud services / solutions, and


infrastructure, indicating an overall need for digital

infrastructure to remain competitive. Transportation is

cloud-friendly in part due to the integration with supply

chain, which has most applications already in the cloud,

and fleet management and vehicle tracking / routing, all

of which are transitioning to the cloud.

A growing number of logistics executives are planning on

or considering closing the gap between transportation

planning and the overall supply chain planning (SCP)

landscape to synchronize end-to-end supply chain

processes and meet their supply chain goals. This will be

enabled by increasing reliance on digital ecosystems

(transportation CIOs are expected to triple digital

ecosystem partners by 2019), as well as the ability for

transportation ecosystems to expand to other sectors

such as retail, energy and utilities, insurance, smart cities,

etc.

Transportation CIOs expect to source 37% of the critical

components (e.g. IP, algorithms, platforms) from existing

partners, 22% from new partners, and build 37% in house.

This furthers the need to participate and influence a

myriad of digital ecosystems that are directly or

tangentially important to logistics CIOs.

Overall, transportation is not a highly regulated vertical

(especially compared to Financial Services and

Healthcare), however, there are specific regulations

affecting the logistics industry. For instance, European

efforts to cut carbon emissions by 40% by 2030 have made

funds available for collaboration in logistics (e.g. consortia

like NexTrust are beginning to emerge). Government

mandates regarding the installation of telematics devices

(e.g. e-log mandate in the US) are driving the adoption of

commercial telematics solutions. By collecting data

regarding driver behavior from these telematics devices,

driver communications, and logistics sensors, the logistics

industry is now able to harness the benefits of predictive

analytics.

Additional barriers to success for logistics CIOs are related

to the industry’s heavy reliance on non-digital business

practices (e.g. manual / paper-based processes) such as

workflows, certificates of analysis, bills of materials, and,

for global logistics, customs documentation. This has

created great difficulty in terms of content management /

governance.

Passenger Travel – This sub-segment includes all forms of

transportation that moves people from place-to-place,

such as the airline industry, railways, bussing systems,

passenger ships, etc. Much like logistics, the top two

technology investments are in BI / analytics and cloud

services / solutions. A major difference is passenger

travel’s expected investment in mobility and mobility

applications, which is likely due to enabling crew and

firstline workers to deliver high-caliber customer

experiences for consumers while also improving

employee satisfaction.

The airline industry is in the unique position to know

where someone will be (or supposed to be) on a given day,

however, airlines have not yet tapped into this knowledge

and the potential opportunity to empower their role

within this digital travel ecosystem with opt-in data.

Advanced analytics used in passenger data, destination

context and location, travel itineraries, reasons for travel,

passenger relations and network peers, transaction

currencies, modes of local transport, weather, and other

location-based data can alter the power dynamics and

role in this digital ecosystem. Airport authorities and

airlines have implemented beacon technology to engage

with passengers. Several rail authorities are leveraging

sensors to improve train diagnostics and drone

technology for aerial surveillance of trains and tracks.

Connected buses are informing riders with accurate bus

location / arrival times, as well as providing a fleet

management solution for bus operators.

The major challenge for CIOs in passenger travel is reliance

on legacy hardware, software and infrastructure. After

several airline network and infrastructure failures in 2016,

cloud-based solutions have become an increasingly

promising alternative to on-premises systems. Other sub-

verticals like smart transportation will require cloud-

based infrastructure and solutions to connect end-point

devices with IoT platforms.

Unlike industries like Financial Services and Government,

where regulations are considered an inhibitor to cloud

adoption, regulations for passenger travel are driving

cloud adoption. These CIOs view cloud adoption as one of

many steps toward digitalization, which will ultimately

improve efficiencies and reduce fines / further regulation

due to technology failures.

Total Addressable Market Segments The Transportation Industry accounts for ~9.0% of the

total available market (TAM), 6.3% of the total knowledge




organizations with over 100+ employees for the seven

verticals analyzed. Knowledge workers engage in

management, analytics, and travel agent functions, while

the firstline segment includes freight / truck operators,

longshoreman (load / unload vessels), warehouse

employees, and client service representatives (crew

members and call center agents).

Table 5.1: Transportation Industry Knowledge Worker TAdM and Firstline Worker TAdM by Region (100+ Employee Firms)


Spending: Through 2021 Software is expected to grow the fastest,

with a 7.8% CAGR, followed by IT Services with a 5.0%

CAGR.

Figure 5.3: Transportation IT Spend by Category, 2016 to 2021


While the largest spend currently is on infrastructure

followed by Vertical Specific Software (VSS), the ERP /

SCM / CRM segment is expected to grow the fastest with

an 11.3% CAGR through 2021. The next two fastest

growing segments are Desktop (which includes Office

Suites) and VSS, with CAGRs of 7.7% through 2021.

Transportation will remain heavily focused on vertical

specific software, but workflow improvements and digital

initiatives across the board are driving growth in the

additional segments.


APAC 2.11 5.04

Canada 0.19 0.16

CEE 2.66 3.06

France 0.30 0.27

GCR 1.28 4.75

Germany 0.42 0.36

India 1.82 2.09

Japan 0.65 0.60

LATAM 0.95 1.22

MEA 2.26 6.60



WE 1.06 0.99

Total 15.00 26.34


Figure 5.4: Transportation Software Spend by Segment, 2016 to 2021


Solutions The top 3 solutions for the Transportation Industry that


are Mobile Technology, Scheduling / Carrier Tendering,

and Disruption Management (Irregular Operations). Table

5.2 shows the key industry solutions, the aligned Office

365 workloads, and the potential interactions of these


Table 5.2: Transportation Key Solutions and Applicable Office 365 Workloads and VSS Interactions, 2016

Mobile Technology – Mobility and mobile applications is

one of the top 5 technology investment priorities for CIOs

in the transportation industry. Mobile technology in

transportation logistics can improve driver

communications, driver task assignment, predictive and

driver behavior analytics, telematics, efficiencies through

improved situational awareness, productivity, and

digitalized workflows (e.g. digital logs). The

communications and collaboration workloads within

Microsoft Office 365 are the key enablers of mobility and

connectivity. Organizations can benefit from the use of

Skype for Business, Teams, Yammer, Skype for Business

Cloud PBX / PSTN Conferencing, and SharePoint to

activate firstline workers and connect them to

management. Teams and Yammer can be great tools to

use as a digital bulletin board where drivers and logistics

personnel can communicate about route complications,

weather forecasts, loading and unloading difficulties, and

any unexpected situations that could cause delays.

Scheduling / Carrier Tendering – Scheduling and carrier

tendering are highly integrated and important workflows

for transportation organizations. Driver scheduling tools,

carrier tendering, independent operator tendering, and

last mile delivery can all be improved through better

communication channels. Skype for Business can provide

quick means of communications, while Teams and

Yammer can provide a digital collaboration space to

organize for-hire carriers and private fleet carriers. Teams

and Yammer can also improve visibility into shipping

status and delays, and communicate the need for

overtime hours in the warehouse.

Disruption Management (Irregular Operations) – Across

the airline industry customer service is a top priority, and



(VSS) Interactions

Mobile Technology

Skype for Business Teams Yammer Skype for Business Cloud

PBX / PSTN Conferencing SharePoint

Telematics Transportation

Management System Yard Management Vehicle Routing and

Scheduling

Scheduling / Carrier Tendering

Skype for Business Teams Yammer

Transportation Management System

Vehicle Routing and Scheduling

Telematics

Disruption Management (Irregular Operations)

Skype for Business Teams Yammer SharePoint

Irregular Operations Airport Operations Reservations / Ticketing Flight Operations


one of the major gaps in customer service is how airlines

approach disruption management. Disruptions (e.g.

weather delays, maintenance / repairs, etc.) create

serious headaches for passengers and airlines alike; how

fast an airline can respond to these disruptions affects an

airline’s revenue directly. There has been significant

growth in solutions to address irregular operations and

disruption management, but for many airlines it is still a

manual and painful process. The use of Skype for Business,

Teams, Yammer, and SharePoint, to increase

collaboration between air traffic control, ground

operations, crew management, and airport operations

can help improve efficiency and reaction time. These tools

can also help provide staff with up to date information in

order to increase transparency and accuracy when

communicating with customers, thus improving customer

experiences. Providing better communication and

collaboration to management will help ease interactions

with travel partners (e.g. hotels, shuttles, etc.), reduce

costs, lower brand and customer loyalty damage, and

benefit employees as well.

6. Retail

Overview: Organizations in the Retail industry are making significant

investments in transformation, both digitally and

organizationally, as retailers fight to remain competitive

with e-tailer powerhouses (e.g. Amazon); however, tight

budgets, historical underinvestment in technology /

software, and reliance on vertical specific solutions make

the industry less likely to turn to Office 365 for their

digitalization needs.





market.

Within the knowledge worker segment, the UK represents

the best opportunity in the Retail industry. The United

Kingdom leads the pack in addressability because of its

fast projected adoption of cloud through 2021. The United

States follows in terms of addressability, but only by a

small margin. Canada, France, and Germany are the next

highest aligned. Retail online channels are opening

opportunities for partnerships between retailers and

transportation companies. An example is the partnership

between the North American companies Walmart and

Uber to test grocery delivery using the ride-sharing

company.

Figure 6.1: Microsoft Addressability vs. Knowledge Worker TAdM for Retail

Retail corporate workers and in-store management make

up the majority of the knowledge worker opportunity in

retail. Microsoft productivity suites are widely used

among retail knowledge workers but, there is a rising

opportunity to meet the demands of firstline workers by

enabling staff with mobile devices capable of POS and

collaborative communication tools. Retailers are looking

for competitive advantages through customer

engagement. Enabling firstline workers with mobile

devices that allow faster and more knowledgeable service

could meet the desired impact.


Figure 6.2: Microsoft Addressability vs. Firstline Worker TAdM for Retail

Retail – Retailers are pushing forward with unified

commerce strategies; the proliferation of customer touch

points has forced retailers to re-evaluate their

investments to support customer interactions across

multiple channels, and optimize capabilities across the

supply chain. As customer expectations change due to

connectivity and accessibility through e-tailers, Retailers

are struggling to compete through their brick-and-mortar

stores, resulting in further tightening of budgets and the

need for large, investment-heavy digitalization initiatives

in order to remain relevant in the market. Retailers are

emphasizing analytics in order to optimize operations and

to better understand and serve evolving customer needs.

Reinventing the customer experience is critical for

multichannel retailers as they transform from

multichannel to unified retail commerce to enable

exceptional customer experience. To avoid losing market

share, Retailers are redirecting resources toward activities

that differentiate the customer experience and increase

the speed of innovation.

Advanced analytics, IoT, and business algorithms were

cited as the technologies with the most potential to

change the organization. The impact of digital business

and IoT will require advanced analytics to support real-

time decision making to take advantage of momentary

business opportunities. Retailers will leverage big data,

advanced analytics and algorithms through applied AI to

enable these decisions with greater accuracy and timely

execution of customer-facing processes. Success will

require retailers to use a combination of knowledge,

innovation, speed and strategy to maintain and grow

market share in the digital economy.

Although regulations in retail have been more lenient

compared to other industries, recent data breaches have

brought greater attention / concern regarding customer

data privacy and overall security. Due to these data

privacy and security concerns, as well as the need for

network elasticity to handle spikes in demand (e.g. Black

Friday), retailers, especially those without the internal

skills to manage complex IT and regulatory environments

increasingly look to the cloud.

In the past, retailers have partnered with established

enterprises, and with the rise of online shopping they are

partnering with digital partners in order to better

compete. Reliance on service partners will continue for

the foreseeable future as retail CIOs have stated the

biggest impediment to success is the lack of skills /

resources, particularly for BI / Analytics. Additional

challenges retail CIOs face include lack of funding / budget

and communicating / implementing the broad

organizational change generated by digital workplace

initiatives (particularly in regard to the onset of hybrid,

human, and artificial work environments).

Total Addressable Market Segments The Retail Industry accounts for ~9.6% of the total

available market (TAM), 10.1% of the total knowledge




analyzed. Knowledge workers engage in store /

merchandise planning, digital marketing, and warehouse

/ inventory management work types, while the firstline

segment includes roles such as sales associate, firstline

packing and shipping (digital commerce), and customer

support / call center agent.

The number of use cases for Office 365 and SaaS tools for

firstline retail workers is still limited today, but have a

promising future.


Table 6.1: Retail Industry Knowledge Worker TAdM and Firstline Worker TAdM by Region (100+ Employee Firms)


Spending: Retail CIOs are focusing technology investments to unify

the customer experience across all channels. Front-end

investments include BI / analytics, digital marketing and e-

commerce / website, while also increasing investments in

enabling technologies such as ERP / CRM / SCM and

infrastructure / datacenter to support the evolving

customer experience.

Investments are not universal across all sub-segments. For

instance, 57% of Grocers rank BI / analytics as their top

technology investment priority while only 36% of the

entire Retail industry ranks BI / analytics as number one.

Regions are also spending at different rates – Retailers

from the US, UK and India will drive increased spending on

vertical specific software, while India, the Middle East and

Africa, and Greater China are expected to drive spending

on BI tools.

The retail industry's IT spend in 2016 totaled

approximately $167B and is expected to grow to $199B in

2021 as seen in Figure 6.3. The largest spend is on IT

services and telecom services. The fastest growing

category is software which is expected to grow to

approximately 32.7B in 2021 with a CAGR of 7.9%, which

will move it into the second largest IT spend category in

2021.

Figure 6.3: Retail IT Spend by Category, 2016 to 2021


Within the software category, infrastructure and vertical

specific software are the highest spend segments, as seen

in Figure 6.4. ERP / SCM / CRM is expected to be the

fastest growing segment with an expected CAGR of 9.8%

through 2021.


APAC 3.17 8.22

Canada 0.27 0.18

CEE 4.25 4.06

France 0.39 0.28

GCR 2.62 9.71

Germany 0.51 0.34

India 3.42 3.82

Japan 0.95 0.73

LATAM 2.08 2.60

MEA 2.75 6.88



WE 1.34 1.15

Total 24.24 39.80


Figure 6.4: Retail Software Spend by Segment, 2016 to 2021


Solutions The top 3 solutions for the Retail Industry that have high

alignment to Microsoft Office 365 workloads are

Workforce Management (Scheduling), Internal

Communication & Collaboration, and Customer Service &

Support (Unified Commerce). Table 6.2 shows the key

industry solutions, the aligned Office 365 workloads, and

the potential interactions of these workloads with key

vertical specific software (VSS).

Table 6.2: Retail Key Solutions and Applicable Office 365 Workloads and VSS Interactions

Workforce Management (Scheduling) – Retail workforce

management includes software, services and hardware to

assist organizations with managing the operational

deployment and optimization of the in-store retail

workforce and improving the effectiveness of

management. Investments in workforce management will

be implemented / managed by trusted service providers,

who will create value-added opportunities to drive

improved analytics among workforce analytics (e.g. tools

to improve employee performance, measurement and

decision support throughout retail operations to improve

business outcomes) and ERP / CRM / SCM applications.

Key workloads include Office 365 ProPlus, Skype for

Business, Teams and StaffHub.

Internal Communication & Collaboration – In order to

understand and manage increasing customer service

demands from buyers, Retailers need to improve internal

communication and collaboration. Retailers, plagued by

legacy technology systems and heavily siloed

organizations, will rely heavily on service providers for

technology integration and change management to drive

the organizational collaboration required to provide the

desired unified customer experience. Key workloads

include SharePoint, Skype for Business, Skype for Business

Cloud PBX / PSTN Conferencing and Teams.

Customer Service & Support (Unified Commerce) –

Unified Commerce is about contextualized engagement

with consumers, as well as the execution of meeting

consumers’ needs. Consumers expect a seamless

experience across all channels / devices. This will be

facilitated by integrations for SharePoint and Skype for

Business with applications like CRM / POS, Retail

Operations, and Distributed Order Management.

7. Government

Overview: Government has two main sub-segments: Federal and

State & Local. Within the Federal Government, digital

transformation in “mature” geographies is underway. As

digital government continues to take shape, the appetite

for collaboration and productivity tools is expected to

increase, however, change within Federal Governments

usually moves at a glacial pace. Federal Government is

Microsoft Friendly and will look to Office 365 as a solution,

when budgets and initiatives align. On the other hand,

State and Local Governments (SLG) are focused on

improving constituent access / transparency by investing



(VSS) Interactions

Workforce Management (Scheduling)

Office 365 ProPlus Skype for Business Teams StaffHub

Retail CRM Retail Operations

Internal Communication & Collaboration

SharePoint Skype for Business Skype for Business Cloud

PBX / PSTN Conferencing Teams

Retail CRM Merchandise Assortment

Management Retail Forecasting/

Replenish. Sol. Unified Price/ Promotion,

Markdown Optimization

Customer Service & Support (Unified Commerce)

SharePoint Skype for Business

Retail CRM Retail Operations Retail DOM


in cloud-based solutions to replace legacy applications /

systems. Since SLG is less regulated than Federal, has

more freedom to choose different vendors, and has

greater budgetary constraints, SLG is less likely to turn to

Office 365 compared to Federal agencies.





market.

Government organizations in North America (US and

Canada), Western Europe (UK, France, Germany, and the

Nordics), and APAC (Singapore, Australia, Japan, and

South Korea) are leaders in terms of digital

transformation. As countries continue to invest in

connected assets and open data initiatives, Gartner

expects to see increased digital readiness in Greater

China, Eastern Europe, and Latin America. Most countries

in Africa and the Middle East (outside of financial strong

holds and oil rich nations) are positioned well behind the

digital frontier. As digitization increases across the globe

and governments make transformational investments,

Microsoft’s addressability is expected to increase. A

secondary trend that will help to increase Office 365

addressability is adoption in established economies. Many

countries throughout Latin America look to regional

leaders (the United States in this case) to set the standard

for technology adoption. As investments to drive adoption

increase, a fast follower mentality can be expected.

Similar copycat mentalities resonate throughout Western

Europe with Germany, and APAC with Japan and Australia.

Finally, Gartner expects to see significant government

investment at all levels in India in productivity and vertical

specific solutions, ultimately signaling improved

addressability for Office 365 as a standalone solution and

as a platform.

Figure 7.1: Microsoft Addressability vs. Knowledge Worker TAdM for Government

While the knowledge worker opportunity is relatively well

understood in government (mission-based teams, citizen

engagement, and administrative tasks), emerging

opportunities for firstline workers are on the rise. Two key

opportunities include the deployment and management

of IoT in the government vertical and increasing usage of

communications and collaboration tools in law

enforcement. These two opportunities are well suited to

Office 365 and will help to increase firstline worker

addressability.


Figure 7.2: Microsoft Addressability vs. Firstline Worker TAdM for Government

Government – Austerity measures continue to impact

government’s ability to effectively delivery IT. Years of

budget cuts have left IT departments struggling to deliver

innovative solutions and have reduced the focus to

“keeping the lights on.” However, rising citizen

expectations have forced a decision point for adoption of

digital government solutions. Government CIOs' at the

federal, regional, and local level must shift focus away

from infrastructure – Gartner is already seeing a

significant movement regarding data center consolidation

– and its cost burden toward quickly delivering true

mission outcome improvements. While the structure of

public service delivery in government organizations /

agencies has remained unchanged for 50 or more years,

citizen expectations have outpaced government’s ability

to address them. Modern IT can assist in rebalancing

Government accountability, responsiveness, and foresight

in setting and executing on public policy objectives to

address the increasing expectations of citizens.

To excel in a digital society, government organizations are

pursuing digital transformation strategies to increase their

responsiveness, accountability, and transparency. These

strategies must be both internal, digital workplace, and

external, digital service delivery.

In order to manage the cost of this transformation and

keep pace with an increasingly innovative market place,

government agencies are looking to the cloud.

Governments are increasingly adopting a cloud-first policy

(set by the US in 2011) and interest in public cloud and

SaaS continues to grow as security fears are increasingly

seen as being unfounded.

Adoption of SaaS based technologies required to support

digital workplace initiatives have been the first domino to

fall in the cloud adoption journey. Specifically, cloud-

based office, collaboration, and file sync and share have,

or are being adopted across all levels of government

(although Gartner predicts mainstream adoption is still

two to five years away). As investments in internal

capabilities yield process improvements and cost savings,

expect Government organizations to turn their focus

towards legacy application modernization as IT leaders

look to manage the growing cost and risk of aging

technologies. Replacement of legacy solutions will be

gradual, and Governments will focus on a strategy of

extending the capabilities of existing investments to meet

mission critical processes as well as wholesale legacy

replacement with cloud based, vertical specific COTS

solutions. Gartner expects service providers to play a

significant role not only in the sales and servicing of these

technologies, but by bringing innovative solutions /

capabilities to ensure that Government organizations are

able to reach their objectives.

Total Addressable Market Segments Government accounts for ~20.7% of the total available

market (TAM), 24.6% of the total knowledge worker

addressable market (KW TAdM), and 25.1% of the total

firstline worker addressable market (FW TAdM) for


analyzed. Knowledge workers engage Government

administration positions (e.g. politicians, appointees,

courts, citizen services), while the firstline segment

includes law enforcement and field workers.


Table 7.1: Government Knowledge Worker TAdM and Firstline Worker TAdM by Region (100+ Employee Firms)


Spending: Figure 7.3 shows the overall IT spend for 2016 and 2021

for Government. Government IT spend is expected to

increase to approximately $536B in 2021 from $470.8B in

2016. The largest category of spend was IT services in

2016 followed by telecom services and software. Software

is expected to have the largest growth and move into the

second largest category of IT spend in 2021 to

approximately $109B.

Figure 7.3: Government IT Spend by Category, 2016 to 2021


Within the software segment, as shown in Figure 7.4,

Infrastructure and vertical specific software have the

highest spend, and by 2021 vertical specific software is

expected to be the largest. ERP / SCM / CRM category is

expected to grow the fastest at a 9.3% CAGR to

approximately $14.7B in 2021.


APAC 7.43 22.00

Canada 1.31 0.46

CEE 11.52 10.26

France 2.07 1.40

GCR 3.65 14.28

Germany 2.59 0.91

India 3.40 4.51

Japan 1.57 0.70

LATAM 3.83 5.88

MEA 7.17 14.08



WE 5.54 2.48

Total 59.12 80.50


Figure 7.4: Government Software Spend by Segment, 2016 to 2021


Solutions The top 3 solutions for the Government that have high

alignment to Microsoft Office 365 workloads are citizen

services (citizen engagement), case management, and

regulatory, licensing, & permitting / civic planning. Table

7.2 shows the key industry solutions, the aligned Office

365 workloads, and the potential interactions of these


Table 7.2: Government Key Solutions and Applicable Office 365 Workloads and VSS Interactions, 2016

Citizen Services (Citizen Engagement) – Digital

government initiatives are driven by citizen requirements,

one of which is increased access to city, regional, and

national services through an easy to use digital channel.

Where many government agencies largely rely on

traditional mail today, citizens’ demands for instant

question / answer is increasing. Office 365’s collaboration

technologies (specifically Yammer, Skype for Business,

and Exchange) can help provide new communication

channels and cut down on the lag associated with

traditional calling and emailing while improving customer

satisfaction.

Case Management – Aging case management systems

have reached end of life, however, budgetary concerns

have forced government agencies to leverage a strategy

to extend them beyond useful life rather than adopt new

COTS solutions. Custom built or legacy solutions can no

longer keep pace with government expectations and

Office 365 (through SharePoint and Teams) offers unique

opportunities to redesign government processes and

eliminate what is a today a paper based process with

existing investments, effectively killing two birds with one

stone.

Licensing & Permitting / Civic Planning – Licensing and

permitting in most municipalities remains a highly manual

process. While large US state and local government

agencies have begun the process of replacing these

processes with cloud based solutions, most municipalities

lack the budget for these investments. With Office 365, an

opportunity to improve collaboration and accuracy

throughout the process from submission, to departmental

review will yield higher revenues, improved constituent



(VSS) Interactions

Citizen Services (Citizen Engagement)

Skype for Business Skype for Business Cloud

PBX / PSTN Conferencing Yammer Exchange

Citizen Engagement

Case Management

SharePoint Teams

Case Management Women, Infant, and

Children Employment

Regulatory, Licensing, & Permitting / Civic Planning (Community Dev.)

Teams SharePoint Skype for Business Skype for Business Cloud

PBX / PSTN Conferencing

Community Development


satisfaction, and elimination of a heavily paper based

system.

8. Hospitality

Overview: Hotels and restaurants have historically built systems by

piecemeal. Instead of upgrading a system to have

additional functionality, Hospitality organizations have

resorted to just purchasing a separate system for the new

function. This has led to a technology environment where

the multiple disconnected systems cannot be effectively

integrated. This problem is further complicated if different

locations have different versions of the software within

the same hotel chain or restaurant group. Like other

industries, Hospitality also suffers from disconnected

departments that act within their own silos rather than

acting like a digital entity. While Hospitality organizations

desire to integrate these disparate systems to improve /

digitize workflows, cloud migration is viewed as a

daunting task, especially in light of historically tight IT

budgets. Organizational fears regarding moving core

applications such as reservations systems has also

hindered cloud adoption in Hospitality.





market.

The UK, the US, Canada, Germany, and France are the

regions that are best aligned to Microsoft Addressability,

however, the delta between addressability ratings for the

top region (UK) and the lowest rated region (Central and

Eastern Europe) is relatively small in Hospitality compared

to other industries. This suggests that although there are

some regions of strong opportunities, all regions are

expected to demonstrate growth in the next few years.

CIOs in the Hospitality industry are prioritizing

investments in cloud services / solutions, BI / advanced

analytics, and digitalization / digital marketing. These

investments are aimed at breaking down organizational

and location-based silos, which have inhibited a

continuous customer experience.

Cloud services / solutions will enable integration

opportunities for partners to create the desired

unification of the disparate systems. In addition to being

the first step to being able to leverage advanced analytics

and deep business intelligence, cloud solutions enable can

be spun up or down to meet the demands created by

opening and closing of brick-and-mortar locations.

Furthermore, cloud solutions decrease system outages

caused by local natural disasters.

Investments in advanced analytics will drive insights

aimed at improving / unifying the customer experience.

Currently, data is not shared among the many disparate

systems (e.g. reservation systems, marketing databases

and workforce optimization tools), thereby creating a

situation where demand-based pricing is not possible. For

Hotels, this has created obstacles to driving revenues

while also increasing the level of difficulty in honoring

online prices. Advanced analytics will align pricing and

marketing campaigns, driving improved communication

among corporate and regional branches.

Restaurants and Hotels are looking beyond internal data

points and are applying advanced analytics to improve

digital marketing campaigns. For instance, social media

analytics are driving more targeted digital marketing

campaigns that are increasing conversion. Location

analytics are being used to understand why certain

locations are performing better than others and then

leveraged to drive improved results at these locations.

Figure 8.1: Microsoft Addressability vs. Knowledge Worker TAdM for Hospitality


Figure 8.2: Microsoft Addressability vs. Firstline Worker TAdM for Hospitality

Total Addressable Market Segments The Hospitality Industry accounts for ~3.3% of the total available market (TAM), 3.0% of the total knowledge worker addressable market (KW TAdM), and 2.9% of the total firstline worker addressable market (FW TAdM) for organizations with over 100+ employees for the 7 verticals analyzed. Knowledge workers in Hospitality are usually in upper management, while the firstline segment includes servers, customer-service representatives, and food preparation staff.

Table 8.1: Hospitality Knowledge Worker TAdM and Firstline Worker TAdM by Region (100+ Employee Firms)


Spending: The Hospitality industry has the lowest IT spend out of the

industries analyzed. Figure 8.3 shows the breakdown of

overall IT spend by category – Hospitality’s total IT spend

in 2016 was approximately $33B. The largest category of

spend included IT Services at approximately 13.6B in 2016.

The fastest growing category is software, which is

expected to grow at an 8.5% CAGR over the next 4 years

to approximately $6.7B in 2021.


APAC 1.07 2.13

Canada 0.08 0.05

CEE 1.01 0.80

France 0.08 0.05

GCR 0.76 2.21

Germany 0.16 0.09

India 0.79 0.70

Japan 0.47 0.31

LATAM 0.45 0.46

MEA 0.64 1.23



WE 0.42 0.31

Total 7.17 9.15


Figure 8.3: Hospitality IT Spend by Category, 2016 to 2021

Within the software category the breakdown of spend is

shown in Figure 8.4. Infrastructure and vertical specific

software are the two highest segments at $1.7 and $1.4B

respectively. Infrastructure, vertical specific software, and

ERP / SCM / CRM are expected to grow fastest at similar

rates over the next 4 years, approximately a 9% CAGR.

Desktop, which includes office suites is the smallest

segment and is expected to grow at a 6.7% CAGR over the

next 4 years to approximately $0.3B.

Figure 8.4: Hospitality Software Spend by Segment, 2016 to 2021

Solutions The top three solutions for the Hospitality industry that


are hotel operations, customer service and support, and

restaurant operations. Table 8.2 shows the key solutions

in the industry, the aligned Office 365 workloads, and the

potential interactions of these workloads with key vertical

specific software (VSS).

Table 8.2: Hospitality Key Solutions and Applicable Office 365 Workloads and VSS Interactions



(VSS) Interactions

Hotel Operations

Office 365 ProPlus SharePoint Skype for Business Teams Yammer StaffHub

Property Management System (PMS)

Customer Service & Support

Skype for Business Teams Yammer SharePoint

Property Management System (PMS)

Reservations

Restaurant Operations

Skype for Business SharePoint Teams StaffHub

FOH / Dining Room Management

Kitchen Management Back Office Restaurant /

Product Management


Hotel Operations – Hotel operations encompass the

interactions between front desk, housekeeping, and the

back office, with functions including room management,

customer service, and revenue management. Hotel

operations need to run smoothly in order to deliver

exceptional customer service. The main software used to

support these functions is a property management

system; however, workflows exist outside of this software

and streamlining communication is key to delivering

better productivity, efficiency, and a more engaged

workforce. The Core Office Suite and SharePoint offer

easy communication between back office and front desk

staff. Skype for Business can be used to check the status

on room cleaning and to quickly communicate with

management to resolve problems that arise. Teams can be

also used for communication between departments to

troubleshoot problems and bridge the gap between the

different functions. Yammer could provide hotel-wide

notifications for keeping staff informed (e.g. maintenance

actions, construction zones, new services added for

customers, etc.) in order to increase efficiencies and help

provide pro-active customer service. StaffHub is an

emerging platform designed to address pain points in

scheduling firstline workers.

Customer Service and Support – Customer service and

support is key to fulfilling customer expectations and

achieving customer loyalty. Traditionally the front desk is

the primary contact to hotel guests, but having well

informed staff across all hotel operations and providing

fast, friction-less communication channels with guests is

also desirable. As with hotel operations, Teams and

Yammer can be used to help keep employees informed

and resolve any customer problems with ease. SharePoint

can be used to share resort or hotel event schedules or

specials for the week with staff so they can easily

communicate to the customer. Skype for Business offers

both internal and external opportunities. Skype for

Business can provide quick communication between

internal departments without the customer service staff

having to leave the customer’s side. Skype for Business

could also be implemented in a way that allowed

customers to directly ask questions with front desk staff,

order room service, set a morning alarm, or ask for towels

directly from housekeeping, without having to pick up the

phone.

Restaurant Operations – Restaurant operations include

the processes that are required to run a restaurant from

back office to front of house operations. These processes

include table management, kitchen management, labor

management, and product management; while much of

the vertical specific software on the market touches many

of these functions, a lot are incomplete and leave

employees with manual tasks that can cause delays in

food service, incorrect orders, and missed opportunities.

Customer service is a key initiative for restaurants and

Microsoft Office 365 has workloads that can improve

communications, decrease delays, and thus improve

customer experience. Skype for Business can be used by

wait staff and hostesses to check on orders, inform

kitchen staff of a large influx of people so they can adjust

their break schedules, and answer customer questions

without having to leave the table or the front of house.

Giving staff access to SharePoint so that they have up-to-

date information on menu items, daily specials, or

inventory limitations would be beneficial. Teams could be

used for additional collaboration and communication

between management and the different departments in

order to enable staff. Similar to hotel operations,

scheduling of firstline workers can be improved through

the use of StaffHub


9. Appendix

Regional / Country Taxonomy Region Country / Countries

Asia / Pacific (APAC)

Australia Indonesia Korea Malaysia

New Zealand Philippines Singapore Thailand

Vietnam Rest of Emerging Asia /

Pacific

Canada Canada

Central and Eastern Europe (CEE)

Czech Republic Hungary Poland Kazakhstan

Romania Russia Slovakia Ukraine

Rest of Eastern Europe Rest of Eurasia

France France

Greater China Region (GCR) China Hong Kong Taiwan

Germany Germany

India India

Japan Japan

Latin America (LATAM) Argentina Brazil Chile

Columbia Mexico Panama

Peru Trinidad and Tobago Rest of Latin America

Middle East and Africa (MEA)

Israel Nigeria Qatar

Saudi Arabia South Africa Turkey

UAE Rest of Middle East &

Northern Africa Rest of Sub-Sahara Africa

United Kingdom (UK) England Northern Ireland Scotland

Wales

United States (US) United States

Western Europe (WE)

Austria Belgium Denmark Finland Greece

Ireland Italy Netherlands Norway Portugal

Spain Sweden Switzerland Rest of Western Europe


Vertical / Industry Taxonomy Vertical Sub-Verticals

Financial Services Banking & Securities Insurance

Government Federal & International Government Local & Regional Government

Healthcare Provider Hospital / Integrated Delivery Network (IDN) Physician Practice

Manufacturing & Natural Resources Automotive Consumer, Non-Durable Products Energy Resources & Processing Heavy Industry IT Hardware Life Sciences & Healthcare Products Natural Resources & Materials

Retail General Retailers Grocery Specialty Retailers

Hospitality Restaurants & Hotels

Transportation Air Transport Motor Freight Pipelines Rail & Water Warehousing, Couriers & Support Services


IT / Markets Taxonomy Term Definition / Example

Knowledge Worker Knowledge workers are involved in non-routine tasks that require industry / solution-specific expertise.

Knowledge workers are often a dispersed workforce, thereby needing collaboration tools in order to share knowledge and project progress

Firstline Worker Firstline workers are employees, staff, team members or the workforce itself, that serve as the first point of contact between companies, their customers / products / suppliers and the market.

These workers are often in roles that directly impact the customer experience and the delivery and development of products and services.

Total Available Market (TAM) The size of the market in terms of the total number of employees regardless of designation

Total Addressable Market (TAdM) The portion of the available market that can be addressed by a given provider for a product or service

Vertical Specific Software (VSS) Software developed to address the specific needs of a given industry

Office Suites Office productivity suites are generally collections of basic

productivity applications for tasks such as word processing, spreadsheet manipulation and presentation graphics

Web Conferencing / Collaboration

Web conferencing represents one form of real-time collaboration. It consists of real-time electronic meeting and content delivery, desktop and application sharing, IM, and group document markup with electronic whiteboarding (augmented by audio, data and video), security (encrypted data transfer and password protection), and remote control (a participant can control applications of another device)

Business Intelligence (BI) An umbrella term that includes the applications, infrastructure and

tools, and best practices that enable access to and analysis of information to improve and optimize decisions and performance

Project and Portfolio Management (PPM)

PPM applications support an integrated view across the portfolio of resource effort, including both project and nonproject work. Organizational resource information can be grouped into taxonomies of roles, functions and skill sets, thus allowing for better tracking of resource assignment and utilization

Enterprise Content Management (ECM)

ECM suites consist of applications for content life cycle management that interoperate but that can also be sold and used separately. Some vendors have added extended technology components, such as digital asset management, for handling rich media, electronic forms and document composition for high-volume generation of customized documents

Digital Content Creation (DCC) Software is used for creating or altering visual digital content. The

digital content can be either computer-generated or transformed from analog means, such as photographs or videos

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