ibm and everyone else: how and when will bi services vendors dethrone ibm
DESCRIPTION
According to TBR research, the business intelligence (BI) services market is growing 12% to 14% per year, and IBM is dominating the market. However, as software vendors transition from offering services to supporting clients, IT services vendors are bringing solutions to market aggressively and are expected to far exceed that growth rate. TBR invites you to view a webinar that originally aired on Thursday, Oct. 9, 2014, to discuss the findings in its most recent Business Intelligence Services Vendor Benchmark, including what is causing this growth, which service lines in the BI services space are growing the fastest and how vendors can improve go-to-market strategies to pursue opportunities in the market. This webinar focuses on the business models, strategies and performance metrics of BI services vendors to deliver actionable insights that enable attendees to make more informed business decisions. The webinar will help decision makers evaluate the viability of their go-to-market strategy and identify weaknesses that should be addressed by noting expectations of vendors in their market. Principal Analyst Patrick Heffernan, Principal Analyst Matt Healey and Analyst Jennifer Hamel shared their insights into BI services vendors’ behaviors and opportunity in the market. They then fielded questions from the audience. Questions for discussion included: • Why does IBM dominate the BI services space? • Can any other vendors take market share, and if yes, how? • What differentiates non-IBM BI services vendors from each other? • Within the BI service lines, which vendors lead and why?TRANSCRIPT
TBR
T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .
TBR’s BI Professional Services Vendor Benchmark Highlights and Outlook
IBM and everyone else: How and when will BI services vendors dethrone IBM — or even start to catch up? Technology Business Research (TBR) Quarterly Webinar Series
Oct. 9, 2014
TBR
2 TBR Quarterly Webinar Series | 10.9.14 | www.tbri.com | ©2014 Technology Business Research Inc.
BI Professional Services Vendor Benchmark Highlights and Outlook: Webinar Presenters
Jen Hamel
Professional Services Analyst Email: [email protected]
Twitter: @jenhameltbr
Patrick Heffernan
Principal Analyst and IT Services Practice Manager Email: [email protected]
Twitter: @TBR_PatrickH
Matt Healey
Principal Analyst Email: [email protected]
Twitter: @mhealey_TBR
TBR
3 TBR Quarterly Webinar Series | 10.9.14 | www.tbri.com | ©2014 Technology Business Research Inc.
• TBR’s Business Intelligence program is used to:
o Identify opportunity.
o Adjust messaging to align with customer needs and broader purchasing criteria.
o Improve competitive positioning.
• Insight to advance clients’ business intelligence (BI) software and services businesses:
o Understand segment customers’ current and evolving behaviors.
o Realize market opportunity based on customers’ perception and assessment of BI vendors.
o Profit from insights around exemplary vendor strategies, customer trends and results.
Clients gain advantages and a better understanding of revenue opportunities through our reports and their personal relationships with TBR
BI Professional Services Vendor Benchmark Highlights and Outlook: Webinar Overview
TBR’s Business Intelligence program improves clients’ market opportunity by delivering insights to vendor and customer behavior
Covered in today’s webinar: Business Intelligence
Professional Services Vendor Benchmark
Additional BI products: • Business Intelligence Professional
Services Customer Research • Business Intelligence Software
Customer Research • Business Intelligence Software
Vendor Benchmark
TBR
4 TBR Quarterly Webinar Series | 10.9.14 | www.tbri.com | ©2014 Technology Business Research Inc.
IBM will continue to lead as global and India-centric vendors battle for services share and software- and hardware-led vendors struggle
IBM dominates the space — in revenue,
end-to-end-capabilities and customer
perception.
India-centric vendors will struggle to move further into
consulting and must create differentiated alliances with
software powerhouses while taking on new technologies
and platforms, such as open-source data processing, to
fight off global and Eurocentric vendors pushing into
their market space.
Global and
Eurocentric
vendors have the
easiest road to
surpass
benchmark-
average growth:
Build end-to-end
services
portfolios,
continue
partnering with
software vendors
and add resources
of every kind,
including in low-
cost areas.
Software and
hardware-centric
vendors will begin
losing services
market share, absent
a strategic shift from
these vendors.
BI Professional Services Vendor Benchmark Highlights and Outlook: Key Findings
Business Intelligence Professional Services Vendor Benchmark, October 2014
TBR
5 TBR Quarterly Webinar Series | 10.9.14 | www.tbri.com | ©2014 Technology Business Research Inc.
BI professional services market expansion will outpace the growth of IT services overall as analytics adoption becomes more mainstream
Barriers to BI Growth:
• Budgetary pressure
• Software vendor entrenchment
• Unclear value of additional BI
professional services
• Sluggish IT services growth
Drivers of BI Growth:
• Operational efficiency
• Industry expertise
• Scalability of resources
• Maturation of complementary
emerging technologies
Global BI Professional Services Market Opportunity
2013
$57 billion global
revenues
2016
$85 billion global
revenues
BI Professional Services Vendor Benchmark Highlights and Outlook: Opportunity
TBR
6 TBR Quarterly Webinar Series | 10.9.14 | www.tbri.com | ©2014 Technology Business Research Inc.
$4.9 $5.2 $5.3 $5.7 $5.8 $6.0
$17.8$21.1
$24.5
$13.5 $13.8 $14.2 $14.5 $15.5 $15.8
$50.0
$56.0
$65.0
$0
$10
$20
$30
$40
$50
$60
$70
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 Est. 2012 2013 2014 Est.
Esti
mat
ed
Re
ven
ue
(in
$ M
illio
ns)
ESTIMATED AGGREGATED TBR BI PROFESSIONAL SERVICES MARKET LANDSCAPE
REVENUE AND GROWTH
Estimated BI Professional Services Revenue BI Professional Services Total Market
SOURCE: TBR ESTIMATESSOURCE: TBR ESTIMATES
1Q14 YTY Growth Across Covered Vendors: 16.9%1Q14 Total Market Growth: 14.8%
2014 Estimated Growth:Covered Vendors: 16.3%
Market: 16.1%
TBR
Average growth of the 20 covered vendors outpaced overall market growth in 1Q14, showing well-known services vendors’ advantage
Strong customer relationships and investments in BI services provide established IT services and consulting vendors with an advantage in the BI
services market as adoption increases.
BI Professional Services Vendor Benchmark Highlights and Outlook: Opportunity
BI Professional Services Market Sizing: Benchmark Versus Global
TBR
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TBR’s recent customer research found BI services buyers value industry expertise and a smooth working relationship in vendor selection
Vendors that offer domain-focused consulting and high-touch client management are best-positioned in the market due to customer demand for
BI solutions that address their unique business needs.
BI Professional Services Vendor Benchmark Highlights and Outlook: Opportunity
BI Professional Services Customer Buying Criteria
TBR
8 TBR Quarterly Webinar Series | 10.9.14 | www.tbri.com | ©2014 Technology Business Research Inc.
$875 $936 $940 $1,069 $1,044 $1,095 $1,116 $1,254 $1,235 $1,275
$1,810 $1,899 $1,931$2,063 $2,148 $2,247 $2,297
$2,417 $2,516 $2,583
$682$714 $727
$805 $803$847 $865
$949 $922 $972
$797 $824 $838
$903 $950 $974 $995
$1,052 $1,105 $1,126
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14Est.
Re
ven
ue
(in
$ M
illi
on
s)
BI PROFESSIONAL SERVICES REVENUES BY SEGMENT AMONG VENDORS COVERED IN BI
PROFESSIONAL SERVICES BENCHMARK
BI OM&M: 16.3%
BI ADM: 14.8%
BI I&I: 17.1%
BI Consulting: 18.3%
TBR
SOURCE: TBR ESTIMATES
Total 1Q14 YTY Growth: 16.8%
1Q14 Growth YTY:
Clients’ expectation of a quick ROI will drive demand for operations management and maintenance (OM&M) services to extract greater value
from BI investments.
Consulting expanded the fastest in 1Q14, followed by implementation, indicating clients are moving quickly from exploration to action
BI Professional Services Segment Overview
BI Professional Services Vendor Benchmark Highlights and Outlook: Opportunity
TBR
9 TBR Quarterly Webinar Series | 10.9.14 | www.tbri.com | ©2014 Technology Business Research Inc.
IBM
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
-5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%
1Q
14
Op
era
tin
g M
argi
n
1Q14 BI YTY Revenue Growth
IBM'S 1Q14 ESTIMATED BI PROFESSIONAL SERVICES REVENUE, PROFITABILITY AND YTY
REVENUE GROWTH
TBR
1Q14 Average Operating Margin = 15.4%
SOURCE: TBR ESTIMATES AND COMPANY DATA
1Q14 Average BI YTY Revenue Growth = 16.9%
NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE.
IBM’s legacy in integrated IT solutions and evolving business-led analytics portfolio enable the company to stand out among BI services vendors
IBM continues to adapt to stay ahead of changing BI services purchasing trends, including the increasing involvement of line-of-business (LOB) buyers
in decision making around BI solution deployments.
IBM’s BI Services Revenue Growth and Profit
BI Professional Services Vendor Benchmark Highlights and Outlook: Vendor Landscape
TBR
10 TBR Quarterly Webinar Series | 10.9.14 | www.tbri.com | ©2014 Technology Business Research Inc.
MICROSOFTORACLE
SAPSAS
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
-5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%
1Q
14
Op
era
tin
g M
argi
n
1Q14 BI YTY Revenue Growth
SOFTWARE-CENTRIC VENDORS' 1Q14 ESTIMATED BI PROFESSIONAL SERVICES REVENUE,
PROFITABILITY AND YTY REVENUE GROWTH
TBR
1Q14 Average Operating Margin = 15.4%
SOURCE: TBR ESTIMATES AND COMPANY DATA
1Q14 Average BI YTY Revenue Growth = 16.9%
NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE.
Software-centric vendors will continue to cede BI services market share to C&SI partners as they focus efforts on more profitable software sales
Unlike IBM, software-centric vendors are strategically shifting away from BI services to play to their strengths in software and platforms, leaving
consulting and implementation to system integrator partners.
Software-centric Vendors’ BI Services Revenue Growth and Profit
BI Professional Services Vendor Benchmark Highlights and Outlook: Vendor Landscape
TBR
11 TBR Quarterly Webinar Series | 10.9.14 | www.tbri.com | ©2014 Technology Business Research Inc.
CISCO SYSTEMS
FUJITSU
HITACHI
HP
DELL
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
-5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%
1Q
14
Op
era
tin
g M
argi
n
1Q14 BI YTY Revenue Growth
HARDWARE-CENTRIC VENDORS' 1Q14 ESTIMATED BI PROFESSIONAL SERVICES REVENUE,
PROFITABILITY AND YTY REVENUE GROWTH
TBR
1Q14 Average Operating Margin = 15.4%
SOURCE: TBR ESTIMATES AND COMPANY DATA
1Q14 Average BI YTY Revenue Growth = 16.9%
NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE.
Hardware-centric vendors build BI services portfolios to add value to infrastructure engagements, spurring short-term growth
Despite a similar infrastructure legacy to IBM and investment in IP-based platforms, hardware-centric vendors still rely on BI software alliances such as
SAP and Microsoft to remain viable in the BI services space.
Hardware-centric Vendors’ BI Services Revenue Growth and Profit
BI Professional Services Vendor Benchmark Highlights and Outlook: Vendor Landscape
TBR
12 TBR Quarterly Webinar Series | 10.9.14 | www.tbri.com | ©2014 Technology Business Research Inc.
COGNIZANT
INFOSYS
TCSHCLT
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
-5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%
1Q
14
Op
era
tin
g M
argi
n
1Q14 BI YTY Revenue Growth
INDIA-CENTRIC VENDORS' 1Q14 ESTIMATED BI PROFESSIONAL SERVICES REVENUE,
PROFITABILITY AND YTY REVENUE GROWTH
TBR
1Q14 Average Operating Margin = 15.4%
SOURCE: TBR ESTIMATES AND COMPANY DATA
1Q14 Average BI YTY Revenue Growth = 16.9%
NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE.
India-centric vendors maintain above-average profitability with low-cost business models but stay middle-of-the-pack in revenue growth
India-centric vendors lead in profitability but face two major challenges: traditionally weaker advisory capabilities and eroding perception as go-to
software development houses.
India-centric C&SI Vendors’ BI Services Revenue Growth and Profit
BI Professional Services Vendor Benchmark Highlights and Outlook: Vendor Landscape
TBR
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ACCENTURE
ATOS
CAPGEMINI
CSC
DELOITTEPWC
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
-5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%
1Q
14
Op
era
tin
g M
argi
n
1Q14 BI YTY Revenue Growth
C&SI VENDORS' 1Q14 ESTIMATED BI PROFESSIONAL SERVICES REVENUE, PROFITABILITY
AND YTY REVENUE GROWTH
TBR
1Q14 Average Operating Margin = 15.4%
SOURCE: TBR ESTIMATES AND COMPANY DATA
1Q14 Average BI YTY Revenue Growth = 16.9%
NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE.
C&SI vendors will stay ahead of India-centric vendors by building on advisory capabilities and moving into ADM and managed services
Consulting-led vendors have two major plays against lower-priced peers: Move down the value chain more rapidly than competitors can move up, and
attract and afford high-quality consultants that lower-priced peers cannot.
C&SI Vendors’ BI Services Revenue Growth and Profit
BI Professional Services Vendor Benchmark Highlights and Outlook: Vendor Landscape
TBR
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BI Alliances
Act
uat
e
Clo
ud
era
Dat
amee
r
Dat
aSta
x
Do
mo
Go
od
Dat
a
Go
ogl
e
Ho
rto
nw
ork
s
HP
So
ftw
are
IBM
So
ftw
are
Info
rmat
ica
Jasp
erso
ft*
Kag
gle
Mar
kLo
gic
Mic
roso
ft
Mic
roSt
rate
gy
Ora
cle
Pen
tah
o
Piv
ota
l/EM
C
Qlik
Tech
SAP
SAS
Tab
leau
Tera
dat
a
TIB
CO
Accenture
Atos
Capgemini
Cisco Systems
Cognizant
CSC
Dell
Deloitte
Fujitsu
HCLT
Hitachi
HP
IBM
Infosys
Microsoft (Services)
Oracle (Services)
PwC
SAP (Services)
SAS (Services)
TCS
Covered Vendors in TBR's Business Intelligence Software Vendor Benchmark
Co
vere
d V
end
ors
in T
BR
's B
usi
nes
s In
telli
gen
ce P
rofe
ssio
na
l Ser
vice
s V
end
or
Ben
chm
ark
Software alliances are increasingly critical to building BI services capabilities, particularly for technology-agnostic C&SI vendors
SOURCE: TBR AND COMPANY DATA
*Not all alliances have been identified for all vendors. TIBCO acquired Jaspersoft in April 2014. New/Enhanced in 1Q14
Partnering
Alliance Activity Between BI Services and BI Software Vendors
Partnering with
Hadoop providers
positions
Accenture to
address growing
open-source
demand. Expanding SI
relationships with
SAP creates
opportunities for
joint BI solutions
and/or BI-
enabled digital
transformation.
BI Professional Services Vendor Benchmark Highlights and Outlook: Alliances
TBR
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TBR evaluates the business intelligence professional services market across 4 lines of service delivery
Consulting (BI Strategy)
Integration and
Implementation
Applications Development
and Maintenance
Operations, Management
and Maintenance
Provide strategic and tactical advice in a particular area of expertise for the use of
business intelligence.
Offer assistance in aligning business intelligence deployments with existing on- and off-premises
infrastructure and applications.
Software development and personnel-led maintenance that encompasses requirements of engineering design, implementation, testing
and maintenance to construct software for business intelligence
Assistance in the maintenance, enhancement and monitoring of business intelligence
deployments, and support of overall interaction of the infrastructure
BI Professional Services Vendor Benchmark Highlights and Outlook: Taxonomy
TBR BI Professional Services Taxonomy Segments
TBR
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TBR delivers actionable intelligence on the maturing BI market to help clients bridge the gap between buyer aspirations and vendor actions
BI Professional Services Vendor Benchmark Highlights and Outlook: Research Portfolio
Business Intelligence Software Vendor Benchmark
Business Intelligence Professional Services Vendor Benchmark
Business Intelligence Addressable Market Forecast
Business Intelligence Software Customer Research
Business Intelligence Professional Services Customer
Research
TBR
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PSP Research 3Q14 Topics 3Q14 Report Key Themes
• Business Intelligence Professional Services Vendor Benchmark
• Covered Vendors:
Use of acquisitions to gain expertise in niche verticals and expand local market presence
Assess how vendors are leveraging acquisitions to build BI expertise in niche verticals and/or expand local market presence. Compare and contrast vendors’ use of acquisitions versus alliances and cross-training employees.
Accenture Atos Capgemini Cisco Systems Cognizant CSC Dell Deloitte Fujitsu HCLT
Hitachi HP IBM Infosys Microsoft Oracle PwC SAP SAS TCS
C&SI vendors’ expansion of ADM services capabilities and resulting impact on India-centric vendors’ market share
Examine how consulting-led vendors are broadening application development and managed services capabilities to build end-to-end BI professional services portfolios. Assess how increased leverage of low-cost delivery resources by high-value C&SI vendors impacts the ability of India-centric vendors to differentiate in BI services.
Positioning for increased demand in Europe as clients start to move beyond cost takeout to more discretionary projects
Assess how vendors are adapting portfolios and resource management strategies to target the maturing BI services market in Europe. Compare and contrast go-to-market and investment strategies in Europe versus those of the early adopting U.S.
Vendors look to maintain and develop BI services market positions by expanding portfolios and delivery capabilities
BI Professional Services Vendor Benchmark Highlights and Outlook: 3Q14 Research Outlook
TBR
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Questions?
TBR
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BI Professional Services Vendor Benchmark Highlights and Outlook: Contact Information
Jen Hamel
Professional Services Analyst Email: [email protected]
Twitter: @jenhameltbr
Telephone: 603.758.1875
Patrick Heffernan
Principal Analyst and IT Services Practice Manager Email: [email protected]
Twitter: @TBR_PatrickH
Telephone: 603.758.1834
James McIlroy Vice President of Sales Email: [email protected] Telephone: 603.929.1166
Twitter: @TBRinc
SlideShare: www.slideshare.net/TBR_Market_Insight
YouTube: www.youtube.com/user/TBRIChannel
LinkedIn: www.linkedin.com/company/technology-business-research
Matt Healey
Principal Analyst Email: [email protected]
Twitter: @mhealey_TBR
Telephone: 603.758.1846
TBR
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PSP Syndicated Research Coverage
IT Services Vendors Public Sector Vendors Benchmarks (Benchmark XLS data also available)
• Accenture • Atos • Capgemini • CGI* • Cisco Services • Cognizant • CSC • Dell Services • Fujitsu • HCL Technologies • HP Services • IBM Global Services • Infosys • T-Systems • Tata Consultancy Services • Unisys • Wipro IT Services • Xerox
• Booz Allen Hamilton* • CACI International* • General Dynamics IS&T* • L-3 Communications* • Leidos* • Lockheed Martin IS&GS* • ManTech* • Northrop Grumman IS&TS* • Raytheon Intelligence, Information &
Services* • SAIC*
• Business Intelligence Services Vendor Benchmark*
• Global Delivery Benchmark* • Healthcare IT Services Vendor
Benchmark • IT Services Vendor Benchmark • Management Consulting Benchmark* • Public Sector IT Services Vendor
Benchmark
Healthcare IT Services Vendors
• Accenture HITS* • CSC HITS* • Dell HITS* • HP HITS* • IBM HITS*
Management Consulting Vendors
• Bain & Company* • Boston Consulting Group* • Deloitte Consulting* • McKinsey & Co.* • PwC*
TBR Professional Services Practice Syndicated Coverage
*Semiannual publication
TBR
T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .
About TBR Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, telecom and enterprise network vendors, and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in formats that are tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis. TBR has been empowering corporate decision makers since 1996. To learn how our analysts can address your unique business needs, please visit our website or contact us today.
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