research highlights and outlook focus on managed private-cloud services
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TBR
TECHNOLOGY BUSINESS RESEARCH, INC.
TBR’s Cloud ProgramManaged Private & Professional Services Cloud Benchmark
Research Highlights and Outlook Focus on Managed Private Cloud Services
Technology Business Research Webinar Series
Oct. 24, 2013
TBR
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Cloud Business Research Highlights and Outlook: Webinar Presenter
Ramunas SvarcasSenior Analyst and Engagement Manager,Professional Services [email protected]@rjsTBR
TBR
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TBR Cloud Program — Portfolio Product Descriptions
Customer and Competitor Reports:TBR cloud customer reports provide primary research-based insights into purchasing behavior, vendor adoption, satisfaction and demand across multiple cloud offerings and professional services segments.
Benchmarks:TBR’s benchmark reports provide analysis through qualitative and metric-based comparisons of key vendors in a market segment. Cloud data models are included with the benchmarks; this TBR research and analysis is built from the ground up based on 15+ years of vendor-centric financial models.
Vendor Reports:Reports analyzing vendors’ cloud businesses cover all relevant segments and track performance across cloud-driven metrics including operating expenses, operating profit, headcount breakouts and geographic breakouts
TBR Cloud Research Overview
Cloud Benchmarks
Cloud Business Reports
Cloud Customer Research
Tracks
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Cloud Benchmarks
Public Cloud Benchmark
Managed Private Cloud and Professional Services
Benchmark
Cloud Business Reports
Accenture AmazonAtosCapgeminiCognizantCSC Dell
DeloitteFujitsuGoogleHPIBM InfosysMicrosoft
OracleRackspaceSalesforceSAPServiceNowVerizonTata
WiproWorkday
*Plans in place for additional vendors
Cloud Components Benchmark
Cloud Customer Research
Tracks
TBR Cloud Program — Portfolio Product Overview
Private Cloud Customer and
Competitor Report
Hybrid Cloud Customer and Competitor Report
Cloud Prof. Services Customer and
Competitor Report
Topical Cloud Reports: 2013 reports include Cloud Security and Orchestration
TBR Cloud Research Overview
OUR FOCUS TODAY
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Cloud Business Quarterly: Cloud Benchmark Definitions
SOURCE: TBR
Managed Private Cloud Taxonomy
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CLBQ Research Highlights and Outlook
Managed Private Cloud
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Managed Private Cloud Market Summary
The cloud computing delivery model is not an anomaly, rather a continuously evolving mechanism for providing IT services
What is happening in the managed private cloud market?
What segment of managed private cloud services is seeing the highest demand?
What segment of managed private cloud services is seeing the greatest growth?
TBR
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TBR Position
Managed Private Cloud Market Summary
Total IT services revenue growth continues to decline, but cloud-related revenues continue to expand as clients search for IT cost savings
What is Happening?As services portfolios expanded to include managed private cloud services, revenue for managed private cloud services grew 45% in 1Q13. Continued interest in cloud solutions is expected to result in an $18 billion market for cloud managed private services at the end of 2013 and double in size again to $37 billion by 2018.
Largest sub-segment?Industry-specific, vertical-focused solutions coupled with the transition of core products to new business models is enabling vendors to ride the rising wave of cloud “as a Service” offerings. Infrastructure as a Service dominates managed private cloud services revenues as clients convert capital costs to operating expenses.
Greatest Growth?The fastest-growing managed service market, Business Process as a Service is evolving as vendors create differentiated solutions that leverage legacy strengths with unique cloud IP and assets. Increased value is generated by the application of analytics to data created through the outsourcing of business processes.
TBR
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Managed Private and Professional Services Cloud Market
Cloud Market Sizing and Forecast
Managed private and professional services revenues are expected to grow hand-in-hand as clients continue to leverage vendors for assistance
Doubled
Will Double
TBR
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Managed Private Cloud Services Revenue Growth
Managed private cloud revenue growth is outperforming total services growth as clients embrace the cost savings of hosted cloud services
Managed Private Cloud Revenue Growth
From the 2013 TBR Private Cloud Customer Survey, clients interested in cloud are choosing to build their own private clouds 30% of the time, while system integrators host and manage their cloud environments
70% of the time.
Managed Private Cloud Revenue Growth
Outperforming Total Service Revenue Growth
TBR
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TBR Position
Managed Private Cloud Market Summary
IaaS solutions are the prevalent approach in reducing IT infrastructure cost
What is Happening?As services portfolios expanded to include managed private cloud services, revenue for managed private cloud services grew 45% in 1Q13. Continued interest in cloud solutions is expected to result in an $18 billion market for cloud managed private services at the end of 2013 and double in size again to $37 billion by 2018.
Largest sub-segment?Industry-specific, vertical-focused solutions coupled with the transition of core products to new business models is enabling vendors to ride the rising wave of cloud “as a Service” offerings. Infrastructure as a Service dominates managed private cloud services revenues as clients convert capital costs to operating expenses.
Greatest Growth?The fastest-growing managed service market, Business Process as a Service is evolving as vendors create differentiated solutions that leverage legacy strengths with unique cloud IP and assets. Increased value is generated by the application of analytics to data created through the outsourcing of business processes.
TBR
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Segment Growth
Managed Private Cloud Market Segments
While managing hardware infrastructure dominates revenues, business platforms incorporating new solutions led managed services growth
Private Dynamic Applications, or Software as a Service (SaaS), and Infrastructure as a Service (IaaS) dominate the landscape and accounted for 37% and 40%, respectively, of total managed private cloud services revenue in 1Q13.
$464 $513 $551 $596 $695 $723 $775 $845 $909 $936$346 $367 $416
$509$557 $581 $615
$767$851 $901
$161$183
$203$234
$284 $293$316
$374$418 $423
$29 $31
$34 $36
$51 $53 $59
$98 $117
$155
$1,001$1,094
$1,204$1,374
$1,587 $1,650$1,765
$2,084$2,296
$2,415
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13E
Reve
nue
(in $
Mill
ions
)
CLOUD REVENUES BY SEGMENT AMONG VENDORS COVERED IN MANAGED PRIVATE CLOUD MARKET BENCHMARK
Business Platforms:128.8%PaaS: 47.2%
Dynamic Apps: 52.7%
IaaS: 30.7%
TBR
SOURCE: TBR ESTIMATES
Total 1Q13 YTY Growth: 44.6%
1Q13 Growth YTY:
TBR
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Private IaaS Revenue Growth: Percentage and Dollar Growth
IT services vendors are re-engineering portfolios, replacing traditional ITO with Cloud IaaS offerings
Private Cloud IaaS: Growth Leaders
The up-and-coming players are focusing on developing human capital resources and expanding portfolio offerings to effectively compete with the established revenue leaders who began embracing
“as a Service” offerings in the early stages of adoption of cloud computing.
Revenue Leaders
Up-and-coming Players
Within the cloud market, initial engagements are small test cases; successfully implemented will lead to additional opportunities and revenues.
TBR
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Private IaaS Revenue Growth: Percentage and Dollar Growth
The bevy of data centers enable dollar growth leadership in managed private IaaS as clients look to reduce capital infrastructure costs
Private Cloud IaaS: Growth Leaders
The 2013 TBR Private Cloud Customer Survey also indicates that reduction of total cost of ownership is the second most perceived benefit of moving to a managed private cloud.
Leaders, except Rackspace, are cannibalizing legacy-hosted, infrastructure-managed services and replacing them with cloud IaaS services.
Revenue Leaders
Up-and-coming Players
TBR
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Private IaaS Revenue Growth: Percentage and Dollar Growth
Industry-specific solutions help services firms rapidly expand managed services revenues
Private Cloud IaaS: Growth Leaders
With virtualization an old concept, vendors such as VMware are expanding services offerings to include managed IaaS offerings to accommodate the growing trend to host and then manage IT infrastructure.
Up-and-comers are relying on legacy expertise and strengths to create offerings for the financial, retail, healthcare and manufacturing verticals.
Revenue Leaders
Up-and-coming Players
TBR
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TBR Position
Managed Private Cloud Market Summary
The merging of analytics with BPO on the cloud is generating high interest from clients and driving demand growth for vendors
What is Happening?As services portfolios expanded to include managed private cloud services, revenue for managed private cloud services grew 45% in 1Q13. Continued interest in cloud solutions is expected to result in an $18 billion market for cloud managed private services at the end of 2013 and double in size again to $37 billion by 2018.
Largest sub-segment?Industry-specific, vertical-focused solutions coupled with the transition of core products to new business models is enabling vendors to ride the rising wave of cloud “as a Service” offerings. Infrastructure as a Service dominates managed private cloud services revenues as clients convert capital costs to operating expenses.
Greatest Growth?The fastest-growing managed service market, Business Process as a Service is evolving as vendors create differentiated solutions that leverage legacy strengths with unique cloud IP and assets. Increased value is generated by the application of analytics to data created through the outsourcing of business processes.
TBR
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Private Cloud BPaaS: Growth Leaders
Private BPaaS Revenue Growth versus Total Cloud Revenue Growth
Niche BPaaS solutions in industry verticals and analytics capabilities are driving growth leadership in the BPaaS market
The number of vendors competing in the managed private cloud BPaaS market is considerably smaller than for other cloud services, as BPO has become a commodity service with low profitability. Adding capabilities, and
thus value, to the service is re-energizing the market.
Leaders
TBR
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Private BPaaS Revenue Growth: Percentage and Dollar Growth
Dollar revenue growth leadership tracks closely to revenue growth as BPO vendors add value to offerings
Private Cloud BPaaS: Growth Leaders
Many enterprises have outsourced their business processes. The additional value with automation, cloud delivery and coupling of analytics with BPO has yet to be fully demonstrated, resulting in BPaaS recording the
lowest dollar revenue growth of all managed private cloud services.
Leaders
TBR
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Applying analytics to business process outsourced services is key to creating value for clients and generating revenue growth for vendors
Vendor Offering Description
TCS E-commerce Platform
Provides clients managed commerce business service, including merchandising and content management, order life cycle management, campaign management, site operations, analytics and Web operations, through a hosted private cloud delivery model
Infosys BigdataEdge Applies analytics to data acquired from multiple sources including business process outsourcing operations; the solution is designed to improve business efficiency for clients, enabling them to pursue growth initiatives faster.
Xerox ConnectKey Leverages a software platform that integrates with Xerox multifunction printers to provide cloud-based services, back-office process automation and document management
HP Customer Engagement as a Service (CEaaS)
Provides clients with a set of cloud-based contact center tools that help deliver customer service in a single platform through enhanced features such as social media marketing, mobile integration and customer analytics
Private Cloud BPaaS: Portfolio Expansion
While BPO enables companies to reduce operational costs by having others execute daily business processes, the application of analytics enables information to be derived from the data collected through outsourced activities,
leading to better business execution decisions and resulting in improved operations.
TBR
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TBR Position
Managed Private Cloud Market Summary
Managed private cloud revenues continue to expand as clients search for IT cost savings
What is Happening?
Managed private cloud services growth will continue to expand at double-digit rates, resulting in a $37 billion market by 2018.
Largest sub-segment?
Infrastructure as a Service and switching from capex to opex costing models to provide IT services will continue to dominate the market.
Greatest Growth?
Business Process as a Service will continue to expand, providing to clients improved operational efficiency and enlightened decision-making capabilities through the application of analytics.
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Questions?
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TBR Cloud Program — Upcoming WebinarsTBR Cloud Research Overview
Cloud Program Tract Webinar Focus Webinar Date
Cloud Benchmarks
Managed Public and Professional Services Cloud Benchmark: Professional Services Cloud Focus
11/7/2013
Cloud Components Benchmark TBD
Public Cloud Benchmark January, 2014
Cloud Customer Research
Private Cloud 11/14/2013
Cloud Professional Services December, 2013
Hybrid Cloud January, 2013
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For additional information, please contact:
Cloud Business Quarterly Research Highlights and Outlook: Webinar Presenters
Twitter: @TBRincSlideShare: www.slideshare.net/TBR_Market_InsightYouTube: www.youtube.com/user/TBRIChannelLinkedIn: http://www.linkedin.com/company/technology-business-research
Ramunas SvarcasSenior Analyst and Engagement Manager,Professional Services [email protected]@rjsTBR
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