View
205
Download
1
Category
Preview:
Citation preview
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
1
Hosted by:
John King
Bank of America Merrill Lynch
18 July 2016
The ISG Index™
Second Quarter and First Half 2016
EMEA Combined Outsourcing and As-a-Service Market Insights
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
2
Covering the state of the combined sourcing and as-a-service industry for EMEA commercial contracts
Welcome to the 55th Quarterly ISG Index™ Review
John KeppelPartner & President
Bernd SchaeferPartner
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
3
€ 0.9€ 0.8 € 0.7 € 0.7 € 0.7 € 0.7 € 0.7 € 0.6 € 0.6 € 0.6
€ 1.4 € 1.3 € 1.2 € 1.1
€ 0.8 € 0.8 € 0.7 € 0.6 € 0.7 € 0.8
€ 2.3 € 2.1 € 1.9 € 1.8
€ 1.6 € 1.5 € 1.4 € 1.3 € 1.3 € 1.3
2Q161Q164Q153Q152Q151Q154Q143Q142Q141Q14
Global SaaS Global IaaS
New!
Growing As-a-Service Market Featured in the ISG Index
As-a-Service as a % of Combined ACVNEW! As-a-Service ACV (€B) by Type
36%
30%
24%
19%20%
2Q161Q4Q3Q2Q151Q4Q3Q2Q141Q
2Q16 As-a-Service % of the Combined
Market up 16 pts over 1Q14 %
Combined Market ACV = Outsourcing ACV
+ As-a-Service ACV (IaaS and SaaS)
2Q16 As-a-Service ACV had a
growth rate of 45% from it’s 2015 like-quarter compare
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
4
At a Glance
2Q ACV OF €6.4B DRIVEN BY RECORD AS-A-SERVICE GROWTH;HALF-YEAR ACV OF €13.4B UP 10% Y/Y
AMERICAS 2Q ACV OF €3.4B UP 7%, ECLIPSING EMEA FOR FIRST TIME SINCE 2013;HALF-YEAR AMERICAS ACV OF €7B UP NEARLY 20%
EMEA 2Q ACV FALLS 18% Y/Y; WEAKNESS DUE TO FEWER LARGE AND RESTRUCTURING
AWARDS; TENTATIVE AS-A-SERVICE GROWTH CAN'T BOOST COMBINED RESULTS
ASIA PACIFIC 2Q ACV UP 13% Y/Y, DRIVEN BY 50%+ GAINS IN IAAS; TRADITIONAL MARKET FLAT, REMAINING IN A TIGHT RANGE
Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
Scorecard 2Q16 2Q Y/Y 2Q Q/Q 1H16 1H Y/Y
ACV (€B)* Change Change ACV (B)* Change
Global Combined Market € 6.4 -2% -9% € 13.4 10%
By Type Outsourcing € 4.1 -17% -16% € 9.0 -1%
As-a-Service € 2.3 47% 9% € 4.4 44%
By Service ITO € 2.9 -24% -14% € 6.3 -4%
BPO € 1.2 4% -21% € 2.7 6%
IaaS € 1.4 70% 9% € 2.8 69%
SaaS € 0.9 16% 8% € 1.6 14%
By Region Americas € 3.4 7% -4% € 7.0 19%
EMEA € 2.2 -18% -22% € 4.9 0%
Asia Pacific € 0.8 13% 18% € 1.5 7%
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
5
2Q16 Combined Market ACV down 2% Y/Y on New Scope weakness; YTD, Combined Market ACV up 10% with As-a-Service increasing 44% and traditional sourcing flat.
Global Combined Quarterly ACV (€B)
Global Combined Half-Year ACV (€B)
Global Combined Market Contracting Trends
Global Combined Half-Year ACV by Type (€B)
Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
€ 6.25
€ 2.65€ 1.62
€ 2.76
$0
$2
$4
$6
$8
$10
ITO BPO SaaS IaaS
Range of Prior 4 Halves Avg of Prior 4 Halves
2H15 1H16
€ 9.0 € 9.9 € 9.0 € 10.1 € 10.8
€ 4.4 € 3.7 € 3.1
€ 2.7 € 2.6
€ 13.4 € 13.7 € 12.1 € 12.8 € 13.4
1H162H151H152H141H14
Outsourcing As-a- Service
€ 4.1 € 4.9
€ 5.5 € 4.4 € 4.9
€ 4.1
€ 5.5 € 4.6
€ 5.5 € 5.3 € 2.3
€ 2.1 € 1.9
€ 1.8 € 1.6 € 1.5
€ 1.4 € 1.3
€ 1.3 € 1.3
€ 6.4 € 7.0 € 7.5
€ 6.2 € 6.5 € 5.6
€ 6.8 € 5.9
€ 6.8 € 6.6
2Q161Q164Q153Q152Q151Q154Q143Q142Q141Q14
Outsourcing ACV As-a-Service ACV
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
6
2Q16 Combined Market down 18% Y/Y; As-a-Service growth unable to compensate for 30% shortfall in traditional sourcing; YTD, EMEA flat, with lack of larger market awards and sluggish Restructuring activity.
EMEA Combined Quarterly ACV (€B)
EMEA Combined Half-Year ACV (€B)
EMEA Combined Market Contracting Trends
EMEA Combined Half-Year ACV by Type (€B)
Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
€ 2.63
€ 1.21
€ 0.42 € 0.64 $-
$1
$2
$3
$4
$5
ITO BPO SaaS IaaS
Range of Prior 4 Halves Avg of Prior 4 Halves
2H15 1H16
€ 1.6
€ 2.2
€ 3.0
€ 2.1 € 2.3 € 1.9
€ 2.7 € 2.2
€ 2.7 € 2.7 € 0.6
€ 0.5
€ 0.4
€ 0.4 € 0.4 € 0.4
€ 0.3
€ 0.3 € 0.3 € 0.3 € 2.2
€ 2.7
€ 3.5
€ 2.5 € 2.7 € 2.3
€ 3.0
€ 2.5 € 3.0 € 3.0
2Q161Q164Q153Q152Q151Q154Q143Q142Q141Q14
Outsourcing ACV As-a-Service ACV
€ 3.8 € 5.1 € 4.2 € 4.9 € 5.4
€ 1.1
€ 0.9 € 0.8
€ 0.6 € 0.6 € 4.9
€ 6.0 € 5.0
€ 5.5 € 6.0
1H162H151H152H141H14
Outsourcing As-a-Service
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
7
Outsourcing MarketFleetCor
Frontica Business SolutionsGFI Informatique
ISON GroupLuxoft
MindtreeNNIT
TranscomVirtusaPolaris
WNS
Co. Revenues < $2 B
Outsourcing MarketHCL
CapitaCGI
Genpact Infosys
Jones Lang LaSalleSercoWipro
As-a-Service MarketAdobe Systems
Equinix
Co. Revenues $2 -10 B
Outsourcing MarketAccenture
AtosBT
CapgeminiCognizant
HPEIBMTCS
T-Systems
As-a-Service MarketAmazon Web Services
ISG Combined Market Standouts in EMEAVery little leader board turnover across the region, except for a few As-a-Service firms and a couple of traditional sourcing providers in the high-growth category.
Placements based on the annual value of commercial contract awards in the past 12 months sourced from ISG Contracts Knowledgebase®.Service providers in alphabetical order; no rankings implied. Revenues sourced from Hoovers and individual company financial fillings
The Building 10
Sourcing Standouts
The Breakthrough 10
Sourcing Standouts
The Big 10
Sourcing Standouts
Co. Revenues >$10 B
SOURCINGSTANDOUTS GROUPED BY COMPANY SIZE
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
8
ACV in the Nordics and France is up sequentially and Y/Y. UK rises 39% compared to previous quarter, but falls 11% Y/Y while DACH ACV declines despite increased contracting activity.
EMEA - Half-Year ACV (€B) by Sub-region - Traditional Outsourcing Only
EMEA - Half-Year ACV (€B) by Industry - Traditional Outsourcing Only
EMEA Traditional Outsourcing Award Trends
Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
€ 1.0 € 0.8
€ 0.5 € 0.4 € 0.4 € 0.2 € 0.2 € 0.1
€ 0.3 $0.0
$0.5
$1.0
$1.5
$2.0
$2.5
FinancialServices
Manufacturing Energy Travel,Transport &
Leisure
Telecom &Media
BusinessServices
Healthcare &Pharma
ConsumerPackaged
Goods
Retail
Range of Prior 4 Halves Avg of Prior 4 Halves 2H15 1H16
€ 1.57
€ 0.59 € 0.70
€ 0.20 € 0.24 € 0.18 € 0.33
€ 0.04 $0.0
$0.5
$1.0
$1.5
$2.0
$2.5
U.K. & Ireland DACH Nordics Benelux France Africa &Middle East
SouthernEurope
E. Europe &Russia
Range of Prior 4 Halves Avg of Prior 4 Halves 2H15 1H16
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
9
2Q16 Combined Market ACV up 7% Y/Y on surging As-a-Service activity; YTD, Americas shows promise with 6% sourcing growth and 48% As-a-Service ACV growth.
Americas Combined Quarterly ACV (€B)
Americas Combined Half-Year ACV (€B)
Americas Combined Market Contracting Trends
Americas Combined Half-Year ACV by Type (€B)
Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
€ 3.13
€ 1.06 € 1.10
€ 1.67
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
ITO BPO SaaS IaaS
Range of Prior 5 Halves Avg of Prior 5 Halves
2H15 1H16
€ 2.0 € 2.2 € 2.1
€ 1.8 € 2.2
€ 1.8 € 2.2 € 2.1 € 2.0
€ 1.7
€ 1.4 € 1.4 € 1.2
€ 1.1 € 1.0
€ 0.9 € 0.8 € 0.8 € 0.8
€ 0.8
€ 3.4 € 3.6 € 3.3
€ 2.9 € 3.2
€ 2.7 € 3.0 € 2.9 € 2.8
€ 2.5
2Q161Q164Q153Q152Q151Q154Q143Q142Q141Q14
Outsourcing ACV As-a-Service ACV
€ 4.2 € 3.9 € 4.0 € 4.3 € 3.7
€ 2.8 € 2.3 € 1.9 € 1.6
€ 1.6
€ 7.0 € 6.2 € 5.8 € 5.9
€ 5.3
1H162H151H152H141H14
Outsourcing As-a-Service
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
10
Outsourcing Market LuxoftMinacs
MindtreeMphasis
SITELSutherland Global
SynacorSyntel
VirtusaPolaris
As-a-Service MarketWorkday
Co. Revenues < $2 B
Outsourcing MarketCGIDell
Genpact HCL
InfosysWipro
As-a-Service MarketAdobe Systems
EquinixRackspace
Salesforce.com
Co. Revenues $2 -10 B
Outsourcing MarketAccentureCapgeminiCognizant
HPEIBMTCS
As-a-Service MarketAmazon Web Services
GoogleOracle
SAP
ISG Combined Market Standouts in the AmericasWell-established IaaS and SaaS firms enter the Big 10 leader board; moderate turnover in the medium- and small-size firms.
Placements based on the annual value of commercial contract awards in the past 12 months sourced from ISG Contracts Knowledgebase®.Service providers in alphabetical order; no rankings implied. Revenues sourced from Hoovers and individual company financial fillings
The Building 10
Sourcing Standouts
The Breakthrough 10
Sourcing Standouts
The Big 10
Sourcing Standouts
Co. Revenues > $10 B
SOURCINGSTANDOUTS GROUPED BY COMPANY SIZE
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
11
While ACV in traditional sourcing market is flat, number of contracts sets record high each year; YTD ACV activity led by Financial Services and Healthcare.
Americas - Half-Year Contract Counts - Traditional Outsourcing Only
Americas - Half-Year ACV (€B) by Industry - Traditional Outsourcing Only
Americas Traditional Outsourcing Award Trends
Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
391 383 318 221 291 266 272 231 192 164
305 297
278 227 259 200 219 196
150
391
688 615
499 518 525 472 450
388 314
201615141312111009082007
1H Counts 2H Counts
€ 1.02
€ 0.67 € 0.64
€ 0.44 € 0.46
€ 0.22 € 0.21€ 0.30 € 0.25
$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
$1.2
FinancialServices
Manufacturing Healthcare &Pharma
BusinessServices
Telecom &Media
Energy Travel,Transport &
Leisure
Retail ConsumerPackaged
Goods
Range of Prior 5 Halves Avg of Prior 5 Halves 2H15 1H16
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
12
2Q16 Combined Market ACV up 13% Y/Y while traditional sourcing stays flat for the sixth quarter; YTD, IaaS ACV responsible for positive market trajectory.
Asia Pacific Combined Quarterly ACV (€B)
AP Combined Half-Year ACV (€B)
Asia Pacific Combined Market Contracting Trends
Asia Pacific Combined Half-Year ACV by Type (€B)
Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
€ 0.5€ 0.4€ 0.4€ 0.4€ 0.5€ 0.5
€ 0.6
€ 0.4
€ 0.8€ 0.8 € 0.3€ 0.3€ 0.3€ 0.3€ 0.2€ 0.2
€ 0.2
€ 0.2
€ 0.2€ 0.2 € 0.8€ 0.7€ 0.7€ 0.7€ 0.7€ 0.7
€ 0.8
€ 0.6
€ 1.0€ 1.1
2Q161Q164Q153Q152Q151Q154Q143Q142Q141Q14
Outsourcing ACV As-a-Service ACV
€ 0.9€ 0.9€ 1.0€ 1.0
€ 1.6
€ 0.6€ 0.5€ 0.4€ 0.4
€ 0.4 € 1.5€ 1.4€ 1.4€ 1.4
€ 2.1
1H162H151H152H141H14
Outsourcing As-a-Service
$0.49$0.37
$0.15
$0.45
$0.0
$0.5
$1.0
$1.5
$2.0
ITO BPO SaaS IaaS
Range of Prior 4 Halves Avg of Prior 4 Halves
2H15 1H16
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
13
Outsourcing MarketAegisAjilonASG
ChinaSoftHollysys Automation
Interactive PtyMinacsNeusoft
Sutherland Global
As-a-Service MarketXero
Co. Revenues < $2 B
Outsourcing MarketAvayaHCL
Indra SistemasInfosysUnisysWipro
As-a-Service MarketAdobe Systems
EquinixRackspace
Salesforce.com
Co. Revenues $2 -10 B
Outsourcing MarketCapgeminiCognizant
FujitsuHPEIBM
SodexhoTCS
As-a-Service MarketAmazon Web Services
China TelecomKT Corp.
ISG Combined Market Standouts in Asia PacificTurnover of 30%-40% in the leader board across all Service Provider segments with prominent As-a-Service firms making the Top 10 in large-firm category.
Placements based on the annual value of commercial contract awards in the past 12 months sourced from ISG Contracts Knowledgebase®.Service providers in alphabetical order; no rankings implied. Revenues sourced from Hoovers and individual company financial fillings
The Building 10
Sourcing Standouts
The Breakthrough 10
Sourcing Standouts
The Big 10
Sourcing Standouts
Co. Revenues > $10 B
SOURCINGSTANDOUTS GROUPED BY COMPANY SIZE
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
14
YTD, contracting activity remains muted; ACV half-year gains come from Manufacturing and Telecom while most other Industry groups struggle.
Asia Pacific - Half-Year Contract Counts - Traditional Outsourcing Only
Asia Pacific - Half-Year ACV (€B) by Industry - Traditional Outsourcing Only
Asia Pacific Traditional Outsourcing Award Trends
Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
67 81 91 69 88 84 71 68 50 45
78 81 74
81 69 80 82 70
48 67
159 172
143 169
153 151 150
120 93
201615141312111009082007
1H Counts 2H Counts
€ 0.13
€ 0.23 € 0.24
€ 0.12€ 0.05
€ 0.00€ 0.06
€ 0.02 € 0.01$0.0
$0.1
$0.2
$0.3
$0.4
$0.5
$0.6
FinancialServices
Manufacturing Telecom &Media
Travel,Transport &
Leisure
Energy ConsumerPackaged
Goods
BusinessServices
Healthcare &Pharma
Retail
Range of Prior 4 Halves Avg of Prior 4 Halves 2H15 1H16
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
15
Discussion Topic Second Quarter 2016
DEFINING THE AS-A-SERVICE MARKET VALUE
John KeppelPartner & President
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
16
Market Size in Perspective
As-a-Service vs. Traditional Outsourcing Market Size billions
Growing As-a-Service Market Now Featured in ISG Index
Defining the As-a-Service Market
550+
$100M+CoRevs
17% with
< $100MCoRevs
83% with
Across Functional Domains
leading
SaaS Providers
The ISG SaaSMarket Basket
The ISG IaaS
Market Basket
Nearly 30leading
IaaS Providers
carrier
cloud firms
co-location firms
public cloud infra providers
IaaS€ 19
SaaS€ 41
Outsourcing€ 91
Combined
Market
40%
€ 151
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
17
Comparing Global Outsourcing and As-a-Service ACV (€B)
Comparing the As-a-Service and Outsourcing MarketsThe Global SaaS and IaaS markets are trending upward with Infrastructure building at a more pronounced rate; Americas leads in As-a-Service growth.
Regional As-a-Service ACV (€B)
36%
30%
24%
19%20%
2Q161Q4Q3Q2Q151Q4Q3Q2Q141Q
As-a-Service as a % of Combined ACV
As-a-Service ACV (€B) by Type
Americas€ 1.4
EMEA€ 0.6
AP€ 0.3
2Q162Q152Q14
€ -
€ 0.3
€ 0.5
€ 0.8
€ 1.0
€ 1.3
€ 1.5
€ 4.1 € 4.8
€ 5.5 € 4.4
€ 4.9 € 4.1
€ 5.5 € 4.6
€ 5.5 € 5.3
€ 2.3 € 2.1 € 1.9 € 1.8 € 1.6 € 1.5 € 1.4 € 1.3 € 1.3 € 1.3
2Q161Q164Q153Q152Q151Q154Q143Q142Q141Q14
Outsourcing ACV Global As-a-Service
€ 0.9€ 0.8 € 0.7 € 0.7 € 0.7 € 0.7 € 0.7 € 0.6 € 0.6 € 0.6
€ 1.4 € 1.3 € 1.2 € 1.1
€ 0.8 € 0.8 € 0.7 € 0.6 € 0.7 € 0.8
€ 2.3 € 2.1 € 1.9 € 1.8
€ 1.6 € 1.5 € 1.4 € 1.3 € 1.3 € 1.3
2Q161Q164Q153Q152Q151Q154Q143Q142Q141Q14
Global SaaS Global IaaS
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
18
Combined Market dips slightly Y/Y in 2Q16; outsourcing market endures a rougher than expected stretch in 2Q and falls by double digits
YTD, Combined Market rises 10%, driven by As-a-Service segment, specifically high-growth area of IaaS; outsourcing segment comes in basically flat
Americas shows promising YTD growth with nearly 50% growth in As-a-Service and a 6% growth in outsourcing segment
EMEA edges down YTD with weakness in outsourcing, most notably a shortfall in large-contract activity and Restructuring awards
Asia Pacific is on an upswing at the half year point, due to growth in the as-a-service segment that counteracted stagnant traditional sourcing activity
The As-a-Service space is growing at a fast pace and likely will continue that trajectory
Outsourcing markets pull back in 2Q and come in at lower levels than initially projected. Even though sourcing demand is increasing, 2nd half results will face a difficult compare; outsourcing ACV may come in slightly lower than in 2015
Factoring in As-a-Service contract flow into the Combined Market, ACV likely will finish 2016 with high single-digit growth
2Q/1H 2016 ISG Index™ - Global Summary and Outlook
summarymarket
outlookmarket
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
19
Please contact us with your questions and comments.
Learn More
Paul ReynoldsPartner & Chief Research Officer,
ISG Momentum+1 508 625 2194
paul.reynolds@isg-one.com
www.isg-one.comJohn Keppel
Partner and President+44 (0)7879 432 212
john.keppel@isg-one.com
Denise Colgan EMEA and AP Media Contact
+44 1737 371523denise.colgan@isg-one.com
Bill McNeeCEO Saugatuck Technologies,
an ISG Business+1 203 820 8987
bill.mcnee@saugatucktechnology.com
Laura MountainCohn & Wolfe for ISG+44 (0) 20 7331 5372
laura.mountain@cohnwolfe.com
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
20
Second Quarter and First Half 2016
APPENDIX: SCORE CARD FOR TCV
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
21
The ISG Outsourcing Index has moved to ACV as the primary measure of the Broader Market. We will continue to provide a high-level TCV view of the market via a Scorecard analysis.
2Q and 1H 2016 TCV Scorecard – Outsourcing Market
*Contracts with TCV ≥ €20M from the ISG Contracts Knowledgebase®
Scorecard 2Q16 2Q Y/Y 2Q Q/Q 1H16 Y/Y
TCV (€B)* Change Change TCV (€B)* Change
Global Market € 15.7 -2% 2% € 31.1 -8%
New Scope € 9.3 -17% -13% € 20.1 -17%
Restructurings € 6.4 32% 38% € 11.0 15%
Mega-deals € 0.0 0% -100% € 2.9 -26%
ITO € 11.7 1% 24% € 21.2 -14%
BPO € 4.0 -10% -33% € 10.0 10%
Americas € 7.1 15% 30% € 12.6 5%
EMEA € 7.0 -13% -9% € 14.7 -17%
Asia Pacific € 1.6 -12% -26% € 3.8 -3%
© 2016Information Services
Group, Inc.All Rights Reserved
isg-one.com
22
www.isg-one.com
Information Services Group is a leading technology insights, market intelligence and advisory services company, serving more than 500 clients around the world to help them achieve operational excellence. ISG supports private and public sector organizations to transform and optimize their operational environments through research, benchmarking, consulting and managed services, with a focus on information technology, business process transformation, program management services and enterprise resource planning. Clients look to ISG for unique insights and innovative solutions for leveraging technology, the deepest data source in the industry, and more than five decades of experience of global leadership in information and advisory services. Based in Stamford, Conn., the company has more than 1,000 employees and operates in 21 countries.
imagine your future™
RESEARCH | CONSULTING | MANAGED SERVICES
let’s connect...
Recommended