IBM and everyone else: How and when will BI services vendors dethrone IBM

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

mailto:[email protected]



TBR


• 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


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


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


$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 Market Sizing: Benchmark Versus Global

TBR


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 Customer Buying Criteria

TBR


$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


TBR


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


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


SOFTWARE-CENTRIC VENDORS' 1Q14 ESTIMATED BI PROFESSIONAL SERVICES REVENUE,

PROFITABILITY AND YTY REVENUE GROWTH

TBR





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


TBR


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


HARDWARE-CENTRIC VENDORS' 1Q14 ESTIMATED BI PROFESSIONAL SERVICES REVENUE,


TBR





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


TBR


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


INDIA-CENTRIC VENDORS' 1Q14 ESTIMATED BI PROFESSIONAL SERVICES REVENUE,


TBR





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


TBR


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


C&SI VENDORS' 1Q14 ESTIMATED BI PROFESSIONAL SERVICES REVENUE, PROFITABILITY

AND YTY REVENUE GROWTH

TBR





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


TBR


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


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


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


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


Questions?

TBR


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




https://twitter.com/TBRinc

http://www.slideshare.net/TBR_Market_Insight

http://www.youtube.com/user/TBRIChannel

http://www.linkedin.com/company/technology-business-research






TBR


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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