Remote managed IT services across devices, platforms, infrastructure & apps

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1 Signal: I SIGNAL 4th Quarter 2014 \sig-n l\ n (Webster s) -- 1: something that excites to action; 2: something that conveys notice or warning; 3: an object used to transmit or convey information Welcome to I-Signal, a publication through which AMI-Partners provides a periodic, graphic review of the strategic issues, trends and directions impacting information technology (IT), communications and related industries. 10 Trends Impacting the S Market In accessing the global small and medium business market, AMI believes that four key areas highlight the critical changes in the global S market: Remote managed IT services across devices, platforms, infrastructure & apps 1. Pain Points Ss view of the macroeconomic environment and how they manage business issues and priorities 2. Decision Making How Ss view of technology is changing mindset, decision making, buying behavior 3. Marketing Challenges and opportunities for vendors related to marketing to Ss 4. Opportunity Keeping a pulse of where and what the IT opportunity is in the S market, how to segment and target In this issue, we will examine the transformation of Ss underway due to the and the effect on S channel partners. Stay tuned for more signals in the future and send us back a few. Market dynamics creating opportunities and disruptions Renewed focus on business realities, customer experience & OPEX Channel ecosystem & RTM transformation blurring MSPs, Hosters, Telcos, Resellers, SIs Decision making tied to scalability & business goals Robust ICT infrastructure investments back-up, security, network S Hosted servers & virtualization for workload optimization Wide range of cloud solutions and increasingly hybrid Increasing mobile user segmentation Rising appetite for bundled cloud services and pricing Integration of mobile devices, widening of apps, impact of LoB users 2014 WW S Market ICT Opportunity WW S ICT spending estimated at $1 Trillion for 2014 wide regional variances in ICT spent per S # of Ss = 75.3M S ICT Spend/Region: $1.0 T NA 10% LATAM 21% LATAM MAPAC 10% 14% WEU 16% Mature APAC 10% Em'g APAC 23% ICT Spend/Category: $1.0 T NA Telecom Eqpt & Svcs 35% EAPAC 13% EEMEA 20% EEMEA 8% Internet WEU 25% Infrastr ucture 24% IT Svcs & Sftw Infrastructure = PCs, Printers, Svrs, Ntwkg, Secur, Strg Average ICT Spend Per Business $725, x 4.3x $18,925 $197,136 $4,406 Emerging Region s Developed Region s Emerging Region s Developed Region s Best regards, Andy Bose Fifth Avenue, New York, NY Tel: Fax: URL:

2 AMI-Partners: Extensive Global Footprint AMI-Partners R&D Investments: Global Primary Research (Surveys) Coverage Map Touches All Major Countries AMI Tracking Surveys Cover Countries Driving over 90% of WW S IT/Telecom Spending ( = 1-99 Employees, = Employees, LB = 1,000+ Employees) Actionable Global S Market Intelligence, GTM Strategy & Implementation Models Year History - WW Deep End User Tracking Mindset, Buying Behavior, Decision Criteria, RTM, ICT Adoption/Usage/Plans, Migration, Bundles, Brands WW Channel Partner Tracking Solutions, Skill Sets, Customer Base, Business Models, Vendor Programs, Capacity Planning, Benchmarking Tools, KPIs, ROI Engines, Transformation Global IT/Telecom Market Sizing Model 110+ ICT Categories 50+ countries;/sub-regional/city level 19 Verticals, 8 employee segments RTM Overlay Actionable Market Segmentation Model & Predictive Database Analytics GTM - Campaigns/Lead Gen/Partner Recruitment; Competitive Benchmarking; Best of Breed; KPI Strong Global Presence Across Americas, Europe, APAC I-Signal Feedback I-Signal is an interactive publication. We invite you to help us focus our future coverage of global technology markets. Tell us what issues are important to you. We welcome your comments by at: Ask-AMI@ami-partners.com. I-Signal Contents Welcome to I-Signal...1 Transformation of the WW S Landscape...3 RTM and Channels Transitions...5 I-Signal Staff Publisher Andy Bose Production Eileen Zimbler Contributing Editors Ryan Brock Deepinder Sahni Marketing Americas/ EMEA Julia Blelock Marketing APAC Jyoti Singh Neha Goenka Jackilyn Almazan Staff Editors Americas/EMEA Jason Atkins Rohan Bose Steffen Grabowski Andrew Kirk Clayton Miller Yuki Uehara Staff Editors APAC Devapriyo Chakravarty Somnath Das Abilash Pillai Subrata Sarkar Partha Sengupta Copyright 2014 by Access Markets International (AMI) Partners, Inc. All rights reserved. No part of this newsletter may be reproduced without permission from the Publisher. I-Signal is published quarterly by Access Markets International (AMI) Partners, Inc., 546 Fifth Avenue, New York, NY 10036, Tel: , Fax: , URL: Fifth Avenue, New York, NY Tel: Fax: URL:

3 Transformation of the WW S Landscape WW S Migration to Accelerating Highlights Worldwide S ICT spending has risen steadily, albeit with increasing shift from traditional onpremise IT products/services to hosted and remotely managed solutions Migration to Total Proportion of WW IT/Telecom Spend Migrating Into The $1,037 b By year end 2014, WW Ss will have spent over $1 Trillion on IT and communications solutions. Future growth will be driven by the rapid adoption of hosted/ cloud-based solutions. Overall, WW S spending on cloud services is projected to rise from $140 Billion (2014) to $285 Billion (2019). As a percent of total spending on ICT by WW Ss, this represents a migration of 13.5% (2014) to 20.3% (2019) towards hosted solutions Computing $177b 17% Software $106 b 10% Networking $23 b 2% Security $17 b 2% Storage $30 b 3% IT $206 b 20% Internet $119 b Telecom Equipment $45 b 4% Telecom $314 b Impact of Mature Vs Emerging Market Ss on Growth of Spending $285 b 13.5% $140 b Total Opportunity Breakout Total Worldwide Value & Growth (2014, 2019) $60.0 Total Market Value in 2014 ($B) Mature markets will, however, still account for the lion s share of cloud-related spending almost $7 out of every $10 spent on hosted solutions will be driven by countries in North America, Western Europe or Mature Asia Pacific. 20.3% Computing = PC Hardware, Tablets, Printers, Peripherals, Servers Networking = Routers, Hubs, Switches, WLANs, Other Networking HW Emerging markets will lead in cloud spending growth over the next five years. Emerging Asia Pacific is expected to grow at a CAGR of over 25% and Latin America at a CAGR of about 21%. % of total North America $92.9 Note: Bubble size represents market value ($B) in 2019 $50.0 Western Europe $67.3 $40.0 $30.0 $20.0 Mature APAC $38.2 $10.0 $ % Emerging APAC $46.8 Latin America $21.7 EEMEA $ % 15.0% 20.0% 25.0% 30.0% 5 YR CAGR Migration to cloud: Ss are integrating cloud solutions with on-premise in a controlled approach towards a blended hybrid environment Almost half of all WW Ss report they are anticipating an increase in their IT budgets, with almost one-quarter likely to migrate more IT dollars to cloud-based solutions. Both and IaaS solutions are highlighted as key investment areas. One in four Ss plan to control the assimilation of cloud services into their IT infrastructure using both hosted and on-premise versions of solutions in an integrated manner. Budgets on the Rise Likelihood of migrating more IT spending on hosted/cloud solutions than on-premise IT products/services Allocation of Increased IT Budget by Category (% of Ss Likely to Migrate More of IT Budget to ) 84% 31% 81% 72% 71% 71% 60% 22% Software & applications () Remotely managed IT services (RMITS) Fifth Avenue, New York, NY Tel: Fax: URL: Infrastructure services (IaaS)

4 Transformation of the WW S Landscape WW S Business Issues and Goals WW S Buying Behavior s and s have similar business issues tied to cash flow, OPEX, competition, revenue growth and are taking actions; Across regions business goals portend need for IT investments IT solutions must be scalable & aligned with business objectives; Providers must connect value prop with impact on business goals WW Ss: Buying Behavior- Decision Triggers Business Pain Points Decreased revenues Actions Planned Improve customer experience/ retention 48% Slower receivables Restricted cash flow 35% Pricing pressures Cancelled sales orders 27% 18% 38% 43% 41% 38% Reduce OPEX Launch new markets /products Keep Customers Satisfied Improve Pricing/Competitive Productivity Pressures Manage Cash Flow Savvier Customers HR/Talent Supply Chain Influences Sales Growth Manage Time IT solutions align w/overall bus strategy 73% 81% Scalability of solution is key 66% 77% Calculate TCOD before investing 61% 77% Improve productivity/ leverage IT 28% 22% Hire empls w/new skill sets 26% Price is most important Speed of Business/ Response Times Collapse Response Time Easy/Simple to Manage Using a formal purchase process Business Growth, Rising Mobility, Remote Workforce, Lack of Internal IT Among s Growth Plans Next 12 Months Plan to add locations Plan to hire employees 14% 53% Good news is that there are common themes across geos; Magnitude varies among s and s and regionally Small Business Improve network connectivity& bandwidth 5.3 % 6.2 % Presence of Internal IT Department WW S Interest in Deploying Ss Show 3-4X Interest in Bundled & Integrated Equipping mobile empls w/smartphones 56% 46% 37% 46% Migrate more apps to cloud & tablets Purchasing tablets over notebooks 53% 50% 36% WW S Bundling Opportunity Strong Opportunity for Service Providers & Hosters to Broaden Revenue Stream, Increase ARPU and Reduce Churn, With Successful Bundles Transforming revenue stream poses key questions: Productivity 40% ERP PCs PBX Core IaaS Broadband Data Wireless Video Conferencing 9% Security Single Service Project Mgt. Storage IaaS & Managed UC IM IT Help Desk Web Hosting Key drivers of selecting providers Preferred solutions portfolio: Product/services bundling preferences Core Ss: profile and characteristics CRM Cost of sales Business Intelligence HRM Multiple Network VoIP Voice Accounting Servers Web Conferencing 65% 40% Utilize integrated UC 87% 63% 47% Use CRM & BI/Analytics & LoB Apps Implement Virtualization solutions 54% 78% 60% Deploy IT systems mgt. tools Mobile Workforce Medium Business 70% Deploy Back-up/disaster recovery solutions Enhance Data & Mobile device security Expected Revenue Growth WW S Top 10 Strategic IT Mindset Issues Medium Business 77% Firmographic Drivers of ICT Small Business 36% 50% 56% Implications: promotions, onboarding, activation, migration & support Fifth Avenue, New York, NY Tel: Fax: URL:

5 Laggards Emerging Migrating Transformed In $ Billions RTM & Channels Transitions WW S Spending by Channel More inter-dependencies among SPs/hosters, IT vendors and channel partners Ecosystem Evolution U.S. Partner Attitudes Towards Distributors Distributors facing increased competition from hosters and other cloud providers/service providers $300.0 $285 b $250.0 $200.0 $150.0 $140 b Telcos/Cable Hosters MSPs System Integrators 40% 38% 34% 31% 40% Agree Neutral Disagree $100.0 $50.0 $ CPs (Resellers, ISVs, etc) Retail/DMR Vendor Direct 15% Distributors have done a good job at evolving to help us sell cloud 32% We can't be successful in cloud without support from distributors 26% For cloud, we'll be working less with distributors & more w/other partners like Hosters & Telcos Steps Taken by Most Successful Partners U.S. S Channel Partner Transformation Top cloud partners have invested to build business units dedicated to cloud S Channel Partners: Transformation 1. Have launched dedicated cloud business unit 2. Have the expertise needed to effectively sell cloud solutions Created a separate services business unit Specify sales goals for solutions/ services Integrated cloud into primary sales & marketing motions Employees Have achieved certifications Have a dedicated cloud marketing team Emerging 26% Laggards Migrating 24% 37% Transformed 13% 1. Have some expertise needed to sell cloud solutions, but require additional vendor support 2. Plan to ramp investments in cloud business 1. Lack the expertise needed to effectively sell cloud solutions 2. Need significant support for cloud business expansion 1. Focus mainly tied to on-premise solutions 2. Low to no competencies U.S. S Channel Partner Profitability of Business Models Managed services & consulting services drive partner profitability AMI s RTM & Channels Practice Focus Areas Partner Opportunity, Strategy & Enablement Identifying the Addressable Partner Opportunity Profiling and Targeting High- Value Partners Implementing Successful Channel Programs 55% Providing Remote Managed 50% Providing Consulting 49% Customizing other vendors cloud solutions 43% Developing & selling own cloud solutions 38% Reselling other Vendors cloud solutions ICT Forecasting Model Ss ICT Spending Routes-to-Market Sell Through Model ICT Spending Per RTM Partner Competencies Report No./Type of Partners Driving Opportunity by Solution Partner Transformation Tracker No./Type of Partners Generating Meaningful Revenue Partner Segmentation & Targeting High-Value Partners Profile Regional Opportunity & Capacity Planning Tool No. of Partners Needed to Drive Market by Geo/Region/ Metro, by Competitor Benchmarking & Metrics Report & Tool Successful Partner Metrics & Best in Class Comparisons Programmatic Support & Tools Programs with Greatest Impact on Partner Transformation Partner Enablement Workshops How Vendors can Provide Partners with the Tools for Success (% of Partners who feel each model is profitable) Fifth Avenue, New York, NY Tel: Fax: URL:

6 I SIGNAL A publication of AMI-Partners AMI-Partners Portfolio & Expertise AMI-Partners provides actionable market intelligence and GTM consulting to IT, communications and business services companies, with a strong focus on global small, medium and enterprise business market sectors. We develop analytics-driven GTM strategies including channel partner/rtm programs to help our clients succeed throughout the world. AMI Product and Service Offerings Content & Primary Research Market Intelligence Strategy Marketing S, LB & HBB End User IT Tracking Studies in leading countries NA, LatAm, EMEA, APAC Syndicated GTM Sales & Channel Programs AMI s syndicated services cover a full spectrum of global technology usage across a broad array of solution types and business size segments. Calls to Action Global Model (GM) HBB, S & LB Market Sizing & Forecast Channel Partner Databases Channel Partner Tracking Studies and Databases in the NA, LATAM, EU,& APAC Consulting Analytics & Models Database of Vendor/Supply-side & Industry Analyses and Competitive Assessments Global S IT Spending Forecast Model and Routes to Market Model Conjoint Analysis Systematic Assessment of Optimal Offers & Bundles Along with Revenue Uplift Database Analytics/Predictiv e Modeling Competitive Analyses & Benchmarking Managed Overview IT Infrastructure (Security/Storage) Market Assessment RTM & Channels Practice Segmentation Models (Audience, Personas, Product, & Markets) Marcom, Brand Equity & Customer Satisfaction GTM Assessments & Product Positioning AMI Sector-Focused AMI Core Products & ICT Sector-Focused Svs: Mobility/Tablets, Svs, Security, Virtualization, UC/Collaboration Virtualization Tracking Strategic & Tactical Assessment Campaigns, Lead Gen, Prospecting Tools CRM & BI/Data Analytics Outlook Mobility Tracking Managed vs. Unmanaged IT Ss Customer Journey & Experience, Sales & Marketing Strategy, Routes to Market, Channel Capacity Planning/Partner Programs (Examines how Ss managed their IT infrastructure) IT Adoption & Mindset-Based Segmentation Global Voice of the Customer Research (fieldwork design, execution, management) (Targeting high-value Ss/lead gen) Global Model Overview AMI s WW S Practice AMI s Global Model (GM) is a portfolio of strategic planning tools that provide market sizing & 5 year forecast models of 110+ ICT categories across 50 countries & regions. Excel-based modules supply granular, actionable market insights. 1. Assess & quantify demand for and migration to cloud services 2. Identify specific features, bundles & pricing to maximize uptake and revenues 3. Partner ecosystem, S segmentation, lead generation & customer acquisition Complete Commercial and Public Sector Coverage Coverage of Key Solutions across leading countries Compare and contrast market size, growth and attractiveness across major segments for 110+ products/services; prioritize targeted countries and sub-segments; evaluate resulting business impact via multiple if-then scenarios Audio Home Based Business (HBB) Small Business (1-99 Employees) Medium Business ( Employees) Large Business (1,000+ Employees) Public Sector (Govt. + Education) Further Drill Down Lenses Comprehensive On-Premise & Coverage Pinpoint opportunities and align strategy accordingly; ensure geographic & distribution capacity alignment. Visualize changes in the marketplace across products and services; see how target markets shift spending dollars across products/service categories. 12 Employee 19 Vertical Bands Industries Devices Applications Networking IaaS 8 Routes-To- Top Metros Market (RTM) and Cities UCC Telecom Security PaaS Mobility Storage conferencing Hosted VoIP Video conferencing Web conferencing RMITS AMI WW S Tracking UC Networking PBX PCs Security Servers Storage RMITS (Remotely Mg d. IT Svcs IaaS Productivity Suites Accounting Payroll HRM CRM ERP BI/Analytics Security Servers & Co-Location Storage Virtualization Web Site Devices & Platforms Notebooks Ultrabooks Tablets Smartphones Servers Networking PaaS Hosting & Maintenance Bundles, Prices, Seats, Private, Public Channels Competitors Geographies For more information about AMI-Partners and our global services, call , isignal@ami-partners.com, or visit New York, London, Singapore, Tokyo, Bangalore, Kolkata, Mumbai Fifth Avenue, New York, NY Tel: Fax: URL: