Managed Services Market in South Africa Mapping Opportunities in the Data Centre and Cloud Markets
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1 Managed Services Market in South Africa Mapping Opportunities in the Data Centre and Cloud Markets January 2012
2 Contents Section Slide Numbers Executive Summary 4 External Challenges: Drivers and Restraints Total Managed Services Market 15 Forecasts and Trends Total Managed Services Market 26 Market Share and Competitive Analysis Total Managed Services Market 31 Competitor Profiles of Selected Industry Participants 37 Segment Analysis: Data Centre Hosting 57 Segment Analysis: Cloud Services 86 Strategic Recommendations for Service Providers 114 The Last Word 118 3
3 Market Overview Key Questions This Study Will Answer Hypotheses How is the market for managed services changing? What are the key trends in the data centre hosting and cloud services markets? What is the level of adoption of data centre offerings and cloud-based services in the different vertical end-user segments? What customer needs and demand trends are pertinent in government and education sectors? How does the scenario differs from other sectors? What is the end-user s perception of cloud services. Do they plan to invest in these services in the next 24 months? What are vendors currently offering in terms of data centre and cloud services? Are the products/services offered presently meeting customers needs or are there opportunities to develop tailored offerings that could address these needs? 12
4 Market Overview Segmentation Infrastructure support accounts for more than xx% of the managed services market Percent Sales Breakdown Total Managed Services Market: South Africa, 2010 x.x% x.x% x.x% xx.x% xx.x% xx.x% Infrastructure support Data centre hosting Application hosting Web hosting Network security Other Note: Other includes specialised security, certain cloud service segments, and business continuity and disaster recovery. Note: All figures are rounded. The base year is
5 Adoption Rate Market Overview Segmentation (continued) The majority of managed services segments are in the growth stage High Total Managed Services Market: Segment Lifecycle Analysis (South Africa), 2010 Introduction Growth Maturity Decline Network management Managed Security Web Hosting Converged networks Cloud services Data centre hosting Unified communications Low Note: Bubble size represents relative market size. Network management, converged networks and technical support, maintenance and upgrades fall under infrastructure support, while unified communications and cloud services, such as SaaS, are components of application hosting. Time 14
6 Market Restraints Market Drivers Drivers and Restraints Total Managed Services Market: Key Market Drivers and Restraints (South Africa), Increasing need to focus on core business processes 1-2 years 3-4 years 5-6 years is driving the demand for outsourced services Shortage of in-house skills is driving the demand for third-party services Shift from CAPEX to OPEX drives uptake of managed services Developments in undersea cables and terrestrial networks Increased adoption of managed services by SMMEs Limited service offering due to connectivity and high bandwidth costs Lack of outsourcing culture restricts the demand from large enterprises Regulatory and compliance issues Perceived security risks limit the adoption of thirdparty services Impact: High Medium Low 16
7 Drivers Explained Increasing Need to Focus on Core Business Processes is Driving the Demand for Outsourced Services To maintain a competitive advantage as industry competition increases, companies need to focus solely on those activities central to revenue earning. Although critical to companies operations, business data services are not considered to be the core. Therefore, allowing third parties to manage business data services is a prime strategy that is being adopted. This driver is expected to have a high impact throughout the forecast period. Impact Short Term : HIGH Medium Term: HIGH Long Term: HIGH 17
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