CA Technologies Channel Index 2013

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1 WHITE PAPER CHANNEL INDEX 2013 JULY 2013 CA Technologies Channel Index 2013 agility made possible

2 Innovation Matters For many years, IT directors have been told to do more with less; to not just keep the business operating, but to be an engine for innovation and growth, despite budgets remaining flat. The CA Technologies Channel Index 2013 shows just how far customer IT organisations and channel partners have come on this journey, and reveals how they are using innovation to deliver demonstrable business benefit. It also reveals how partners and their customers are responding to today s biggest IT challenges. For the first time, the CA Technologies Channel Index 2013 surveyed partners worldwide, providing a global insight into the state of IT today. Partners Feel Positive About the Economy IT budgets can be seen as a sign of confidence. Companies fail to invest in IT when their future looks uncertain, and tend to be more conservative when the economy is struggling. The good news is that our survey respondents are optimistic about the shape of the economy in 2013: 43% expect the economic outlook to improve, and 39% expect it to stay the same. Less than a fifth (19%) are predicting a decline. Asia Pacific is significantly more optimistic than average, with 63% of respondents expecting the economy to improve this year. Throughout 2013, do you expect the economic outlook to get... As the economy is increasingly seen as stable or growing, and confidence returns to the board room, this could translate into higher budgets next year. For this year, IT budgets are mostly flat or experiencing cutbacks. This provides an important context in which to see the climate of innovation in IT, and there are significant pockets of growth. Globally, 28% of partners expect their customers IT budgets to increase in 2013, and 35% expect budgets to stay the same, while only 37% predict that customers budgets will decline. Asia Pacific is significantly more optimistic than the average, with 46% of partners expecting their customers to increase IT spending. That includes 10% who expect IT spending to increase by more than a quarter. What do you expect will happen to your cutomers 2013 IT budgets? Customer IT budget cuts were named as one of the biggest challenges faced by 69% of CA Technologies surveyed partners, way ahead of the 58% who cited profitability as a challenge, and the 47% who named competition. What are your biggest challenges for your business today? 2

3 While the outlook for 2014 looks positive, for now IT directors, IT departments, and their suppliers must contend with flat budgets, and find creative ways to make their budgets work harder. Innovation Takes the Lead Although budgets are stagnant, IT still needs to meet the increasing business demands for agility and growth. The Index revealed the extent to which limited budgets are being re-allocated to support more innovative projects. It is often said that 80% of an IT budget is typically spent on maintenance and operations: keeping the lights on, as it s often called. That leaves just 20% for innovation in most organisations. This shift in priorities presents great opportunities for the channel. Partners are evolving their business models to adapt to customer demand. Partners build cloud based service offerings that allow their customers to meet business needs with less internal IT, while achieving improvements in flexibility and cost-efficiency. Some 85% of those surveyed recognised the need to evolve into an MSP, and 60% have already begun to do so. With the advent of cloud computing, have you diversified your business model in the last 2-3 years? By way of contrast, the Index found that an average of 34% of CA Technologies partners time is spent helping customers with innovative projects that enable new revenue-generating services. A third of partners are spending between a quarter and half their time on innovation, and a further 23% of partners are spending more than half their time on innovation. What percentage of your time is spent helping your customers innovate? Managed services are already being provided by partners for service management (42% of respondents), infrastructure management (41%), backup and recovery management (39%), application performance management (27%), identity and access management (22%) and project and portfolio management (20%). Over the next year, about a quarter of respondents intend to introduce each of these services (from 23% to 28% of respondents, depending on the service). What managed services are you planning to provide your customers? 3

4 IT projects are being driven by the need for businesses to innovate for growth, delivering new products and services and creating new ways to serve customers. Two priority areas for IT investment emerged: What steps are you taking to address these challenges? Enterprise mobility, a disruptive technology that enables organisations to be more responsive by empowering employees to work anywhere, without compromising on access to data or other corporate resources that help to sell to or serve customers. It also enables customers to access a company s offering via their mobile devices, creating new opportunities for partners to build, manage and secure that mobile access; and Cloud computing, which gives customers greater agility to match business needs, and enables innovation by leveraging this new way of using and consuming technology, which is also transforming the cost model away from fixed investments. Partners Evolve and Differentiate In the CA Technologies Channel Index 2013, partners revealed how they are competing against tough market conditions: 71% said they were offering services above and beyond basic IT services. When the market is tough, basic IT services can become relatively commoditised, but offering more sophisticated services enables companies to capitalise on their expertise, command a higher price, and deepen the relationship with the customer. 67% said they were ensuring their business is strongly differentiated from their competitors. Differentiation is about more than branding, and permeates everything partners do. Partners can differentiate themselves on their expertise and the quality of the technology solutions and services they offer, to ensure positive word of mouth and strong customer retention. As customers increasingly turn to their suppliers for help with innovative, revenue-generating IT projects and solutions, particularly in enterprise mobility and the cloud, service providers must be able to answer with incisive expertise, and the ability to deliver. This provides differentiation, capitalises on technology leadership and provides a way to wrap and market services that go beyond commoditised IT provision. Partners Overwhelmingly Predict Rise in Enterprise Mobility 84% of partners surveyed believe IT spending will increase in enterprise mobility in 2013, compared to the previous year. This makes it the leading emerging technology, ahead of virtualisation management, big data and business intelligence analytics, and the internet of things. Which of the emerging technologies do you predict will lead to increases in IT spending in 2013? 56% said they were offering technology leadership, keeping a step ahead of the market. When budgets are limited, customers want to know that their new technologies can be used for as long as possible. It s important, then, that partners understand upcoming trends and technologies, so they can future-proof new projects as much as possible. 4

5 Tablet computers and smartphones have become hugely popular consumer technologies in recent years, and this has clearly had a knock-on effect in the workplace. Employees expect the same quality of experience, including mobility and connectivity, from their work IT. Now mobile devices have enabled businesses to reach customers through new channels, to deliver innovative customer service experiences, and to increase employee engagement. Of course, with any disruptive technology there is disruption. Initiatives such as bring your own device (BYOD) lower hardware costs but they also challenge IT departments to manage a heterogeneous fleet of computing devices. IT must balance its need for security and manageability with the business s need for a fluid and carefree computing experience. Mobility management technologies have developed independently of the principles of business service innovation, so there is also a risk that IT organisations find themselves slipping back to simply managing and maintaining IT, instead of truly delivering business services. CA Technologies has products and services that help enterprises embrace the mobile opportunity. As companies manage the complexity of introducing new technology architectures and management approaches, partners can become trusted advisors. Some 94% of CA Technologies partners surveyed believe the rapid adoption of mobile technologies creates opportunities for the channel. In particular, having devices that roam free of the corporate premises creates increased demand for security services, 61% say. There are also opportunities to help with managing the patchwork of different devices, according to 52% of respondents. Over half (54%) of the partners surveyed said that enterprise mobility enables the channel to deliver greater business value, which is particularly important for winning new business at a time when budgets are flat. Hybrid Cloud on Track to Dominate Market Cloud computing provides a solid platform for innovation, by enabling businesses to more quickly deploy new applications and to scale flexibly in line with demand. This can eliminate large capital expenditures, making it easier for companies to experiment to find the best allocation of resources, and to mirror business needs more closely. Partners are increasingly finding that the cloud provides both them and their customers with a significant competitive advantage. Cloud computing has also played an important role in recent years in bridging the gap between flat budgets and the demand from the business for expanded, more responsive or new IT services. Using cloud solutions, companies can increase business agility, accelerate cycle times, reduce costs, increase margins, and ultimately drive revenues. The Index shows that cloud computing remains a priority for innovative and strategic IT projects, and is taking budget from other technologies. Some 69% of partners predict that spending on cloud will increase, even as budgets remain flat. As IT is increasingly seen as a utility and not as an infrastructure that its user must own, there will be a corresponding decline in hardware budgets, partners predict. And finally, 47% of partners expect hardware budgets to fall, and only 14% expect them to rise. Throughout 2013, what do you think will happen to spending in cloud computing and hardware? How much do emerging technologies present opportunities for the channel? 5

6 62% of partners report that their customers already use Software as a Service (SaaS); 44% have customers using Infrastructure as a Service (IaaS) and 35% have customers using Platform as a Service (PaaS). This shows broad support for the concept of cloud computing, and highlights the way that service providers have become integral to the provision of IT in many enterprises. Are any of your customers using the following? Conclusion CA Technologies partners and their customers are seeking out new innovative ways of delivering business growth through embracing disruptive and emerging technologies. With enterprise mobility on the increase, IT spending is set to follow as organisations look to capitalise on consumer trends to not only satisfy existing customers but reach new markets. For now, budgets need to be stretched as far as possible to ensure there is enough investment in new innovation fuel growth. Cloud computing also continues to proliferate so that IT can react quickly to market changes and deliver solutions customers want. This provides great opportunities for partners who are responding to these functional changes in three ways: Evolving into MSPs to meet customer needs Helping customers innovate by supporting their management and security needs Differentiating their services from their competitors The private cloud is the leading deployment model, with 65% of partners reporting they have customers who use it; 42% of partners know of customers using the public cloud, and 34% say their customers are using hybrid cloud deployments. All types of cloud deployment have grown in the last year but the biggest growth has been in the hybrid cloud, where adoption has risen by 50% since 2012 in EMEA (compared to data from last year s Channel Index). Last year, partners predicted that the hybrid cloud would be the most popular cloud computing model by 2017, and this year partners worldwide predict it will see greatest growth in % of partners say customers are planning to implement it in the next 12 months, compared to 18% for public cloud and 17% for private cloud. Are any of your customers using the following? Overall, innovation is enabling partners and their customers to be in a healthy position to grow their businesses, in 2013 and beyond. About the CA Technologies Channel Index The CA Technologies Channel Index is the annual study which tracks the IT industry outlook of CA Technologies partners. This is the fifth year of the Index and the first year it has been carried out globally. In 2013 the study surveyed 554 of CA Technologies partners across EMEA, APJ and North America. Respondents carried out an online survey between January and May Agility Made Possible: The CA Technologies Advantage CA Technologies (NASDAQ: CA) provides IT management solutions that help customers manage and secure complex IT environments to support agile business services. Organizations leverage CA Technologies software and SaaS solutions to accelerate innovation, transform infrastructure and secure data and identities, from the data center to the cloud. CA Technologies is committed to ensuring our customers achieve their desired outcomes and expected business value through the use of our technology. To learn more about our customer success programs, visit ca.com/customer-success. For more information about CA Technologies go to ca.com. Copyright 2013 CA. All rights reserved. CS _0713

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