Data Centre Managed Services Market

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1 Data Centre Managed Services Market Martin Molloy 20/03/2012

2 Macro Challenges Recession User growth and diversity The world of collaboration Clouds on the horizon Cloud market - 48% compound annual growth rate. Projected market size of 35 billion by 2014 Source: Gartner (December 2011) 1

3 Market trends Global market growth will accelerate Virtualisation virtually, but not quite there Automation not automatic Green agenda Cloud gathering pace Client virtualisation rates between 20% and 50%, across their entire estates Source: KPMG client engagement data Data centre emissions projected to overtake those of the world s airlines by 2020 source: McKinsey report,

4 What about the providers? Evolving offerings rapidly, but... Indian players gaining share ensuring position for future services market Integration a challenge Colo moving up AWS, MS, SF 2011 an Indian provider included in Gartner s Magic Quadrant for the first time Source: Gartner Magic Quadrant for Data Center Outsourcing and Infrastructure Utility Services, Europe,

5 Unlocking benefits when buying: Utilisation Invest in differentiation Consolidate, standardise Have an apps strategy 20% - 40% benefit is the norm Blended average server utilisation rates remain around the 25% or below level Source: KPMG project statistics

6 Deal Shape client perspective Asset light 2 year window Commitment to Cloud Unitary pricing a must Online, real-time reporting Organisations dedicating 10% or more of their IT budget for Cloud services increased from 12% in 2011 to 28% in Source: KPMG International 2012, Government Cloud Survey KPMG International 2011, Clarity in the Cloud Security concerns receding 5

7 Deal Shape provider perspective Standard offering a struggle Transformation is key 83% Client Drivers for Outsourcing Assets and pricing Pricing models - stuck in the middle. 1 42% 39% 38% Cost savings Financial flexibility Access to skills Quality improvement Time to market 23% Change agent 12% Source: KPMG Service Provider Satisfaction Survey

8 Benefits of Buy vs Build Capex light Access Flexibility Leverage provider scale Number of companies that outsource their IT infrastructure: % % Source: Savvis, 2010 Speed to deploy Driving standardisation Freeing resources 7

9 Challenges of Buy vs Build Finding the right supplier Reaching the right deal Client s satisfaction level with Infrastructure service providers Existing assets Very Satisfied, 11% Very Unsatisfied, 1% Unsatisfied, 5% Somewhat Unsatisfied, 12% Your organisation Satisfied, 40% Somewhat Satisfied, 31% Source : KPMG Client Satsifaction Survey,

10 Conclusions DC outsourcing will grow Decreasing builds Commoditisation will accelerate Organisational fit is key Pace of change increasing 9

11 Thank you Martin Molloy

12 2011 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International Cooperative (KPMG International).

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