Leading Providers of SAP Hosting in Germany 2013

Transcription

1 SAP Hosting I Germany I 2013 Leading Providers of SAP Hosting in Germany 2013 SITSI I Vendor Analysis I PAC RADAR Scoring results for T-Systems

2 SITSI I Vendor Analysis I PAC RADAR I SAP Hosting I Germany I Table of contents Objective of this report... 4 Report license... 5 Introduction... 6 SAP hosting definition... 8 Methodology of the PAC RADAR... 9 Introduction to the methodology... 9 Selection of providers for the PAC RADAR Evaluation methodology in the PAC RADAR Voluntary self-disclosure by the providers Rating of the providers by their customers Weighting of criteria General PAC methodology The PAC RADAR: the leading providers of SAP hosting in Germany Positioning within the PAC RADAR Positioning within the rings Positioning along the rings Size of the rings Review of the top-seeded provider T-Systems Best in Class : T-Systems (final score: 1.48) About Pierre Audoin Consultants (PAC) About the PAC RADAR... 19

3 SITSI I Vendor Analysis I PAC RADAR I SAP Hosting I Germany I List of figures Definition of SAP hosting... 8 Clusters and sub-clusters for the PAC RADAR, according to which the providers are evaluated... 9 Description of the PAC methodology The PAC RADAR for SAP hosting in Germany Document information Author: Karsten Leclerque (k.leclerque@pac-online.com) Co-author: Philipp Schalla Date of publication: October 1, 2013 Last update: n/a Scope ID: SAP Hosting I Germany I 2013 Portfolio ID: SITSI I Vendor Analysis I PAC RADAR Related reports: SITSI SAP Services Research

4 SITSI I Vendor Analysis I PAC RADAR I SAP Hosting I Germany I Objective of this report Market analysis and strategy consulting firm Pierre Audoin Consultants (PAC) has designed the PAC RADAR as a new concept for the holistic evaluation and visual positioning of the leading IT providers in a particular services segment of a local market. With the help of pre-defined criteria, PAC evaluates and compares providers revenue scope, development and market share in addition to performance and competencies within the specified market segment (SAP hosting in this instance).

5 SITSI I Vendor Analysis I PAC RADAR I SAP Hosting I Germany I Report license PAC RADAR Leading Providers of SAP Hosting in Germany 2013 PAC RADAR report license As part of the report license, content from the PAC RADAR report may only be reproduced either in whole or in part (e.g. the PAC RADAR graphics) for internal purposes (e.g. internal presentations). All content used in part must have "PAC" cited as the source. However, content must not be modified or used out of context of the overall document. It is not permitted to use the content of the PAC RADAR report for external communication purposes (including communication with clients, partners and the media). Moreover, the copyright conditions for PAC RADAR apply (see "About the PAC RADAR" on the last page of this document).

6 SITSI I Vendor Analysis I PAC RADAR I SAP Hosting I Germany I Introduction Services relating to SAP products such as consulting, implementation, system integration, application management and operation accounted for more than 20% of the overall German IT services market. SAP hosting, i.e. the operation of the SAP system landscape in a data center run by an external provider, accounts for 27% of this SAP related services market. Even in the German outsourcing market, SAP hosting is particularly important, as 68% of all hosting services in Germany are SAP-related! And not least, the German market accounts for more than 20% of the worldwide SAP hosting services. SAP's dominant market position on the German software market and the early establishment of a comprehensive service partner network has led to the hosting of SAP applications to be one of the most mature outsourcing segments in Germany. The majority of providers reviewed in this RADAR have been operating on this market since the 1990s with the SAP hosting history of some providers reaching as far back as the 1980s. In view of this long tradition, a heterogeneous provider landscape has evolved with a large number of providers exhibiting both SAP knowledge and operations competence. Apart from numerous major, internationally active IT services providers, a large number of smaller and often local providers offer SAP outsourcing services - often with specific focal points in relation to client size, industry, service depth or geographic focus. However, despite this maturity which has led to services providers in this environment being exposed to particularly harsh competition and a significant deterioration in pricing the market is continuing to show continued high dynamics. Firstly, growth potential continues to be promising. The trend towards externalization is unstoppable and new client groups particularly SMEs form an additional field of operation for providers. Nonetheless, numerous large German corporations have continued to operate their SAP systems inhouse despite the outsourcing wave of recent years frequently via their in-house "IT companies" such that another reduction in the range of production can be expected. However, not only completely new outsourcing projects lead to growth. Innovations from SAP (further verticalization of SAP solutions, Business Intelligence, additional opening right up to Software-as-a- Service models etc.) as wells as the constant efforts on the user side to reduce complexity and costs through standardization, consolidation and harmonization lead to increasing investments even within the core market, i.e. within existing outsourcing relationships. Moreover, the service itself is subject to constant change. In the face of constantly increasing standardization and the partial bundling of offers, increased flexibility in contractual provisions and user-based price and payment models as well as an ever more prevalent platform-based approach on the side of the provider, it is possible to speak of an increasing "cloudification" of the service.

7 SITSI I Vendor Analysis I PAC RADAR I SAP Hosting I Germany I While in the previous edition (2011/12) of the German PAC RADAR on the leading providers of SAP hosting it was the very large providers who (more or less) took into account the cloud trend in their SAP hosting models, meanwhile all of the evaluated providers have followed suit. The individual scopes and depths of cloudability, as referred to in this PAC RADAR report, are still very diverse; however, a flexibilization of contract modalities and the increase in as-a-service models are omnipresent. The detailed findings of the evaluation are presented in the following PAC RADAR report.

8 SITSI I Vendor Analysis I PAC RADAR I SAP Hosting I Germany I SAP hosting definition This PAC RADAR is devoted to the subject of SAP hosting in Germany. For this edition of PAC RADAR, PAC has focused on SAP hosting services that fulfill the German markets'/german clients' requirements. The "German" market encompasses both the provision of services for German clients in Germany as well as the provision for German subsidiaries of international clients. "SAP hosting" relates to the operation and management from the technical perspective of an SAP application, including the operation and management of the hardware infrastructure (server, memory, network) and technical application management (including the management of the SAP basis/netweaver, databases, operating systems and middle ware), at the site of the providers (possibly including partnerships with co-location providers). And even though these were not the core of this research, further competencies such as Consulting & Systems Integration (C&SI) were included in the assessment that are necessary to be able to provide clients with holistic end-to-end services. Business Process Management/ BPO! Process Consulting! Functional Application Management! Functional! Consulting! & Systems! Integration!! Technical Application Management! Infrastructure Management! SAP Basis/ NetWeaver! Server! Operating System! Storage/Backup! Archiving! Middleware! Housing/ Data Center Facilities! Database! Network!! C&SI SAP Hostingrelated (infrastructure & SAP basis)!! Transition/ Migration!! OPERATIONS! C&SI! For this PAC RADAR, PAC has observed: Definition of SAP hosting - Stand-alone SAP hosting services (i.e. dedicated agreements for SAP hosting only), as well as - "embedded" SAP hosting services, i.e. SAP hosting services as part of extensive agreements such as SAP application outsourcing (incl. SAP hosting + functional SAP application management and any individual projects relating to SAP applications), business process outsourcing, etc.; in such cases, only the SAP hosting aspect of such agreements is relevant for this PAC RADAR.

9 SITSI I Vendor Analysis I PAC RADAR I SAP Hosting I Germany I Methodology of the PAC RADAR Introduction to the methodology The aim of PAC RADAR is to aid the holistic evaluation of IT providers. PAC publishes the PAC RADAR two to four times per year for different segments. Every PAC RADAR targets a specific IT services sector with up to 15 leading providers in a local market are assessed per RADAR edition. In the PAC RADAR, the performance, competence and market position of the key providers in a services segment are assessed and compared using approx. 50 pre-defined criteria. The criteria are ordered according to clusters and can be assigned to the main features, "Competence" and "Relative Market Strength" as well as the underlying clusters and sub-clusters (see figure). There is an overall rating from the evaluation of the criteria as well as sub-ratings per cluster and sub-cluster. With the help of the weighted evaluation of all criteria and the resulting overall rating, each provider is given is characteristic position in the PAC RADAR (see Section Position within the PAC RADAR ). The following applies to the PAC RADAR: The better the evaluation for competence and relative market strength, the closer a provider is to the center. The closer to the center a provider is, the closer the provider is to customer requirements for that segment. Evaluation of Criteria at Cluster and Sub-Cluster Levels Main Cluster Cluster Know-how & Expertise Offering & Sales Competence Delivery & Support Strategy & Stability Relative Market Strength Sub-Cluster Skills &! Qualifications! Experience! Value of Offering! Quality of Sales! & After-Sales! Maturity & Quality! of Delivery! Local & Global! Support! Importance of! Topic for! the Supplier! Companyʼs! Stability! Market Power Performance PAC Clusters and sub-clusters for the PAC RADAR, according to which the providers are evaluated

10 SITSI I Vendor Analysis I PAC RADAR I SAP Hosting I Germany I SAMPLE CRITERIA FOR SAP HOSTING IN GERMANY 2013 Cluster 1 Know-how & experience : knowledge/qualification Resource strength (data center capacities, no. of SAP consultants, no. of service personnel for operation and transition) global & local Certifications (quality, security) "Cloudability" Partnership with SAP Cluster 1 Know-how & experience : experience Scope of SAP hosting business (no. of customers, users, systems, etc) global & local History of SAP hosting services global & local Cluster 2 Offering & sales : value of portfolio Portfolio coverage "core SAP hosting" & "advanced SAP hosting" (SAP hosting + related services) Dedicated offerings for specific customer groups Flexibility/ variability in business models, contract design, etc. "Cloudability" Add-on: Strength of SAP application management local Add-on: SaaS portfolio (SAP & non-sap) Cluster 2 Offering & sales : sales and after-sales quality Possibility for demand-based billing (usage based) Pre-defined services packages Variability & flexibility in price models, share of flexible price models Staff acquisition & integration Evaluation by customers (bidding, account management, pro-active approach in bidding phase) Transparency to the market Cluster 3 Delivery & support : maturity and quality in delivery Partnership with SAP Shared services & infrastructure Scalable resources ("as-a-service" models) Certifications (quality, security) Evaluation by customers (service provision, pro-active approach in service provision)

11 SITSI I Vendor Analysis I PAC RADAR I SAP Hosting I Germany I Cluster 3 Delivery & support : local and global support "Cultural fit" small customers vs. international large enterprises No. of SAP services staff global & local Geographic distribution of data centers local Languages (service desk) Business share of SME vs. large enterprises Cluster 4 "Strategy & stability : significance of offering for the provider Strategic significance of SAP hosting Focus on IT services, SAP services, SAP hosting local & global Cluster 4 Strategy & stability : company stability Strength of references Diversity of customer structure (industries, sizes, etc.) Dependence on few large customers Company size global Development of revenue (CAGR 10/12) global Cluster 5 Relative market strength : market position Company size local Focus on Germany (share in total revenues) Size of SAP services business global & local Size of IT services business local Size of SAP hosting business local Cluster 6 Relative market strength : performance Customer satisfaction evaluation by customers Development of IT services business 2010/12 local Development of SAP hosting business 2010/12 local Development of focus on SAP hosting 2010/12 local Selection of providers for the PAC RADAR In order to be selected for the evaluation in the PAC RADAR, certain criteria must be fulfilled. The most important criterion for the segment SAP hosting in Germany was the relevance of the provider within their respective target market. Thus we have not only addressed those SAP hosting providers Germany with the highest turnover levels, but also for instance providers that are specialized on SMEs. Additional criteria included the strategic relevance of the services offering in the complete

12 SITSI I Vendor Analysis I PAC RADAR I SAP Hosting I Germany I portfolio, the width and depth of the portfolio as well as a broad customer base in the market segment of the target group. Another prerequisite for participation was the willingness of the providers to participate in the voluntary disclosure process. All providers positioned in the PAC RADAR were invited to support our analysis with the voluntary disclosure of comprehensive information about their organizations as well as the submission of evaluations through four of their customers. The providers mentioned in the PAC RADAR by their names All for One Steeb, Atos, Freudenberg IT, HP, T-Systems participated in the entire evaluation process, i.e. they disclosed information about their organizations and submitted customer evaluations. The participants generate 49 percent of the market for SAP hosting services in Germany. However, we also included providers that were not willing to actively participate in the PAC RADAR and undergo the comprehensive evaluation process, but are in fact part of the peer group due to their positioning in the market. They were evaluated and positioned by means of the tried and tested PAC methodology (see below). The providers reviewed in this edition of the PAC RADAR generate 66 percent of the market for SAP hosting services in Germany The following assessments are based on a comparison within the peer group, i.e. these leading providers among one another: Participants All for One Steeb Atos Freudenberg IT HP Non-participants Fujitsu/TDS IBM NTT Data/itelligence QSC/Info AG T-Systems Evaluation methodology in the PAC RADAR The providers evaluation is conducted via an initial voluntary self-disclosure through voluntary disclosure by the providers themselves, a rating by their customers as well as a supplementary assessment through PAC on the basis of PAC s renowned methodology. Voluntary self-disclosure by the providers In the voluntary self-disclosure, the providers were asked for aspects such as topic-specific experience, skills and resources, portfolio, service provision, common contract types and price

13 SITSI I Vendor Analysis I PAC RADAR I SAP Hosting I Germany I models, sales structures, customer focuses and further relevant topics, such as the willingness to take over and integrate staff. The providers were asked to give their view on the following aspects: History in the SAP services and hosting business Partnerships (with SAP and other technology and services providers) Know-how & resources Certifications Customer structure Contract design, business and price models Portfolio and service provision Investments and quality management Rating of the providers by their customers In addition to the voluntary self-disclosure, we considered the ratings of four existing SAP hosting customers at German level. Not all providers submitted four customer ratings for evaluation. With less than four customer ratings, missing ratings were regarded as average, i.e. they scored the ratings satisfied or service provision according to contractual agreement. Any submitted customer rating therefore particularly offered the opportunity to improve the score compared to the average rating. In case of more than four submitted customer ratings, the four best ratings were considered in the final assessment. The providers assessment by their customers was conducted using grades on a scale from 1.0 ( Considerably exceeded agreement or Delighted ) to 5.0 ( Plainly not adhered to/ fulfilled agreement or Very unsatisfied ) for the following criteria: SUBJECTS FOR CUSTOMER EVALUATION (INCL. SAMPLE CRITERIA) Bidding phase Reaction time/completeness Comprehensibility; transparency Flexibility/ innovation: pricing structure/models Level of coverage with the requirements Pro-active approach Consultation services during the pre-sales phase General behavior/communication

14 SITSI I Vendor Analysis I PAC RADAR I SAP Hosting I Germany I Account management Response to change requests Availability of account manager Reaction time of account manager Specialist competence of account manager General behavior/communication Behavior in the event of escalation/under stress Service provision Budget and deadline compliance Realization of requirements Quality of results Specialist competence (technology & processes) Sector competence Teamwork with the customer Pro-active approach, contributing innovation Implemented methods & tools Project management competence Knowledge transfer Where applicable: collaboration with offshore resources Weighting of criteria HEAVILY WEIGHTED CRITERIA IN THE SELF-DISCLOSURE AND THE CUSTOMER RATINGS Resource strength (data center capacities, no. of SAP consultants, no. of service personnel for operation and transition) global & local Certifications (quality, security) Cloudability Partnership with SAP Scope of SAP hosting business (no. of customers, users, systems, etc) local

15 SITSI I Vendor Analysis I PAC RADAR I SAP Hosting I Germany I History of SAP hosting services global & local Portfolio coverage "core SAP hosting" Customer evaluation (bidding, account management, service provision, pro-active approach) Focus on SAP hosting local Size of SAP hosting business local General PAC methodology The following overview describes PAC's methodology for market analysis and key differentiation features. SUPPLY DEMAND Vendor database Qualitative approach Quantitative approach Face-toface and phone interviews Situations and trends Quantitative results IT user database Market volumes Situations and trends Quantitative data Face-toface and phone interviews Qualitative approach Quantitative approach Market forecasts Bottom-up methodology Top-down methodology PAC references 35+ years of data tracking Macro-economic data/statistics Market modeling Key vendors, key market segments, key success factors, key trends Description of the PAC methodology Local research and face-to-face communication are two core elements of PAC s methodology. In our market studies, we can draw on over 35 years of experience in Europe.

16 SITSI I Vendor Analysis I PAC RADAR I SAP Hosting I Germany I The PAC RADAR: the leading providers of SAP hosting in Germany 2013 The PAC RADAR for SAP hosting in Germany 2013

17 SITSI I Vendor Analysis I PAC RADAR I SAP Hosting I Germany I Positioning within the PAC RADAR Positioning within the rings From the resulting overall score, each provider receives their characteristic positioning within a ring of the PAC RADAR. Here, the following applies: The closer a provider is to the center, the closer they are to meeting customers requirements. The customers requirements in the center of the PAC RADAR represent a cross-section of the market; the providers positioning reflects the completeness with which their offering and competence meets the requirements of all potential customers: purely German customers as well as international, very large companies as well as SME customers, etc. The providers are positioned within ring 1 (innermost ring) to ring 4 (outermost ring). The rings of the PAC RADAR can be classified by the following attributes: Ring 1: Best in Class (scoring between 1.00 and 1.99) Ring 2: Excellent (scoring between 2.00 and 2.99) Ring 3: Strong (scoring between 3.00 and 3.99) Ring 4: Solid (scoring between 4.00 and 4.99) Positioning along the rings The providers positioning along the rings does not represent any rating, but additional information. It shows the providers focuses within the SAP hosting business: National vs. international Degree of national vs. international SAP hosting business SME vs. large enterprises Degree of SAP hosting business with SME customers (< 1,000 employees) vs. large enterprises Size of the rings The size of the rings corresponds to the providers market strength, i.e. the revenue and market share of the respective provider with respect to SAP hosting in Germany.

18 SITSI I Vendor Analysis I PAC RADAR I SAP Hosting I Germany I Review of the top-seeded provider T-Systems In the following, all those criteria are presented (per provider) which were considerably better or led to devaluation in comparison to the average of the analyzed providers. Best in Class : T-Systems (final score: 1.48) CRITERIA VALUATED AS ABOVE AVERAGE Resource strength (data center capacities, no. of SAP consultants, no. of service personnel for operation and transition) global & local "Cloudability" Scope of SAP hosting business (no. of customers, users, systems, etc) global & local Add-on services: SaaS portfolio (SAP & non-sap) Possibility for demand-based billing (usage based) Share of flexible price models (vs. fixed price; readiness to take risks") Bidding phase evaluation by customers Account management evaluation by customers Pro-active approach in the bidding phase evaluation by customers Service provision evaluation by customers Pro-active approach in service provision, contributing innovation evaluation by customers Transparency to the market Shared services & infrastructure Scalable resources ( as-a-service models) Possibility for demand-based billing (usage based) Business share with large enterprises (> 1,000 employees) Cultural fit international large enterprises Strength of references Company size Size of IT services business Size of SAP services business Size of SAP hosting business Focus on Germany CRITERIA LEADING TO DEVALUATION Cultural fit small customers (< 1,000 employees) Business share with SMEs (< 1,000 employees) Dependence on a few large customers Development of IT services business 2010/12 local

19 SITSI I Vendor Analysis I PAC RADAR I SAP Hosting I Germany I About Pierre Audoin Consultants (PAC) From strategy to execution, PAC delivers focused and objective responses to the growth challenges of Information and Communication Technology (ICT) players. Founded in 1976, PAC is a privately held research & consulting firm for the software and ICT services market. PAC helps ICT vendors to optimize their strategies by providing quantitative and qualitative market analysis as well as operational and strategic consulting. We advise CIOs and financial investors in evaluating ICT vendors and solutions and support their investment decisions. Public institutions and organizations also rely on our key analyses to develop and shape their ICT policies. For more information, please visit About the PAC RADAR The PAC RADAR is protected by Pierre Audoin Consultants (PAC) s copyright. The PAC RADAR is a graphical representation and written analysis of the positioning of various IT providers within a defined market segment at a specific point in time. The positioning and characterization of selected companies within the PAC RADAR is conducted on the basis of an analytical assessment of criteria which PAC previously defined for this analysis. The selection, positioning, and characterization of companies within the PAC RADAR is not subject to any vested interests whatsoever. PAC does not support any providers that are represented in the PAC RADAR, and does not give any recommendations to technology users. The PAC RADAR represents a result from market research only and must not be taken as a recommendation for action. The contents of the PAC RADAR have been created with utmost diligence and care. However, PAC cannot be held responsible for any errors or omissions. PAC excludes all express or implied claims, also if derived from warranties with respect to the PAC RADAR report, including any implied warranties of merchantability or fitness for a particular purpose. The PAC RADAR may only be used for a license fee and with the consent of PAC. Moreover, the use and publication of the contents and the results of the PAC RADAR are subject to the Terms & Conditions of Pierre Audoin Consultants (PAC) for the Use of PAC RADAR Licenses. Copyright Pierre Audoin Consultants (PAC), All rights reserved.