Business Intelligence Report: North East IT Industry

Transcription

1 Business Intelligence Reprt: Nrth East IT Industry Business Intelligence Reprts are ffered by Sunderland Sftware City at n charge fr eligible businesses. T access the Intelligence Service cntact Billy Webber n [email protected] r call

2 Enquiry Hw many cmpanies in the Nrth East turnver mre than 1.5m and have mre than 10 emplyees? What is the size f the IT industry in the Nrth East (ttal spend)? What is the size f the IT industry in the Nrth East (ttal spend) split by the regins: Nrthumberland Tyne & Wear Cuntry Durham Teesside What is the size f the IT industry in the Nrth East (ttal spend) split by services: Cnsultancy Sftware Off the shelf Bespke Web Services Design SEO Applicatins Engineering Services Infrastructure IT Supprt and Maintenance Netwrking (LAN/WAN) Systems platfrms Windws Servers / Linux O/S Cllabratin Systems e.g. Exchange, Ltus Ntes Hsting Services Data Centres Page 1

3 Clud Services Sftware as a Service (e.g. Amazn, IBM) Ggle Micrsft Office 365 Hsted Applicatins Exchange Data Strage, On-line Data Backup Bespke Applicatins Mbile Frms/nline dcuments Hw many cmpanies subscribe t Disaster Recvery Services e.g. (C-Lcatin fr backup and recverability; Disaster Recvery Suites)? What is the typical private sectr spending n: Cnsultancy Services IT Supprt Infrastructure What is the typical public sectr spend n: Cnsultancy Services IT Supprt Infrastructure Number f Nrth East Based IT Slutins cmpanies including turnver breakdwn and breakdwn f staff Number f IT Slutins cmpanies Nn-Nrth East Based but delivering services t NE including turnver breakdwn, breakdwn f staff, and services delivered: brken dwn by: Cnsultancy, Sftware (Off-the-shelf Bespke, Web Services, Design, SEO Applicatins) Cllabratin Systems (e.g. Exchange, Ltus Ntes) Engineering Services (Infrastructure Netwrking (LAN/WAN) Systems platfrms Windws Servers / Linux) IT Supprt And Maintenance Page 2

4 Number f cmpanies that have dedicated IT Department Size f Accunts packages market in Nrth East, the number f cmpanies running multiuser accunts packages: nt available reginally, spke t ne f the rganisatins listed belw and aside frm nt publishing their data, they target sales based n the uk rather than reginally therefre reginal statistics are nt available and presumably this is the case fr all f the cmpanies listed. Sage Line 50 Sage 200 Pegasus Opera Iris Hsted systems such as financialfrce Size f CRM market in Nrth East nt available reginally, spke t ne f the rganisatins listed belw and aside frm nt publishing their data, they target sales based n the uk rather than reginally therefre reginal statistics are nt available and presumably this is the case fr all f the cmpanies listed. Number f cmpanies using CRM packages brken dwn by: Micrsft Pegasus Gldmine Sage Act Hsted systems such as salesfrce Size f Unified Cmmunicatins Market Size f Nrth East Market Number f cmpanies adpted Unified Cmmunucatins Page 3

5 Respnse Hw many cmpanies in the Nrth East turnver mre than 1.5m and have mre than 10 emplyees? Using Thmpsn Lcals Business Strata database 1 we identified that 563 businesses are listed in the Nrth East as having ver 10 emplyees and a turnver f 2m r ver (turnver bandings were in 1m bands). This figure nly includes thse rganisatins that has prvided turnver details t Thmsn. What is the size f the IT industry in the Nrth East (ttal spend) split by the regins: Nrthumberland Tyne & Wear Cuntry Durham Teesside Accrding t the Technlgy Insights reprt by e-skills the Sectr Skills Cuncil fr the IT industry, there are nearly 144,000 IT & Telecms wrkplaces in the UK representing 6% f the UK ttal. Of these IT & Telecms wrkplaces, the vast majrity (87%) are IT fcussed and services rientated (90%). Of these 3% (2,600) are based in the Nrth East regin, with Nrth East businesses being respnsible fr prviding 3% (33,000) f the ttal UK IT and Telecms wrkfrce. The Thmpsn business directry lists 764 cmpanies in the Nrth East regin fr cmputer related services. The UK has the secnd-biggest ICT sectr in Eurpe, wrth an estimated 92bn ( 81bn), accrding t data frm analyst firm Frrester 3. A new survey frm the Natinal Cmputing Centre 4, The Benchmark f IT Spending and Strategy 2011 shws that UK rganisatinal Infrmatin Technlgy (IT) spending remains in decline. A significant divide in IT spending between public and private sectrs is emerging. The Benchmark f IT spending and Strategy identifies the spending in IT acrss 13 different sectrs, fr a range f criteria including peratinal, capital and staffing spending. The Benchmark als addresses spending intentins, strategic changes in prviding IT and technlgical preferences. The Benchmark f IT spending and Strategy 2011 canvassed the views f 160 rganisatins. Between them the respndents had nearly 740,000 emplyees and 680,000 end users and reprted an aggregate spend f just ver 2.3bn Page 4

6 The survey was cnducted between Nvember 2010 and January As well as cllecting data n the spending plans f rganisatins it als prvides an verview f sme f the key strategic issues currently facing decisin-makers in the adptin and implementatin f IT technlgy. The survey reveals that levels f spending n IT by UK private and public sectr rganisatins, cntinues t fall. The median level f ttal IT spending in this year s Survey is 3135 per end user, cmpared t 3227 in 2009 and 3275 in Expressed as a percentage f turnver/revenue the median IT spending figure represents just 2.48% f expenditure, dwn slightly frm 2009 when it was 2.54%. There are significant variances between sectrs hwever; a quarter f respndents reprted an end user spending figure f less than 2096, whilst at the ther extreme a quarter f respndents reprted a figure higher than The finance sectr reprts the highest spending ratis with a median spend f 9348 per end user, thugh this figure represents a 9.3% fall since The lwest spending sectrs are charities (with a median spend f 2123 spent per end user) and educatin (with a median spend f 2264 per end user). Overall IT spending is predicted t decline by 3.7%. When inflatin is factred in, the dwnturn in IT spending will exceed 4%. Steve Fx, Managing Directr at The Natinal Cmputing Centre said, Difficult times are driving business t act differently, lk fr the lwest csts and cnsider alternatives t the previus status qu the IT department is nt immune t this. Fr mst, investments in IT have fallen year n year in real terms. The danger with this is that a lack f investment will impede the pace f recvery when the ecnmic climate imprves. The IT department has a pivtal part t play in aiding the streamlining f business prcesses, intrducing peratinal efficiencies and being innvative in the delivery f slutins. Fr thse emplyed in IT the future lks challenging. 28% f respnding rganisatins predict a decline in staffing levels, whilst 51% expected numbers t stay the same; just ne in five expected an increase in staff in the next tw years. Despite recent reprting f staff cuts, the finance sectr still emplys the highest number f IT staff per 1000 users, at ; The figure fr lcal gvernment is 17.1 IT staff per 1,000 users. Overall staffing levels will decline by 1.4%. The median level f IT staff fr all sectrs is nw 22.2 IT staff per 1000 end users, cmpared with 25.0 per 1,000 users in The mst variable area f spending is capital/develpment (external spending assciated with the acquisitin and/r upgrading f systems) with ne third f respndents predicting a decrease f 20% r mre and 29% predicting an increase f 20% r mre. Capital spending is the mst susceptible t be cancelled when times are tugh; 44% f respndents thught it very likely quite likely that applicatin develpments wuld be pstpned r cancelled. Operatinal spending, the n-ging csts assciated with the peratin and maintenance f the IT functin, excluding staff averaged 39% f ttal IT spend, but is expected t decline by 6.4% ver the year. Steve Fx said, With the threat f a duble dip recessin it is nt surprising that spending remains depressed. The situatin is a catalyst fr widespread take-up f clud, virtualisatin and mbile wrking technlgies, which prmise similar levels f service, but can be achieved with less capital utlay, are scalable and enable rganisatins t save csts in ther areas. Page 5

7 This Reprt can be purchased fr 100 r 75 if yu becme a member f the Natinal Cmputing Centre 5. It may be in yur interests t lk int membership fr benefits such as mnthly reprts n the industry and IT events. 5 Page 6

8 What is the size f the IT industry in the Nrth East (ttal spend) split by services: Cnsultancy A Surcefrcnsulting.cm reprt released in June fund that the ttal Eurpean market fr cnsulting hit almst 25billin in The reprt, which interviewed mre than 150 cnsulting firms acrss 35 cuntries, als fund that the ttal market is expected t grw by almst 5 per cent in In terms f services, the biggest market verall was IT cnsulting, which amunted t 6.6billin in 2010, r 27 per cent f the ttal. The reprt says that althugh IT cnsulting is the biggest market verall, and it mainly centres n getting mre fr less, there has been a lt f interest in clud cmputing with many cnsulting firms reprting the first real investment frm clients in this area. Sftware Over the last tw years, the UK sftware market swung frm grwth t an unprecedented decline. Nnetheless it remains a market in excess f 8bn, and is nw returning t a grwth path which will strengthen ver cming years accrding t Tech Market View s 2010 reprt The UK Sftware Market: Trends and Frecasts 7. Keynte prduced a reprt in 2011 Cmputer Sftware Market Reprt 2011 which estimated that in 2010, the cmputer sftware industry (excluding vide games) in the UK was wrth an 9.16bn a rise f 4.6% when cmpared with the figures recrded in The market fr cmputer sftware has been grwing since 2003 at an average rate f arund 4.2% and it lks set t cntinue t increase. The UK cmputer sftware industry is n the rise and is presently the secnd-largest market by value in the EU. Other leading markets include the US and Germany, but the largest levels f year-n-year grwth can be seen in the develping BRIC cuntries f Brazil, Russia, India and the Peple s Republic f China (PRC), which saw an average market value rise f 11% between 2009 and Web Services Lcal cuncils in Britain spent nearly 10 times mre than businesses n equivalent external web services last year, accrding t a reprt published tday in The reprt, based n a Freedm f Infrmatin request t every lcal cuncil in the UK, is published by Peple Per Hur, an rganisatin set up t link small businesses with independent service prviders. It shws that n average lcal cuncils spent 40,917 in a 12-mnth perid spanning 2008 and 2009, cmpared t 4,373 fr the average spend amng ver 60,000 businesses. This is despite the bservatin that the business sites were mstly mre cmplex than lcal authrity sites and handled as much r mre traffic, says PPH funder Xenis Thrasyvulu. On the lcal gvernment sites there is n e-cmmerce and n user-generated cntent, n Web 2.0 features which wuld add t the verall expense, Thrasyvulu tld Cmputing. Yu have t wnder what they spend the mney n Page 7

9 While the cmparisns are fr average spending, the reprt shws massive differences in spending frm brugh t brugh and regin t regin. Basingstke and Deane Brugh Cuncil tps the league fr the biggest percentage increase a stnking 4696 per cent when cmparing last year's spending with the year befre. But cmparing reginal averages, the suthwest and nrtheast f England and Sctland shw the biggest jumps in spending all up nearly 50 per cent per annum. The figures represent nly ne facet f IT spending, Thrasyvulu admits. This is a small prprtin f a much bigger spend n the full range f IT services prcured by the public sectr, he says in the reprt. Bearing in mind that IT services is just ne f many areas f verspend and cuncils a small part f the public sectr, ne can nly imagine the magnitude f waste in the system. We were unable t btain figures fr Engineering Services, Infrastructure, IT Supprt and Maintenance, Netwrking (LAN/WAN), Systems platfrms and Hsted Applicatins in the time that we had t cmplete the reprt. Hsting Services Data Centres The UK data centre market, is the largest in Western Eurpe and the grwth in the amunt f data and new services such as clud cmputing is creating new surces f demand. Gartner predicts a rise in verall hsting and clud services frm 21.2bn in 2008 t 70 billin in Clud Services The UK Clud Cmputing annual market value is predicted t grw frm 2.4bn t 6.1bn by Currently 18% f UK SME business use clud slutins but a further 30% plan implementatins within the next year. By 2015 half f all new IT spending by the public sectr is predicted t be n public clud services. 10 Sftware as a Service Pierre Audin Cnsultants (PAC) said SMBs spent almst 1.6bn n business applicatin sftware and SaaS 11 in 2011, and this is set t grw t mre than 2.1bn by 2015 faster than the enterprise segment. Saas spend will hit 500m by 2015 in the UK, PAC said. Key areas f investment include CRM, analytics, mbility and industry-specific sftware, the analyst revealed. The strngest pprtunities fr SaaS suppliers will be start-ups, enterprises expanding verseas and subsidiaries f internatinal cmpanies expanding int the UK. Gerge Mirnescu, senir cnsultant at PAC, said: "There are significant differences in the psitining f vendrs by cmpany size. Althugh Sage is the undisputed giant f the UK SME market, it is nt as strng in the upper mid-market and faces tugh cmpetitin frm the likes f IRIS Sftware in the SOHO segment Page 8

10 "The SME market is entering int a majr phase f transfrmatin as buyers are increasingly attracted t clud-based services which enable them t access enterprise-class functinality n affrdable and flexible cmmercial terms. "PAC expects the SaaS market in the UK will mre than duble its size by 2015 t well ver 500m. Hwever, SaaS is a wrk in prgress fr many ISVs, with established players wary f cannibalising existing revenue streams." Of the tp 20 applicatins vendrs servicing the UK SMB sectr, PAC rates nly Salesfrce.cm and Fidessa as currently having a "mature" SaaS prpsitin. Hw many cmpanies subscribe t Disaster Recvery Services e.g. (C-Lcatin fr backup and recverability; Disaster Recvery Suites)? Business Clud News reprted in April , the whilst nearly all cmpanies have a disaster recvery plan in place fr their data, less than half f them are using ff-premises slutins. Using data frm a survey f CIO s by EVault 13 they reprted that 95% f businesses in the UK nw have a disaster recvery plan in place. But fewer than 45% have remte r clud-based disaster recvery capabilities. While nearly all businesses have disaster recvery (DR) plans in place fr their data, there are still less than 50% using ff-premise DR capabilities. Evault s Andy Brewertn explains why, when it cmes t prtecting data, a shift t the clud shuld be smething every cmpany is cnsidering. What is the typical private sectr spending n Cnsultancy Services, IT Supprt and Infrastructure? We were unable t btain figures fr this questin in the time that we had t cmplete the reprt. What is the typical public sectr spend n Cnsultancy Services, IT Supprt and Infrastructure? Accrding t a reprt released in 2011 by Kable 14, the UK public sectr ICT verview and frecast t shws the sectr is in the midst f a marginal decline. The headline figures 15 are fr the ttal spend, estimated at 17.99bn fr , t slip t 17.75bn in the next financial year, fllwed by anther mild decline in ; but that by it will rise t 18.27bn, shwing an verall increase f 1.5%. Spending utlks vary fr the different parts f the public sectr. Lcal gvernment is expected t lead the recvery as it will have t adapt quickly t the new scenari, taking the sectr's ttal frm 3.22bn in t 3.96bn in In additin, radical refrms in the health service are ging t need a cnsiderable investment in ICT, and the current dip in spending will sn be reversed Page 9

11 By cntrast, central gvernment is currently under the greatest pressure and the mst likely t cnslidate its business, if nt between the big departments, at least within them. While Whitehall may spend a little mre n utsurcing, its verall ICT spend is frecast t fall and it is expected t be the last t cme ut f the decline nly at the end f the five year perid. The recvery is als expected t be slw fr defence, criminal justice and transprt. Infrmatin frm a presentatin cnducted by Intellect16 using infrmatin frm Kable shws the fllwing breakdwn in spend: 16 Page 10

12 Predictins fr the next 5 years: Page 11

13 Number f Nrth East Based IT Slutins cmpanies including turnver breakdwn and breakdwn f staff The Thmpsn business directry 17 lists 764 cmpanies in the Nrth East regin fr cmputer related services. It is imprtant t nte that nt all businesses are listed in this directry and nt all businesses in the directry include their turnver figure. The fllwing tables break dwn Thmpsn s ttal figure by number f staff and turnver: Number f staff Number f Nrth East Businesses Unclassified 14 Turnver Number f Nrth East Businesses Equal t/less than , , , , , , , ,001-1,000, ,000,001-2,000, ,000,001-5,000, ,000,001-7,500, ,500,001-10,000, ,000,001-20,000, ,000,001-50,000, ,000,001-75,000, ,000, ,000, ,000, Unclassified Page 12

14 Number f IT Slutins cmpanies Nn-Nrth East Based but delivering services t NE including turnver breakdwn, breakdwn f staff, and services delivered: brken dwn by: Cnsultancy, Sftware (Off-the-shelf Bespke, Web Services, Design, SEO Applicatins) Cllabratin Systems (e.g. Exchange, Ltus Ntes) Engineering Services (Infrastructure Netwrking (LAN/WAN) Systems platfrms Windws Servers / Linux) IT Supprt And Maintenance We were unable t prvide any details n this questin, it wuld require checking the details f all nn-nrth East based rganisatins that prvide IT Slutins in rder t check the lcatins they prvide services. Due t the time cnsuming nature f this task we utilised the time allcated t cmplete this wrk in ther areas t maximise the return yu gt frm us. Number f cmpanies that have dedicated IT Department. This respnse wuld require primary research; a desk based search prvided n indicatin t the level f businesses with internal IT Departments. Size f Accunts packages market in Nrth East, the number f cmpanies running multiuser accunts packages: Sage Line 50 Sage 200 Pegasus Opera Iris Hsted systems such as financialfrce Reginal figures are nt available, having spken t ne f the rganisatins listed, whilst they cllect this data and they culd if required pull an internal reprt breaking sales dwn by regins they d nt as a rule use reginal data, they target n a UK basis. Therefre nt nly d they nt hld the data in this specific frmat the data is nt made publically available. We have therefre cncentrated n UK figures. A reprt prduced by ClearBks 18 in 2010 suggests that n-premise accunting sftware is used in the UK by an estimated 1.14 millin small businesses, a market which generates ver 213 millin a year. The size f the nline accunting sftware market was estimated t have arund 200,000 paying users currently generating 40 millin f revenue per annum. The table belw shws statistics fr the fur cmpanies that dminate the UK market: 18 Page 13

15 Page 14

16 Size f CRM market in Nrth East The CRM market is currently experiencing rapid grwth; analysts expect the glbal CRM market revenue t hit arund at least $18 billin in Salesfrce.cm 19 - is the mst ppular clud-based CRM sftware, claiming 14.8% f the entire CRM sftware market. Accrding t Trefis 20, Salesfrce's Share in the Custmer Relatinship Sftware Market has increased frm arund 10.5% in 2008 t arund 13.5% in Salesfrce.cm gained market share at the expense f SAP, Amdcs and ther smaller players. Trefis estimates Salesfrce s market share is expected t reach arund 24% by the end f In its Furth Quarter Fiscal 2012 Financial Results 21 released in late February 2012, Salesfrce stated that it had 100,000+ custmers. Micrsft Dynamics CRM 22 - Analysts expect the ttal revenue frm Dynamics CRM and ERP t reach $2.5 billin by the end f Micrsft s Cnvergence 2012 event revealed current CRM user numbers: 2.25 millin users and 33,000 custmers, with an average implementatin size f 68 users. (Surce: Micrsft 23 ) SAP 24 - has ver 30,000 custmers and ver 2 millin users. They als have 12,000 partners t assist them. SAP s market share is expected t stand at 20% by the end f SugarCRM 25 - SugarCRM is the leading prvider f pen-surce CRM sftware. The cmpany has mre than 7,000 custmers and ver half a millin users arund the glbe. Number f cmpanies using CRM packages brken dwn by: As with the previus questin, the statistics are nt available reginally and therefre we cncentrated n UK figures, hwever extensive research was unable t uncver any figures fr the market share f the CRM cmpanies listed. The nly figures we were able t find were thse fr wrldwide. Salesfrce leads all CRM vendrs in market share grwth, advancing 2.8% frm 2010 t 2011 accrding t Gartner s glbal market share analysis shwn belw. Salesfrce attained 26.9% revenue grwth frm 2010 t 2011 ($1.3B t $1.6B) and 36.7% grwth frm 2011 t 2012 ($1.6B t $2.27B). The future mmentum f Salesfrce is in unifying the enterprise, redefining crprate IT in the cntext f the custmer. Their recent acquisitins shw analytics, marketing autmatin and develpment platfrms are key pririties Page 15

17 The fllwing table is frm the reprt Market Share Snapsht: CRM Sftware, 2011 by Gartner (millins $) 2011 (millins $) Share 2010 (%) Share 2011 (%) SAP 1, Salesfrce 1, Oracle 1, , Micrsft Amdcs IBM SAS Institute Cegedim Rightnw Technlgies Others 2, , Ttal 10, , Gartner estimates 35% f all CRM implementatins tday use SaaS, grwing t ver 50% by 2020 accrding t their prjectins. In 2011, mre than $5 billin was invested in sales applicatins. Clud adptin varies significantly acrss CRM sftware categries with Web analytics achieving 95% adptin, Sales Frce Autmatin achieving just ver 50%, and Cnfigure Price Qute (CPQ) achieving 40%. Clud-based Sales Perfrmance Management has the highest cmpund annual grwth rate (CAGR) f any CRM categry accrding t inquiry and client calls. Sales, Custmer Service, Scial CRM and Marketing are the fur fastest-grwing areas f enterprise Sales applicatins n SaaS. Campaign Management is increasingly quickly, up frm 19% using SaaS in 2010 t 29% in Gartner sees significant grwth in Cnfigure Price Qute (CPQ), prjecting a market f $300M in 2012, up frm $240M in Gartner is due ut with a MarketScpe n CPQ shrtly, where the 15 majr vendrs it tracks in this area will be ranked. 40% f existing implementatins are n SaaS, and that prprtin is increasing relative t licensed versins Page 16

18 Of the 15 vendrs in this market, 12 have annunced SaaS-based versins f their applicatins. By 2017, 25% f cmpanies adpting CRM will have extended their custmer service cntact centres t include scial media including Facebk, Twitter and ther emerging nline cmmunities. As f 2012, Gartner is seeking nly 1% f cmpanies integrate scial media int their cmpanies departments and wrk flws t ensure a cnsistent custmer experience. Size f Unified Cmmunicatins Market In 2011, the ttal number f wrldwide crprate unified cmmunicatins (UC) users amunted t 104 millin. This figure is expected t grw t nearly 234 millin crprate users by year-end Page 17

19 Disclaimer Please nte that this respnse and the included links can nly be treated as advice and are nt a substitute fr prfessinal cuncil. Page 18