Global IT Spending by E-Grocers 2015-2019

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2015-2019

TECHNAVIO.COM

GLOBAL IT SPENDING BY E-GROCERS

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TECHNAVIO.COM GLOBAL IT SPENDING BY E-GROCERS 2015-2019

AMERICAS

CANADA

36 Toronto Street, #505Toronto, ON M5C [email protected]

UNITED STATES110 E Schiller Street, #208Chicago, IL [email protected]

EUROPE, MIDDLE EAST, AFRICA

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PART 01: Executive summary 5

Highlights 5

PART 02: Scope of the report 6

Market overview 6 Offerings of the top vendors 6

PART 03: Market research methodology 8

Research methodology 8 Economic indicators 9

PART 04: Introduction 10

Key market highlights 10

PART 05: Market landscape 16

Industry overview 16 Market overview 17 Market size and forecast 21 Five forces analysis 22

PART 06: Geographical segmentation 23

Segmentation of global IT spending by e-grocers bygeography 23 Americas 24

EMEA APAC

PART 07: Market drivers PART 08: Impact of drivers PART 09: Market challenges PART 10: Impact of drivers and challenges PART 11: Market trends PART 12: Vendor landscape

Competitive scenario Other prominent vendors

PART 13: Key vendor analysis

HP IBM SAP TCS Oracle

PART 14: Appendix

List of abbreviations

PART 15: Explore Technavio

Table of contents





``


List of exhibits






2014 SIZE OF SPEND

$3.57BILLION

2015 GROWTH RATE

21.9%

2019 SIZE OF SPEND

$9.94BILLION

2019 GROWTH RATE

23.5%

CAGR 22.7%

Highlights

Global e-commerce platforms are becoming a boon for the welfare of society becau

they are convenient, easy to access, and buying through them can be less expensi

than traditional shopping. E-grocers are an e-commerce doorstep grocery delivery

channel witnessing a lot of traction among IT players. It needs investment in terms

setting up large servers, networking equipment, hardware peripherals, e-commerce

software, and other enterprise software such as CRM, ERP, and SCM. With the

evolution of new IT products every day and increasing consumerization of IT,

organizations are seeking to invest more in the e-grocery market.

IT companies are undergoing a collaboration with e-grocers to offer e-commercsoftware and solutions to strengthen their marketing as well as enterprise

management

M-commerce platforms are gaining traction among end-users, thus IT companie

offer a comprehensive range of solutions to e-grocers to manage the mobile

workforce and strengthen the operation across the supply value chain

Established offline retailers have invested more in IT to enter the e-grocers mar

over the past five years and most of the investments are expected to happen in APAC

E-grocers companies in the US are still reluctant to invest in IT because of the ltraction of online grocery shopping among end consumers

PART 01:

Executivesummary






Market overview

This report covers the present scenario and the growth prospects of global IT spend

by e-grocers for the period 2015-2019. To calculate the size of spending, the report

focuses on spending made by two types of online grocery company. The grocery

delivery marketplace players considered in the report are of two types: players whic

offer on-demand delivery services that connect consumers with local merchants in

neighborhood grocery shops; and other players who store and deliver the groceries

demand.

The report presents an overview of e-grocers' spending across the IT market. It also

presents the vendor landscape and a corresponding detailed analysis of the five ma

vendors of IT technology supporting e-grocers. In addition, it includes the major driv

that influence the growth of the market and the challenges faced by the vendors an

the market at large. It also outlines the key trends emerging in the market that willcontribute to its growth during the forecast period.

Offerings of the top vendors

Some of the products offered by the major vendors of IT technology supporting e-

grocers are listed below.

Product offerings

Company Products offered

HP

In-store POS system

HP Neoware c50 Thin

Clients

HP 5545 Thin Clients

POS system

Linux OS

Microsoft Windows Server Microsoft Windows

Terminal Services

VMware Server

Remote Desktop Protocol

PART 02:

Scope ofthe report






Company Products offered

IBM

IBM SurePOS 500 Series

IBM SurePOS 300 Express

IBM SurePOS 500 Express

IBM SurePoint Printers

Oracle Eloqua

SAP

ERP

CRM

E-commerce

TCS POS systems






Research methodology

This Technavio report is based on the synthesis, analysis, and interpretation of

information about global IT spending by e-grocers collected from specialized source

Technavio analysts have derived insights using a mix of primary and secondary

research with the aim of providing a holistic picture of the market.

PART 03:

Market researchmethodology Primary research

• Vendor briefings• Interviews with industry experts

and centers of influence

• Telephone and online surveys

Qualitative analysis • Drivers, challenges, and trends• Vendor analysis

Top-down approach

Secondary research

• Proprietary tools and databases• Company reports and publications• Webinars and podcasts

• Industry journals and publications

Quantitative analysis • Market size and market share• Statistical models

Bottom-up approach






Economic indicators

Technavio has conducted a detailed study of global economic conditions and other

economic indicators to assess their impact on the current condition of global IT

spending by e-grocers and to make informed predictions about future market

scenarios.

Microeconomicindicators

Macroeconomic indicators

Mesoeconomicindicators

Data collectionand analysis






Key market highlights

Key customer segments

Pure-play online deliveryplayers

Hybrid players

Key market challenges

Lack of SME-specific solutions

Integration issues with e-grocers

platforms

Limited number of vendors in

the e-grocers marketplace

Key market drivers

Need to enrich the customerexperience

Need for system integration

Rising concern for cloud security

Key market trends

Rising m-commerce platforms

Increasing security measures for

payment gateways

Increasing focus on information

gathering and dissemination

Technology is opening new horizons for end-users which in turn is changing consumbuying behavior. Retailers are refocusing their business strategy for integrating onli

and offline media to create a seamless personalized omni-channel customer

experience.

Digital channels greatly influence purchases, as shoppers are using smartphones to

read product reviews or compare prices. Smartphone usage and improved bandwid

is leading to increased internet penetration, which in turn is accentuating e-commer

As online commerce increases it will have a cascading effect on the online grocery

business.

As grocers are moving toward the omni-channel approach for reaching out to

customers, integration of online and store systems is becoming a business imperat

for grocers. The challenge posed for creating a single platform for inventory, custom

data, suppliers, distributors, and order management poses a business opportunity f

IT vendors. Another opportunity lies in creating multi-functional POS systems, whic

PART 04:

ntroduction






should be flexible and accept in-store orders and online orders for home delivery.

Current POS systems are not offline- and online-mode integrated.

IT vendors are also providing e-commerce tools having in-built substitution

management capability to provide alternative product options in place of the sold-ou

product to mitigate the risk of inventory clearance. In addition, they are also providin

solutions for synchronizing the in-store and online price variation as pricing for

perishable goods is highly volatile. In addition, they are providing solutions for

integrating order management systems with backend system and analytics tools to

streamline the online order management and extract meaningful insights.

E-commerce companies are reluctant to adopt data registry standards such as

UCCNet which is still leading to poor data quality. Manual entry of data leads to poo

master data management and this is a challenge faced by those e-grocers that

maintain their own inventory.

In addition, the exponential rise of both structured and unstructured data is leading

increased investment by e-grocers in predictive analytics tools. As they have a vast

pool of data such as customer web navigation, they can get an overview of their

customers and provide contextual offerings to them. E-grocers are also investing in

CRM and SCM analytics to provide the relevant offers and design a personalized

shopping experience for consumers.

Some of the successful e-grocers and their respective funding is as follows:

List of top funding

Company Funding Investors

BigBasket $85.8 million

$3 million seed funding

Series B funding/$32.8 million

ICIC Venture

Zodius Capital

Series C funding/$50 million

Ascent Capital Group

Bessemer Venture Partners

Helion Venture Partners






Zodius Capital

Grofers $45.5 million

Seed funding/$500,000

Series A funding/$10 million

Sequoia Capital

Tiger Global Management

Series B funding/$35 million

Sequoia Capital

Tiger Global Management

Freshdirect $91 million


CIBC Capital Partners

Mercantile Capital Partners


Ventures


Ventures

Blue Apron $193 million


Alan Gould


BoxGroup



BoxGroup


Stripes Group






Series D funding/$135 million

Fidelity Investments


BoxGroup

Redmart $55.1 million

Series A funding/Undisclosed

amount

DHG Communications Network BV

East Ventures

Garena

Golden Gate Ventures

Ohad Gilad

Toivo Annus


Garena

Eduardo Saverin

Ohad Gilad

SoftBank Capital

Softbank Ventures Korea

Visionnaire Ventures

Series C funding/$26.7 million

Eduardo Saverin

Far East Ventures

Garena

Softbank Ventures Korea

Visionnaire Ventures



https://www.crunchbase.com/organization/garena

https://www.crunchbase.com/person/eduardo-saverin

https://www.crunchbase.com/person/ohad-gilad

https://www.crunchbase.com/organization/softbank-capital

https://www.crunchbase.com/organization/softbank-ventures-korea

https://www.crunchbase.com/organization/visionnaire-ventures


https://www.crunchbase.com/organization/far-east-ventures







https://www.crunchbase.com/organization/far-east-ventures




https://www.crunchbase.com/organization/softbank-capital

https://www.crunchbase.com/person/ohad-gilad






Instacart$274.8

million

Seed funding/$2.3 million

Canaan Partners

FundersClub

Khosla Ventures

Semil Shah

Series A funding/$8.5 million

Sequoia Capital

Michael Moritz


Andreessen Horowitz (Lead)

Partner: Jeff Jordan

Aaron Levie

American Express Ventures

Canaan Partners

Khosla Ventures

Sam Altman

Sequoia Capital


Andreessen Horowitz (Lead)

Partner: Jeff Jordan

Aaron Levie

Canaan Partners

Comcast Ventures

Khosla Ventures

Kleiner Perkins Caufield & Byers






Sam Altman

Sequoia Capital

Thrive Capital






Industry overview

The on-demand economy is revolutionizing commercial behavior around the world.

The concept is defined as the economic activity created by technology companies t

fulfill consumer demand via immediate provisioning of goods and services. The on-

demand economy has captured public sentiment and imagination. Instead of goods

and services coming from businesses to consumers, the business is led by consum

The growth of the on-demand economy is the result of growing consumer appetite f

convenience and speed.

Some of the on-demand economy market categories are:

Grocery

Food delivery

Cab aggregators

The grocery industry has been one of the untouched sectors despite the rise of onli

shopping, but over the past five years the retail industry has witnessed a revolution

change as start-ups and established retail companies are realizing and implementin

more delivery services using technological innovations within their stores. In the

gradually growing and demanding grocery arena, companies are looking to stay

competitive and build an edge over the rest in the marketplace.

PART 05:

Marketandscape






Business framework of on-demand economy

Source: Technavio 2

Market overview

Global e-grocers' IT spending is full of opportunities. As in most of the developing

countries the e-grocers segment is mainly dominated by the small and mid-sizedplayers. During the past year, the market has been witnessing a lot of venture capit

funding to embrace the benchmark of services and hence lot of e-commerce giants

such as Amazon are coming up with online grocery delivery business models. Alon

with that some of the established e-commerce players are planning to enter the e-

grocers market such as Flipkart and Alibaba-backed payment platform Paytm.

On-demand economy

Core on-demand

services

Logisticsmanagement

Offline services tomove online

Vendor

management

Other resources

Payment system

Cloud services

CRM platforms

Technology

Mobile adoption

App marketplace

Internetconnectivity

Consumer

behavior

ConvenienceEfficiency

User-friendly






Most of the e-grocers business model falls under two categories: home delivery and

'click and collect' model.

Maturity model of e-grocers business

Click and collect model

The click and collect model needs low IT spending as illustrated in the diagram and

has low entry barriers because it is less complex to offer online and mobile shoppin

options. It lacks scalability, as managing and forecasting inventories is difficult, and

there are some costs associated with training the staff required to fulfill 'click and

collect' orders.

The US was an early adapter of this model. Companies such as MyWebGrocer pro

a low risk option and thus low investment was needed to establish a virtual

supermarket by creating a company-branded website and taking online orders. In th

model consumers have the option to pay on POS terminals when they come to colle

the order.

Although it requires low investment, it does require significant change management

both central distribution and local stores for running the business processes of pick

and preparing the orders.

Home delivery model

Home delivery is complicated and expensive for grocery retailers compared to click

and collect as it requires a high degree of logistics intelligence and associated

business processes which can increase the costs and complexities involved. Leasin

From existing stores

From existing storesDrive-through pickup

from local distribution

center

From central

distribution centers

I T s

p e n d i n g

Operation scalability

In-store fulfilment Warehouse fulfilment

Click and

Collect

Home

delivery






and managing a delivery vehicle fleet, establishing order management systems for

inventory management and routing of orders, and implementing scheduling system

manage delivery routes are some of the areas where e-grocers' spending is focuse

Global IT spending by e-grocers is categorized into three broad segments: IT softw

spending, IT hardware spending, and IT services spending.

Segmentation of global IT spending by e-grocers by product

Source: Technavio, 2

Global IT

spending by e-

grocers

IT software

IT services

IT hardware






IT software spending

IT software spending by e-grocers consists of software solutions, application

development, API, operating systems, and LBS technologies. E-grocers are

concentrating on system integration and application development solutions to impro

the reliability of their app-based online ordering and delivery systems.

IT hardware spending

IT hardware spending by e-grocers includes procuring of personal computers, serve

storage devices and systems, peripheral devices, and telecommunication and netw

infrastructure.

IT services spending

IT service spending includes on software testing, database maintenance, IT supporpayment services, and cloud services. E-grocery firms require IT services for speed

flexibility, and scalability to deliver superior on-demand services.






Market size and forecast

Global IT spending by e-grocers was valued at $3.57 billion in 2014 and is expected

reach $9.94 billion by 2019, growing at a CAGR of 22.7%.

Global IT spending by e-grocers ($ billions)


Global IT spending by e-grocers is dominated by the investments made by leading

grocers such as Peopod, AmazonFresh, Google Express, and Instacart. These

companies introduced the concept of same-day delivery of products which requires

high level of technological competence to streamline the supply and distribution cha

as well as acquire and retain new customers.

Most e-grocers have been facing challenges to improve the complex SCM of groce

as this can vary depending on location. Most of the entrants to the market run pilots

selected cities and progressively roll out these services in other cities. Efficient deliv

systems, high-end IT infrastructure, and cost management are some of the key are

companies are looking to improve their business output.

With the development of online spending of consumers, e-grocers are investing in t

implementation of PCI/DSS so that they can capture the consumer information such

name and address for home delivery. Some of the online grocery delivery stores

convert them to tokens and link store transactions on the same card to the specific

consumers, helping to build a CRM database. In this market of intense competition

more service providers are likely to emerge during the forecast period.

3.57 4.35 5.32 6.54 8.05 9.94

21.9%

22.3%

22.9%23.1%

23.5%

21%

22%

22%

23%

23%

24%

24%

0

2

4

6

8

10

12

2014 2015 2016 2017 2018 2019

Revenue Growth rate






Five forces analysis

Five forces analysis


Bargaining power of suppliersLow

The market is not dependent onsuppliers. This makes the bargaining

power of suppliers low.

Threat of substitutesModerate

There are companies

coming up with a hybridmodel, some of which areestablished supermarket

chains. The threat ofsubstitutes is moderate

because many companiesare developing their own IT

teams.

Threat of new entrantsHigh

The e-grocers marketplace

witnessed a number of start-ups joining the race in 2014. The trend is

expected to grow in the forecastperiod. This enormous growth of thesector led a number of IT players toshift their focus to the food deliverymarket, making the threat of new

entrants high.

Threat of rivalryHigh

Companies such as Google andMicrosoft are some of the IT

giants catering to this market. The services offered by the ITplayers to the online grocery

delivery marketplace are similarwith very low product

differentiation, making the threatof rivalry high.

Bargaining power ofbuyers

Moderate

E-grocers are very consciousof their IT spending.Companies demand high

quality service at reasonableprices, which makes them

trust reputable brands in theIT domain, resulting in

moderate bargaining power.






Segmentation of global IT spending by e-grocers by geograp

Global IT spending by e-grocers is dominated by APAC, accounting for 60.3% of th

market. A number of countries in APAC are at a nascent stage of adoption of online

grocery stores yet it has witnessed tremendous growth over the past two years and

hence vendors are seeing significant investment from e-grocers boosting their IT

spending.

The Americas accounted for 15.5% of the market. Companies are focusing on

enhancing the digital experience of consumers and improving the engagement leve

such as product listing, coupons, and ordering and delivery experience. Relay,

Freshdirect, Safeway, Amazon, Tesco, and Walmart are some of the top spenders

IT to offer a seamless business structure and improve the customer experience usi

customer intelligence tools.

Geographical segmentation of global IT spending by e-grocers 2014


EMEA accounted for 24.2% of the global IT spending by e-grocers. The UK and

Germany are the top IT spenders help boosting the sales of online grocery and

spending of consumers have become fourth times in online grocery shopping

compared to traditional shopping in UK. This has opened a gateway for many SME

come up with online grocery stores in Europe and hence they are spending on IT

services and software to strengthen their CRM and SCM.

APAC60.3%

EMEA24.2%

America15.5%

APAC EMEA America

PART 06:

Geographicalsegmentation






Americas

Competition among e-grocers is heightened as the prices of products are competitiv

on the grocery websites. Amazon and Walmart in North America have an edge on t

competitors because of their well established brand names and vast distribution

networks, along with robust logistics and delivery systems.

In spite of ongoing changes in the technologies and growing usage of online chann

the Americas is falling behind in growth compared to other regions and the online

grocery industry in the Americas has failed to create enough traction in the e-

commerce market. According to Technavio research, the general retail sector is

making great strides in the online space, while e-grocery retail is falling behind

expectations in the US as it struggles with several business process and logistics-

related challenges.

In past decades, there was lack of investment in this sector in the Americas. Howev

the shifting attitudes of technology-savvy consumers, coupled with increasing

competition among the traditional retailers, has encouraged grocery retailers to exp

the online marketplace. They are rapidly investing in innovative technologies,

implementing robust customer winning and retention strategies, and adopting

competitive ways of increasing their market share.

EMEA

EMEA is the second largestdestination for IT vendors to enter the

e-grocers market. European

shoppers spend significantly highly

on e-grocery purchases. This makes

e-commerce more of an opportunity

than a threat for the giant retailers to

tap the online grocery marketplace.

The UK has the largest number of

online grocery shoppers in Europe.

However, it is likely to be overtaken

by France because of the rising

popularity of the 'French drive model'

- shoppers select and buy products

UK online grocery sales were valued at$15.2 billion in 2014 and are expected toreach over $25 billion by 2019. The UKis followed by online grocery sales inFrance and Germany.

The click-and-collect model is giving

established retailers a new approach todrive loyalty and reach potentialconsumers on-the-go at remotelocations. Asda has introduced the firstfully automated 24-hour online grocerycollection point this year.






online but drive to a pick-up store for collection.

APAC

The online grocery delivery marketplace in APAC is gaining traction in developing

economies such as India and China. The market has witnessed the emergence of anumber of successful start-ups investing a bigger chunk of their sales revenue in IT

enhance consumer engagement. In line with this, a lot of venture capitalists and we

established e-commerce companies are investing in these start-ups as they have a

bigger market to tap because of the high populations in China and India. For examp

China's biggest e-commerce player Alibaba has invested $575 million of funding to

Paytm as a part of fresh funding to back the new business of online grocery retailing

Most of the big cities and metropolitan areas in China and India are witnessing a

growth rate of over 25% in the online grocery market. Some of the established play

are BigBasket, LocalBanya, Zopnow, Yihaodian (acquired by Walmart in July 2015)Epermarket, and Kate & Kimi.

The market is gaining traction among cab aggregators as they have started their ow

online grocery stores. For example Ola has launched its own online grocery deliver

store named OLAstore. Japan-based messaging app company Line has launched t

first online grocery delivery services in Thailand.

The rising popularity of such applications and high availability of e-commerce softw

platforms such as Magento, Opencart, Prestashop, and 3D Cart helps graduates an

industry people to start an online grocery store effectively. The utilization of the righcommerce software can help e-grocers to build an effective application or user-frien

website as the consumer looks for easy navigation and order history details.

In China most of the online grocery sales are driven by digital marketplaces such as

Tmall, owned by Alibaba, and JD.com as pure-play online grocery players offer an

increasingly broad product selection.






Some of the growth drivers are listed below:

Need to enrich the customer experience


Rising concern for cloud securityNeed to enrich the customer experience

The online shopping behavior of an online grocery shopper is not the same as in

traditional retail shopping. Consumers can navigate the whole online grocery store

some clicks on their personal computer or smartphone. Online e-grocers are

increasingly spending not only to develop user-friendly websites; they are offering

coupons and weekly sales promotional offers which also need to be integrated with

existing databases of their inventory holdings. These promotional coupons can be

provided in terms of bundling of products or with any single product. E-grocers shou

be more consistent over things such as providing access to coupons, pulling up pas

purchase lists, saving lists so that products can be easily re-ordered, loyalty and

coupon management, robust account management, personalized product assortme

subscription, and automation of recurring orders.


With online grocery platforms, the ability to integrate core e-commerce components

with backend and user-facing application interface is crucial. Companies are looking

for open architecture that allows close-fitting integration with the existing systems.

Online grocers have been focusing on scaling up their operations and online offerin

based on integration of three major components:

Loyalty program: Loyalty programs are one of the crucial factors online grocery retailers

focusing on. Unlike in traditional grocery shopping consumers can shop at many diffe

grocery stores for their basic needs, but in online shopping consumer retention is cr

because of intense competition. These programs are entirely driven by third-party data

systems or complex internal sources which consume all key customer data such as purc

history, web-stores frequented, and profile information. These critical data points are use

creating personalized promotions and coupons for their customer base. Therefore e-gro

focus on capturing these data from the various mobile and online touch points and tig

integrating them into the systems of database records. Record integration for new mem

registration via different channels such as online and mobile is also crucial.

Point of sale: Retailers have always faced challenges in the integration of legacy POS syst

and online channels. However, this integration is a key factor in offering a seamless o

channel experience to the customer. It is important to build an order system of records that

handle returns and service customer complaints as a part of an integrated ordering system.

PART 07:

Market drivers






it is equally important for a store manager to provide the ability to override pricing at the

level.

Inventory: Integration with inventory systems is imperative for all retailers looking to achie

unified omni-channel experience for their customers. Fast turnover in many product segm

has pushed e-grocers to approach the tight integration with inventory systems for store-

availability and hence achieve the confidence in the minds of shoppers that online gro

orders will be fulfilled completely.

Rising concern for cloud security

Some start-ups in the online grocery delivery market are facing a great deal of

pressure as they are offering services in a highly competitive market with many of th

retail giants. To enhance the customer experience e-grocers are focusing on improv

their supply chain and taking serious account of all customer feedback. With a lot o

challenges facing business leaders, these companies are investing in IT to ensure t

safety of their vital information and customer financial data and hence network secu

policies need to be at the core of every online grocer's IT strategy. Most of the e-

grocers are using cloud platforms as it is the only dynamic and powerful option for

infrastructure needs. With more organizations depending on the cloud, there is a ne

to be cautious when teaming up with service providers. The delicate nature of the

grocery supply chain and stiff competition from industry leaders requires new entran

to place a heavy emphasis on the safety of the information. Without proper security

measures, smaller firms risk fragmented business operations leading to dissatisfied

customers and tarnished reputation.






Impact of drivers


PART 08:

mpact of drivers

Drivers Impact on key customer

Need to enrich thecustomer experience

Pure-play onlinedelivery players

Hybrid players

1 1

Need for systemintegration


Hybrid players

4 4

Rising concern forcloud security


Hybrid players

4 4


Hybrid players

4 4






Some of the challenges are listed below.


Integration issues with e-grocery platforms

Limited number of vendors in the e-grocers marketplace


Some of the barriers faced by SMEs in the adoption of e-grocers solutions are:

Technical barriers: Lack of IT infrastructure such as broadband connection in ru

areas, lack of knowledge of methodologies and models and of e-commerce, and

lack of full measures for internet security are some of the technical barriers to th

adoption of e-commerce solutions

Financial barriers: Lack of financial infrastructure to ensure implementation and

upgrading of e-commerce suites and the high cost of installation and execution

some of the financial barriers to the adoption of e-grocers solutions

Organizational barriers: A traditional organizational setup poses barriers to the

adoption of e-commerce solutions. Some enterprises still deploy traditional e-

commerce infrastructure and are reluctant to change their traditional methods o

retailing

Moreover, enterprises face legal barriers due to the lack of legal and regulatory

standards to govern the proper adoption and implementation of e-commerce solutio

Furthermore, SMEs are facing challenges in selecting the right vendor. Due to the

presence of many e-commerce solution providers, SMEs need to conduct thorough

research on the various tools and technologies offered by solution providers before

adopting their solution.

Integration issues with e-grocers platforms

There is no single application that solves all integration issues. Most large-scale

implementations require some form of customization, which may cause issues that

place vendors and consultants at odds with their customers. The level of integration

applications will also affect the initial costs, maintenance costs, and upgrade costs.

higher level of integration could lead to complexity when not properly managed, wh

would result in low efficiency. CRM solutions should also be aligned to corporate

strategies with solid roadmaps, enabling operational systems to work bi-directionall

with analytical systems and identify focused incremental deployment use cases.

However, there is a serious dearth of skilled IT professionals that can perform the

integration process.

PART 09:

Marketchallenges






Limited number of vendors in the e-grocers marketplace

A lot of e-grocery companies are looking to establish their own IT team to handle th

marketing as well as supply chain and designing their online ordering and delivery

platform as the market is witnessing a lack in the standard technology offerings and

companies are confused about choosing the right vendor for their business modelsCompanies in the e-grocers market are expanding their footprint to reach out to a

larger customer base. For instance, Amazon has come up with its online grocery st

Kirana Now in India because of the rising popularity of online shopping in India. The

company has a significant presence worldwide with different online grocery store

names. In order to provide enhanced service in the global market, companies need

customized solutions according to the country’s culture. The global IT service provid

face the challenge of standardization of the IT requirements of e-grocery companies

and hence face difficulty in maintaining partnership with the companies. In this

marketplace companies require vendors that can partner with them as technologypartners to cater to the local competition. The technology model of online grocery

delivery companies requires scalable and flexible software architecture that can

process efficiently in developing and developed countries.






Impact of drivers and challenges

Drivers Challenges

Need to enrich thecustomer experience

Lack of SME-specifsolutions

Need for systemintegration

Integration issues witgrocers platforms

Rising concern forcloud security

Limited number ofvendors in the e-groc

marketplace


01234 0 1 2 3 4

01234 0 1 2 3 4

01234 0 1 2 3 4

PART 10:

mpact of driversand challenges

2015 2017 2019






Global IT spending by e-grocers is fragmented worldwide. Over the past five years

has started to take shape. With much investment coming from venture capitalists,

starts-ups are beginning to spend more on IT to streamline their distribution of prod

and order management. In addition, many of the well established players such as

Tesco, Walmart, and Amazon have entered into the e-grocers IT space empowerin

various technology trends. Some of these are listed below.


Increasing security measures for payment gateways

Increasing focus on information gathering and dissemination


The increased adoption of mobile devices and smartphones and rising popularity of

mobile commerce is driving the growth of global online grocers' IT spending. More t

50% of customers who shop online use tablets and smartphones. This trend is

expected to rise as mobiles become more consumer-friendly. Several retailers have

developed smartphone applications to tap the potential of mobile commerce. There

also an increase in the use of Android-enabled smartphones and iPhones for surfin

making reservations, online payments, and online shopping, which has created the

need for e-commerce solutions to integrate mobile devices with other sales channe

Furthermore, there has been a rapid increase in the number of smartphone users

worldwide. By the end of 2015, the smartphone penetration is likely to reach over 7

worldwide because of the advanced features and apps available. Some online groc

such as Grofers, Big Basket, Tesco, and Freshdirect are increasingly investing in th

integration of payment gateways with mobile platforms which can give quick access

consumers. This will positively influence the e-grocers' spending on technology dur

the forecast period.

Increasing security measures for payment gateways

Online grocery shopping is likely to witness the highest number of transactions afte

the mobile recharge within a year or two. Some companies are aggressively investi

in order to provide a secure payment gateway to consumers. In line with this, many

online payment and e-commerce solution providers are raising funds to improve the

technology offerings. For instance, Amsterdam-based Newgen Payments has raise

funding in 2015. It helps its merchants to create online and mobile e-commerce

platforms by designing their websites, offering development and hosting services, a

simplifying the checkout process by providing payment options. Its analytics softwa

ensures sales and website security and optimizes the shipping options. Its cloud-ba

PART 11:

Market trends






payment gateway is built on Microsoft Azure platform which allows merchants to

accept secure payments from their app and websites. Some of the other start-ups a

NumberMall, based in Hyderabad, which has raised equity funding, and Jaipur, Ind

based Razorpay, which has raised $120,000 funding from a US-based company.

Increasing focus on information gathering and dissemination

Some start-ups and mid-sized companies are focusing on targeting the right segme

with IT-enabled marketing tools. Enterprises are focusing more on aligning marketin

channels with organizational business strategy. Marketing automation software allo

companies to generate highly qualified leads that are ready for sales engagement.

provides the framework for companies to target, build, execute, and measure the

success of marketing campaigns by identifying the buyer-readiness conditions for

generated leads. As social media marketing gains popularity, SMEs and large

enterprises are benefiting from social networking sites and their respective CRM

platforms. SMEs use social networking to reach more people and improve the visib

of their products and services. Social-based customer engagement applications he

companies derive business insights as well as prospective demands, benefiting bot

the company and customers.






Competitive scenario

With growing internet penetration, large customer base, and the rising popularity of

online shopping, a quantifiable number of entrepreneurs have the potential to create

stores for groceries such as GroceryRun in Australia, Instacart and Peapod in the U

Instabuggy in Canada, Yihaodian in China, and Grofers, BigBasket.com,

LocalBanya.com, AaramShop, and many more in India. In addition, many of the

existing retail chain stores have established online grocery delivery services in

metropolitan areas and major cities. Coles Supermarket, Walmart, AmazonFresh,

Safeway, and Tesco are some of the leading supermarket chains focusing on

penetrating the regional areas. Amazon has recently launched an express-delivery

platform in partnership with local mom-and-pop stores. The US e-commerce giant is

running a pilot in Bengaluru, India at present. It has undergone a tie-up with gourme

food retailer Godrej Nature's Basket.

Many IT companies can see high potential in the e-grocery marketplace. Security is

one of the major concerns in the online grocery delivery marketplace. Companies

operating in the space invest heavily in building secured solutions to enhance their

customer base. The security solutions offered by the IT service providers encrypt th

customer information and are more focused on handling the critical information stor

in customer’s credit cards or debit cards to prevent security breaches.

On analysis of vendor offerings for secured solutions, POS systems, virtualization

technology, and offerings from different IT service providers are found to be similar

with little differentiation. Therefore, there is not one vendor that leads the market in

terms of serving the IT requirements of food delivery marketplace companies. Some

the key players in the market are IBM, HP, Microsoft, and NetSuite.

HP

HP is one the leading IT service providers to the e-grocers marketplace. The compa

offers improved security solutions with the encryption of customer data, central

administration of proprietary POS systems, and fast and easy workstation deploym

The impetus for secured solutions in terms of customer information comes with new

PCI regulations on how credit card information should be handled, stored, encrypte

and passed along the internet. The HP thin client offering running on Linux OS offe

easy manageability.

IBM

IBM is one of the leading vendors in the IT marketplace supporting the e-grocer

industry. The company has several years of experience in offering solutions in the

PART 12:

Vendorandscape






market; it offers POS and self-service to improve the logistics and supply chain

operations. IBM’s Sure POS 500 family has been widely accepted among e-grocers

one of the leading POS platforms. These solutions help to enhance customer

experience and optimize the point of service with minimal loss. IBM and its business

partners offer solutions such as online ordering, digital menu boards, and integrated

loyalty solutions. The company’s solutions are designed to maintain some importan

factors of the food services industry such as customer experience while making the

transaction at the point of sale. Speed, accuracy, effectiveness, and enhanced

productivity are some of the features of IBM’s solutions. The company also provide

robust infrastructure including reliable touch technology, system management, and

service/support. However, the company faces some challenges in providing its

solutions. For example, as operators expand their services in emerging economies,

maintaining global brand promises while adapting to local tastes and expectations i

difficult.

Oracle

Oracle offers CRM and marketing technology software to e-grocers.

SAP

SAP is a leading provider of cloud-based ERP/financials and omni-channel comme

software suites. The company offers online service experiences through a single clo

platform that combines e-commerce, in-store POS, and order management with the

back office systems of restaurants. It also helps in central management of orders fro

multiple channels. SAP is the world’s most deployed cloud ERP. The software

streamlines the finance operations across an entire organization and provides real-

visibility which helps in taking faster decisions.

TCS

TCS is one of the leading providers of POS systems. POS systems offered by the

company are used for inventory management, order management, and staff

scheduling. Microsoft offers Hyper-V virtualization technology, which helps e-grocer

better manage their online orders.






Other prominent vendors

Company Description

CiklumEurope's leading provider of IT outsourcing andconsulting services for food delivery companies

such as JustEat

Citrus PayProvides a payment facility for credit card and de

payment services

DemandwareOne of the leading SaaS based e-commerce

platforms catering to retail companies

eBay-GSI Commerce

An outsourcing e-commerce services provider

specialized in creating, designing, developing, an

running online shopping websites. GSI Commerc

was acquired by eBay in 2011

Hybris

Hybris offers e-commerce software and omni-

channel solutions to help online players to innova

faster and sell more

Infosys

Infosys global SCM software allows e-grocers to

streamline their supply chain and IT-related

process. It offers software to develop better supp

chain understanding at a wider level

JDA SoftwareProvides inventory management, supply chain, a

commerce product management software

MapmyIndia Provides LBS services and mapping technologie

MicrosystemOne of the leading OCP providers of retail and

hospitality systems

NetSuiteIts SuiteCommerce allows B2C and B2B

businesses to seamlessly connect every step of a






Company Description

multi-location business, multi-channel, and in-sto

POS to order management, marketing,

merchandising, financial, and customer services

Paypal

PayPal is one of the leading payment gateway

providers for the e-grocers companies as most o

the leading and other prominent players in this

market domain witness an average of more than

50,000 transactions on a daily basis.

PayU Delivers a payment gateway facility for digitalpayment solution

ZaakpayProvides a payment gateway facility through

website and mobile phones






HP

Business overview

HP was founded in 1947 and is headquartered in Palo Alto, California, US. It is a

global provider of products, technologies, software, solutions, and services to individconsumers, large enterprises, and small and medium-sized businesses, including

customers in various sectors such as government, health, and education. As of

October 2014, the company had around 302,000 employees and more than 34,000

patents worldwide.

Business segmentation

HP's business activities are classified into the following segments:

Enterprise group (EG)

Enterprise services (ES)

Others (software, HP financial services (HPFS), corporate investments, persona

systems, and printing)

HP: Business segmentation by revenue

Enterprise group (EG)

It provides a broad portfolio of enterprise technology infrastructure solutions for a

variety of operating environments. The company’s integrated solutions enable

organizations of all sizes to efficiently utilize IT staffing resources and deploy

applications faster.

PART 13:

Key vendoranalysis

Enterprisegroup24%

Enterpriseservices

19%

Others57%






Industry standard servers: Offers entry-level servers and premium ProLiant serv

from software providers such as Microsoft and VMware and open-source softwa

from other major vendors. Its product line includes microservers, towers, traditio

racks, density-optimized racks and blades, and solutions to large distributed

computing companies. It also offers HP Moonshot servers operating on ARM,

AMD, and Intel Atom-based processors Business critical systems: Delivers mission-critical systems over a portfolio of H

Integrity servers created on the Intel Itanium processor that operates the HP-UX

and OpenVMS operating systems, and HP Integrity NonStop solutions and

mission-critical x86 ProLiant servers. Its storage offerings include platforms for

enterprise and SMB environments. 3PAR StoreServ Storage Platform is theflagship product designed for virtualization, cloud, and IT-as-a-service. Its

traditional storage solutions include tape, storage networking and legacy extern

disk products such as EVA and XP, and converged storage solutions that includ

3PAR StoreServ, StoreOnce, and StoreVirtual products

Networking: Includes switches, routers, and wireless local area network andnetwork management products that deliver open, scalable, secure, agile, and

consistent solutions; software-defined networking; and unified communications

capabilities. Its networking solutions are based on the FlexNetwork architecture

designed to allow unified communications, simplified server virtualization, and

multi-media application delivery for the enterprise. Software-defined networking

offers an end-to-end solution to automate the network from data center to camp

and branch

Technology services: Offers cloud mobility and big data based services. It also

provides advice, design, implementation, migration, and optimization of the EG’

platforms including servers, storage, networking, and converged infrastructure.

offers support services such as HP Foundation Care (reactive hardware and

27,045 26,809

0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

2013 2014

Enterprise Group (in $ million)






software support services); HP Proactive Care (remote support technology for r

time monitoring with rapid access to technical experts); HP Datacenter Care

(complete end-to-end support for HP and multi-vendor systems); and Lifecycle

Event services)

In 2014, the revenue for this segment decreased by 0.87% as compared to 201

due to multiple market trends, including weak market demand in Business criticsystems), transition to cloud computing, and rising demand for hyperscale

computing infrastructure products

For FY2014, the EG segment reported revenue of $26,809 million, which

accounted for 24.05% of the company’s total revenue

Enterprise services (ES)

Provides technology consulting, outsourcing, and support services across

infrastructure, applications, and business process domains.

Application and business services: Offers services to develop, revitalize, andmanage applications and information assets. This application approach includes

application development, testing, modernization, system integration, maintenan

and management for applications and cloud offerings. Its portfolio also includes

intellectual property-based industry solutions, along with technologies and relate

services for finance and administration, human resources, CRM, and payroll an

document processing

For FY2014, the ES segment reported revenue of $21,297 million, which accounted

19.11% of the company’s total revenue

Others

The other segments of the company include:

Personal systems: Offers thin client PC, tablets, commercial PC, consumer PC,

workstations, retail POS systems, calculators, and other related accessories. It

offers software, support, and services for the commercial and consumer market

Printing: Offers printer hardware, supplies, media, software and services, and

scanning devices to the consumer and commercial markets

Software: Offers information management, IT management, application testing

delivery, big data analytics, security intelligence, and risk management solutions

various sizes of business and enterprise

HP financial services: Offers flexible investment solutions, such as utility progra

leasing, financing, and asset management services

Corporate investments: Comprises HP Labs and certain cloud-related business

incubation projects






The company offers single-point-of-contact IT service desk software and solutio

that utilize a dependable set of automated processes to handle service delivery

support. It brings together a broad range of ITSM capabilities, big data, and soc

collaboration to equip the workforce with connected intelligence

For FY2014, the other segments collectively reported revenue of $63,348 millio

which accounted for 57% of the company’s total revenue

Business strategy

Operational strategy

HP's long-term strategy is focused on leveraging the advantages of its portfolio of

hardware, software, and services as it is moving toward a changing and hybrid mod

of IT delivery and consumption. This is driven by the growing shift toward cloud

computing and increased demand for integrated IT solutions.

In FY2014, the company planned to return at least 50% of its free cash flow toshareholders through dividend and share repurchases. HP also announced plans to

invest in improving its product portfolio. For FY2014, the company announced plans

invest approximately US$0.12 per share of the savings from its reformation program

into the business.

Recent developments

Company details Description

Key highlights

May 2015: Partners with Aimia, a data-drivenmarketing and loyalty analytics company to

provide safe and scalable environments for

internal and client-facing IT operations

May 2015: Signs an agreement with California

Welfare Client Data Systems (WCDS) to

continue managing the consortium's welfare

eligibility determination system

May 2015: Launches compute platforms and

solutions for data-intensive workloads

December 2014: Launches a full range of IT

operations management solutions built around

big data analytics to assist organizations in

automating and enhancing their applications a

infrastructure technology







December 2014: Enters into an agreement wit

Microsoft to offer Office 365 and HP service

delivery as one comprehensive enterprise

solution

December 2014: Launches new enterpriseproducts and services that help customers to

alter operations across the data center to allow

growth, improve profitability, and increase

business agility

December 2014: Expands its consulting and

support services to help customers

May 2014: Launches the HP Helion portfolio o

cloud products and services

May 2014: Extends industry-leading Z

workstation family into the virtualization realm

April 2014: Unveils new dream color displays

that offer unmatched color accuracy and

affordability

May 2014: Launches a new data center sourc

approach to save customers millions in upfron

capital

April 2014: Introduces a new information secu

service to help businesses reduce risk

April 2014: Introduces a next-generation

enterprise array for mission-critical workloads

April 2014: With Foxconn announces a joint

venture agreement to deliver a new class of

servers for the fast growing global service

provider market

February 2014: Unveils 360-degree convertibl

PC






IBM

Business overview

IBM was founded in 1911 and is based in New York, US. It provides a wide range o

computer products and services. It offers various types of hardware, software,consulting, and infrastructure services. The company has around 379,592 employe

and operations in more than 175 countries. IBM serves various industries, including

automotive, banking, chemicals and petroleum, communications, insurance, life

sciences, media and entertainment, metals and mining, and retail.

Product portfolio

Product portfolio Products

Software

Systems software and Storage softwarWebSphere (integration and

optimization), Security, Cloud & Smarte

Infrastructure (Tivoli), Rational (softwa

management), Lotus (collaboration),

Informix, InfoSphere), Enterprise conte

management, Information managemen

(DB2), Business analytics (Cognos,

SPSS)

Systems and servers

System Networking, PureSystems,

Power Systems (AIX, IBM, Linux), z

Systems mainframe, System x (xSeries

BladeCenter, Business analytics

(Cognos, SPSS), Linux, and UNIX

servers

Storage

Network attached storage, Storage are

networks, Tape systems, Flash systemDisk systems, and Entry-level servers

storage products






Services

Service categories Services

Business services

Application management and

innovation, optimization and business

analytics, and strategy and

transformation

IT services

Resiliency services, End user services,

Integrated communication services, IT

strategy and architecture services,

Technical support services, Security

services, Enterprise mobility services,

Data center services, Managed

services, Server services, Site and

facilities services, and Storage and data

services

Outsourcing servicesBusiness process outsourcing and IT

sourcing

Lab services and training Systems Lab Services (US)

Business segmentation

IBM is a leading technology company. Its business activities are classified into five

business segments:



http://www.ibm.com/services/in/en/it-services/business-continuity/index.html

http://www.ibm.com/services/in/en/it-services/end-user-services.html?lnk=mhse

http://www.ibm.com/services/in/en/it-services/business-communication-services/index.html

http://www.ibm.com/services/in/en/it-services/it-strategy-and-architecture-services.html?lnk=mhse


http://www.ibm.com/services/in/en/it-services/security-services/index.html


http://www.ibm.com/services/in/en/it-services/mobility-services.html

http://www.ibm.com/services/in/en/it-services/data-center/index.html

http://www.ibm.com/services/in/en/it-services/managed-services/index.html


http://www.ibm.com/services/in/en/it-services/server-services/index.html

http://www.ibm.com/services/in/en/it-services/data-center/site-and-facilities-services/index.html


http://www.ibm.com/services/in/en/it-services/storage-services/index.html


http://www.ibm.com/services/in/en/it-services/ibm-global-process-services.html

http://www.ibm.com/services/in/en/it-services/it-outsourcing/index.html


http://www.ibm.com/systems/services/labservices/





http://www.ibm.com/services/in/en/it-services/ibm-global-process-services.html





http://www.ibm.com/services/in/en/it-services/server-services/index.html



http://www.ibm.com/services/in/en/it-services/data-center/index.html

http://www.ibm.com/services/in/en/it-services/mobility-services.html





http://www.ibm.com/services/in/en/it-services/business-communication-services/index.html

http://www.ibm.com/services/in/en/it-services/end-user-services.html?lnk=mhse

http://www.ibm.com/services/in/en/it-services/business-continuity/index.html




IBM: Business segmentation by revenue

Global technology services (GTS)

Global business services (GBS)

Others (software, systems and technology (STG), and global financing)

Global technology services (GTS) segment

Provides business process and IT infrastructure services, using its unique technolo

and IP integrated services within a global delivery model.

For FY2014, this segment reported revenue of $37,130 million, which accounted fo

40.01% of the company’s total revenue.

GTS comprises the following capabilities:

Strategic outsourcing: Provides a wide range of IT outsourcing services to

transform existing infrastructure. The company integrates its expertise in service

management and technology with new technologies from IBM systems and

software, such as analytics, virtualization, and cloud computing, to provide high

performance and improved ability to achieve business targets

Global process services: Offers processing platforms and business process

outsourcing to deliver improved business results through strategic change of the

client's business processes, applications, and infrastructure

Integrated technology services: Delivers a portfolio of project-based and manag

services that help clients to transform and optimize their IT environments. It

improves efficiency, flexibility, and productivity and reduces costs

Cloud: Offers a variety of cloud services that assist clients in building their own

private clouds, building customized dedicated managed clouds, leveraging

Globaltechnology

services40%

Globalbusinessservices

19%

Others41%






standardized cloud infrastructure services from the SoftLayer and Cloud Manag

Services offerings, and creating hybrid environments linking private and public

workloads together

Technology support services (maintenance services): Offers a full range of sup

services such as product maintenance, solution support, and improvement of IT

infrastructure

The revenue of this segment decreased in 2014 in comparison to 2013, due to

divestitures of the customer care and server businesses and because of currency

fluctuations.

Global business services (GBS) segment

Operates through two primary business areas, consulting and systems integration a

application management services. It delivers business value and innovation to clien

through solutions that leverage industry and business process expertise. It drives

initiatives that integrate IBM content and solutions and improve the company's stratimperatives

GBS comprises the following capabilities:

Consulting and systems integration: Offers solutions in strategy and transformaapplication innovation services, enterprise applications, and smarter analytics. I

also provides client solutions that drive smarter commerce, cloud, mobile, and

social businesses

Application management services: Delivers application management, maintena

and support services for packaged software and custom and legacy applications

has advanced capabilities including application testing and modernization, cloud

application services, and standardization and automation of application

management

The revenue of this segment decreased in 2014 in comparison to 2013, due to

divestitures of the customer care and server businesses and currency fluctuations.

For FY2014, the global business services segment reported revenue of $17,825

million, which accounted for 19.21% of the company’s total revenue.

Others segment

The other segments of the company include:

Software: Offers middleware and operating systems software

Systems and technology: Offers clients business solutions that require advance

computing power and storage capabilities






Global financing: Capitalizes on financing assets, leverages with debt, and

manages the associated risks

The company provides IBM infrastructure resource management services, an

accelerator for Virtual Help Desk that provides automated, customized, electronic

support for Microsoft Windows-based environments.

The company's storage software helps organizations manage growing volumes of

primary and backup data effectively. Some of the features of the company's storage

software are:

It adds analytics which helps in predicting usage patterns

Reduces backup infrastructure costs by up to 38%, while improving data protec

It helps in optimizing storage software for physical, virtual, and cloud environme

The business partners of the company include SAP and Oracle.

For FY2014, the others segment collectively reported revenue of $37,838 million,

which accounted for 41% of the company’s total revenue.

Business strategy

Operational strategy

IBM continuously focuses on innovative solutions, software, and infrastructure to

improve client outcomes. In addition, the company is expanding its operational and

geographical presence through acquisitions and associations with market leaders

worldwide. In line with this, since 2000 the company has acquired over 150 compan

IBM in IT professional services sector

IBM is focusing on the IT professional services sector by helping financial services

clients balance costs with agility, achieve profitable growth, and improve their risk

management and industry differentiation. IBM engages in delivering the transforma

of industries and professions with data, enabling systems of engagement for the

enterprise with mobile and social technologies. The company has implemented var

strategic initiatives for expanding its IT professional services business. Some of the

key developments include the following:

May 2015: The company collaborated with Deloitte to provide a transformative

series of regulatory compliance and risk management solutions. Deloitte and IB

are jointly developing various solutions for financial services firms to address the

immediate compliance needs. The company provides a variety of technological

advances in analytics, big data, and cognitive computing, which can generate m

deeper insights






March 2015: IBM expanded its IBM MobileFirst for iOS solution portfolio to addr

major priorities in the financial and banking services, airline, and retail industries

The IBM MobileFirst for iOS solutions include Advisor Alerts (banking and finan

services); Passenger Care (travel and transportation); and Dynamic Buy (retail)

February 2015: IBM collaborated with Citi to design and develop the next

generation of financial technology (FinTech) through the Citi Mobile Challenge.Under this collaboration, IBM will help developers to participate in the Citi Mobil

Challenge to build, test, and deploy their FinTech solutions

July 2014: IBM entered into a multi-year global alliance with Monitise to deliver

cloud-based mobile commerce solutions for financial services institutions

Recent developments


Key highlights

February 2015: Signs a strategic teamingagreement with Tech Mahindra, a specialist in

digital transformation, consulting, and busines

re-engineering

February 2015: Signs a nine-year IT outsourcideal with Birla Sun Life Insurance to redesign

scope applications

February 2015: Launches a new mobile app th

allows clients to securely trade stocks, track a

manage portfolios and market movements, an

analyze industry research and trends

December 10, 2014: Launches high energy

efficient mainframes to drive the next generati

of cloud data centers

November 6, 2014: Introduces the industry's fi

intelligent cloud security portfolio for global

businesses

March 10, 2014: Enters into an agreement wit

Adobe to build specialized enterprise consultin

capabilities for Adobe Marketing Cloud

February 24, 2014: Enters into an agreement

with Juniper Networks to build smarter networ

with predictive analytics

January 2014: Announces plans to sell its x86server business to Lenovo







January 2014: Announces plans to establish I

Watson Group, a new business unit dedicated

the commercialization and development of

cloud-delivered cognitive innovations

January 2014: Completes the acquisition of Aspera, which undertakes the development of

software transfer technologies for business

enterprises

SAP

Business overview

SAP was founded in 1972 and is headquartered in Walldorf, Germany. The companoffers application and analytics software and software-related services for

enterprises worldwide. It serves various industries including aerospace and defense

automotive, banking, chemicals, consumer products, defense and security, and min

Its lines of business include platform and technology, human resources, sales,

sustainability, asset management, manufacturing, service, commerce, marketing,

sourcing and procurement, finance, R&D, engineering, and supply chain.

The company's product categories include analytics, ERP, SCM, content and

collaboration, financial management, CRM, human capital management, supplier

relationship management, technology platform, data management, and product

lifecycle management.

Its solution offerings include analytics, customer engagement and CRM, SAP busin

suite, big data, Internet of Things, SAP HANA platform, business networks, mobile,

security, data protection and privacy, cloud, platform, and small and midsize

enterprises.






Business segmentation by revenue 2014

SAP: Business segmentation by revenue 2014


The company operates through two segments, namely:

Software and software-related services:

Includes revenue from cloud subscriptions and support revenue plus software and

support revenue. Software revenue is generated from selling or licensing software t

its customers. Revenue generated from cloud subscriptions and support refers to thincome earned from contracts. Support revenue represents fees earned from provid

technical support services and unspecified software upgrades, updates, and

enhancements to customers. In FY2014, the revenue recorded was $19.75 billion,


Professional services and other services:

Consists of consulting and other service revenue. The other service revenue consis

mainly of revenue generated from its messaging services and training revenue from

educational services supplied to customers and partners on the use of softwareproducts and related subjects. In FY2014, the revenue recorded was $3.59 billion,


Software and

software relatedservices85%

Professionalservices and

other services

15%






Business segmentation by revenue 2013 and 2014

SAP: Business segmentation by revenue 2013 and 2014 ($ billions)


Software and software-related services:

The revenue for the segment increased to $19.75 billion in 2014 compared to $18.5

billion in 2013, due to changes in volumes and prices.

Professional services and other services:

The revenue for the segment decreased to $3.60 billion in 2014 compared to $3.80billion in 2013, due to changes in volumes and prices.

18.52

3.80

19.75

3.60

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

Software and software relatedservices

Professional services and other services

$

b i l l i o n

2013 2014






Geographical segmentation by revenue 2014

SAP: Geographical segmentation by revenue 2014


SAP in IT professional services sector

SAP provides a wide range of IT professional services in the financial and banking

sectors. The company focuses on the IT professional services business through

various strategic initiatives. SAP has initiated many plans to improve its offering rela

to the sector, which include the following:

Product launch

In June 2015, SAP introduced its SAP HANA platform, a new foundational offering

financial services and insurance companies to manage their finance and integrated

processes.

Contract

In April 2015, it announced that Asian Paints and Citi Simplify Financial Transaction

had integrated their financial transactions through SAP Financial Services Network,

platform designed to simplify interaction between corporations and financialinstitutions.

Recognition

In November 2014, SAP announced that it had been named a leader in Magic

Quadrant for International Retail Core Banking by GartnerTwenty. SAP was

recognized on two key parameters, completeness of vision and ability to execute.

EMEA48%

Americas37%

APEJ15%






SAP in IT spending by region and industry

SAP offers a wide range of solutions related to mobile payment, one of the key

offerings being SAP audit management powered by SAP HANA, which provides the

following benefits:

It tracks and manages various audit issues with global monitoring and follow-up

Integration with SAP Risk Management and SAP Fraud Management based on

business needs

It has initiated many plans to improve its position related to its mobile payment

solutions, which include the following:

Partnerships

In May 2015, it entered into a partnership with Accenture, a global consulting,

technology services, and outsourcing company, by providing its SAP Mobile Platfor

The partnership will allow Accenture's business and revenues to grow by helping it

improve customer satisfaction; enabling sales teams to upsell and cross-sell; and

providing more secure mobile payment to attract and retain customers throughout t

world.

In November 2014, SAP entered into a partnership with Samsung, a provider of

electronic products and services based in South Korea, to add new devices to

Samsung's existing portfolio of wearables and mobile technologies for business use

with extra security features and applications customized to Samsung’s hardware an

SAP’s software for business users which can be integrated into payments solutions

Product development

In January 2015, SAP developed an omni-channel mobile payment cross-industry

solution, which helps connect different payment sources like POS, mobile, and othe

devices through SAP's mobile platform to the payment engine and/or to a loyalty

engine.

Recent developments


Key highlights June 2, 2015: Launches an IT skills

development program in 11 countries in Africa







March 17, 2015: Announces the opening of a

new community workspace, the HanaHaus, in

Palo Alto, California, US

February 18, 2015: Announces the availability

a new solution, SAP Cloud for Planning

January 26, 2014: Announces its plan to launc

a marketing gap analysis tool in collaboration

with Raab Associates

Key partnerships

May 6, 2015: Partners with IBM (a US-based

technology and consulting company) for cloud

to-cloud integration of human resources

software and services March 17, 2015: Collaborates with GEA (a

German system provider for food and energy

processes) to address condition monitoring an

predictive maintenance with the Internet of

Things

March 6, 2015: Enters into an agreement with

the Zain Group to provide big data and analyti

solutions in the Middle East

Awards and recognitions May 26, 2015: Announces that BILT app (a fre

mobile app) has been honored with an Appy

Award in New York, US

Product launches

May 6, 2015: Launches SAP HANA Cloud

Platform for the Internet of Things

May 5, 2015: Unveils the latest innovations in

SAP Lumira and SAP Predictive Analytics

software

April 28, 2015: Announces the availability of th

9.2 version of SAP Transportation Manageme

SAP Warehouse Management, and SAP Even

Management applications

April 27, 2015: Unveils the SAP Sports One

solution for soccer







April 14, 2015: Launches SAP Revenue

Accounting and Reporting application

Acquisitions December 4, 2014: Acquires Concur

Technologies, a company that offers travel an

expense management solutions

TCS

Key facts

Business overview

TCS, a division of Tata Sons, was established in 1968 and incorporated as a separ

entity in 1995. The company is headquartered in Mumbai, India. It is an IT servicescompany which offers consulting, IT-enabled services, and business solutions to

industries worldwide. The company offers wide-ranging services including applicatio

development and maintenance, business process services, enterprise solutions,

assurance services, consulting, asset leverage solutions, and engineering and

industrial services. In addition, it offers mobility, big data, and cloud services.

TCS delivers its services to industries including BFSI life sciences, healthcare,

manufacturing, telecom, media and information services, retail and consumer

packaged goods, metals and mining, travel, transportation, and hospitality.

As of March 2015, the company had 319,656 employees working in more than 190

offices in 55 countries. TCS has established 40 delivery centers operating in 22

countries to ensure effective service delivery. It also holds 114 patents in its portfoli

The company generated $15.52 billion revenue in FY2015.







TCS: Business segmentation by revenue 2015


TCS: Business segmentation by revenue 2014 and 2015

Applicationdevelopment

andmaintenance

40%

Enterprisesolutions16%

IT infrastructure

services14%

Businessprocessservices

12%

Assuranceservices

8%

Engineering andindustrialservices

5%

Consulting3%

Products andservices

2%

5.65

2.10

1.141.63 1.62

0.640.34 0.46

6.24

2.42

1.321.81

2.15

0.700.37

0

1

2

3

4

5

6

7

$ b

i l l i

o n s

2014 2015







TCS: Geographical segmentation by revenue 2015

Market segmentation by revenue 2015

North America52%

UK17%

Europe(excluding UK)

12%

APAC(excluding

India)9%

India

6%

Latin America2%

MEA2%

Banking,financial

services, andinsurance

41%

Retail andconsumerpackaged

goods14%

Telecom,media, and

entertainment11%

Manufacturing

10%

Others24%






Market segmentation by revenue 2014 and 2015

TCS in IT services and BPO sector

TCS focuses on the following strategic areas to expand its business operations in t

IT services and BPO sector:

Continuous investment in digital technologies (mobile, cloud, big data analytics)

drug delivery platforms, and software defined networks. For instance in June 20

the company launched TCS BaNCS Digital, a new solution designed specifically

financial institutions in North America

Creating a significant market presence in APAC, Latin America, the Middle Eastand Africa. For instance, in March 2015 the company opened a new TCS

Singapore banking and financial services center in Singapore

Strengthening customer relationships and expanding its service portfolio by

launching new products, platforms, and delivery centers. For instance in July 20

it partnered with Adobe to enable its clients to fully leverage Adobe’s marketing

platform and its core solutions

TCS in IT spending by region and industry sector

TCS is an IT services and consulting company which offers a wide-ranging consulti

led integrated portfolio of assurance services, engineering services, BPS, and ITservices.

The company also offers banking and financial services for cards, banking technolo

depository/registry, custody, reconciliations, retail banking, investment banking, risk

and compliance, surveillance, corporate banking, wealth management, and

exchanges/trading/broker-dealer,

5.83

1.16

1.881.60

3.12

6.32

1.52

2.101.79

3.78

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

Banking,

financial

services, and

insurance

Manufacturing Retail and

consumer

packaged goods

Telecom,

media, and

entertainment

Others

$ b

i l l i o n s

2014 2015






The company focuses on the following client challenges: increasing regulatory and

security requirements, providing superior levels of customer service, and managing

price pressures.

TCS provides:

Secure and reliable systems which address market changes and develop custo

relationships and also help in securing new opportunities by having a competitiv

edge

Broad end-to-end solutions which enable banking institutions to focus on their

financial services competencies

Recent developments

TCS Description

Key highlights

July 2015: Recognized as a Global Leader in

Card Management and Transaction Processin

Vendors Part IV by Celent

July 2015: Wins 2015 Business Transformatio

Award from Pegasystems at the 2015

PegaWORLD conference in Orlando, Florida,

US

June 2015: Recognized as The Forrester Wav

SAP Service Providers in Asia Pacific, Q2 201

June 2015: Launches TCS BaNCS Digital, anew solution designed specifically for financia

institutions in North America

June 2014: Receives two Stevie awards at the

12th Annual American Business Awards for its

CSR and HR activities

June 2014: Wins China Retail Financial Servic

Award for the best core banking implementatio

May 2014: Receives "Innovation Award" from

Informatica, a premier consulting partner, for itoperational efficiency

April 2014: Receives two "SAP Pinnacle

Awards" for service delivery






TCS Description

March 2014: Wins a multi-million dollar and

multi-year contract from GDF Suez for IT

services

March 2014: Top Employers Institute names

TCS the number one employer in Europe for t

second consecutive year

March 2014: Partners with Microsoft to develo

online versions of Microsoft Dynamics CRM

Key partnerships

June 2015: Partners with K2 to market

comprehensive, integrated, and process-drive

solutions to customers globally

May 2015: Partners with Red Hat to provideopenstack-based NFV orchestration and test

solution

April 2014: Enters into an agreement with

Mitsubishi to merge TCS Japan, IT Frontier, a

Nippon TCS Solution Center into a single entit

February 2014: Enters into a strategic

partnership with Diageo to provide IS services






Oracle

Business overview

Oracle was incorporated in 2005 and is headquartered in Redwood City, California,

US. The company offers database and middleware software, cloud infrastructuresoftware, and hardware systems (includes Oracle engineered systems, servers,

storage, networking, and industry-specific products), and application software, alon

with support and related services.

As of May 31, 2015, the company employed 132,000 employees and had 400,000

customers worldwide. It invested $5.50 billion in R&D activities and generated reve

of $38.23 billion.


Oracle: Business segmentation by revenue 2014


Software and cloud

Includes three sub-segments:

New software licenses and cloud software subscriptions: Markets, sells and

delivers its application and platform technologies which include its SaaS and Pa

offerings

Cloud infrastructure as a service: Provides software and hardware managemen

and maintenance services for customers

Software and

cloud

77%

Hardware

systems

14%

Services

9%






Software license updates and product support: Provides unspecified product

upgrades and maintenance releases and patches that are released during the te

of the support period. It also provides technical support assistance

Hardware systems

Includes two operating sub-segments:

Hardware systems products: Offers a wide range of products including hardwar

systems and related services including Oracle engineered systems, servers,

workstations and related devices, industry specific hardware, storage, networkin

virtualization software, and OS

Hardware systems support: Offers software updates for software components th

are required for the functioning of its hardware products, including Oracle Solari

and other software products

Services

Includes the following:

Consulting services: Offers services related to IT strategy alignment, enterprise

architecture planning and design, initial product implementation, and integration

also provides ongoing product enhancements and upgrades

Advanced customer support services

Education services for Oracle products and services


Oracle: Business segmentation by revenue 2014 and 2015


29.20

5.37 3.70

29.48

5.213.55

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

Software and cloud Hardware systems Services

$

b i l l i o n s

2014 2015






Software and cloud

This segment's revenue increased to $29.48 billion for FY2015 from $29.20 billion i

FY2014 which is an increase of 1% that can be attributed to the growth in updating

software license and product support revenues, growth in its SaaS, PaaS, and IaaS

revenues, and revenue contributions from its recent acquisitions.


Oracle: Geographical segmentation by revenue 2014


Business strategy

The company focuses on growth through acquisition in various markets. In line with

this strategy, the company acquired MICROS Systems in 2014, a provider of

integrated software, hardware, and services solutions to the hospitality and retail

industries, to expand its existing software and cloud, hardware, and related service

offerings for hotels, food and beverage industries, facilities, and retailers.

In addition, it also acquired other companies such as Responsys, a provider of

enterprise-scale cloud-based business-to-consumer marketing software; Acme Pac

a provider of session border control technology; and Eloqua, a provider of cloud-ba

revenue performance management and marketing automation software.

Oracle in IT spending by region and industry

Oracle provides solutions related to mobile payments, which include Oracle Retail

Mobile POS. The initiatives taken by the company to enhance its presence in the

market include the following:

Americas

55%EMEA

30%

APAC

15%






Offering development

In September 2012, it announced that it had built its own in-store mobile POS syste

that leverages on VeriFone's Payware mobile enterprise hardware and software.

Oracle announced that it would use VeriFone, a provider of secure electronic POS

solutions, mobile card readers, and mobile app software development kits to assist building its new retail mobile point-of-service system.

Acquisition

In August 2015, Oracle announced its plan to acquire Maxymiser, a cloud-based

software maker, in order to enhance its web and mobile customer experience.

Maxymiser technology allows markets to test, target, and customize website visits o

apps to drive revenue and customer engagement. The acquisition will help Oracle

Marketing Cloud to strengthen its solution to manage marketing programs across a

digital channels and throughout the entire customer lifecycle.

Recent developments


Key highlights

June 29, 2015: Introduces Oracle Commerce

Cloud, a flexible and scalable SaaS solution th

is built for the Oracle Public Cloud

June 22, 2015: Announced new additions to it

Oracle Cloud Platform, to assist IT

professionals, developers, analysts, and

business users to build, extend, and integrate

cloud applications

June 16, 2015: Launches Oracle Argus 8.0

solutions in order to expand its clinical safety

monitoring and reporting capabilities

June 16, 2015: Announces the availability ofOracle Health Sciences InForm Cloud Service

6.1 that allows life sciences organizations to

accelerate study start-up and expand risk-basmonitoring precision

June 8, 2015: Launches Oracle utilities servic

order management, which is the first

commercially available service order automati

solution







April 27, 2015: Replaces legacy customer

system with Oracle utility solution at Avista

Utilities, a provider of energy services and

electricity

September 29, 2014: Announces the availabil

of Oracle’s zero data loss recovery appliance

which helps in delivering zero data loss

protection for critical Oracle Databases

Key partnerships

April 29, 2015: Enters into an agreement withPanduit, a manufacturer of solutions that

connect, manage, and automate the physical

infrastructure to provide Oracle transportation

management cloud to support business growtand market expansion

April 27, 2015: Launches a new business grou

jointly with Accenture to help customers use t

cloud to achieve their digital transformation

goals

Key mergers and

acquisitions

May 15, 2015: Collaborates with Mirantis to

bring Database as a Service which is powered

by Oracle Multitenant to OpenStack-based

private clouds






List of abbreviations

AMD - advanced micro devices

API - application program interface

ARM - application resource manager

BPS - business process service

CRM - customer relationship management

CSR - corporate social responsibility

DSS - decision support system

ERP - enterprise resource management

IaaS - infrastructure as a service

IS - information system

ITSM - IT service management

NFV - network function virtualization

OCP - open commerce platform

PaaS - platform as a service

PCI - peripheral component interconnected

POS - point of sale

SaaS - software as a service

SCM - supply chain management

SMB - small and medium business

SME - small and medium-sized enterprise

PART 14:

Appendix






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