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In this study, we focus on the dynamics of the 2013 MSP service provider landscape and its impact on the MSP market. We position service providers on the Everest Group PEAK Matrix, categorizing them as Leaders, Major Contenders, or Emerging Players. Key insights and differentiators that set the Leaders apart from the rest of the pack are discussed in detail. We analyze the MSP service provider landscape across market success, scale, scope, technology, delivery footprint, and other differentiating factors
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Market Report: December 2013 – Preview Deck
Topic: Managed Service Provider (MSP) – Service Provider Landscape with PEAK MatrixTM Assessment 2013
Copyright © 2013, Everest Global, Inc. EGR-2013-3-PD-1034
Copyright © 2013, Everest Global, Inc. EGR-2013-3-PD-1034
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Copyright © 2013, Everest Global, Inc. EGR-2013-3-PD-1034
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Background and methodology of the research
Background of the research The global MSP is estimated to be US$60-65 billion based on managed spend and ~US$1.05 in terms of Net Fee Income (NFI). Its landscape is characterized by the juxtaposition of traditional and emerging drivers which are shaping the MSP market in a multitude of ways. To maintain a competitive edge in this evolving space, service providers differentiate their offerings by specializing across various dimensions. However, only some players have the capability to execute deals with both depth and breadth of scope. In this research, we analyze the global MSP market across the following dimensions: l Market overview and service provider landscape l 2013 MSP PEAK Matrix l Key insights into PEAK Matrix dimensions l Key areas of differentiation and specialization
The scope and methodology of this report includes: l Proprietary data collected from ~15 MSP providers l MSP deals with a minimum of four core processes included and minimum contract term of two years l Scope of hires includes temporary/contingent hires, SoW consultants, and independent contractors l Everest Group defines MSP as the transfer of ownership of all or part of the management of an
organization’s contingent/temporary staffing activities on an ongoing basis
Copyright © 2013, Everest Global, Inc. EGR-2013-3-PD-1034
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Table of contents (page 1 of 2)
Background and methodology 5 Executive summary 8 l Summary of key messages 9 l Implications for key stakeholders 12 Section I: Market overview and service provider landscape 13 l Summary 14 l Market size 15 l Market dynamics 16 l Service provider landscape 18 Section II: 2013 MSP PEAK Matrix 19 l Summary 20 l 2013 MSP PEAK Matrix scoring methodology 21 l 2013 MSP PEAK Matrix 23 l Service provider assessment 24
Section III: Key insights into PEAK Matrix dimensions 27 l Summary 28 l Market success 29 l Delivery capability – scale 30 l Delivery capability – scope 31
Topic Page no.
Copyright © 2013, Everest Global, Inc. EGR-2013-3-PD-1034
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Table of contents (page 2 of 2)
Section III: Key insights into PEAK Matrix dimensions (continued) l Delivery capability – technology 32 l Delivery capability – delivery footprint 33 Section IV: Key areas of differentiation and specialization 34 l Summary 35 l Areas of differentiation and specialization 36
– Job category and family 37 – Industry 39 – Deal size 40 – Multi-country MSP 41 – Geographic reach 42 – Global sourcing 44 – Technology 45
Appendix 46 l Glossary of terms 48 l MSP research calendar 50 l References 51
Topic Page no.
Copyright © 2013, Everest Global, Inc. EGR-2013-3-PD-1034
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This report examines the global 2013 MSP service provider landscape and its impact on the MSP market. It focuses on service provider position and growth in the MSP market, changing market dynamics and emerging service provider trends, assessment of service provider delivery capabilities, and key MSP service provider differentiators. It also identifies the key implications of the research findings for buyers and service providers.
MSP market and growth
2013 MSP PEAK Matrix
Overview and abbreviated summary of key messages (page 1 of 2)
l Everest Group PEAK Matrix categorizes MSP service providers into Leaders, Major Contenders, and Emerging Players based on their market success and overall MSP delivery capability
l We assessed service providers’ delivery capabilities along the following four dimensions: – Scale – Scope – Technology capability – Delivery footprint
Some of the findings in this report, among others, are:
l The managed spend in the MSP market grew by 13 to 16% in 2012 to reach US$60 to 65 billion
l The current market size, in terms of Net Fee Income (NFI), is ~US$1.05 billion
Copyright © 2013, Everest Global, Inc. EGR-2013-3-PD-1034
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Key insights into PEAK Matrix dimensions
Key areas of differentiation and specialization
l Key insights on comparing the top quartile performers and other performers on delivery capability dimensions – Market success: The top quartile performers are massively ahead of their
peers in terms of market success, which leads to a domino effect contributing to greater success
– Delivery capability – scope: Top quartile performers are “masters of multiple trades”, across industries, job families, deal sizes, and geographies
l MSP providers differentiate through varying capabilities along multiple dimensions – job category and family, industry, deal size, multi-country MSP, geographic reach, and global sourcing – Industry – MSP providers generally have experience across multiple industries
with focused play around a couple of industries – Technology – Pure-play and niche MSP providers have a stronger focus on
proprietary VMS technology
Overview and abbreviated summary of key messages (page 2 of 2)
Copyright © 2013, Everest Global, Inc. EGR-2013-3-PD-1034
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Others Top quartileperformers
Others Top quartileperformers
This study offers four distinct chapters providing a deep dive into key aspects of the MSP market; below are four charts to illustrate the depth of the report
Source: Everest Group (year)
2013 MSP PEAK Matrix Key insight into PEAK Matrix dimension – scale
MSP provider capability – large sized contracts MSP provider capability – proprietary VMS
High
Low Low
High 25th percentile
25th
per
cent
ile
75th percentile
75th
per
cent
ile
Mar
ket
succ
ess
Delivery capability
Leaders
Emerging Players
Major Contenders
Hudson RPO
Xchanging
AMN Healthcare Capita Resourcing
Yoh
Superior Group nextSource
Hays
ZeroChaos Randstad Sourceright
KellyOCG Allegis Group Services
ManpowerGroup Solutions TAPFIN Average managed spend per provider
FTE (denotes economies of scale) US$ million
Average number of FTEs per provider Number of FTEs
Large-sized deals Mega-sized deals
Market share by deal size Number of deals
100% =
Service provider 1
Service provider 2
Service provider 3
Service provider 4 Service provider 5 Service provider 6
Service provider 7 Others
Service provider 1 Service provider 2 Service provider 3 Service provider 4 Service provider 5 Service provider 6 Service provider 7 Service provider 8 Service provider 9
Service provider 10
Service provider 11 Service provider 12 Service provider 13
ý þ þ ý þ ý þ þ þ þ ý þ þ
Staffing-legacy MSP providers
Pure-play MSP providers
Other “new” providers
Service providers Proprietary
VMS? Number of deployments of proprietary VMS
Copyright © 2013, Everest Global, Inc. EGR-2013-3-PD-1034
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MSP program research calendar
Topic Release date Published Current
December-2013 MSP – Service Provider Landscape with PEAK MatrixTM Assessment 2013
October-2013 Managed Service Provider (MSP) – Mastering the Winds of Change
Q1-2014 Managed Service Provider (MSP)– Service Provider Compendium 2013
Q1-2014 Multi-country MSP: Market adoption, best practices and challenges
Q1-2014 The Rise of Procurement and HR Collaboration – Effectively Managing HR-spend
Q3-2014 Managed Service Provider (MSP) – Service Provider Landscape with PEAK Matrix 2014
Q3-2014 Managed Service Provider (MSP) – Service Provider Compendium 2014
Q2-2014 Managed Service Provider (MSP) – State of the Market 2014
Copyright © 2013, Everest Global, Inc. EGR-2013-3-PD-1034
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Additional research recommendations
The following documents are recommended for additional insight into the topic covered in this research. The recommended documents either provide additional details on the topic or complementary content that may be of interest 1. Managed Service Provider (MSP) – Mastering the Winds of Change (EGR-2013-3-R-0958); 2013. Over the last few years, the
Managed Service Provider (MSP) market has experienced steady growth as well as concurrent elementary changes that are altering the dynamics of the market. Not only are buyer expectation and drivers changing, but also the buyer profile. The service provider landscape is also morphing, as is the operating model of the providers. This flux in MSP makes it imperative for buyers to understand what they can derive from the offering in the market and for service providers to update/upgrade their service portfolio
1. RPO Annual Report 2013 – Dichotomy of Market Exuberance and Subdued Economy (EGR-2013-3-R-0850); 2013. Recruitment
Process Outsourcing (RPO) continued its momentum in 2012 with record new deal signings. However, due to a decrease in hiring volumes, the RPO market grew at a moderate rate of 12% to touch US$1.5 billion. This research provides comprehensive coverage of the market across dimensions such as market overview, key business drivers, buyer adoption trends, transaction trends, and service provider landscape. It also provides predictions for the 2013 RPO market
2. Rise of Blended RPO – Addressing the Total Talent Acquisition Need (EGR-2011-3-R-0597); 2011. The "Rise of Blended RPO" report provides insights into the value proposition of a total talent acquisition approach leveraging a blended RPO solution. It highlights the drivers behind such an approach; provides an analysis of the benefits in terms of financial, business, and strategic impact; and describes challenges and key considerations for adoption
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