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David Ackerman
March 18, 2014
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Gartner Briefing: The Future of I & O
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved. © 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
I&O Perspective
1
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Consulting
Implementation
IaaS
Infrastructure Outsourcing
Applications Outsourcing
BPaaS
Traditional BPO
Software Support
Hardware Support
$0.0
$50,000.0
$100,000.0
$150,000.0
$200,000.0
$250,000.0
$300,000.0
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%
2
The Market Will Not Grow Uniformly — Market Segments Collide and Cannibalize
20
12
Ma
rket S
ize
($M
illio
ns)
2012-2017 CAGR
= $4 billion in 2012-2017 absolute growth
Source: Gartner (February 2013)
IT Services Market 4.5% CAGR
Cloud Services
Outsourcing
Projects
Product Support
Size of bubble
2012 Market
Size ($B)
2012-2017
CAGR (%)
Data Center Outsourcing $75.1 -1.0%
Enterprise Network Outsourcing $45.8 2.7%
End-User Device Outsourcing $33.5 0.8%
Hosting $24.5 13.6%
Help Desk Outsourcing $22.7 2.6%
Colocation $16.5 11.1%
Infrastructure Utility Services $14.5 11.5%
Infrastructure Outsourcing Expanded
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
3%
4%
5%
5%
5%
7%
7%
5%
8%
8%
10%
11%
21%
3%
5%
4%
6%
6%
7%
5%
12%
8%
10%
10%
9%
11%
4%
4%
7%
5%
7%
5%
8%
7%
9%
8%
9%
9%
10%
Shifting mix of sourcing choices (from T&M to fixed fee to managed services)
Moving Capex to Opex
Convergence of IT & operational technologies
Strategic determinations for use of cloud services
Enabling revenue enhancement
Overcoming staff shortages
Improving IT governance
Allowing IT to focus on key business initiatives
Business process improvement
Consolidating IT or business process operations (shared service centers)
IT process improvement
Improving competitive position
Reducing costs
Most important 2nd most important 3rd most important
Q02A. What are your organization's top three most important Infrastructure Services (or any subset of infrastructure) sourcing strategy objectives?
Base: Organization outsources Infrastructure services (any subset )
Most Important Infrastructure Services Sourcing Strategy Objectives
43%
17%
29%
24%
20%
26%
10%
16%
29%
16%
24%
19%
14%
n=383 Top 3
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
CIO Technology Priorities Represent Two Complementary Goals
Ranking Based on How Many CIOs Cited Each as a Top-Three New Spending Priority for 2014
15
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Organizations are Looking to New Providers for the Next Generation of Innovation
5
OT
HE
R/
TB
D
Which technology company has been most influential over the last 10 years?
And which will be in the next 10 years?
Source: Gartner 2014 annual CIO survey
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Cloud Is Being Deployed to Support Agility
Have made significant cloud investments
50%
14%
13%
10%
12%
Agility
Cost
Innovation
Quality
Other
Main Reason Payback
17
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Private Cloud Still Gets a Lot of Attention
Source: Gartner Cloud Survey, July 2012
Cloud Deployment Preferences (all applications)
7
Private Cloud, 33%
Hosted Cloud, 24%
Community Cloud, 12%
Public Cloud ,
12%
Hybrid, 8%
Not Cloud, 11%
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Sourcing: Time for Change
70% will change their technology and sourcing relationships in the next 2 to 3 years for a variety of reasons:
"IT sourcing
strategies must
be structured to
enhance IT
agility and
address the
needs of digital
business.
Organizations
that don't adapt
their strategies,
will fail to
achieve the
value
opportunities
presented by a
highly digitalized
future."
Ian Marriott,
Gartner
Research VP
57%
Price/
Price Structure
55%
Service
Quality
52%
Flexibility
46%
Ability to
Partner
45%
Innovation
28%
Scale
46% need to work with new categories of partners, e.g.: Mobility
Big Data
Cloud
Analytics
Digital
Social
21
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Nexus of Forces
9
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0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
2009 2010 2011 2012 2013
CIO
Ra
nk
ing
Analytics and BI
Mobile
Cloud
Social
recession
Gartner introduces "Nexus of Forces"
at Symposium 2011
CIO Technology Priorities 2009-13
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Evolution of the Nexus of Forces
• Isolated technical strategies
• Acceleration of mobile
• Internal cloud
2011
• Vendors and service providers build NOF strategies
• End Users put NOF into five-year plans
• Mobile reference architecture
2012 • Advanced analytics splits from traditional BI approaches
• Mobile+cloud+info solutions gain traction
2013
• Increased integration of social into traditional work
• Increased decoupling of device and function
• More data in the cloud
2014
BYOD BYOx
Tech-centric Business-centric
Mobile for Information Mobile for Transaction
Physical+Virtual Convergence
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Market Views
Opportunity Presented by the Nexus of Forces
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Big Disruptive Vendors Align With Disruptive Forces
13
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"There is a growing disconnect between our increasingly nonlinear world and the linear mindsets, practices and
institutions that we deploy in our work."
John Hagel, co-chairman, Deloitte Center for the Edge
Digital Is Upon Us "My business and its IT organization are
being engulfed by a torrent of digital opportunities. We cannot respond in a timely fashion, and this threatens the
success of the business and the credibility of the IT organization."
"The IT organization has the right skills and capabilities in place to meet upcoming
challenges."
4
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
The Chief Digital Officer Role Is on the Rise
Asia/Pac:
11%
No. Am.:
5%
EMEA:
6%
Lat. Am.:
7%
Industry %CDOs
Media 21%
Communications 13%
Services 11%
Banking 10%
Insurance 9%
Retail 9%
Healthcare Providers 5%
Government 5%
Manufacturing & Natural Resources 5%
Wholesale Trade 3%
Education 3%
Transportation 4%
Utilities 1%
"If the CEO asks 'Who is in charge of digital?' and gets multiple responses, then there is no digital leadership."
Baron Concors, CIO of Yum Restaurants International, former CIO and CDO of Pizza Hut
Gartner predicts a tripling of the CDO role by 2015.
"For the CIO,
there is a
strong
opportunity,
and also a
responsibility,
to be part of
this new digital
game.
However the
organizational
model plays
out, there will
be a strong
push for the
digital future."
Gianni Leone,
CIO and CDO,
Miroglio Group
Mythbuster: The CDO role is not limited to media or information-intensive industries.
9
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Providers Not Yet Engaged in Strategy Despite Having Capabilities and Intentions
Provider role in your BYOD initiative Managing end user identity
Managing break/fix of mobile/BYOD
20%
14%
20% 21%
26%
0%
5%
10%
15%
20%
25%
30%
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Competitive Landscape A Cloud Journey
18
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The Promise of Cloud Services
Rehost
Relink/ Recode
Rebuild
Replace
IaaS
PaaS
SaaS
Reimagine
? ? ?
Multienterprise
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Disruption in the Vendor Landscape
Note: vendors shown here are representative of the broader market. This view is not intended to be comprehensive.
Shared One-to- Many
Services Led Business Value Message
Technology Led IT Efficiency
Message
Enterprise One-to-
One
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Plan Beyond Cloud Services to the ―Next Generation‖
Hybrid IT
Traditional IT
Cloud Service Brokerage
Private Cloud(s)
Public Cloud(s)
Hybrid Cloud
21
An integrated, well-managed Hybrid IT
environment…
…lays the foundation for the next-generation solutions based on the
Nexus of Forces.
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
New buying trends and behaviors
• Business line managers have increasing influence over cloud purchasing decisions (~40%)
• RFIs/RFPs are increasing dramatically for cloud services (including public cloud)
• 2-3 year contracts are common, often with demand guarantees (paradoxically violating one of the core tenets of cloud computing – elasticity)
• SLAs and risk management are top-line factors
• Regulatory compliance and security are still the factors that hold people back from public cloud. This continues to drive private cloud purchases.
• Cloud-related services are almost always part of the largest deals (consulting, implementation, management)
22
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Infrastructure Services
23
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“Due to increased automation and reducing incremental benefit from labor arbitrage, the total employed global labor pool for infrastructure outsourcing services will decrease by 15% through 2016.”
Key Infrastructure Services Predictions
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
"By 2016, a legal test case will challenge the bundling patches, upgrade rights and technical assistance that constitute today's software support monopolies."
Key Infrastructure Services Predictions
"By 2016, megadata center "hijackings" will force governments to regulate
facility operators to assure minimum physical and virtual security levels."
(Extracts from "Predicts 2013: Infrastructure Services Threatened as New Structural., Political, Competitive, and Commercial Challenges Emerge―)
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Provider level Analysis for Infrastructure Services – Market landscapes
IBM Global Services IBM SmartCloud
Desktop Infrastructure
IBM SmartCloud Desktop Infrastructure offers
virtual desktop solutions while reducing IT
complexity and simplifying security and
compliance.
IBM SmartCloud Desktop Infrastructure solutions
powered by IBM PureFlex System and IBM Flex
System support a wide range of hardware, software
and hypervisor platforms to seamlessly integrate
into IT environment.
It comprises of VDI middleware, servers and
storage devices
Dell Dell Desktop as a
Service (DaaS)
Dell DaaS On Demand, allows users to manage
their virtual desktops (user profiles, operating
system and applications) with a self-service
portal. Dell manages the rest as a monthly
subscription service, including data center
hardware and facilities, VDI software and
security. Users can connect to full-featured
virtual desktops from anywhere, at any time.
The key components of Dell DaaS are as follows:
1) Shared Desktop, 2) Virtual Desktops, 3)
Published Application
The solution allows users to choose from variety of
Virtual desktops including: 1) Standard 2)
Professional 3) Premium 4) Shared
DVS pre-configured and pretested bundles include:
Dell PowerEdge servers, Dell Fluid Data
Architecture storage and Dell Force10 data-
center switches and routers that support high-
performance, virtualized and dense computing
HP HP Workplace360
Provide full desktop management of devices
including hardware and software for
physical or virtual desktop support
Logistics of acquiring and distribution of devices
based on customer persona. Provides Win7 and
user segmentation assessments to drive
efficiency in the environment.
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Provider level Analysis for Infrastructure Services – Market landscapes
CompuCom Desktop & Application
Virtualization
Desktop & Application Virtualization services
leverage integrated Infrastructure Management
(IIM) framework to deliver technology and
process transformation and improvements
in IT infrastructure maturity
CompuCom Desktop Virtualization Solutions
include:
1) Virtual Desktop Infrastructure 2) Server based
computing 3) Application virtualization 4) Virtual
Desktop Security 5) Desktop optimization
RedHat Red Hat Enterprise
Virtualization
Red Hat Enterprise Virtualization offers
enterprises the base for large-scale
virtualization initiatives and internal/private
cloud deployments.
The enterprise management system allows
management of virtual datacenters, clusters,
hosts, guest virtual servers and desktops,
networking, and storage.
The product is build on a Kernel-based Virtual
Machine (KVM) hypervisor and the oVirt open
virtualization management project. Red Hat allows
users to virtualized desktops on the same
infrastructure as servers.
Red Hat Enterprise Virtualization Manager is a
feature-rich desktop virtualization management
system with advanced capabilities for physical host
servers and virtual desktops to VM guests.
Zerigo Zerigo Hosted VDI
Zerigo Hosted VDI combines inherent
scalability, on-demand provisioning, and best
of breed hardware. Our user interface allows
you to access your hosted virtual desktops
from a wide range of end-user devices for
the ultimate end-user experience in the
cloud.
Zerigo's custom interface provides all the features
and benefits of hosted VMware View while
eliminating the complexity of provisioning,
scaling, and deployment.
Scale your VDI deployment, on-demand, access
from anywhere in the world with a network
connection.
Monitors hosted virtual desktop pool and regularly
updates admin. with system health.
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Provider level Analysis for Infrastructure Services – Market landscapes
Amazon Amazon Workspaces
Amazon WorkSpaces is a fully managed
desktop computing service in the cloud.
Amazon WorkSpaces allows customers to
provision cloud-based desktops that allows
end-users to access their documents,
applications and resources.
Integration works via a secure hardware VPN
connection to your on-premises network using
Amazon Virtual Private Cloud (VPC) or with
AWS Direct Connect.
Further, Amazon WorkSpaces incorporates PCoIP
technology from Teradici. which compresses,
encrypts, and encodes the users‟ desktop
computing experience and transmits „pixels only‟
across any standard IP network to users‟ thin
clients, PCs, laptops and mobile devices.
Unisys Virtual Office as a
Service VoaaS
Virtual Office as a Service (VoaaS) offering
provides a virtual desktop infrastructure in the
cloud. It simplifies desktop maintenance
and reduces support costs, provides virtual
desk top solution aligned with the client
defined persona.
Unisys offerings include a "drop box" for mobile
enterprise storage with technologies that include
the VantagePoint service, which helps clients
understand service performance with a service
monitor portal. A patent is pending on data
integration with customized use of products
including Liferay, Portal and Proshare
Axciom Audience Operating
System
A software-as-a-service offering that combines
data from multiple sources and that enables
digital marketers to run analytics and
applications against this data to segment
and target audiences across channels.
The AOS platform runs applications developed by
Acxiom and its partners. (including facebook)
It presents marketers with a comprehensive view
of an audience: 1) Across channels, devices and
media sources 2) With unduplicated data, enriched
by detailed demographic, contextual, behavioral
and social profiles 3) From both online and offline
activities
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Data Center Outsourcing
29
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Towers
"Data Center" Sourcing Is Happening Outside the Data Center Tower
Multi-sourcing Integration
Data
Cen
ter
Ap
ps
Ne
two
rk
En
d U
ser
Vendor Management
Cloud
Service Brokerage
Service Management
SaaS
PaaS
IaaS
BPaaS
Data
Cen
ter
Ap
ps
Ne
two
rk
En
d U
ser
Data Center
Apps
Network
Towers XaaS Utilities
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Near Term Trends: A Buyer's Market
Cost reduction focused
Cloud adoption
Virtualization
Automation
Demographic time bomb
Limited provider differentiation
Greater number of choices
Anti-industrialization inertia
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Midterm Trends: Market Disruption
Big data
Predictive analytics
Service optimization tools
Data residency regulations
Compute futures markets
Labor arbitrage diminishes
Provider consolidation
Converged infrastructure
Power price fluctuation
Service configurators
Shorter contracts
New and different buyers
Multi-sourcing
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Long Term Trends: Accelerated Externalization
Green
Over capacity resale
Prevention-based services
Risk optimization
Compute de-dupe
Capacity management 2.0 "war on waste"
Workload portability
Lower barriers to trade
"License to operate" requirements
TCO redefinition
Strategic partnerships
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Top Buyer Insights from the MQ Research
• Buyers are reviewing multiple DC delivery offerings in a progression. (CoLo, Utility, managed services)
• Anticipate costs continue to go down year over year.
• Looking for innovation in the DC services with continued maturity and added solutions.
• Linkage to and bundling of DC services (thin client virtual desktops with DC support)
34
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End User Services (Desktop,
Service Desk and Mobility)
35
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Differentiation is difficult
Poor margins
Global delivery/Shared service Centers
Willingness to sacrifice service levels for cost reduction
BYOD
Paranoia/Protectionism
ITIL apathy
High cost, Low value
Desktop as a Service
Mobility
End User Services: Near Term Market Radar
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Generation Y
Persona based user segmentation
Social networking
Local dialect preference
Labor arbitrage advantage neutralized
HVD/VDI rollback vs. diagnostics
User and agent personality profiling
Social media
Profile-based services Portals and dashboards
Provider inertia Rejection of transactional pricing models
User IT competence assessments
Proactive education outreach
Service scope expansion
Predictive analytics
Machine translation
End User Services: Mid Term Market Radar
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Net contribution based pricing
Intonation analysis/Emotion detection
White-label service desk providers
Non-IT focused entrants
Prevention-based services
Agent avatars
Service desk 2.0 —Productivity loss limitation
The "shift left" backlash/ Self-service rebellion
Bundled education services
Benchmarking
Software vendors begin supporting end users
Business focused SLAs
The thing after ITIL
Internal support communities and forums
Field assignment optimization
Business process improvement enabler
End User Services: Long Term Market Radar
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Top Buyer Insights from the MQ Research
• Organizations are looking for service in all three areas of EUS from a single vendor.
• Organizations demand is driving all vendors to work on developing mobility solutions.
• Looking for a simple, seamless, repeatable and integrated solution.
• Looking for pricing that will motivate the provider to work in the interest of the organization.
• See higher end technical resources retiring and need this capability via outsourcing.
39
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Recommendations
Focus on business priorities:
Clearly defined purpose of Infrastructure and how it serves business.
Maintain governance to keep business and IT syncronized
Identify key initiatives and related time tables for:
Nexus of forces impact on business.
Plan for I&O changes:
To include technology and ability to access and retain skills.
Understand the current cost and level of services:
Benchmark to peers and anticipate budget needs to meet the goals of business.