Top
10 IT trends in SMB
According to
AMI-Partners, a New York-based
research firm, IT vendors will focus on the next 10 emerging markets such as
Thailand, Malaysia, Indonesia, Vietnam, Philippines, Pakistan, Sri Lanka,
Bangladesh, Argentina, and Chile.
AMI forecasts the worldwide
IT spending by SMBs to grow by 10% in 2007, mainly centred in the big four
emerging markets also known as the BRIC (Brazil, Russia, India and China), which
will have high double-digit growth.
SMB spending In North America and Japan
will surpass large business IT spending In 2007. But these countries are showing rates of
growth more than 20%.
The follow are the
list of 10 top IT trends, plus a bonus prediction.
1. Collectively,
these 10 emerging markets are exhibiting GDP growth rates of over 7% and showing SMB IT
spending growth rates exceeding 20% in 2007.
Vietnam and Chile
have seen surges in foreign direct investment (FDI), both being increasingly recognized for their manufacturing
potential. High adult literacy
rates and increasing governmental support will drive the SMB sector. SMB IT spending in Indonesia will equal that of Sweden and
surpass it in 2008.
2007 will also see the
fall of the majority share of IT spend by large businesses in
Japan and North America.
For the first time, SMB IT spending is poised to surpass spending by
large businesses in the two countries as noted above. Such a trend has already occurred in
other regions - Asia Pacific, Europe and Lat Am.
2. Storage and
security convergence will help SMBs move up the adoption curve: Storage and
security solutions will continue to converge, leading to market
consolidation. SMBs will be more
inclined to adopt dual-purpose solutions as they check their budgets against
investment priorities.
AMI forecasts storage and
security spend will grow by 19% in 2007.
3.
Software-as-a-Service (SaaS): SaaS was previously all about selling companies on
the scale and skill advantages that SaaS provides, helping businesses take
advantage of sophisticated solutions while minimizing IT investments, footprints
and risks. The next for SaaS
vendors will be to increase the focus on how their solutions help customers
streamline business processes for market advantage.
4. Managed services
for SMBs: SMBs in mature technology markets are already highly penetrated in
terms of PC, Internet, server, security, telecom and
mobility solutions. Increasingly,
they also struggle with the same IT complexities that larger enterprises face,
such as mounting regulatory requirements, more remote and mobile employees, and
multiple locations.
AMI's global primary
research results indicate that SMBs are increasingly likely to offload
cumbersome IT chores to outside experts, so they can focus on their core
business. AMI predicts vendors will offer SMBs more inclusive
IT-based managed services packages over the next year. Though initially aimed at testing the
waters among early adopter and mid-market businesses, these services will go
beyond the piecemeal approach, building towards more
comprehensive portfolios.
5. Outsourcing:
AMI forecasts that the traditional
IT services market will continue to see double digit growth in 2007 among global
SMBs as an increasing number of businesses spend on different types of
services. The IT outsourcing market
will get a boost as a direct fallout. IT service vendors in
India, China, Philippines, and Russia will
continue to reap benefits as mid-market IT outsourcing gains
momentum.
6. SMBs will
mobilize: City governments are picking up the tab to provide the public with
free or low-cost wireless Internet access.
The number of municipally funded Wi-Fi/WiMax projects is soaring, with
cities large and small participating.
This year will see fixed mobile convergence (FMC) between fixed IP infrastructure/applications
and mobile (cellular) infrastructure/applications with increased focus on
ubiquitous mobility.
AMI predicts that global SMB
notebook shipments will grow by 20% in 2007 over 2006, outpacing desktop PC
growth by five times.
7. SMB caution over
Vista: Despite all the hype about pent-up demand for Vista, 17% of mid-market
businesses, and less than seven per cent of small businesses in the
U.S. plan to adopt Vista in
the next 12 months, according to AMI's U.S. small and medium business
survey. That translates into
447,000 US PC SMBs who have expressed an interest in Vista adoption during 2007. Most SMBs tend to take a wait-and-see
attitude when it comes to deploying something new, and in this case, will use
extra caution due to concerns generated by the media and industry pundits
regarding potential incompatibilities and security loopholes, and uncertainty
about the benefits of migrating from their current OS to Vista.
8. Unified
communications: AMI predicts that
VoIP will begin a long transition from a market-driven attraction of all-in-one
VoIP appliances that supports voice/unified messaging/security/mobility with
provisions for remote management and desktop/server collaboration application
integration. While the transition
will not be complete in 2007, the die has been cast by
Office 2007 and MS Exchange, which embed unified communications as a
feature. Adoption of broadband VoIP
applications such as Skype, Yahoo, and Vonage will grow rapidly, especially
among small SBs (1-4 employees); hosted VoIP adoption will increase among the
5-20 employee segment as these solutions become more
reliable, secure and scalable.
9. The Rise of the
Value-Added Provider (VAP): The IT channel continues to be in a state of flux,
as value-added resellers (VARs) and regional systems integrators (SIs) struggle
to adapt to the changing market demands and the evolving business models of IT
vendors. While SMBs continue to
spend a significant portion of their IT budgets with local and regional VARs,
the nature and scope of what they purchase through these providers is
changing. With hardware becoming a
commodity purchase, and as manufacturers improve direct service and support
capabilities, the percentage of direct hardware purchases through retail will
continue to rise.
10. The Battle for the Web-based
operating system: Salesforce.com (Apex and AppExchange) and Amazon (Amazon Web
Services) have led the charge to build web-based operating systems and
ecosystems, providing developers and customers with access to their technology
platforms, infrastructure, tools and knowledge
base. As they do so, they are
transforming the Internet from an ecosystem to a new computing platform. The Web-based operating system embodies
the same core components as traditional operating systems, such as processing
power, storage and memory. But unlike traditional operating
systems, the Web-based operating system is comprised of a huge distributed
computer network that many users can access
virtually.
#Bonus Prediction:
The IT Generation Gap Materializes, Dramatically Changing the Way IT Decisions
Are Made. As baby boomers retire and are replaced by younger Gen X workers and entrepreneurs, a
significant IT generation gap will emerge and grow, especially in mature
technology countries. Younger
decision makers, reared on the Internet, video games, MySpace and iPods, will
demand business applications that are as easy to use and as flexible as the
consumer applications they've become accustomed to.
This segment will expect a more “consumerized” business application
shopping experience, in which it is easy to access, evaluate, and purchase
solutions.
Younger
decision-makers will also demand solutions with minimal training requirements,
smaller IT footprints, automatic upgrades and fast
ROI. In addition, they will expect
their business solutions to enable community participation and allow for
personalized, contextualized information access. This dynamic bodes well for vendors who
are powering their solutions with next generation, Web 2.0 capabilities, and
creating transparent sales, pricing and packaging
strategies.
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 Top
Stories
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Europe's ICT
sector growing steadily:
The European
Information and Communication Technology (ICT) market is
expected to grow by 2.9% to є668bn in 2007, reports the
European Information and Technology Observatory (EITO). The growth will
be primarily driven by the growth in the IT sector including
software, hardware, and services.
The IT sector is expected to grow by 4.4%
to reach є320bn in 2007 and 4.7% to
reach є335bn
in 2008. However, the telecom
products and services market is likely to increase by 1.5% and 1.1%,
respectively, in 2007 and 2008.
In the telecom sector, the spending on broadband access systems,
such as DSL (Digital
Subscriber Line) modems, primarily drives the
growth.
Offshoring
of healthcare revenue cycle management services to gain
traction
According to a study
titled 'US Healthcare Revenue Cycle Management (RCM) - Offshoring of
Medical Coding & Billing Services' conducted by ValueNotes, A range of
services beginning from the admission to post-discharge of a patient
including medical coding, billing, medical transcription, claims
generation, patient follow-up, etc. are referred to as revenue cycle
management.
US hospitals
account for 20% of the total medical billing and coding work offshored
from the US to
India. The medical billing and coding
market is likely to increase from US$125M in 2006 to approximately US$375M
in 2011. The employee base in
the market is also expected to touch 17,500 by
2011. This growth is driven by rising cost pressures and increasing
workload on healthcare institutions.
The study cited more end-to-end revenue cycle management work to be
offshored by the hospitals in the US. Mid-size hospitals (<500 beds)
in the US are also likely to provide a
huge market for such offshore vendors.
Gas
Utilities Adopt Business Process Outsourcing More Aggressively Than Their
Electric Counterparts: Study
According to
the results of a study conducted by EquaTerra and UtiliPoint, gas
utilities in North America have strategic
objectives beyond cost savings in mind when implementing business process
outsourcing (BPO). Findings
from the telephone-based study include * Gas utilities look to BPO as a
means to improve business process improvement more readily than electric
utilities. * Gas utilities
reported a higher percentage of fully outsourced processes than their
electric counterparts, and appear to be more
accepting of BPO in general.
* While reducing costs is a common goal, gas utilities are more
interested in gaining access to business process skills and knowledge than
electric utilities (42% versus 22%).
IT Professional Services
Industry grew by 3.3%
A study conducted by Frost
& Sullivan, revealed that the worldwide IT professional services
market grew by 3.3% to reach USD 426bn in 2006. The Americas
contributed about 48% of the total IT professional services market in
2006, followed by the EMEA region, which accounted for about 42%. The Asia-Pacific region
contributed the remaining 10 percent of the total IT professional services
market. In terms of segments,
both the technology services and the outsourcing services segment,
accounted for 45% each, of the total market while the consulting services
segment contributed the remaining 10% to the total market in
2006.
American
Airlines Outsources HR To IBM
American
Airlines has awarded a 7.5-year, US$217M Business Transformation
Outsourcing deal to IBM to
transform and manage its various HR functions. IBM will collaborate with Mercer to
standardize the enterprise-wide HR functions of American Airlines and to
provide various HR services to the airlines. IBM will also offer support for various HR
processes such as training, recruitment, and staffing. The company will also provide
HR-related systems as well as call centre support to the
airlines.
Barclaycard
to Close UK Call Centre
Barclaycard, the credit
card firm that issued the first ever credit card in 1966, has decided to
close one of its call centres located in Manchester this July and move
some of the work to India.
Somerfield's
IT helpdesk moves to India
Somerfield
has transferred its IT helpdesk to India in the first part of its
seven-year £33M offshoring deal with Tata Consultancy Services. The offshore IT helpdesk went live in Bangalore on 2
March. Tata Consulting
provided an IT helpdesk trial during February when all
the helpdesk functions were provided by the outsourcer’s employees working
in the UK. Somerfield’s 900-plus retail
outlets and eight distribution centres will receive all their IT services
from Tata.
American
Airlines call centre comes to India
The airline
has appointed Bird Information Systems (BIS), a technology provider of automated
aviation and travel-related software solutions, to provide call centre
services for travel-related queries of its customers not
only in India, but the entire
Asia-Pacific region. As part
of the long-term agreement signed between the two companies, Bird will
provide American Airlines call centre services round the clock to handle
all customer requests relating to travel bookings, reservation, fares,
ticketing (including e-tickets) and other general information related to
the airline.
Lloyds
TSB returns Mumbai call centre work to the UK
The bank has commented
that, as a result of a new automated answering service, its Mumbai, India call centre, which had been used as an overflow for UK call centres since 1994, is
no longer necessary.
According to Lloyd TSB, the automated service, intended to handle
simple enquiries electronically, was only expected to reduce call centre call volumes by 8%, but
proved much more effective, in fact reducing numbers by 26%. According to Finextra, Lloyds
TSB’s 10 UK contact centres will now
handle all calls, while the Mumbai centre’s 180 staff will be redeployed to handle back office
processing.
New York City DOE
Contracts with IBM for Student Data Management
The New York City
Department of Education has signed IBM to develop and deploy a new data
management system for New York City Schools, which serves some 1.1 million
students and employs more than 90,000 teachers. The system will
be designed to measure student performance and progress in real
time and provide that information to educators and
parents.
Pfizer
extends HP's IT outsourcing contract in Asia
Pfizer, the maker of
Viagra, has extended its IT outsourcing agreement with Hewlett Packard
(HP) for helpdesk support in Asia. In a media statement Wednesday,
the pharmaceuticals firm said that it has also appointed HP to consolidate
its service desk operations across 14 countries in the
region.
Fonterra
may outsource IT jobs to India
Fonterra is
considering outsourcing jobs in its information services sector to
India. The company moved into a due
diligence phase yesterday with a company called HCL, from
India. |
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Service Provider
News |
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AMI-Partners:
Indian SMBs to Invest US $8Bn on IT Solutions This
Year
Small and medium
businesses (SMBs, companies with up to 999 employees) in
India are set to spend just
over US $8bn to beef up their IT infrastructure, up a robust 24% since
last year. While computing
products will still account for the bulk of IT investments, Internet
spending is fast increasing as these enterprises embrace IP-enabled
business process services.
Wipro
& Microsoft align to enhance TOS
Wipro Infotech and Microsoft India today announced a
Memorandum of Understanding (MOU) to provide comprehensive IT
infrastructure, solutions, and services to Wipro’s Total Outsourcing
Services (TOS) customers.
CSC
wins $81M contract with Norway's DnB NOR
Computer Sciences
Corporation (CSC) has renewed
its IT services agreement with DnB
NOR, Norway's largest financial
services group. The contract,
which has a five-year base period and three one-year options, is valued at
approximately $81M (500M NOK)
if all options are exercised.
Perot
Systems wins five-year contract with Altivity
Packaging
Altivity Packaging, a
leading provider of folding cartons and bag packaging, has retained Perot
Systems Corporation in a five-year contract to support its business and
technology integration strategy. Terms of the
contract were not
disclosed.
e4e
plans third centre in India
Business
process services and software engineering outsourcing company e4e, which
has two centres in India, plans to open a third centre with a 500-seat
capacity during the next fiscal (2007-08) in a secondary city. e4e, which operates in the
technical, financial, and healthcare domains, has centres in Bangalore, Chennai,
US, and Scotland. The bulk of the work takes place
in Indian centres where close to 3,200 of the company’s staff strength of
4,000 is employed.
HP
to expand BPO operations in India
Hewlett
Packard (HP), the world's largest personal computer company, said it
remains committed to its BPO unit in India and plans to increase its
employee base by 20 per cent over the next year.
The company said its business process outsourcing (BPO) business in
India has global
capabilities to provide an extensive range of services to customers and
plans to ramp up its BPO headcount in India to
7,800 over the next year from the current strength of
6,500.
Genpact
acquires ICE Enterprise
Genpact, a global provider
of business and technology services, has acquired ICE Enterprise
Solutions, a European SAP
service provider established in 1996. Terms of the deal were not disclosed.
WNS
to acquire Marketics Tech for $65M
Offshore BPO
services provider WNS (Holdings) Limited has announced a non-binding
letter of intent to acquire Marketics Technologies, a privately-owned
leader in offshore analytics services, for a total enterprise value of
approximately $65M in
cash. If completed, the
acquisition is expected to enhance WNS' Knowledge Services business, which
provides market research, business and financial
research and analytics services.
EDS to
acquire privately-held ReIQ Software Indian software testing
firm
The purchase of Bangalore,
India-based ReIQ Software is expected to be completed by May this year,
Electronic Data Systems stated.
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