Search through our UKHotViews and UKHotViewExtra articles plus complete research reports
Recent research from the ESASViews stream looked at the real world situation underneath the Big Data hyperbole in ‘What are the market realities behind Big Data?’. In an area that is still so immature that the definition defies consensus and investment swamps revenue, this research looks at what it is all about, how it is developing and the key software providers that are helping to shape the market. We are highlighting the research now in case the festivities frenzy meant you missed the original publication in late December.
One thing is clear – industry-specifics will be critical to the development of the Big Data and related analytics market but each sector has very different triggers, which presents a challenging environment for suppliers. Failure to spot and respond to the differences will make it so much harder to recoup extensive upfront investments. With suppliers looking to Big Data to compensate for falling revenues in other areas, it is something no-one cannot afford to get wrong so we will be revisiting this topic repeatedly during the year. Subscribers can read our initial findings here, those of you who have not joined the TechMarketView family yet, can find out more by contacting Deborah Seth (dseth@techmarketview.com).
Posted by Angela Eager at '12:18' - Tagged: software bigdata applications
One of our key predictions for 2013 is to see more hybrid Software as-a-Service (SaaS) and Business Process as-a-Service (BPaaS) delivery models emerging in the UK BPS market (see Predictions 2013: UK Business Process Services). We see Xchanging’s launch of a next generation insurance business process platform (BPP) Xuber as a clear play into this hybrid cloud-based BPS space. We recently met with Xchanging CE Ken Lever to discuss Xuber, and his plans to exploit its capability in the wider insurance market.
Xuber forms a key part of Lever’s growth strategy for Xchanging in 2013, moving the business from turnaround to recovery. However Xuber will face stiff competition to exert influence in a market with established SaaS pure plays like Guidewire Software, insurance specialists like The Innovation Group and Quindell Portfolio, and global BPS players like Accenture.
Subscribers to TechMarketView's BusinessProcessViews research service can read our analysis here.
Posted by John O'Brien at '14:34' - Tagged: bpo bpaas bps
Eligible TechMarketView subscribers can download the new edition of IndustryViews Venture Capital to see our latest summary of venture capital investment in the UK software and IT services market.
Posted by HotViews Editor at '07:52'
The adoption of telehealth – which we broadly define as the use of technology to monitor patients’ vital signs remotely, usually in their own homes – is still nascent in the UK but a broad range of suppliers are jockeying for a good position on the ‘start line’.
Despite progress continuing to be slower than many in the industry expect, we think that telehealth has finally reached something of a ‘tipping point’ in the NHS market. Taken together, stronger government policy, growing (though not yet conclusive) evidence from pilots, advances in technology (e.g. smartphone apps and superfast broadband) and more innovative supplier offerings conspire to bring telehealth to the cusp of wide-scale adoption.
Indeed, we believe that the widespread adoption of telehealth in the UK is inevitable and that it presents significant opportunities for a wide variety of ICT suppliers from device manufacturers, through application developers to providers of a complete managed monitoring and triage service.
In the latest research from our PublicSectorViews team – Telehealth: the next big thing? - we examine progress towards the adoption of telehealth services in the UK to date, highlight the emergent supplier landscape and present our view of the longer term outlook for the UK telehealth services market. The report is available for PublicSectorViews subscribers to download from today. If you don’t yet subscribe to our public sector research please contact Deborah Seth for more details.
Posted by Tola Sargeant at '09:00' - Tagged: publicsector health telehealth
Next year is going to be “Make or Break” for many infrastructure services (IS) companies. The continuing economic downturn will of course loom large in the decision making process for buyers - but so too will the challenges of trying to navigate a disruptive and changing technology scene. A prime challenge for suppliers of IS will be ensuring their own businesses are fit for purpose to support and guide buyers through transition periods towards Bring Your Own Technology (BYOT), mobile computing, and more efficient and effective consumption models. Leadership teams in firms delivering infrastructure services will need to pull all the levers they can (e.g. investment, partnerships, portfolio development) to ensure successful execution in this environment. Here are our key predictions for 2013:
Underinvestment will be punished Firms who cannot afford to - or opt not to - invest in further standardisation and automation of infrastructure management services will increasingly be swapped out by buyers looking for more reliable and cost-effective services. A vicious cycle of low revenue growth/low margins - and therefore little cash for investment - will mean that underperforming infrastructure services firms will become less attractive. Increased standardisation and automation will enable more infrastructure support services to be moved from the deskside into the data centre, helping to reduce delivery costs. However, innovative suppliers will find compelling and cost-sensitive ways to ensure the quality of end user services is sustained – for example, through social media support communities.
Economic climate will accelerate the need to innovate The dire situation in which many IT departments find themselves is not set to change in 2013. Those that have no more ‘fat to cut’ will start to run out of options to further reduce the cost of maintaining legacy systems. And those in fast-moving industries that do have cash to invest will continue to expect their tech suppliers to provide the type of solutions that give them the competitive edge. In either case, alternative and innovative infrastructure services and commercial approaches will figure highly on CIO agendas next year.
Judgement day for M&A strategies Infrastructure Services firms that have raced to build-out Big Data and Cloud capabilities via aggressive acquisition strategies will be under pressure to deliver a return on these. Leadership teams will have to demonstrate exactly how these purchases will add value for customers and investors alike. The spotlight will be on just how these new capabilities - which could well be outside of the normal scope of the business - are blended with existing offerings and/or cross-sold into existing customers. Start-up and mid-sized infrastructure services firms will continue to be hot targets for acquisition, putting their management teams in an unenviable “make or break” position to choose their new owners wisely.
The market will reward ‘early mover’ virtual desktop suppliers Demand for virtual desktops (VD) in 2013 will gather pace as confidence amongst buyers grows and as CIOs share success stories amongst peers. This will start to create a highly-contested battleground where the main benefactors are likely to be those who already have good customer reference points. Buyers will be driven not only by the need to reduce the cost of desktop services, but by the requirement to improve the quality of service delivered to end users. IT services providers who are able to guide buyers through VD roll outs in the context of a broader strategy to improve the end user experience will be the real winners. 2013 will be a “make or break” year for infrastructure services providers to become established in the corporate VD market.
Infrastructure as a Service supplier landscape will shape-up In 2013, more suppliers than ever will have Infrastructure-as-a-Service offerings ready for the market; the competitive landscape for IaaS will therefore broaden and toughen. Traditional incumbent infrastructure services suppliers will see competition increase from all angles as IaaS offerings evolve and suppliers better understand the very distinct target markets for these services. Against this backdrop, suppliers will have to craft winning pitches that demonstrate their differentiation. It will be “make or break” for incumbent suppliers who are not able to convert their own customers to an as-a-service model before the competition swoops in.
Subscribers to InfrastructureViews can read more on our predictions for 2013 in the new year. To subscribe, email Deb Seth (dseth@techmarketview.com).
Posted by Kate Hanaghan at '06:00'
We see 2013 as being a pivotal period for enterprise software and application services suppliers as they grapple with the disruptive implications arising from cloud, mobile, social media, and big data/analytics. The scale of change is already forcing suppliers to think differently about what they deliver, how, and how they charge for it. A new factor is the need to predict the rate of change across these interlocking spaces.
Supplier maturity varies - from enthusiastic adopters and transitioning traditionalists, to reluctant followers and slow starters - but they are all faced with turning disruptive innovation into profit-generating revenue streams. That means taking them mainstream and innovating to reduce the cost of delivery. As a result, 2013 will be a make or break year for suppliers while developments that further blur the boundary between the two groups will bring additional make or break considerations. Some providers will fail to make the changes or get the timing wrong, meanwhile there is a throng of emerging providers ready exploit any mistakes made by today’s lead pack.
Investment-to-revenue lag start to hurt
Upfront investments in new business and technology areas (cloud, mobile, social media, big data) will start to hurt during 2013 due to the combined effects of the slowing market and the early market stage of these new technologies. Although adoption will ramp up during the year, it will be from a low base so actual revenue will be a small proportion of software and services suppliers’ overall revenue. Suppliers who can reduce the cost of delivery through shared development/shared risk, standardisation and asset reuse, and one-to-many delivery and support models; and adjust business models around outcome-based fees will be best placed to manage the investment-to-revenue lag.
Technology without a cause?
It will be incumbent on suppliers to demonstrate the business value of new technologies/solutions in specific use cases. The scope for social, mobile and big data analytics use is vast and many enterprises will not have the bandwidth or resources to explore potential use and value. Unless there is a clear outcome-based business case, enterprises will continue to explore via pilots or deploy tactical solutions rather than invest in the revenue-generating deployments suppliers need. This will drive the development of process-specific and vertical solutions earlier in the lifecycle than usual. Suppliers with deep domain knowledge will have an advantage – those who just skim the surface risk being exposed.
Back to the starting blocks
Leadership in ‘traditional’ technology and solution areas is no guarantee of a top position in the new areas. With so many of the fundamentals changing - business models, delivery mechanisms, development timetables, technologies, skill requirements, asset and IP mixes, partner models - everyone is starting from the same place. Early movers will gain an advantage but even here established suppliers will face intense competition from emerging players.
Established suppliers at risk of being outmanoeuvred
Existing software suppliers risk being outmanoeuvred by cloud-centric competitors acquiring and/or partnering to bring portfolio cloud solutions to market. Traditional vendors are slicing off more of their core systems and putting them in the cloud; at the same time cloud providers are edging further towards the core. Running alongside this will be other budding partnerships involving cloud providers that could cross service lines (e.g. between cloud and network providers, cloud and telco providers), and expand the range of complementary functions and services. Traditional software providers will be hard pressed to adjust their go-to-market approaches. Software and services suppliers will have to be prepared for sales negotiations (and revenue splits) to become more complex and involve an extended group of participants.
SaaS, ERP and profitability
Cloud providers will not have it all their own way. SaaS offerings have yet to make a substantial impact in mission critical transactional ERP and providers are still dogged by profitability problems (when assessed from a GAAP perspective), which will be intensified by pressure to prove the case for SaaS ERP. Those factors, combined with traditional providers’ stepping up their own SaaS activities, could see some SaaS pure-plays break down during 2013, while others break through into new areas.
The Windows 8 effect
The fate of Microsoft is tied to the performance of Windows 8, so 2013 will be a make or break year in the consumer, enterprise and mobile spheres. But the effects will ripple out through the huge ecosystem too, so whether positive or negative the impact in the SITS space will be widespread.
Posted by Angela Eager at '08:59' - Tagged: software predictions applications
We see 2013 being a decisive year for many UK BPS/BPO (business process services/outsourcing) providers as disruptive trends around platform-based BPS, Business Process-as-a-Service (BPaaS) and Software-as-a-Service (SaaS) come of age.
These trends, largely driven by the cloud, demand suppliers respond with new services, partnerships and contracting models to meet client expectations for increased delivery flexibility, cost transparency, and elasticity of consumption.
We see suppliers now delivering such propositions to market, but those further behind could well have left it too late. Even so, big questions remain as to how suppliers will make these new models profitable. 2013 will be the test-bed for this and determine which models and suppliers are likely to succeed or fail.
Outcome-based BPS deals become mainstream
We expect ‘outcome-based BPS’ deals (where suppliers are paid according to agreed service outcomes) to become widespread in 2013 as organisations seek to minimise upfront costs and ensure maximum accountability from their suppliers. Numerous models have been emerging in recent years, such as per transaction pricing, and per process per person per month, but they are now becoming more mature and embedded in to platforms that enable the measurement and monitoring of these metrics. Outcome-based BPS deals represent real opportunities for new business, but without careful planning, also big risks to revenue and margin expectations.
Payment-by-results in UK public sector
‘Payment by results’ (PBR), a version of outcome-based BPS, will become commonplace in the public sector in 2013, as Government looks to further shift the risk to its BPS and support services partners. PBR means that suppliers only get paid if they deliver the ‘results’ or outcomes, but this is a high risk contracting mechanism as there is little if no room for manoeuvre on either side. We expect suppliers to push back against PBR, and seek more equitable contracting that is underscored by a base fee and/or milestone payments. Those deals which remain solely PBR-based, or where risk is skewed too far onto the private sector, will cause many supplier/Government relationships to reach breaking point in 2013.
Hybrid SaaS/BPaaS delivery
We expect to see more hybrid delivery approaches involving both SaaS and BPaaS options that allow clients to adopt self-service around front end applications such as pensions and insurance policy applications (SaaS), backed up by human intervention around more complex mid-and-back office business processes (BPaaS). For suppliers that offer both approaches the risks are going to be lower, but for those providers that offer only SaaS, or only BPaaS, they risk losing out without new partnering models in place to mitigate the threat.
Business process analytics opportunity
Business process analytics (BPA) will become an increasingly hot area of opportunity for BPS suppliers as they seek to use their people and analytics technology to interpret information sets and big data siloes. BPS providers have a strong hand to play in analytics services, since large data sets are often created within business process management systems, providing hugely valuable information on operational performance. Providing analysis and actionable insights for customers can unlock this value and provide clients with a quantifiable value-add. Those suppliers that have built up big data repositories through long-term IT/BP deals will have a head start on selling BP analytics, as will those with expertise in industry-focused data analysis, knowledge services, and risk and compliance.
B2B2C convergence opening up new markets
We are seeing new markets opening up to BPS as a result of the blurring lines between B2B and B2C. Vertical markets like retail, general insurance, and pensions and horizontals like marketing and communications, which touch on the end customer (i.e. B2B2C), are now taking BPS very seriously as they seek help in reaching new customers across multiple channels - mobile, social media and self-service. BPS is an enabler here helping to transform process and operational models and deliver innovative new ways of interacting with the end customer. Global giants and new suppliers alike are emerging offering BPaaS and platform-based BPS to capitalise on this nascent opportunity. Established UK BPS players could find themselves out-manoeuvred.
More to come in the new year on UK BPS Predictions 2013, for subscribers to BusinessProcessViews.
Posted by John O'Brien at '00:00' - Tagged: bpo bpaas bps
Cloud, mobile and social media continue to garner attention and rightly so because of the disruptive changes they bring about on both the supply and buy sides of the market. One of the many consequences of these trends is the pull-through effect on security software and services which, with estimated growth of 5%, is outpacing the software and application services sectors. Each connection can poke holes in a company security shield that was previously deemed fit for purpose. And as security implications can be an afterthought (or not considered at all by individuals bringing in shadow IT), and attacks are becoming more sophisticated, there is a gap between technology deployment and security that needs to be filled by security-capable suppliers.
Subscribers to ESASViews can access the Security opportunities in a cloud and mobile world report here. If you haven’t taken a subscription to TechMarketView as yet, Deborah Seth (dseth@techmarketview.com) will be happy to assist.
Posted by Angela Eager at '17:04' - Tagged: cloud socialmedia mobility security
When we first met Reading-based Assuria back in January, we were impressed by the way the Little British Battler was punching way above its weight in competitive global markets. It operates in one of the hottest SITS niches of all, developing enterprise cyber security and compliance software to combat the growing threat of cyber attack. We recently caught up with Executive Chairman Terry Pudwell to see how things have progressed in 2012. Eligible TechMarketView subscribers can read the full story in our latest CompanyViews note: Little British Battler Update: Assuria.
Posted by Tola Sargeant at '14:56' - Tagged: lbb cyber
It is TechMarketView’s opinion that 2013 will be a ‘Make or Break’ year. In the UK public sector, one of the greatest challenges for SITS suppliers to the market has been to determine which of the tenets of the UK Government ICT strategy, published in March 2011, will have a real impact at the coalface. There’s no doubt that the way government organisations operate must change if they are to continue to deliver effective public services in times of continuing austerity. But there has been resistance from some quarters to the direction of travel set out by the Cabinet Office and the Efficiency & Reform Group (ERG). In TechMarketView’s 2013 Predictions for the UK Public Sector SITS Market we forecast the significant changes that we think will have an impact over the coming year. Here we provide a summary:
• Make or break for leading suppliers and new entrants: The leading SITS suppliers continue to find their dealings with HM Government strained. We hear from many that they are reaching “breaking point” in their relationship with Francis Maude and the Cabinet Office. The pressure to supply ‘more for less’ is unrelenting. In 2013, the top ranked SITS suppliers to the sector will see their lead narrowed as contracts are retendered in a different form. We will see some suppliers make big decisions over whether, or to what extent, to continue to invest in the sector. Meanwhile, 2013 will also herald a year when some new entrants manage to get their ‘break’ and get their first taste of public sector business.
• ‘First movers’ will be at an advantage’: As the Cabinet Office defines ‘new’ roles for SITS companies; those companies winning the initial round of contracts will be at an advantage. By ‘new’ roles, we are talking about the roles created by the reshaping of contracts, such as service integration or cloud services. Suppliers that are winning a large chunk of Cloudstore business, and particularly those that have been accredited to higher security levels, will be at an advantage as more risk-averse Government organisations look for reference sites elsewhere in Government.
• Government organisations will move beyond ‘testing the water’: As we enter 2013, confusion will remain over which elements of the Government ICT strategy really matter to those at the coalface i.e. the ministers that are ultimately responsible for delivering public services. 2012 has been a year of pilots, proof of concepts and tinkering at the edges when it comes to new technologies associated with cloud computing, social collaboration, mobility and BYOD to name a few. However, as austerity measures bite harder and faster, departments and agencies will need to adopt more of these new ways of working.
• Future of procurement frameworks hangs in the balance: Procurement in UK government is supposed to be getting simpler. But, arguably, a proliferation of framework agreements has resulted departments and agencies more confused than ever about how to procure ICT services. A review into frameworks is currently underway. Could this be the death knell for the framework agreement, at least in its current form? Many suppliers would be relieved to not have to spend time and money bidding for contracts with no guarantee of future revenue.
• Civil Service Reform – foundations to be set: In June 2012, Francis Maude published the Civil Service Reform plan. It is our view that if the reforms do not get off to a decent start in 2013, they are unlikely to happen at all, as the current Government will be looking to prove the worthiness of its reform plans by the time of the next General Election in 2015. Particularly interesting to SITS suppliers will be the likely speed of adoption of new delivery models, the acceptance of digital by default and the move to shared services. Larger departments in particular may continue to fight their corner and resist some of the changes. In 2013 we will see if budget cuts are enough to force the arm of government organisations in the direction of the Civil Service Reform plan.
Subscribers to PublicSectorViews can download the full UK Public Sector 2013 Predictions note here.
Posted by Georgina O'Toole at '07:29' - Tagged: publicsector predictions
One of the oft-repeated comments from those taking part in the 2012 Olympics was that they had trained for many years but just a few days in August would be ‘make or break’ for their careers.
In 2000, the tech world changed. It set out on a new path. The trends are well known to TechMarketView subscribers – the ‘maturing’ of the sector which meant that growth slumped to 1xGDP or lower, the move from on-premise to cloud, the advent of mobility and its ‘new’ devices like smartphones and tablets, the move to BYOT, the advent of offshoring which brought a whole list of new top-ranked players, the peaking of public sector IT spend with its serious consequences for the main players.
In the wider economy, the UK and most of the developed world experienced an economic crisis which threatened the banks, the Eurozone and any hope of a return to growth ‘as we have known it’ for the medium term.
None of these points are new. None of them should come as any surprise.
But we see 2013 as a watershed year. Perhaps THE most significant year for our industry and its players for a decade or so. 2013 is the year when all these now well-established trends finally reach their Year of Reckoning.
2013 will be THE Make or Break Year.
Let me give you some specific examples:
Since 2005, we have had a “Diversity of Performance’ theme running. In all my 40+ years in the UK ICT sector I have never seen such a dichotomy between the performance of the top and lowest quartiles – be it companies or sectors. If anything, this dichotomy is growing. Just as an example, although NASDAQ is up a healthy 15% in the last 12 months, the Top Quartile of stocks on NASDAQ rose by a massive 57%. The bottom quartile declined by 23%. I have never recorded such a wide dichotomy in my long ‘career’. Just like a car can run for a while even though its battery is not charging, the same applies to companies. Indeed, there has been much comment on the rise of ‘zombie’ companies in the UK. Time is fast running out. 2013 will be the ‘Year of Reckoning’ for many of these under performing companies and we see a sharp increase in company failures and ‘rescues at garage sale prices’. If you also subscribe to the maxim ‘To be reborn, first you have to die’, that is no bad thing.
If we could concentrate our efforts on the top quartile of high achievers and let the failures fail, maybe 2013 will be seen as a year when our industry and our country really moves to a higher gear.
Footnote – Everyday this week 2013 ‘Make or Break’ predictions will be published for all of TechMarketView’s streams – PublicSectorViews, InfraStructureViews, BusinessProcessViews and ESASViews. Watch out for them or, better still, treat yourself to a TechMarketView subscription for Christmas and have access to the full versions in 2013.
Posted by Richard Holway at '12:29'
2013 will be a watershed year – perhaps the most significant year – for the UK software and IT services (SITS) industry and its players for more than a decade. It will be the year when well-established trends will finally reach their ‘Year of Reckoning’. It will indeed be the Make or Break Year for the UK SITS sector.
Starting next week, the TechMarketView team will be publishing a summary of their top predictions for 2013 each day on UKHotViews. And eligible TechMarketView subscription service clients will also be able to see Predictions 2013 in more detail soon after.
Look out for Predictions 2013 on our UKHotViews website and in your daily UKHotViews email and learn whether 2013 will be make or break for your business!
Posted by HotViews Editor at '06:00'
TechMarketView's PublicSectorViews team has today published the next in its series of reports looking at trends in the UK public sector SITS market. The lastest report contains our forecasts for the UK defence SITS market through to 2015, together with an analysis of the trends that are shaping the market and creating opportunities for suppliers in the near and long term. It should be read in conjunction with the UK Public Sector Market Trends and Forecasts 2012 report, which provides an overview of trends and forecasts for the UK public sector market as a whole.
It is a fascinating time in the defence market; the Ministry of Defence (MoD) is heavily reliant on ICT in order to function but, like the rest of Government, it must also seek to cut costs. This UK defence SITS market trends & forecasts report highlights the implications for suppliers as the department undergoes a major transformation and transitions to a new ICT services procurement model. Subscribers can download the report now; everyone else should contact Deb Seth to see how to gain access.
Posted by Georgina O'Toole at '11:08' - Tagged: publicsector markettrends defence forecasts
