IDG Sourcing Summit We are approaching the beginning of the century

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1 IDG Sourcing Summit We are approaching the beginning of the century Nils Molin Managing Director IDC Sweden 2010 Copyright IDC 2010 IDC. Reproduction is forbidden unless authorized. All rights reserved.

2 IDC Overview IDC is the premier independent global market intelligence, events, and advisory firm for information technology, telecommunications, and consumer technology markets (ICT) More than 1,000 IDC analysts, including in-house statisticians and economists, provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries IDC has been delivering IT intelligence, industry analysis, market data, and strategic guidance since its 1964 founding by Patrick McGovern Our multilingual, multicultural workforce surveys over 360,000 technology users and decision makers annually, delivering unrivaled coverage IDC is a subsidiary of IDG, the world's leading technology media, events and research company 2010 IDC 2

3 Agenda En mognande industri Vad vill kunderna ha? Marknadsutvecklingen 2010 IDC

4 Economy Trends - Europe Recovery has become the new normal Increased financial scrutiny of IT projects In 2008 we were doing more with less In 2010 we are doing even more with even less This trend is unlikely to change Public spending will decrease Increased regulation will drive more compliance projects IT automation will increase, driven by need to keep costs down The barriers to cloud adoption are dropping 2010 IDC 4

5 The new normal 2008 More for less 2010 Even more for even less 2010 IDC

6 Nordic IT Growth Rate Over GDP 4 (IT (IT Growth/GDP) IT IT growth approximates GDP growth 2010 IDC 6

7 Signs of a Mature Industry Slow overall market growth Increased competition for market share Bargain power moves from supplier to buyers Incremental innovation Falling profitability Michael D. Brown: Achieving Growth in a Mature Market 2010 IDC 7

8 How to Compete in a Mature Market Identify market segments that growth faster than industry average Redefine the value chain in the industry Take market share from competitors M&A Michael D. Brown: Achieving Growth in a Mature Market 2010 IDC 8

9 What do customers want? 2010 Copyright IDC 2010 IDC. Reproduction is forbidden unless authorized. All rights reserved.

10 Most Important Business Challenges in Nordic Companies/Organizations Improve Improve productivity productivity Increase Increase revenue revenue Improve Improve product product quality quality Maintain Maintain staff staff Cut Cut overhead overhead cost cost Expand Expand to to new new markets markets Optimize Optimize business business processes processes Improve Improve customer customer support support Reduce Reduce variable variable cost cost (Number (Number of of companies) companies) Source: IDC Nordic CIO Survey, October, 2009 N = IDC 10

11 To do or not to do, that s the question Design Development Implementation Application hosting BPO Application as a service 2010 IDC

12 Investment priorities 2010 Source; IDC, Nordic Investment Guide IDC

13 To reduce cost is the main theme for investments What business goal drives your investment? 2010 IDC Source; IDC, Nordic Investment Guide 2009

14 Marknadsutvecklingen 2010 Copyright IDC 2010 IDC. Reproduction is forbidden unless authorized. All rights reserved.

15 Vad är drivkraften för outsourcing? Hardware 12% Software 9% Löner utgör 4/5 av kostnadsmassan Externa tjänster 21% Interna kostnader 58% Drift och underhåll 70-90% 2010 IDC 15

16 Outsourcing Services Increased acceptance of outsourcing Public sector retirements Existing deals grow in scope Variable parts set to increase Compelling event gone Many renegotiations Price pressure Offshore accepted Shared platforms accepted Market growth: Sweden 2010: 3,3% 2011: 3,1% 2010 IDC

17 Outsourcingmarknaden 2010 IDC

18 Phase 1 4 Outsourcing First phase Personnel Transfer Second phase Price Offshoring from local Vendor Third phase Vendor independence Fourth phase Pure Plays in the sourcing mix Maturity in buying IT as a Service 2010 IDC 18

19 Offshore accepted 2010 IDC Source: IDC report WE Enterprise Investment Survey2010, April 2010

20 BPO Cost argument welcome Moving towards a global process industry Growing interest Cautious buyers Risk reward calculation not good enough Price pressure Market growth: 2010: 1,7% 2011: 4,3% 2010 IDC

21 Forecast BPO Services Sweden 2010 IDC

22 Summering Kostnadstrycket Erfarenheter finns Leverantörerna industrialiseras = IT och BP&O en marknad i tillväxt 2010 IDC

23 2010 IDC