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Revolution Amid Evolution: The Top 10 Game Changers for IT Sourcing
Gartner The Future of IT Conference
October 4-6, 2011 Centro BanamexMexico City, Mexico
David Ackerman
Notes accompany this presentation. Please select Notes Page view. These materials can be reproduced only with written approval from Gartner. Such approvals must be requested via email: [email protected]. Gartner is a registered trademark of Gartner Inc or its affiliates
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Gartner is a registered trademark of Gartner, Inc. or its affiliates.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
The IT Services Sourcing Cycle shows you the four stages of a successful outsourcing implementation:The IT Services Sourcing Cycle shows you the four stages of a successful outsourcing implementation:
• Stage 1: Sourcing Strategy — Formulate your overall reasons for outsourcing and how you want to approach it.
• Stage 2: Evaluation and Selection — Select suitable service providers and narrow down your long list into a shortlist and, finally, a selection of one or more vendors that can meet your needs.
• Stage 3: Contract Negotiation — Helps you define and agree a contract which is realistic, comprehensive, g g p y g , p ,effective, fair and beneficial to all parties.
• Stage 4: Sourcing Management — Ensure that the correct organization, management and governance are in place to manage the ongoing contract and vendor relationships.
Page 1
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 2
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 3
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 4
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 5
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 6
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 7
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 8
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 9
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
During the past 15 years a continuing trend toward IT industrialization has grown in popularity IT servicesDuring the past 15 years, a continuing trend toward IT industrialization has grown in popularity. IT services delivered via hardware, software and people are becoming repeatable and usable by a wide range of customers and service providers. This is partly because of the commoditization and standardization of technologies, virtualization and the rise of service-oriented software architectures, and (most important) the dramatic growth in the popularity/use of the Internet and the Web. These things, taken together, constitute the basis of a discontinuity that amounts to a new opportunity to shape the relationship between those who use IT services and those who sell them. The discontinuity implies that the ability to deliver specialized services in IT can now be paired with the ability to deliver those services in an industrialized and pervasive way. The reality of this implication is that users of IT-related services can focus on what the services provide them, rather than on how the services are implemented or hosted. Just as utility companies sell power to subscribers, and telephone companies sell voice and data services, IT services (such as network security management, data center hosting or even departmental billing) can now be easily delivered as a contractual service. This represents a different model from the license-based, on-premises models that have dominated the IT industry for so long.
Page 10
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 11
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
SaaS The basic scenario represented in 2009's forecast remains in place: Application functionality delivered as a cloud service isSaaS. The basic scenario represented in 2009 s forecast remains in place: Application functionality delivered as a cloud service is establishing itself as the new norm for the software industry. The forecast growth rate has been reduced marginally from the previous year's report to reflect slightly more-sluggish spending on all aspects of IT during the next few years. The scale of application deployments is growing, and multithousand-seat deals are increasingly common. One of the largest — if not the largest — of SaaSsales was a 420,000-seat deal that SucessFactors won with Siemens. IT managers have begun to think strategically, placing new demands on IT services providers.
PaaS. Application infrastructure consists of two types of offering — application platform as a service (aPaaS) and integration as a service (IaaS).
Platform infrastructure is an increasingly high-profile area rapidly assuming a central role in the broader conversation about cloud computing. salesforce.com, VMware and Microsoft are adding credibility and clout — although they are still at an early stage of the market. IaaS is gaining traction. Witness IBM's acquisition of Cast Iron.
IaaS. Gartner has increased its sizing and forecast for cloud computing services, reflecting greater interest among our client basethan had been expected.
We expect the 2013 market to be worth $8 billion (up from $6.8 billion forecast in the previous year) and the 2014 market to be th $10 billi
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David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
worth $10 billion.
Starting in 2012, enterprises will see building new applications on cloud computing infrastructure as the de facto norm. Cloud computing services will rapidly replace dedicated servers for most Web-hosting needs.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 13
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 14
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 15
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 16
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 17
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
This change is far from simply being a semantical one As "externalization" continues (that is as IT spending increasinglyThis change is far from simply being a semantical one. As externalization continues (that is, as IT spending increasingly moves to being spent with external vendors, rather than on internal "do it yourself" approaches), organizations' ways of thinking about and executing "outsourcing" are set to change materially. Organizations will no longer think about buying a technology product first, then maybe outsourcing it later; they will think about buying the "service" first. Sourcing executives will have an increasingly vital role at the heart of their enterprises' business activity, because external services will be an increasingly core component of the success of the buyer. Enterprises need to increase their ability to make smart buying decisions and manage external vendors. Whereas vendor management and procurement roles are currently often perceived as "nice to have" or lower-prestige activities in the organizational pecking order, in the future, they willoften perceived as nice to have or lower prestige activities in the organizational pecking order, in the future, they will be essential skills that will often mean the difference between organizational success or failure. Traditional outsourcing vendors will also be challenged to morph and adapt to these new realities over the next few years. With fewer new third-party technologies available to be outsourced — you don't need to outsource Gmail — outsourcers will have to move with the times and become cloud-service vendors themselves, or else strategically decide to focus on markets undergoing stagnation and gradual decline. Enterprises that contract with traditional outsourcing vendors should keep a careful watch on the business strategies of their vendors to understand how they are reacting to these important trends and to understand what impact these shifts are having on the health of their businesses. This, of course, can have serious ramifications on
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David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
p g , ,the outsourcing providers' ability to provide high-quality service within an existing contract.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 19
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 20
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 21
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 22
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.
Revolution Amidst Evolution: The Top 10 Game Changers for IT Sourcing
Page 23
David Ackerman
MEX38L_136, 10/11
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2011 Gartner, Inc. and/or its affiliates. All rights reserved.