Healthy Growth of BI Market

According to a new report from market research firm Gartner, Inc., the business intelligence software market was one of the segments that significantly outperformed the overall enterprise software market in 2009.

The study revealed that the worldwide market for business intelligence, analytic applications and performance management software saw revenues exceed $9.3 billion last year, a rise of more than four per cent compared with 2008 revenues of $8.9billion.

“Even though growth was nowhere near the levels of 2008, and by no means immune to the recession, BI showed that it is not as cyclical as many other software areas, recording healthy growth in one of the toughest years recorded in software history," said Dan Sommer, a senior research analyst at Gartner.

BI was one area of IT that businesses were not prepared to push aside due to cost pressures. Mr. Sommer explained that “organizations have generally continued their BI projects, hoping that the resulting transparency will allow them to cut costs and improve productivity in a bid to remain competitive”.

Source: ihotdesk

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Russia Information Technology Report Q2 2010: Russian IT market is on the Rise

According to a new Information Technology Research report from Business Monitor International (BMI), the leading, independent provider of proprietary data, analysis, ratings, rankings and forecasts, covering the global market of IT services outsourcing and offshore software development, Russia is expected to start to recover in 2010 from a significant contraction in spending on IT products and services in 2009.

In 2010, the Russian IT market is forecast to grow to US$15bn, up substantially on 2009. Growing computer penetration, government ICT projects and rich potential for IT spending by Russia’s traditional industries could drive an increase in IT spending per capita from around US$107 in 2010 to US$190 by 2014, the report says.

As for the domestic software market it is projected at around US$3.1bn in 2010 and by 2014 it will grow at a CAGR of 15% to US$5.3bn, making Russia potentially one of the most significant global software market opportunities.

BMI projects an IT services market value of US$3.8bn in 2010. The IT services opportunity is forecast to grow to around US$7.2bn by 2014. The broader use of ICT in government and other sectors will ensure an upward market trajectory in the medium term. Systems integration is the largest IT services component, with as much as one-third of segment revenues and, together with implementation of hardware and software, probably account for about half of all IT services. However, more value-added services such as consulting and applications development are growing fast. Outsourcing is also on the rise.

Source: Fast Market Research

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ITO Firms in CEE Prioritize Security of Clients’ Data

Risk mitigation in IT outsourcing engagements has become a hot topic recently. It was scrutinized in a recent Everest Group’s whitepaper titled "Emerging Markets Suppliers: A valuable Lever for Risks Diversification" providing a list of recommended, “must-know” vendors in 6 ITO destinations that compete with India. Central and Eastern Europe (CEE) was represented by its leading full-cycle software services provider EPAM Systems.

At a webinar earlier this year, Everest announced their outsourcing market forecast for 2010, where they stated that in a recovering economy the key ITO vendors would transform their approach in order to shift more risks away from the clients.

With delivery models and contracting structures being updated and adjusted to the buyers’ needs and expectations, the leading service providers keep investing into safeguarding their customers’ information. After the assessment of its multiple CEE development centers for the SAS 70 Type II requirements, EPAM took the lead in security in the CEE’s ITO industry. Last week the company announced that it had also received ISO/IEC 27001:2005 certification for its Information Security Management System (ISMS). The scope of the certificate is “Outsourced software development in accordance with the latest version of the Statement of Applicability.”

"This certificate demonstrates EPAM’s dedication to protecting its clients’ information assets and addressing security concerns by defining and maintaining the strictest security policies and verifying their adherence by recognized industry standards. “ISO 270001:2005 and existing SAS 70 Type II certification combined continue our position of leadership in security for our industry and region and are vital parts of EPAM’s global strategy,” stated Balazs Fejes, EPAM CTO.

László Adlovits, Country Manager at Det Norske Veritas, said: “During this process, it was clear that EPAM surpassed the required level and showed a mature and well implemented information security management system."

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Happy Future for Outsourcing in 2010

Horses for Sources, the foremost social networking community and advisory analyst firm, published its first research report - “The IT Outsourcing and Business Process Outsourcing Industry Landscape in 2010”. The report was conducted on the basis of the opinion of 1,055 senior executives involved with either buying, selling or advising outsourcing services.

According to the report the year of 2010 is primed to be very strong for outsourcing adoption. In particular, IT outsourcing is expected to peak this year. The delivery models for standard ITO services are mature and scalable enough to cope with the demand.
Some other key findings of the report are:
- The middle-market ($750m-$3000m annual revenues) is poised to be the most active.
- Customers are anticipating more business benefits from outsourcing than merely driving out some initial cost. More than half of all customers cite the need to globalize and transform processes as prime outsourcing motives. And this is across all size classes of customers. The need to globalize is impacting all companies, and outsourcing is providing one vehicle to help firms achieve it.
- When evaluating vendors, global scale, financial stability and operational excellence are the table-stakes. Business transformation capabilities are the differentiators.

Source: Research report “The IT Outsourcing and Business Process Outsourcing Industry Landscape in 2010”

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New Horizons for Outsourcing

The recent world economic recession, when everybody was trying to stay afloat, made many cut their IT budgets. Now, when the worst seems to be behind, companies are starting moving forward with renewed trust in the stability and growth of economic markets, leading to increased outsourcing activity. But there’s been a certain shift in how corporations regard outsourcing trying to answer why, what, how and where questions. Why do we outsource? Why do we offshore? What do we actually get in return? How do we really benefit? How, if at all, do our customers benefit?

Michael Morris, Head of Outsourcing Search and Selection at Essentia Consulting, is sure that outsourcing is back now, it has weathered the economic storm and businesses will return to using outsourcing to recapture innovation and maximize their ROI in 2010. But if some five years ago outsourcing was considered primarily a good way to reduce costs, from 2010 onwards, with new deals signed and new management potentially in place in many companies, everything is screaming return on investment (ROI). Clients are demanding quicker, more transparent results and this development will shape the majority of future outsourcing deals.

As for offshoring, India still remains its hotbed but with more options available. With more delivery centers in Eastern Europe as well as in Asia, Central and South America the competition between outsourcing providers will strengthen and that will “drive a focus on services differentiation, bundling of services and greater intimacy with customers through outsourcing relationship management (ORM)” as Matt Shocklee, COP, president and CEO of Global Sourcing Optimisation Services and IAOP US Ambassador, says.

Source: EUcommerz

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EU Enlargement and Nearshoring

With the accession of new Member states in 2004 and 2007 the European Union grew to 27 countries. The trend of nearshore software development outsourcing to Central Europe that started in mid 1990s, became much stronger. Initially it started as outsourcing smaller projects by small and mid-size companies. Shortly, the region has arrested the attention of the global IT players like Capgemini and EPAM Systems, therefore enhancing the scope of the projects outsourced, and enabling the region to compete with well-established Indian and Chinese IT providers.

According to the recent data provided by Deutsche Bank Research, the overwhelming majority of German, Swiss and Austrian vendors still outsource their IT activities to Czech, Slovak Republic, and Hungary preferring them to more remote Asian destinations. However, the impact of EU enlargement on the Central European outsourcing market is forked. While expanding the market of IT services, fostering both demand and supply growth, it may lead to labour costs increase, consequently rising the development costs. And as Natasha Starkell, CEO of Goal Europe has noted the “higher wages will push offshoring further east”, namely to Russia, Ukraine, and Belarus. Product development, software testing, and application reengineering are already in high demand in the emerging markets.

Eastern Europe enjoys cultural and geo proximity to Western Europe, has a large pool of highly educated professionals, especially in the field of math, science, physics, and IT which makes it an attractive nearshore outsourcing destination for EU enterprises. Moreover, as baby boomers retire and Western Europe runs out of engineers and other highly qualified staff, even more IT work will move to Eastern Europe.

Source: levhouse.com

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Looking Eastern Direction: Russia's IT Landscape

In the present post we’d like to catch your eye to the recently issued “Russia Information Technology Report Q1 2010”. The report gives a comprehensive view of the Russian IT market for the next couple of years. The main point, looking forward Russia is on the course to emerge as one of the largest IT markets in Europe. In 2010, after the downward year 2009, the Russian IT market is forecast to recover to US$15.9bn, up 12% on 2009, which looks like a good start. Growing computer penetration, government ICT projects and immense potential for IT spending by Russia's traditional industries could drive an increase in IT spending per capita from around US$113 to US$185 over the 2010-2014 period.

Below we present a more detailed description of the most significant market segments.

• IT Services – The Companies and Markets’ analysts project an IT services market value of US$4.1bn in 2010, which is definitely a recovery from 2009 when the market experienced a sharp contraction. The IT services opportunity is forecast to grow to around US$7.0bn by 2014, as the IT market gradually recovers. Systems integration is the largest IT services component, with as much as one-third of segment revenues and, together with implementation of hardware and software, probably account for about half of all IT services. More value-added services such as consulting and applications development are growing fast. Outsourcing is also on the rise.

• Software – The domestic software market is projected at around US$3.2bn in 2010. Going forward, the market is projected to grow at a CAGR of 14% to US$5.4bn by 2014, making Russia potentially one of the most significant global software market opportunities.

• Hardware – The computer hardware market is forecast to recover to US$8.7bn in 2010, up from US$7.5bn the previous year but still short of 2008 levels.

• Competitive Landscape – Russia is strengthening its positions as a lucrative spot for doing business, which has already been recognized by a good many industry leaders. In November 2009, Microsoft said that it was considering launching its own retail presence in Russia in 2010. Acer brand Packard Bell said that it plans to achieve a 10% share of the Russian notebook segment by 2012, from just 1.5% currently. And that is just to name a few. Don’t overlook your business opportunities in the lucrative destination gaining momentum.

Source: Companies and Markets

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