2. Overview
1. The IT Market in Asia 2009-2010
2. Impact of the recession
3. Snapshot – Datacraft Asia
4. Growth Story – Datacraft Asia
5. Competitors
6. Porter’s Five Force Industry Analysis
7. SWOT
8. Global Strategy – Dimension Data
9. Challenges
10. Recommendations
3. The IT Market in Asia 2009-2010
The overall IT services market in Asia
Pacific (excluding Japan) is estimated to
grow at a compound annual growth rate
(CAGR) of 9.9% for 2009-2013, reaching
US$59.4 billion by 2013 (IDC’s
Asia/Pacific)
2010 sees improved business sentiment and
encouraging signs of economic recovery within
the region, with the IT services market looks set
to regain its momentum to rebound at a
forecasted 8.9% in 2010.
4. The IT Market in Asia 2009-2010
Growth can be attributed to 3 factors
1. The adoption of new technologies (e.g.
virtualization and tiered storage) and IT models like
cloud computing to achieve infrastructure
optimization
2. The impact of stimulus packages, particularly in the
network services space as Asian governments look
to improve connectivity to remote areas
3. Continued investment in outsourcing and managed
services, particularly in growth markets such as
India.
5. The IT Market in Asia 2009-2010
Top Concerns of Asia Pacific CIOs Heading
into 2010
Maximizing value on previously purchased
applications, systems and infrastructure.
Demonstrating value of ICT investments.
Delivering process management and operations
excellence programs.
Measuring efficiency and effectiveness of ICT.
Defending core and non-discretionary costs.
Improving management decision making.
6. The IT Market in Asia 2009-2010
Enterprises are
moving from a
CAPEX to an OPEX
model
7. Datacraft/Dimension Data
Snapshot
Systems integration account for Businesses by revenue
81% of group revenue
Services provided among core IT 6% 4% Systems
infrastructures (Network, voice 9% Integration
and data comms, contact Express Data
centres, operating systems etc.
81% Internet Solutions
Professional Services – Plan Plessey
and build
Product procurement – Systems Integration
Supported by long standing Breakdown
mutually beneficial relationships
with market leading vendors
Managed Services – Pure 15% Product
maintenance services to more
26% Managed
advanced services where 59%
Services
Datacraft takes responsibility for Professional
monitoring and managing the IT Services
infrastructures of clients
8. Datacraft/Dimension Data
Snapshot
Services continuum
Business Lines Key Verticals
Converged Communications Financial Services
Microsoft Solutions
Data Centre and Storage Solutions
Manufacturing
Customer Interactive Solutions Media and communications
Security Solutions Travel Transportation & Real
Estate
Public Sector
9. Datacraft Asia Growth Story
Knowledge Acquisition
Fortifies services business with acquisition of Multisoft (networks, 2000),
National Communication Services NZ (cabling, 2000) amongst others.
Global Partnerships
EMC corp – 2002
Microsoft – 2004
Sun Microsystems – 2005
Cisco Global Service alliance – 2006
Resource consolidation
Leveraged availability of low cost resources, labour and other
infrastructural facilities with the consolidation of five managed services
operations into one global services centre in India
Global Network
Datacraft a wholly owned subsidiary of Dimension Data – positioned as a
stronger force. - 2008
10. Competitors
Computer Associates (CA)
Virtualization management, Security, infrastructure
management,
CSC
Financial vertical, manufacturing, Public sector,
managed network services
IBM
Infrastructure services, consulting
HP
Infrastructure services
Unisys
Data Centre, Security,
11. Porter’s five forces analysis – IT
services asia
Threat of substitutes Competition intensity
(Low to moderate) (Moderate to High)
• High cost • Large established
• Manpower intensive players
• Competitive pricing
• High exit cost
Buyer Power Supplier power
(Moderate) • Skilled labor pool
• Large number of
potential buyers
Entry
Barriers
(moderate
to high)
12. SWOT – Datacraft/Dimension Data
Strengths Weaknesses
• Vertical expertise • Significant revenue dependency on product
• Industry leading expertise in several lines of procurement
business • Service offering does not reflect evolution
• Global partnerships with market leading toward changing industry conditions
vendors
SWOT
Opportunity Threats
• Market conditions and mindset ready for new • Strong competition from major global players
infrastructure management models in • Rising cost of skilled labor
response to changing technology
• Rapidly changing IT infrastructure landscape
• Gaps in current service offerings
13. Dimension Data – Corporate Growth Strategy
Geographical Increasing
Increase Increasing
expansion in market share
Services existing client
high growth in existing
Revenues revenue
markets businesses
KPIs
1. Increased revenue from services
2. Maintaining gross margins
3. Improve operating margin
4. EPS growth
14. Dimension Data – Client Experience Strategy
Demonstrating
Exceeding
Business and Enhancing Fostering client
client
technical delivery quality intimacy
expectations
expertise
KPIs
1. Improved client retention trends
2. Improved client satisfaction trends
3. Improved managed services churn rates
4. Increased services and lines of business per client
15. Dimension Data – Operational Excellence Strategy
Launching and Maintaining world
Improving go-to-
driving class operational
market
compelling processes and
effectiveness
offerings systems
KPIs
1. Professional services utilization and realization rates
2. Certification and Partner awards
16. Challenges – Datacraft Asia
1. Transition up the value curve from IT
infrastructure supplier to strategic IT partner
Perception hurdles; Datacraft traditionally ‘product’
based.
Services offering must be scalable and in line with
technological advancements
2. Client adoption rates
With the rapidly evolving IT landscape, some
segment of the market may be resistant to change
3. Competitive offerings
Strong competitive offerings in areas of high growth
4. Talent / Expertise
Time needed for training
17.
18. Business level strategy – Focus areas in 2010
1. Virtualization
Will be the top networking
investment over the next 5
yrs as CIOs continue to be Virtualization
focused on cost reduction
2. Managed Services
Organizations looking to
lengthen the lifecycle of
existing infrastructure,
refresh cycles delayed.
Services
3. Multisourcing
Traditional outsourcing
strategies are no longer Managed
Multisourcing
satisfactory for some Services
organizations.
Looking for service
providers to provide
strategic effectiveness
19. Virtualization – Why?
1. CIOs continue to be focused on cost
reduction
2. Organizations are increasingly
adopting Virtualization as an energy,
space and cost saving measure
3. Organizations seek competitive
advantage by simplifying
management and increasing
operational efficiency
4. Virtualization has become a critical
element of IT services that is a key
component of more ambitious
internal cloud computing
development
5. Virtualization is becoming more
pervasive in production use
20. Virtualization – Operational Challenges
1. Capacity management
By abstracting the virtual servers
from the raw physical hardware,
the actual resource requirements
become ambiguous.
2. Security risk perception
Any new technology carries
more perceived risk. the hidden
nature of virtual infrastructure
causes concern about new
threats but even more around the
risk of instability.
3. Proper skills are difficult to attain
and retain
Virtualization marks a notable
departure from prior operational
models. Existing staff must be
trained in the new technology
and its complexity mandates
automation.
21. Virtualization - Opportunity
1. Virtualization still in early
phases of operational use
2. Newly introduced levels of
complexity require
refinement in operational
processes and management
Standardization greatly
simplifies the complexity of
such environments
3. Top down management
approach is needed
Virtualization and other
infrastructure technologies are
valuable but without strong
infrastructure, application
stability and performance
suffers
22. Managed Services – Why?
1. Continued demand for
managed services and
outsourcing
2. Cost management
becomes a key focus
for organizations in the
region.
3. Organizations in the
region are increasingly
aware of the need to
increase efficiencies
without incurring
significant cost
24. Managed Services – Opportunity
1. Opportunities expected to arise in the managed
services space as organizations move assets off
their books and scrutinize their operating expenses
more closely
2. New support contracts in conjunction with new
hardware sales are likely to decrease
3. Organizations will look to lengthen the lifecycle of
existing infrastructure
4. Demand for extended support services expected to
grow as warranties expire
25. Multisourcing – Why?
1. Maturation of
sourcing strategies
2. Movement away from
fully-insourced or
fully-outsourced
procurement models
3. Organizations
realizing the benefits
of risk diversification
and cost savings by
using multiple
vendors
26. Multisourcing – Enterprise Challenges
1. Outsourcing Deals Are Difficult to Build and Manage
Many organisations lack the experience to properly oversee and estimate the
end-to-end effort that outsourcing requires
New options, such as alternative delivery and acquisition models, change the way
the sourcing life cycle drives activities, and increases the complexity of the
sourcing environment and the decision-making process
The service provider landscape is dynamic, which makes it frequently challenging
to find the right one with which to build a long-lasting relationship.
2. Outsourcing Deals Often Fail to Deliver Expected Outcomes
Some challenges can arise such as, low end-user satisfaction, poorly defined
business benefits and immeasurable deal benefits, complex governance and
strained relationships
3. Outsourcing Deals Often Fail to Evolve
Outsourcing deals often aren't structured to provide the flexibility needed to
enable the deal to adapt quickly to changes in the market and organisation
27. Multisourcing – Opportunity
1. Strategy management
Aligns sourcing actions with the business goals, strategy, frameworks and governance to ensure optimal ongoing business support
2. Risk management
Mitigates sourcing risks to substantially reduce the levels of risk across all deals
3. Financial management
Formulate financial targets with the business to establish a clear guideline for all sourcing activities.
4. Demand management
Oversees and prioritises IT services based on demand to optimise resources and skills across all sourcing activities
5. Service management
Aligns the services across internal and external service providers (ESPs) to achieve seamless, end-to-end service delivery
6. Programme management
Aligns portfolio and sourcing strategies so that projects achieve desired outcomes
7. Relationship management
Maintains the relationships with all internal and external service providers (SPs). It sets performance expectations with SPs, collects
performance metrics for each and provides feedback
8. HR management
Forecast and fulfill staffing needs relative to sourcing needs to ensure an optimal level of skills and resources
9. Performance management
Optimise ESP’s costs and ensure that new or revised business goals are always attained
10. Contract management
Manages the contracting process to meet the organisation’s needs. It includes keeping internal contracts and industry best-practice contract
templates for future use
28. Business level strategy - Execution
Integrated Approach:
• Client Identification
1. Increasing existing client revenue • Proactive assessments and
Existing Client recommendations
Accounts
2. Increasing adoption of managed
services
3. Opportunity to exceed client
expectations • Collaboration with product
procurement team to upsell
services
4. Upsell opportunities for services New Client • Proactive Client engagement
exist with new product placement Accounts
5. Growth market for increased
services scope (Virtualization/cloud
computing)
• Virtualization Management
6. Once developed, a virtualization Development of • Cloud Computing
management solution would have a increased
ready base of existing clients services scope
29. Business level strategy - Execution
1. Refinement of current Managed Managed
solutions and development Services
Multisourcing
virtualization
of new offerings
Travel,
2. Vertical integration Financial Services Manufacturing
Media and
Communications
Transportation
and Real Estate
Public Sector
3. Education in markets with China India Singapore Hong Kong Malaysia
growth potential but mental
barriers
4. Right product for the right Virtualization Singapore
Managed
Services
Thailand
geographical market