Data Centre Managed Services Market

(1)

Data Centre

Managed Services

Market

Martin Molloy

20/03/2012

(2)

Data Centre Managed Services Market

2 Hours

Macro Challenges

• Recession

• User growth and diversity

• The world of collaboration

• Clouds on the horizon

Cloud market - 48% compound

_{annual growth rate.}

Projected market size of £35

billion by 2014

Source: Gartner (December 2011)

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Data Centre Managed Services Market

2 Hours

Market trends

• Global market growth will accelerate

• Virtualisation – virtually, but not quite there

• Automation not automatic

• Green agenda

• Cloud gathering pace

Client virtualisation rates

between 20% and 50%,

across their entire estates

Source: KPMG client engagement data 2010 – 2012

Data centre emissions projected to overtake

those of the world’s airlines by 2020

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Data Centre Managed Services Market

2 Hours

What about the providers?

• Evolving offerings rapidly, but...

• Indian players gaining share – ensuring position for future services

market

• Integration a challenge

• Colo moving up

• AWS, MS, S

F

2011 – an Indian provider

included in Gartner’s Magic

Quadrant for the first time

Source: Gartner Magic Quadrant for Data Center Outsourcing

and Infrastructure Utility Services, Europe, 2011

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Data Centre Managed Services Market

2 Hours

Unlocking benefits when buying:

• Utilisation

• Invest in differentiation

• Consolidate, standardise

• Have an apps strategy

• 20% - 40% benefit is the norm

Blended average server

utilisation rates remain around

the 25% or below level

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Data Centre Managed Services Market

2 Hours

Deal Shape – client perspective

• Asset light

• 2 year window

• Commitment to Cloud

• Unitary pricing a must

• Online, real-time reporting

• Security concerns receding

Organisations dedicating 10% or more

of their IT budget for Cloud services

increased from 12% in 2011 to 28% in

2012.

Source: KPMG International 2012, Government Cloud Survey

KPMG International 2011, Clarity in the Cloud

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Data Centre Managed Services Market

2 Hours

Deal Shape – provider perspective

• Standard offering a struggle

• Transformation is key

• Assets and pricing

• Pricing models - stuck in the middle.

83% 42% 39% 38% 23% 12% 1 Cost savings Financial flexibility Access to skills Quality improvement Time to market Change agent

Client Drivers for Outsourcing

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Data Centre Managed Services Market

2 Hours

Benefits of Buy vs Build

• Capex light

• Access

• Flexibility

• Leverage provider scale

• Speed to deploy

• Driving standardisation

• Freeing resources

Number of companies that

outsource their IT infrastructure:

2010 - 17%

2020 – 64%

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Data Centre Managed Services Market

2 Hours

Challenges of Buy vs Build

• Finding the right supplier

• Reaching the right deal

• Existing assets

• Your organisation

Very

Unsatisfied

, 1%

Unsatisfied

, 5% Somewhat

Unsatisfied

, 12%

Somewhat

Satisfied ,

31%

Satisfied ,

40%

Very

Satisfied ,

11%

Client’s satisfaction level with Infrastructure

service providers

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Data Centre Managed Services Market

2 Hours

Conclusions

• DC outsourcing will grow

• Decreasing builds

• Commoditisation will accelerate

• Organisational fit is key

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Thank you

(12)

a subsidiary of KPMG Europe LLP and a member firm

of the KPMG network of independent member firms

affiliated with KPMG International Cooperative (KPMG