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Productization of Services - Challenges and Opportunities in the Small and Medium-Sized Business Segment

Published by: IDC

Published: Jul. 7, 2008 - 22 Pages


Table of Contents


Table of Contents

IDC Opinion

In This Study

Methodology

Demand-Side Methodology

Supply-Side Methodology

IDC Methodology

Situation Overview

Current Industry Dynamics

Figure: Asia/Pacific (Excluding Japan) IT Spending Trends: Distribution of Companies by Size and IT Spending

Segmentation of the Small and Medium-Sized Business Market

Small and Medium-Sized Business Clusters

Small and Medium-Sized Business Drivers and Buying Behavior

Reasons Small and Medium-Sized Business Space Are Important to Consulting and Systems Integration

Figure: Asia/Pacific (Excluding Japan) IT Spending Trends 2008 Forecast: Spending Distribution

Table: Estimated Small and Medium-Sized Business Spending on Consulting and Systems Integration for 2007 and 2008

Productization of Services - A Tool to Achieve Long-Term, Sustainable Competitive Advantage

Relevance of Productization for Targeting Small and Medium-Sized Businesses

Benefits of Productization

Table: Comparison of Small and Medium-Sized Business Buying Behavior with Prospective Benefits Associated with Productization

Challenges of Productization

Vendors and Their Strategies

IBM

TCS

Cisco

Future Outlook

Industry Impact

Table: Asia/Pacific (Including Japan) IT Services Spending by Small and Medium-Sized Businesses, 2008-2012 Forecast (US$M)

Challenges

Essential Guidance

Actions to Consider

Learn More

Related Research

Definitions

IT Consulting

Systems Integration

Custom Application Development

Synopsis

Abstract

This IDC study assesses the market opportunities and challenges for adoption and implementation of productization in a service environment, as well as its impact on the small and medium-sized business (SMB) segment. It questions the fundamental ideas and assumptions that prevail in the market today, while it engages in the SMB space and provides analysis and critic on the productization concept. This study also analyzes the impact of productization in the industry, as well as the new models that can help drive the bottom-line growth for vendors. It explores the strategic elements around change, transformation, innovation, and channel management.

"The key questions answered in this study include: (1) How is the buying behavior of the SMBs evolving?, (2) Why is productization relevant in the SMB context?, (3) What are the vendor strategies?, and (4) How can productization impact the bottom line? Productization should be the preferred route for large service vendors to address the SMB segment because it holds strong prospects for better profitability and sustainable competitive advantage. However, there is a caution that productization is not the panacea. Modularization of people, processes, and technology into assets, as well as their integration and profit and loss (P/L) ownership, will determine the level of success of a productization strategy," says Mayur Sahni, senior market analyst, IT Services Opportunities Research, IDC Asia Pacific.



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