Verdict Comment

LONDON – Thursday January 1, 2012 – In a traditionally strong period for the upmarket grocer, Waitrose has delivered a solid performance for Christmas 2011. New stores and an improved website provided strong total growth at 9.5%. L-f-l sales grew by 3.8% buoyed by strong marketing messages and an innovative festive product offer.

Online was crucial for Christmas 2011. Last year’s snow prevented some orders from being delivered, but in 2011 customers returned to a revamped and expanded online offer from Waitrose. This led to sales growth of 49% through this channel in the seven days before 25 December 2011. Sales of WaitroseEntertaining, the party food catering service, also grew by 29%. Many of these orders also relied on delivery services which were hampered last year.

However, according to Cliona Lynch, senior retail analyst at Verdict, the driving force behind Waitrose’ increased sales for Christmas 2011 was the continuing consumer desire to trade up. “This is particularly evident at Christmas where entertaining friends and family with indulgent foods is a priority. Consumers increased spend on entertaining at home to compensate for less disposable income in dining out over the festive season. The quality and added value associated with Waitrose’ Christmas offer negated some of the shopper price sensitivity which has risen with inflation throughout 2011.”

According to Lynch, the strength of Waitrose’ quality food message, backed by a strong Christmas marketing campaign, innovative festive product range and brand ambassadors Heston Blumenthal and Delia Smith ensured that sales growth in Christmas 2011 has set the grocer up for a strong start to 2012.

For further information and/or an interview with one of the Verdict analyst team, please contact:  Kirstin Stocker on kirstin.stocker@informa.com or 01483 825664 or 07716 756453

However, the major element behind the survival of the high street is how the consumer behaves and what consumers want. With retail growth halving every decade since the 1970s there was bound to be a fallout as the sector reached maturity.  This, combined with the impact of online shopping has led to an oversupply of space. Though these factors are behind high street decline, the main reason is consumers shop differently now to the way we shopped even 10 years ago.

We want the convenience of large out-of-town supermarkets with plentiful, free parking and a full range of products. We also want premium shopping centres with a complete range of stores and leisure activities. These locations would not survive if we did not shop at them and taxing them more heavily will be a further tax on shoppers rather than retailers and landlords.

To produce a relevant and vibrant town centre, a planner needs to assess the wants and needs of the local community, their shopping habits now and what impact demographic and economic factors will have on their future attitudes. As the report suggests, the future town centre will not have to be just about retail but the needs of the local community.

Already we are witnessing a return to local shopping. The expansion of click & collect, (in particular Collect + whereby we can collect parcels from local stores rather than wait in for a delivery or go to the Post Office), plus the high costs of driving, are encouraging shoppers to stay local. Furthermore the ageing population, with falling pensions and less mobility, will want local services and stores.

Just as a retailer looks for demand opportunities from consumers, so should local high streets.

 Shoppers will pay more but buy less this Christmas, says new report by Verdict and SAS.  But, do retailers know WHO is doing the Christmas shopping?

London, UK – 11th November 2011 – Men will buy more than half of the nation’s Christmas turkeys this year says a new report from Verdict Research and business analytics company SAS.  According to the report – How Britain will Shop for Christmas 2011 – retailers who want to make the most of the coming season’s opportunities are advised to look carefully at who is doing the shopping.

More than 10.5 million turkeys will be bought by UK consumers this Christmas. Turkey purchases start in earnest from mid-November while more than 5 million will be bought in the last week with 56.5 per cent purchased by men. The research suggests that women send their partners out with lists to save time as they ready the home, wrap presents, prepare party food and organise decorations, leaving men responsible for the tree, drink, Christmas food and present shopping.

“One of the most interesting things to come out of this report is who is doing the Christmas shopping,” said Maureen Hinton of Verdict.  “The data clearly shows that retailers ought to be actively targeting men, for whom Christmas is one of the big shopping windows. After a tough 2011 many retailers will be relying on Christmas to make a profit before being hit hard by a tough Q1 in 2012. Consumers will cut back as they recover from Christmas spending and face increased utility bills and high unemployment. Therefore retailers must build up enough cash and margin to support them through difficult trading until the next likely boost in spending, Easter.”

The report shows that UK households will spend £86.5bn in the run up to Christmas, £1.2bn more than in Q4 last year, but the volume of purchases will be down by 0.7 per cent.  Although shoppers will be counting their pennies, spend on food, clothing, footwear, health and beauty will all increase as consumers purchase their Christmas gifts.

Spend on food will increase by almost four per cent (3.8 per cent) in 2011 to £33.4bn, outperforming overall retail growth but only because of inflation rather than sales. Clothing, footwear, health and beauty will also outperform as they are major gift categories due to their relationship to personal well-being. However, non-food sales will be hit the hardest, shrinking by 0.1 per cent as consumers avoid big ticket items with home related categories expected to shrink by £490 million. (See appendix for a detailed sector-by-sector breakdown.)

Online sales will fare particularly well this year due to the convenience, ease of access and ability to compare prices across different websites. Spending online will grow to £9bn which represents nearly 10 per cent of total spend over the holiday period and this increase can, in part, be attributed to the increase in mobile commerce for price comparisons, ordering and checking stock availability. However, this does not account for the influence online has on overall spending with 63 per cent of online shoppers researching online and then buying instore. The increase in online purchases this year is up against a weaker comparative due to the bad weather of 2010 halting the delivery of online purchases.

“UK retailers face one of the most challenging Christmases ever as a combination of low consumer confidence and inflation is making shoppers question every purchase they make, even at a time when they want to celebrate.

All the growth in the market is inflation led and a repeat of last year’s bad weather would be disastrous for retailers who are already on very tight margins.” continued Hinton.

Cindy Etsell, retail specialist at SAS UK said, “The pressure on retailers this Christmas is unlike anything they will have experienced before. The key for maximising sales is about understanding when consumers are looking to purchase items and ensuring that sales prices are optimised accordingly. Monitoring customer behaviour is critical for this and the information that retailers have about their customers from till receipts, credit and loyalty cards, and even wider unstructured data from sources like social networks can steer their understanding of purchasing patterns and ability to mark down prices at the optimum time to shift stock without losing significant margins.”

-ENDS-

Notes to editors

For a PDF of the full report and/or interviews with Cindy Etsell of SAS or Maureen Hinton of Verdict, please contact:  Kirstin Stocker at Verdict: kirstin.stocker@informa.com OR Pippa Melamet at Hotwire: sas@hotwirepr.com.

ABOUT SAS

SAS is the leader in business analytics software and services, and the largest independent vendor in the business intelligence market. Through innovative solutions delivered within an integrated framework, SAS helps customers at more than 50,000 sites improve performance and deliver value by making better decisions faster. Since 1976 SAS has been giving customers around the world THE POWER TO KNOW.

ABOUT VERDICT:

Verdict Research is the leading authority on retailing. The firm has privileged access, at the highest level, to key executives working within the top 200 retailers. Its research and publications provide executives working in a wide range of business sectors – retailing, manufacturing, advertising, marketing, professional services, property, finance and the media – with unrivalled independent analysis of the retail sectors, key trends driving each, insight into the major players and forecasts. Verdict Research (www.verdict.co.uk) is a wholly owned subsidiary of Datamonitor.

Appendix

Christmas 2011 UK retail trends by sector

Food & grocery

• Online sales will be a key channel for seasonal sales growth and innovation will be crucial in gaining market share (20.9% total sales). However, UK shoppers are wary of another year of heavy snowfall, with many consumers going online to browse before heading to stores to purchase items.
• Grocers are embroiled in heavily publicised price-focused marketing campaigns and private label ranges have gained greater credibility with shoppers wanting to trade down.

Health & beauty

• This will be one of the more robust sectors in 2011 due to relatively low selling prices and a strong focus on offering a wide range of products for gifting. In particular, perfumes are always a strong festive gift with late November/early December being the peak purchasing period.

Clothing & footwear

• Clothing & footwear is expected to fare slightly better than other sectors this Christmas as they make affordable gifts compared to other larger big ticket items. Lifestyle and premium brands are expected to perform well with the in-store experience, brand perception and quality credentials helping customers to justify higher spend.

Electricals

• Small consumer electronics will give the sector a welcome boost but an increase of 3.5% in volume will not be enough to drive positive growth in 2011 because this is one sector that is still deflationary. Online specialists should perform well with their competitive prices and varied delivery options providing shoppers with a far more convenient mode of shopping.
• Post Christmas, market volumes will rise as consumers take advantage of sales but like-for-like comparisons are likely to be poor as many consumers bought big ticket items last year in anticipation of the VAT increase in January this year.

Books, music & video

• These products will struggle this Christmas as demand for physical music and video products continue to drop off and more consumers take to tablets, e-readers and downloading. Price competition from online suppliers and grocers will continue to squeezes margins. Digital content does not fare well as a Christmas gift, while video games will not perform well because no new hardware and consoles have been launched in have been released in the second half of 2011.

Furniture & floor coverings

• This sector will decline by 5% in Q4 2011 as most shoppers made big ticket purchases last year in anticipation of the VAT increase in January and are wary of spending in the current climate.

Homewares

• Gifting will be the key driver of growth over the Christmas period but big ticket categories will continue to suffer. Retailers will need to be aware of consumer demand for decorations peaking in mid-November (12^th – 21^st November) and optimise prices to reflect this demand.

DIY & Gardening

• This is the worst hit sector with a 6.3% drop in expenditure on Q4 last year. The link to the housing market is the key factor behind its difficulties as consumers are reluctant to spend on big projects due to concerns with employment, household expenses and debt. Unless visiting for specific DIY purposes such as Christmas trees, consumers are unlikely to frequent these shops with the aim of purchasing Christmas gifts. As a result, it is more crucial for this sector than any other to closely monitor customer spending patterns and maximise sales opportunities during peak periods.

LUXURY GOODS:  ATTRACTING A 21^ST CENTURY CLIENTELE

Spending on branded luxury goods is forecast to increase by 65% by 2015, but companies that want to reap rewards will have to get to grips with providing a luxury e-commerce experience for their customers, says a new market report by Verdict Research.

LONDON – Wednesday, 9^th November 2011 – Business in the global branded luxury goods market is booming with year-on-year retail expenditure for 2011 forecast to expand by 17.3%, according to a new report from Verdict Research, Global Luxury Retailing.

“This compares to a growth rate of 9.8% observed in 2010, and is being driven by strong spending on luxury goods across all global markets,” explains Ruta Perveneckaite, retail analyst at Verdict.

Europe has remained the largest region for luxury goods consumption and is set to retain this position until 2015, despite its relative share continuously declining due to rapid growth in the emerging markets of Asia Pacific.

During 2010, Asia Pacific excluding Japan overtook the Americas for the first time as the second largest luxury goods market after Europe, and the region is now on course to account for 26.8% of the market in 2011. While Asia Pacific growth is particularly driven by China, which threatens to become the largest single global luxury market, new demand from other countries in the region, including South Korea, Taiwan, and to a lesser extent India, is also responsible for the strong performance.

While luxury goods players are investing heavily in these growth markets, there are other opportunities emerging for which they appear less well prepared, such as luxury e-commerce and digital marketing.

“Initially, luxury houses were sceptical about launching transactional websites, but now the great majority of luxury players have at least a limited online offer,” says Perveneckaite.  “However, there remains much confusion in the luxury goods sector surrounding how to guarantee a premium service online and there is a distinct reluctance to engage customers through digital marketing and mobile platforms.

“ Too often luxury houses adopt practices which are common to the high street, missing the opportunity to use the new channel to further differentiate themselves as luxury retailers and, most importantly, strengthen their brand image and justify premium pricing,” continues Perveneckaite.  “The launch of an attractive website and secure payment processes does not equate to a luxury experience; it requires excellent customer support, top-quality presentation of goods, and more delivery options to satisfy its time-pressured clientele.”

“When purchasing something for a premium price, online customers  expect a much higher quality service, and many luxury goods e-commerce sites fail to reflect this. Site design, product range, dedicated service teams, speed and security and delivery of products are all crucial areas to get right,” adds Perveneckaite.

Highlights of Verdict Research’s Global Luxury Retailing include:

• In 2010 the luxury goods market recovered from downturn and robust growth continued in 2011.
• Spending on branded luxury goods is forecast to increase by nearly 65% between 2010 and 2015.
• In 2010 Asia Pacific excluding Japan overtook the Americas as the second largest luxury market.
• The Middle East and Others is the second fastest growing region for luxury spending.
• Accessories are the key product category in the luxury sector and will be the fastest growing category to 2013.
• Luxury goods houses continue to expand aggressively in Asia Pacific, especially in China, and are putting extra effort into standing out from the competition.
• E-commerce is now an important channel in the luxury goods sector; however, there is much confusion about how to deliver a luxury service online.

-ENDS-

For further information and/or an interview with Ruta Perveneckaite, please contact:  Kirstin Stocker on +44 (0) 1483 825664 or kirstin.stocker@informa.com

ABOUT VERDICT:

Verdict Research is the leading authority on retailing. The firm has privileged access, at the highest level, to key executives working within the top 200 retailers. Its research and publications provide executives working in a wide range of business sectors – retailing, manufacturing, advertising, marketing, professional services, property, finance and the media – with unrivalled independent analysis of the retail sectors, key trends driving each, insight into the major players and forecasts. Verdict Research (www.verdict.co.uk) is a wholly owned subsidiary of Datamonitor.

LONDON – Wednesday, November 02, 2011 – Woes in the home entertainment market continue, largely as a result of consumer reluctance to spend with entertainment retailers, say analysts at Verdict Research in a new report on the Global Home Entertainment market.

A combination of piracy, free access to streaming services such as Spotify, Grooveshark, YouTube and the BBC iPlayer, and access to free apps and casual online games has reduced the value consumers attach to the ownership of home entertainment products. This trend has been exacerbated by consumers having less disposable income and lower confidence as a result of the economic downturn.

“‘Society’s views on piracy remain fairly relaxed and people will talk openly about downloading or streaming products without any worries of it being against the law,” explains Carly Syme, Retail Analyst at Verdict Research. “Even with the prospect of Internet Service Providers being made liable for illegal downloads, piracy seems set to remain a major negative factor for the entertainment sector.”

“Increasing internet usage, faster access speeds and a proliferation of P2P file sharing networks also means illegal downloading and streaming is relatively easy,” adds Syme.  “The weak economic climate has only added to the problem, making it more difficult to tempt people away from piracy towards legitimate services.”

According to the latest data from Verdict Research’s Global Home Entertainment  market report, the UK home entertainment market peaked in 2008 at £7.7bn, largely because of an explosion in popularity of video games across 2007 and 2008. Since that year, the value of the market has fallen by £1.6bn, with the market estimated to be worth £6.1bn in 2011.

“There is potential for the market value to recover to £6.6bn by 2015 if new technology in video games can be effectively monetized and the digital market becomes more mainstream,” says Syme.  “It is expected that 21.4% of UK entertainment sales will occur digitally in 2011 as a result of growing broadband penetration, faster connection speeds, increased use of mobile internet and greater online connectivity of devices such as TVs, tablets and games consoles.”

This percentage would be even higher if the measurement were based on consumption, rather than spending, with illegal online piracy and the popularity of free, subscription and rental services such as iPlayer, Spotify, Sky movies on demand bolstering the numbers of digital products being used.

Indeed, the UK market is not looking as gloomy as the global market which peaked at $103.2bn (£66.5bn) in 2008 and where the forecast is for a continual decline to $74.3bn (£47.9bn) by 2015. The only saving grace in the forecasted numbers is that falls will diminish to 0.5% by 2015.

“The global games market is unlikely to return to the high growth rates that it enjoyed in the years after the last batch of major consoles were released,” says Patrick O’Brien, Global Analyst for Verdict.  “The market for physical DVDs will continue to fall, increasingly moving towards video on demand and internet streaming and rental services. In addition, the music retail market will continue to fall at a rapid rate, as consumers continue to move away from physical music CDs.”

Piracy is rife in both of those markets.

Feature phone apps market to almost double to $1 billion

The mobile apps market for feature phones will almost double by 2016, hitting revenues of $1 billion, after being spurred on by the success of apps in the smartphone sector, according to Ovum.

In a new report*, the independent telecoms analyst claims that while the feature phone apps market has not taken off in the same way as its smartphone counterpart,  it is beginning to take strides forward.

It states that improvements which have made both developing and publishing feature phone apps easier, the larger size of the market and reduced competition mean that the sector has the potential to be more lucrative for some developers.

Nick Dillon, Ovum analyst and author of the report, commented: “While feature phone users vastly outnumber smartphone users, the apps market hasn’t taken off in the same way. This is largely because it has lacked the distribution channels to enable widespread adoption.

“However, inspired by the success of apps in the smartphone market, the options have improved drastically, with many larger handset manufacturers, operators and third parties now offering improved distribution programmes for feature phones.

“While addressing this market is not as easy as the smartphone market, it has the potential to be more lucrative for some developers. The larger size of the market combined with higher barriers to entry means that there is less competition than in the smartphone market.”

According to Ovum, the number of feature phones worldwide will reach 2.3 billion in 2016, when they will continue to dominate the market, with a 63 per cent share, compared to 37 per cent for smartphones.

The report finds that despite its age, JavaME software is the best option for developing feature phone apps, but Nokia web widgets and Opera Mini widgets also enable simple applications using web technologies. In addition, options for web development will be further improved by the introduction of HTML5-capable browsers, which Ovum anticipates will become widespread on feature phones in the next 12–18 months. 

–ENDS—

NOTES TO EDITORS

*Opportunities for Mobile Development in the Mass Market

To arrange an interview or for further details regarding this release please contact  Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.   

Outsourcing in “conservative” utilities sector set to increase

The cash-strapped utilities industry will increasingly turn to IT outsourcing over the next year as many organisations finally realise they have no choice but to consider it because of the potential cost savings, according to Ovum.

In a new report*, the independent technology analyst claims that the recent uptick in the number of IT outsourcing contracts awarded by utilities in Europe and North America is set to grow steadily over the next 12 months as the industry faces unprecedented pressure.

Stuart Ravens, Ovum principal analyst and co-author of the report, commented: “The utilities industry is particularly conservative and until recently very few companies had passed significant business to outsourcing companies.

“However, we have already seen a weakening of this conservatism, with a small but significant number of IT outsourcing contracts awarded in recent months. We believe this number will steadily increase over the next year and beyond. With unprecedented pressure to drive down costs, many utilities are realising that they can no longer afford to ignore outsourcing.

“They are being driven down this path by a number of market forces, including the need for new infrastructure investments, ongoing industry consolidation, and increasing interest in smart energy initiatives.”

According to the report, the areas utilities will look to outsource include infrastructure and application projects as well as back-office activities. In addition, utilities implementing smart energy initiatives will present significant opportunities to systems integrators.

Outsourcing projects awarded by utilities over the last few months include E.ON’s $1.4 billion deal with Hewlett-Packard (HP), which was awarded in December 2010 and will see HP deliver data centre operations and workplace services for more than 80,000 employees at the German giant. Meanwhile in March this year Capgemini was awarded a $162 million contract from French energy company EDF to provide service desk, procurement, and managed desktop services to 15,000 IT users.

Ravens added: “This shift in attitude by the utilities sector obviously represents a massive opportunity for vendors. The more effective IT outsourcers will be the ones that can communicate how removing IT capital expense allows for more investment in addressing industry challenges around regulation, the environment, and infrastructure improvements.”

– ENDS –

NOTES TO EDITORS

*Pressures in the Utilities Industry Creates Opportunities for Outsourcing

The report was written by Ovum utilities technology analyst Stuart Ravens in conjunction with Ovum IT services analyst John Madden and is the first or two reports that they will author on the subject.

To arrange an interview or for further details regarding this release, please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group

Lack of innovation in LTE pricing models, report finds

Operators that offer high-speed mobile broadband technology LTE are failing to deliver innovative pricing models, according to Ovum.

In a new report*, the independent telecoms analyst firm claims that there is a lack of new and innovative LTE (long term evolution) tariffs, which is a missed opportunity for operators given that LTE is a new service in the eyes of consumers.

Nicole McCormick, Ovum senior analyst and author of the report, commented: “We looked at the LTE pricing strategies of operators in Europe, Asia-Pacific, and theUS, and were disappointed with our findings.

“LTE provides operators with the opportunity to experiment with new and innovative pricing models, which allows them to find the best way of deriving revenues from the premium service. 

“However, most operators have not grasped this opportunity. Instead, LTE tariffs in the regions Ovum analysed are dominated by unlimited offerings and large data buckets, which can be problematic.”

According to the report, unlimited data plans for LTE can present significant problems for operators, especially if they are accompanied by a lenient fair usage policy.

McCormick commented: “Operators should not offer unlimited LTE tariffs without some sort of deterrent as they could have an impact on the quality of the service given LTE’s data-intensive nature. However, we note that some leading operators –Verizon Wireless,SKTelecom, NTT DoCoMo and LG U+ – have steered clear of unlimited LTE offerings despite offering such packages in the 3G arena.”

The report also found that charging high premiums for LTE is unsustainable in the long-term due to competitive pressures in the industry and increased migration to 4G services. McCormick added: “Operators will need to be careful not to alienate high-end customers that have paid a premium for a fast, high-quality service by reducing LTE tariffs too quickly or drastically.”

–ENDS–

NOTES TO EDITORS

*LTE Tariff Comparison: Europe, Asia-Pacific, and the US

To arrange an interview or for further details regarding this release please contact  Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.   

Ovum finds significant operational hurdles for telco cloud services

While telcos are well-placed to take advantage of the burgeoning cloud computing market, they face considerable challenges when it comes to supporting and selling cloud services, according to Ovum.

In a new report*, the independent telecoms analyst claims that the operational hurdles telcos face to make a success of cloud services are ‘significant’.

Mark Giles, Ovum analyst and author of the report, commented:  “Much has been made of the potential for telcos to leverage existing assets, such as their communications networks, data centres, OSS and BSS systems and existing customer relationships, to offer cloud services to enterprises. However, while telcos’ assets do provide them with some key advantages over other cloud providers, there are a number of significant challenges that they face.

“Aside from a perceived lack of brand identity in the supply of IT services, obstacles such as bringing internal network and IT teams together, enabling sales teams, and ensuring that OSS and BSS systems can deliver on cloud’s on-demand nature, must be overcome.

“The pace of innovation required for cloud services is very different from traditional network services and requires telcos to drastically reduce their time to market. While this is a challenge for the back office, it also raises questions as to how telcos price and monitor the profitability of these services.”

According to the report, telcos should follow the lead of players such as SFR and Telstra by seriously considering a joint branding, marketing and even sales partnership with an existing IT services player to maximize their potential impact in the market.

Giles continued: “In addition to helping them overcome their internal operational challenges, a partnership can help telcos to expand their number of sales channels and profit from an association with a premium IT services brand.”

–ENDS—

NOTES TO EDITORS

*Enabling Telco Cloud Services

To arrange an interview or for further details regarding this release please contact  Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.   

Despite industry hype, enterprises resist IPv6 push

Most enterprises are continuing to resist pressure from the internet and telecoms industries to migrate to IPv6 by ignoring their efforts to push to the new internet standard, according to Ovum.

The new internet protocol IPv6 is being marketed as essential to the future growth of the internet as it opens up a wealth of new address space for web portals and applications.

However, in a new report* the independent telecoms analyst claims that pressure from players such as telecoms and internet service providers is falling on deaf ears and enterprises see no need to start the transition to IPv6.

Mike Sapien, Ovum principal analyst and author of the report, commented: “The recent World IPv6 day is one example of industry players promoting the protocol as the ‘next generation internet’ and pressurising enterprises to prepare for the move. But our recent research suggests that they are failing to make an impression on enterprise customers, who don’t see any need to even think about it

“There may be a degree of ‘head in sand’ mentality among enterprises, but our research stands in glaring contrast to the industry’s efforts to promote IPv6 over the past several years. Furthermore our research suggests that many enterprise customers think they are already using IPv6, when they are not.”

Metrics carried out by industry players have revealed that IPv6 traffic counts for less than three per cent of all internet traffic today.

According to the report, one of the major reasons for enterprises’ lack of urgency is that there are still plenty of IPv4 addresses available, meanwhile issues such as a lack of return on investment and more pressing IT priorities are also playing a part. “Most enterprise customers assume that having plentiful IPv4 addresses alleviates any need to make the move; it is just not that simple,” commented Sapien.

The report finds that there are some triggers that will motivate enterprises to make the move. For instance, the growing number of new  consumer devices, such as smartphones, that will be assigned IPv6 addresses, and the new web applications that will be accessed by these devices. In addition, as Asia-Pacific leads the world in IPv6 adoption, enterprises (and their many suppliers) doing business within this region will be influenced to follow suit.

In the meantime, it advises that education and planning are the key. Sapien concluded: “Internet application and service providers should continue to focus on customer education so that enterprise and consumer customers increase their awareness of the transition to IPv6. They should explain what the transition entails for the customer’s computers, network equipment, routers, servers and web infrastructure so that they are clear about what is involved. Every enterprise needs a plan before they hit the IPv6 wall unexpectedly.”

–ENDS—

NOTES TO EDITORS

*IPv6 Transition – What’s the Rush?

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organizations must support. Ovum is part of the Informa Group.   

Wealth management industry IT spend to top $32bn as recovery gets under way

Global spending on IT by the wealth management industry will top $32 billion by 2015, a growth rate of 6.5 per cent over a five year period*, predicts Ovum in a new forecast**.

The independent technology analyst finds that the ramping up of technology spend by the sector will be driven by a return to better days for the industry, as the number of wealthy consumers looking for opportunities to invest their money slowly increases.

Ovum senior analyst Jaroslaw Knapik commented: “The recession had a big impact on the wealth management industry and it was one of the sectors that bore the brunt of the fall-out, resulting in growth in tech spend slowing considerably.

“With recovery now under way, the outlook for IT investment is much more positive. Strong growth in the emerging markets, a need to invest in channels such as internet services, and compliance requirements of new regulations such as Basel III, are all fuelling global growth in technology investment.”

Globally, all channels will see growth but it is in internet services that it will be particularly strong. The high net worth banking and financial planning sectors of the global wealth management industry will increase spending in this area by 7.6 per cent from the beginning of 2011 to the end of 2015. Meanwhile, in the retail brokerage sector growth will be 6.7 per cent for the same period, and in retail asset management, 7.6 per cent.

Knapik commented: “The need to create websites and applications that allow customers and financial advisers access to company websites via mobile devices such as smartphones and tablets will drive some of this growth in internet spend. Much of the rest will come from upgrading online services with personal financial management tools and closer integration of the online channel with middle and back-office technology such as product origination, customer information, or investment and portfolio management systems.

In the UK and Ireland, Ovum’s forecast shows that there will be healthy growth in IT spend that is slightly above the global figure. The region will see growth of 6.6 per cent over a five-year period, to reach $2.3 billion in 2015. In the US growth will be 6 per cent for the same period, to hit just over $13 billion.

While the amount of money spent on IT will be greater in the developed world, the emerging markets are set for explosive growth. Wealth management IT spend in Eastern Europe*** will grow by 17.8 per cent from the beginning of 2011 to the end of 2015, as significantly more IT investment will be made, as the industry takes off in the region. Meanwhile, the emerging economies in Asia-Pacific will also see strong growth of 12.8 per cent for the same period.

– ENDS –

NOTES TO EDITORS

More detailed data is available upon request.

* The forecasted data is from the beginning of 2011 to the end of 2015

**Wealth management Technology Spending Through 2015: Business Function Segmentation

Wealth Management Technology Spending Through 2015: Source Segmentation

***Eastern Europe includes Belarus, Moldova, Russia and Ukraine

To arrange an interview or for further details regarding this release, please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group

Desktop virtualisation poses risky problem for CIOs

CIOs see selecting the right technology provider for their desktop virtualisation strategy as a “significant risk”, according to Ovum.

In a new report*, the independent technology analyst claims that CIOs harbour concerns about the immaturity of the market and some are reticent to take the plunge for fear of purchasing the wrong solution for their enterprise.

Roy Illsley, author of the report and Ovum principal analyst, commented: “CIOs are coming under increasing pressure due to the escalating cost of maintaining corporate-owned remote PCs and laptops, demands for more end-user flexibility and mobility, and the proliferation of personal mobile devices in the workplace.

“Desktop virtualisation can go a long way towards alleviating these issues. However, the move away from business PCs towards desktop virtualisation has been hampered by the fragmented market.

“The general view is that as the market is relatively immature, selecting the correct technology represents a significant risk because nobody wants to invest in the Betamax of the desktop virtualisation world.”

Ovum’s research has found that desktop virtualisation currently represents approximately 15 per cent of the business PC market. However, this figure is dominated by the traditional terminal services model (12 per cent), typically used in call centre-type environments, and has been for the last 10 years.

If terminal services are excluded, the next generation of solutions aimed at CIOs, from the likes of VMware, Citrix, and Microsoft, hold less then three per cent of the market, showing that many CIOs are holding back from taking the plunge. In addition, Ovum has found that most CIO deployments are small scale, and the number of large deployments is few and far between.

VMware and Citrix are currently the most dominant vendors in the space and between them account for 83 per cent of the market. However, while Microsoft only holds 11 per cent market share, its range of technologies is beginning to make gains. Meanwhile, niche solutions will continue to be developed, leading to more choice for CIOs, but more confusion about which vendor to back.

Illsley added: “A recent CIO survey Ovum conducted found that simplifying the management of desktops to reduce costs and increasing business agility were the top two reasons for implementing desktop virtualisation, so awareness of the potential benefits is high.

“But an often overlooked aspect is the need to shift thinking from a device-centric perspective to a user-centric one. This is where adjacent solutions from the likes of AppSense, RES Software, and Centrix Software in the user-virtualisation space become important considerations to any desktop strategy.

“Defining a strategy centred on the user is the first step many should take, then CIOs could select the best approach for users’ needs.”

-ENDS—

NOTES TO EDITORS

*Solutions Guide: Desktop Virtualization

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.

Rapid growth on horizon for Colombia’s CRM outsourcing market

The number of outsourced call centre agents in Colombia will almost double during the next five years as the market in the country begins to realise its enormous potential, according to Ovum.

In a new report* the independent technology analyst unveils findings from its latest CRM outsourcing forecast**, which predicts that outsourced call centre agent numbers will hit more than 50,000 in 2016, up from 27,000 in 2010.

Annual growth in the number of outsourced agents will also be strong, hitting a high of 14 per cent this year. The predicted growth will be mainly driven by the domestic market and burgeoning numbers of consumers, but outsourcers from overseas countries such as Spain will also play a part. 

However, although the outlook for the Colombian market is positive, the report warns that it runs the risk of growing too quickly, causing the labour pool to come under strain and leading to attrition and inflation for CRM outsourcers.

Peter Ryan, Ovum lead analyst and the author of the report, commented: “Colombia has emerged as a solid market for CRM outsourcers over the past two years, fuelled by a need for an alternative Latin American delivery site. It has developed a reasonable level of sophistication in a relatively short time, it has substantial magnitude for a country of its size, and its global players service numerous vertical industries.

“Our research has shown that the market has significant potential and will grow rapidly over the next few years. However, there is a possibility that this sector is growing too quickly, so CRM outsourcers looking to invest in the country will need to be wary of the problems this could bring.”

Ovum’s report advises CRM outsourcers keen to take advantage of the Colombian market to initially target the domestic market due to the country’s growing economy, which is creating more and more consumers. It states that links should be made with the enterprises that serve those consumers, either by establishing a greenfield operation in the country, or by acquiring a local player.

The report also recommends that CRM outsourcers setting up bases in Colombia attack the surrounding Latin American markets to compete with more costly Spanish-speaking countries such as Chile, Argentina and Mexico. 

– ENDS –

NOTES TO EDITORS

*Profiting from CRM Outsourcing in Colombia

**CRM Outsourcing Forecast: 2010-16

To arrange an interview or for further details regarding this release, please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.

China to continue to dominate global FTTx market

China’s dominance of the global optical fiber broadband market will continue throughout 2011 and beyond, due to the huge predicted growth in subscribers in the country and the strength of its vendors, according to Ovum.

In a new report*, the independent telecoms analyst predicts that China’s FTTx subscribers will reach 100 million in 2016, which will represent more than 50 per cent of the world’s subscribers.

Meanwhile, the report states that Chinese FTTx vendors Huawei and ZTE, which were ranked the world’s number one and two, respectively, in 2010 by market share, will continue to hold their positions for years to come. The companies are a strong force both in the local Chinese market and overseas and their competitors will find it almost impossible to unseat them, the report finds.

Julie Kunstler, Ovum principal analyst and co-author of the report, commented: “China is the biggest consumer of FTTx equipment right now and that is set to continue. A key driver of the enormous forecasted growth is the bandwidth and subscriber targets set by the Chinese government and service providers. In addition, the government is providing support for deployments in the form of credit and partnerships. Meanwhile, the significant greenfield construction projects that are under way in the country make the installation of FTTx networks easier.”

In terms of the Chinese vendor picture, the report finds that Huawei will continue to be ranked the world’s number one throughout 2011 and beyond and competitors will struggle to steal market share from it. It states that Huawei is the leading FTTx PON vendor today in China and Europe, the Middle East, and Africa (EMEA) and the company will benefit from future growth in China and Eastern Europe.

Ms Kunstler continued: “Chinese FTTx vendors Huawei, ZTE, and FiberHome make up three of the top five global vendors and are ranked first, second, and fourth, respectively. The rise of the Chinese suppliers is mainly due to lower growth rates in Japan and Korea, where high FTTx household penetration rates have been reached. In addition, Japanese and Korean vendors are not major exporters of FTTx equipment.

“Huawei and ZTE are strong exporters outside of China. In the fourth quarter of 2010, 50 per cent of FTTx equipment revenues in EMEA corresponded to shipments by these two vendors. They have strong expertise in FTTx, given their large home market, and they will continue to be a formidable force around the globe.

“There will continue to be room for other players, but it will be difficult to unseat the top two.”

–ENDS—

NOTES TO EDITORS

*FTTx Market Review: China’s Dominance

The report is part of Ovum’s Signature Research portfolio for 2011, which represents the best of what Ovum analysts produce for each of the practices.

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organizations must support. Ovum is part of the Informa Group.   

Vendors of e-prescription software should improve their game to tackle low adoption

Vendors of electronic prescribing software need to up their game and improve the design of their systems, if widespread adoption by hospitals and surgeries is to be reached, according to Ovum.

In a new report*, the independent technology analyst finds that while e-prescribing systems, which cut costs and inaccuracies associated with paper prescriptions, are bringing fundamental changes to the healthcare sector in the US and Europe, uptake has been low.

The report states that a major cause of resistance to adoption is that healthcare practices, especially those in the private sector, believe that the IT solutions currently available are not sophisticated enough to integrate well with other IT systems.

It also claims that the interfaces of some systems are not user-friendly enough and are viewed as cumbersome by healthcare professionals.

Andrew Brosnan, Ovum analyst and author of the report, commented: “E-prescribing not only delivers cost savings, but also improves patient care and reduces the number of prescription errors. It also streamlines the dispensing process for patients, and provides practitioners with medication histories, reducing fraud.

“However, despite the many benefits, actual use of the solutions remains low, particularly in the US. The high upfront costs and patient confidentiality fears are two of the reasons for this, but a major cause of resistance to the adoption is a pervasive sense that the IT solutions currently available have not as yet achieved the level of sophistication that will be required to mesh seamlessly with other IT programmes and systems. This is of great concern to prescribers.

“Physicians also say that cumbersome interfaces and difficulty recalling patient medical records need to be improved as they increase the time it takes to write a prescription, affecting the value they hold over paper-based prescriptions.”

To improve their ability to integrate with other IT systems, the report advises software vendors to ensure their solutions comply with industry standards.

Brosnan added: “Improving the interoperability of software will enhance its perceived value to users, enabling the market as a whole to grow. Until these issues are ironed out, widespread adoption of e-prescribing is unlikely to happen.”

– ENDS –

NOTES TO EDITORS

*ePrescribing brings fundamental change to the healthcare and life sciences ecosystem

To arrange an interview or for further details regarding this release, please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group

North America software market to burst into life in 2011 with 9% growth

• Microsoft ranked market leader but innovation remains an issue

The North America business software market will burst into life this year, growing by almost 9% to hit $123.4 billion, driven by a need for enterprises to manage exploding amounts of data and a slowly improving economy, according to Ovum.

In a new forecast*, the independent technology analyst predicts that recovery will begin this year for the sector, which grew by a meagre 2.8% in 2010. The promising outlook means the sector will grow at a compound annual growth rate (CAGR) of 7.7% during the next four years, reaching revenues of $165 billion  in 2015.

Ovum’s figures show that information management software will experience the strongest growth, and the driving force will be the business software sector. It will grow at a CAGR of 10.7% from 2010 to 2015 due to the growing importance of technologies that manage, integrate, and improve the quality of data between systems and people in business IT.

Madan Sheina, Ovum lead analyst, commented: “With tentative signs that the North American economy might finally be coming back to life, enterprises in the region are no longer seeing the glass as half empty, but looking to top it up. Purse strings are loosening for CIOs and new technology is a key target, meaning the software market will reap the benefits.

“Another key driver of the return to strong investment in business software is the exploding volume of data and speedier data processing, which put existing IT infrastructure under increasing pressure and data governance and security under the investment spotlight.

“Businesses will continue to need applications that allow them to gather and manage transactional information. However, a large proportion of investment is driven by organisations now looking for innovative uses of software to help them use the terabytes of information their systems have collected to drive business value that goes beyond just operational support of the business.”

Ovum has also released a new vendor rankings analysis**, which paints a picture of the companies that are dominating the software space. Microsoft continues to lead both the global and North America markets. In North America Microsoft has more than 25% market share. It is followed by Oracle, IBM and SAP, in second, third and fourth place respectively.

Ovum principal analyst Richard Edwards commented: “Microsoft is still a major player and market maker, with revenues of $62 billion in 2010. The company has gained huge mass and velocity over the past 20+ years, and this looks set to sustain the company in the short and medium-term.

“However, its level of innovation is not keeping pace with the rest of the market – it is doing just enough to stay in the game, but is not a star performer.”

Globally, Ovum predicts that the business software market will grow by a CAGR of 7.5% from 2010 to 2015 to reach $358bn, and will grow by 8.2% this year. The market in Europe, the Middle East and Africa will grow at a CAGR of 6.3% from 2010 to 2015 to hit $108.5 billion, and will increase by 6.5% this year.

– ENDS –

NOTES TO EDITORS

*North America Market Trends 2010: Business Software Forecasts

The Ovum software forecasts include software solutions for business. This covers systems infrastructure, enterprise applications, office applications, information management and security.

**North America Market Trends 2010: Business Software Vendor Rankings and Market Shares

To arrange an interview or for further details regarding this release, please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.

Global software market to burst into life in 2011 with more than 8% growth

• Microsoft ranked market leader but innovation remains an issue

The global business software market will burst into life this year, when it will grow by 8.2% to hit $267 billion, according to Ovum.

In a new forecast*, the independent technology analyst predicts that recovery from the global economic downturn will begin in earnest this year for the sector, which did not grow at all in 2010.

The promising outlook means the business software sector will grow at a compound annual growth rate (CAGR) of 7.7% during the next four years, reaching revenues of $358 billion in 2015. The strong growth is driven by exploding volumes of data, increased enterprise mobility, the transition to cloud computing models, and the emerging markets.

The information management software sector will experience the biggest increase in revenues of all the business software areas. This area will grow at a CAGR of almost 10% from 2010 to 2015 as businesses grapple with spiralling volumes of data and try to extract business value from them.

Tim Jennings, Ovum chief analyst, commented: “As the global economy continues its recovery, the emphasis on IT investment is moving from the traditional area of back-office automation and transaction processing towards the exploitation of information to add value to the business.

“The volume of information within enterprises continues to grow at an astonishing rate, and investment is needed to both manage this information and turn it into actionable intelligence, through technologies such as business intelligence and analytics.”

Ovum has also released a new vendor rankings analysis**, which paints a picture of the companies dominating the software space. Microsoft continues to be the world’s number-one software company, with more than 20% market share. It is followed by Oracle, IBM and SAP, in second, third and fourth place respectively.

Ovum principal analyst Richard Edwards commented: “Microsoft is still a major player and market maker, with revenues of $62 billion in 2010. The company has gained huge mass and velocity over the past 20+ years, and this looks set to sustain the company in the short and medium-term.

“However, its level of innovation is not keeping pace with the rest of the market – it is doing just enough to stay in the game, but is not a star performer.”

Although information management software will experience the strongest growth, Ovum’s figures show that all the sectors will enjoy a healthy outlook. The systems infrastructure software market will grow at a CAGR of 8.3% from 2010 to 2015, while applications software will grow at a CAGR of 6.8% during the same period.

Jennings continued: “Organisations are breaking away from the shackles of desktop IT and providing mobile workers with access to systems from any location and any device. The mobile revolution will generate strong demand for mobile applications, as well as for the development and management platforms to support this shift.

“Although it is still relatively early days for cloud computing, growth will accelerate over the next five years as organisations move further towards a software-as-a-service model and take their data centres towards hybrid public and private cloud infrastructure. This will generate new demand for both infrastructure and application services.

The emerging markets will also make a substantial contribution to the strong growth the software sector is set to experience. Jennings added: “Emerging markets around the world have an insatiable appetite for technology-driven expansion, often unencumbered by the constraints of peers in mature markets. Software vendors have significant opportunities in regions such as South East Asia and Latin America in the same areas of information management and mobility.”

– ENDS –

NOTES TO EDITORS

*Global Market Trends 2010: Business Software Forecasts

The Ovum software forecasts include software solutions for business. This covers systems infrastructure, enterprise applications, office applications, information management, and security.

**Global Market Trends 2010: Business Software Vendor Rankings and Market Shares

To arrange an interview or for further details regarding this release, please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.

Global optical networking market to reach revenues of $20 billion in 2016

• North American market to grow by 12% this year
• Europe, the Middle East, and Africa to return to growth
• Asia-Pacific to contract again in 2011

The global optical networking (ON) market will reach revenues of $20 billion by 2016, as the sector pulls itself out of the economic downturn, predicts Ovum in a new forecast*.

However, the independent telecoms analyst warns that although the global market will grow at a compound annual growth rate (CAGR) of six per cent from 2010 to 2016, not all of the regions will see strong growth.

Ian Redpath, Ovum analyst and author of the forecast, commented: “Increasing bandwidth from residential broadband networks, mobile networks, and enterprises is the key driver of the growth. Carriers are investing in access networks and mobile long term evolution (LTE) rollouts are beginning to gain momentum. The ON market is also reaching a watershed moment in terms of technology. Networks based on 40G and 100G wavelengths are now poised for mass-market deployment.”

“However, while our forecast report shows a marked improvement for the market when compared to the recessionary period, it falls short of a strong bounce back. We expect yet another year of muddling out, with North America continuing to gain momentum; Europe, the Middle East, and Africa (EMEA) improving from contraction to modest growth; and Asia-Pacific beginning a modest retreat.”

Ovum predicts solid growth for North America in 2011 of 12 per cent, up from 7 per cent in 2010. Redpath commented: “Emerging technologies will be the driving force in North America. We expect adoption of 100G network building to gain momentum from both carriers and non-carriers.”

In EMEA, which contracted by 10 per cent in 2010, Ovum predicts that 2011 will be a turnaround year, with three per cent growth and a CAGR of 5.5 per cent from 2010 to 2016. Redpath commented: “Developing economies in EMEA still need basic infrastructure and the developed ones are due for a network refresh after two long years of recession-induced restraint.”

Ovum’s figures show that the market in Asia-Pacific contracted by 2.2 per cent last year and will contract by a further 3.2 per cent in 2011, although the reasons differ. Redpath added: “The 2010 reduction was due to a dry market in Japan and a government-induced freeze in India, while the Chinese market grew. For 2011, we predict growth again from Japan and India but a slowdown in China, caused by an overheated market that needs a little cooling-down period.”

–ENDS—

NOTES TO EDITORS

*ON Forecast Report: 2011-16

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organizations must support. Ovum is part of the Informa Group.

IT services market to return to healthy growth in 2013

• Global market to grow by 4.4 per cent during next four years
• IBM ranked number one IT services provider
• Business process outsourcing strongest service line

Pent-up demand and a slowly improving economy is driving recovery in the global IT services market, which will grow at a compound annual growth rate (CAGR) of 4.4 per cent during the next four years, to hit $756 billion, predicts Ovum.

In a new forecast*, the independent technology analyst finds that although 2011 growth is still not back to pre-recessionary levels, the market will return to healthy growth of over 4.5 per cent in 2013, when the recovery will begin in earnest. This is a significant increase on growth in 2010, which did not even reach two per cent.

Meanwhile, Ovum has also released a new market share analysis** of the top 50 global IT service vendors, to paint a picture of the companies that are dominating the space. IBM continued to be the world’s number one provider of IT services in 2010, followed by HP and Fujitsu.

There was no change in place in 2010 for the top five vendors, when compared to 2009, and all experienced negative growth last year. Most of the vendors that improved their market share and their ranking were Indian-heritage firms such as Infosys, Wipro and TCS, which moved one place to be ranked 13^th. Japanese firms such as NEC, Hitachi and Otsuka Shokai also made gains.

Dr Alexander Simkin, Ovum’s lead IT services market trends analyst, commented: “The market for IT services is gradually recovering from the economic downturn. So far, the turnaround has been patchy, with some geographies and service lines emerging faster than others. By 2013, we expect to see a return to pre-recessionary levels of growth. However, the market is not out of the woods yet and there will be small regional and segmental dips along the way.”

Of the all the IT service lines, business process outsourcing will experience the strongest growth from 2010 to 2015, followed by infrastructure-led outsourcing and support services. Dr Simkin commented: “The growth in infrastructure-led outsourcing and support services reflects the fact that it is still a fundamentally sound market in the majority of territories.”

Meanwhile, Ovum predicts that the project services and application-led outsourcing market will also experience healthy growth. Dr Simkin concluded: “After a dismal 2008 and 2009, enterprise customers realise that they can no longer hold back on making new application investments. Vendors have stepped up their efforts around applications rationalisation and modernisation in anticipation of pent-up demand for those services.”

– ENDS –

NOTES TO EDITORS

*Global Market Trends 2010: IT Services Forecasts

**Global Market Trends 2010: IT Services Rankings and Market Shares

To arrange an interview or for further details regarding this release, please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.

Growth in the number of CIOs deploying green IT

Almost three-quarters of CIOs have deployed green IT within their organisation, with an additional eight per cent planning to do so by the end of 2012, finds new research from Ovum.

According to a survey* by the independent technology analyst, the number of organisations using green IT grew to 73 per cent in the second half of 2010, up from approximately 68 per cent in the first half, as tightened IT budgets and a sluggish economy forced IT decision-makers to scrutinise spending and wake up to the potential cost savings green IT can deliver.

Looking ahead to the end of 2012, Ovum’s survey revealed that a further eight per cent plan to deploy green IT.

Rhonda Ascierto, Ovum analyst and author of a new report** unveiling the survey findings, commented: “This growth in green IT penetration reflects a change of attitude by CIOs and other IT decision-makers. Previously, they considered green IT optional because they defined its value primarily in terms of corporate image, rather than the bottom line.

“It is now viewed as a core technology that that delivers business value by cutting costs and increasing efficiency. We believe this change has occurred because of constrained IT budgets and a sluggish global economy in the wake of the recession, which forced organisations to scrutinise spending on all types of IT. Many CIOs have for the first time had to calculate a financial return on investment of green IT.”

Ovum surveyed CIOs about five major categories of green IT: data centre virtualisation, data centre power and cooling technologies, desktop virtualisation, printing and paper usage management, and power management tools for PCs and monitors. All will experience growth in penetration over the next couple of years.

Of these different areas of green IT, data centre virtualisation has the greatest penetration, with 52 per cent of the CIOs Ovum spoke to saying they use it. According to Ovum’s survey, this figure will grow to 65 per cent over the next couple of years.

– ENDS –

NOTES TO EDITORS

*Ovum canvassed CIOs and IT decision-makers across Europe, the US, the Middle East and Australia

**Green IT Deployments Across Key Global Markets

To arrange an interview or for further details regarding this release, please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group

A new report* by the independent retail analyst has revealed that although e-commerce and social media are separate entities for retailers, those that recognise the potential of combining the two will reap the rewards.

Charlotte Woods, analyst at Verdict, said: “Most retailers have recognised the value of social media, but very few have realised its potential to benefit their online stores. By viewing and running the two operations separately, retailers simply aren’t realising the full power of social media. Retailers have the ability to attract increased levels of traffic to their online stores by using social media to create entertainment destinations which consumers can get excited about. As a result, retailers have the ability to create retail theatre online.”

The research highlights how effective social media could be for online stores in helping to shape brand identity. For example, simply embedding YouTube videos of catwalk shows, and interviews with designers and celebrities could emphasise brand identity and boost customer engagement as they would help consumers to identify with the retailer on a personal level.

One retailer that exemplifies the extent to which retailers can use social media to turn their online stores into entertainment destinations is RVCA. The clothing company, which is based in the US and owned by the Australian brand Billabong, uses social media on its website to enforce a lifestyle that consumers can identify with. The website’s front page is dominated by blogs, YouTube clips, music tour dates and Facebook and Twitter pages. The link to the online shop is given lower priority than tabs for information pages. However, the retailer has benefited from the addition of social media as customers spend longer on the site, and brand engagement has increased, as has consumers’ likelihood of purchasing.

Ms Woods continued: “Retailers across all sectors should not underestimate the potential of creating online retail channels dedicated primarily to entertainment. The concept would work particularly well for entertainment retailers, which could use interviews with authors and actors in the content of their homepage.

“This sort of strategy will become increasingly important as competition continues to grow. Retailers will therefore have to work harder to engage customers, and integrating social media with their online stores could prove lucrative to those that get on the front foot.”

UK consumers visit Amazon more than any other retailer website, according to a new poll* by Verdict.

The independent retail analyst asked consumers which online retailers they visit when considering making a purchase (purchase visits), with the findings revealing that Amazon is streets ahead of its rivals in terms of traffic. The pureplay retailer received a massive 18.8% of purchase visits, with eBay, which came second in the poll, some way behind with 7.6%. 

The top 10:

1. Amazon

2.eBay

3.*Tesco

4.Argos

5.Play.com

6.John Lewis

7. **Asda

8.Next

9.Marks & Spencer

10. Currys

*Tesco and Tesco.digital are tracked separately

**Asda and George are Tracked separately

Source: Verdict Research

Matt Piner, senior retail analyst at Verdict, said: “One of the main reasons that Amazon gets so much traffic is its dominance in small, discretionary, frequently purchased products such as books, music, films, video games and clothing.”

Despite Amazon and eBay taking the top two positions in the poll, the rest of the top 10 is made up of non-pureplay retailers, with the exception of Play.com, which takes fifth place. 

Mr Piner continues: “Online has the potential to offer a more level playing field than the high street, as there is potential for smaller retailers to compete with their larger rivals in a way that they are not able to do with physical stores.”

However, the poll reveals that consumers still prefer the big names, and it is the biggest retailers that dominate the top 10. In fact, the top 10 accounts for more than half of all “purchase visit” traffic. This reveals that, despite their size, these retailers have become adept at personalising the shopping experience and catering to their customers’ individual needs, as well as handling the logistical side. As a result, consumers do not feel the need to defect to smaller rivals.

Although the top 100 has remained fairly stable compared to the previous year, there have been some notable changes. Mr Piner explains: “Clothing retailer Oasis has plummeted 36 places compared to last year, and Boots has dropped four to 28 as consumers seek out value in health and beauty. While Superdrug is still some way behind in 62nd place, it has made considerable gains, jumping up 19 places.”

Rapid growth in use of social media for customer service by Chinese consumers

The use of social media for customer service by Chinese consumers has almost doubled in the last two years, as more and more turn to it as a viable alternative to the phone, research from Ovum has revealed.

According to a survey* by the independent telecoms analyst, 30 per cent of Chinese consumers get in touch with customer service via social media to find an answer to their queries, up from just 17 per cent two years ago.

In addition, the number of Chinese consumers seeking advice from customer service representatives via web chat and web self-service channels has increased significantly.

Two years ago less than 20 per cent of consumers used web chat or web self-service to find information, whereas today more than 60 per cent are using these channels. In fact, web chat and web self-service are the second most widely used channels today among Chinese consumers, with the most popular option being a direct call with a customer service representative.

Aphrodite Brinsmead, Ovum analyst and author of a new report** unveiling the research findings, commented: “We expect the use of social media for customer service will quickly catch up with web chat and web self-service channels. The number of Chinese consumers using social media for customer service today is already significantly higher than in the UK and US.

“In emerging contact center markets such as China, consumers are keen to experiment with new forms of media. Contact centers must evolve with their customers, providing information via the web and responding to social queries on forums to ensure that customers receive accurate product and service information.”

Ovum’s survey found that the most popular uses of social media by Chinese consumers for customer service are discussion boards and forums. Out of those respondents using social media for customer service, more than 50 per cent said they had started a discussion about a company in a forum while almost 50 per cent said they had responded to someone’s question. Meanwhile almost 50 per cent have used social media as a channel to complain about bad service or a faulty product.

However, despite the high number of Chinese consumers using social media and a rapidly evolving web culture, Ovum’s survey revealed that respondents still view a telephone call with a customer service representative as the best method when it comes to resolving an issue on the first attempt.

Brinsmead concluded: “Contact centers need to improve information across social media, blogs and forums so that customers are able to find answers to questions faster and with reduced effort.”

–ENDS—

NOTES TO EDITORS

*Ovum conducted a survey of Chinese consumers from November 2010 to January 2011 to gauge their attitudes on changes in customer service, frustrations with contact centers, channel preferences and social media usage.

**Consumer Preferences in Customer Service: China

The report is part of Ovum’s signature research portfolio for 2011, which represents the premium content produced by Ovum analysts.

To arrange an interview or for further details regarding this release please contact  Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.

Ovum survey reveals UK fears over location-based technology in customer service

More than half of UK consumers say they are not comfortable with businesses using location-based technology to pinpoint their whereabouts, even if it would improve their customer service, research from Ovum has revealed.

According to a survey* by the independent telecoms analyst, despite the current hype about location-based services (LBS) and how they can be harnessed by companies, consumers remain wary. Sixty-one per cent of the consumers Ovum spoke to had concerns about the use of location-based technology in customer service. 

Ian Jacobs, Ovum analyst and author of a new report unveiling the survey findings, commented: “Although many UK consumers use location-based services such as Foursquare in their daily personal lives, when brands use LBS it is seen in a very different light by consumers.

“Consumers to date have very little experience with location-based services in the context of customer service. So, it is not bad experiences, but rather pervasive concerns about privacy driving the mindsets of UK consumers who feel their location data may be misused by businesses. To create a sense of trust, businesses must become much more transparent on how the data will be put to use, and show customers some demonstrable value when using LBS for customer care.”

Ovum’s survey showed that just one fifth of UK consumers are comfortable to share their location with companies using location-based services.

Ovum’s survey also revealed that the use of social media for customer service has not taken off with UK consumers, with just 12 per cent saying they had used it for this purpose.

Meanwhile, 73 per cent said they were doubtful that they would use social media sites in the future for customer support activities. 

      –ENDS—

NOTES TO EDITORS

*Ovum conducted a survey of UK consumers from November 2010 to January 2011 to gauge their attitudes on changes in customer service, frustrations with contact centres, channel preferences and social media usage.

**Consumer Preferences in Customer Service: United Kingdom

The report is part of Ovum’s signature research portfolio for 2011, which represents the premium content produced by Ovum analysts.

To arrange an interview or for further details regarding this release please contact  Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.   

Red-hot growth in the switching and routing market cools in first quarter of 2011

The red-hot growth that the service provider switching and routing market has experienced over the last year cooled in the first quarter of 2011, according to Ovum.

In a new market analysis*, the independent telecoms analyst states that although global spending grew by nine per cent compared to the first quarter of 2010, this was the least positive result in more than a year.

Nonetheless Ovum’s research shows that Alcatel-Lucent, Huawei, Juniper and ZTE all posted double-digit revenue gains compared with the first quarter of 2010. However, market leader Cisco and Tellabs both posted declines.

Market leader Cisco’s revenues of $1.25 billion for the first quarter of 2011 were down six per cent compared to the first quarter of 2010 and down 12 per cent compared to the fourth quarter of 2010. This led to the company losing the most annualised market share.

Second-ranked Juniper enjoyed the biggest gain in sales versus the first quarter of 2010, increasing its revenues by a massive 28 per cent. This meant it also had the largest share gain for the annualised period ending in the first quarter of 2011.

Dana Cooperson, Ovum network infrastructure practice leader and author of the market report, commented: “While the market still experienced healthy growth, it was more modest than we have seen in previous quarters and an indication that this red-hot growth is cooling.

“All the global regions grew compared with the first quarter of 2010. In Europe, the Middle East and Africa and in South and Central America the growth was particularly strong, more than the nine per cent global average. However, growth in North America and Asia-Pacific fell short of this average.

“In terms of vendor strategy, mobility, the cloud, and the mobile cloud continue to be a focus of attention for vendors and are causing them to hone their value propositions. Meanwhile network operators are taking a more holistic approach when it comes to their needs.”

–ENDS—

NOTES TO EDITORS

 *Market Alert: 1Q11 SP Switching and Routing

To arrange an interview or for further details regarding this release please contact  Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.