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.   

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.

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.

Telcos risk losing ground in emerging markets mobile data battle

Mobile operators in emerging markets need to make urgent adjustments to content strategies if they are to adapt to rapid shifts in the market, according to Ovum.

In a new report*, the independent telecoms analyst claims that while telcos are currently the dominant force in the emerging markets mobile content space, this is set to change due to strong competition from new platforms such as app stores. 

Angel Dobardziev, Ovum analyst and author of the report, said: “Unless telcos make rapid changes to their strategy and execution, their dominance is set to be challenged.

“We have found that once a consumer has bought a data access plan, they begin to move away from telco services. This is being heightened by the fact that many device and platform vendors are establishing alternative content distribution platforms that connect providers and end users easier, faster and cheaper than telcos. This will ultimately reduce the role of mobile operators to little more than providers of bandwidth.”

According to the report, while the emerging markets mobile data space will grow significantly in the next five years, it is still highly immature, with less than a fifth of mobile users currently venturing beyond SMS, ringtones and logos. Meanwhile, it claims that feature phones will be the key mobile content battleground in the short-term as smartphone use in emerging markets will continue to be limited until at least 2013.  

Dobardziev continued: “Telcos currently have mobile content strategies that are increasingly inadequate for addressing the new challenges and competition they now face. The key issue is one of strategic clarity on whether telcos plan to make money from bandwidth, mobile content or both. This issue goes to the core of the bit-pipe versus full service provider debate.”

The report states that focusing on mobile bandwidth and making a fair return on billing for content could be a profitable strategy for telcos, unattractive as the bit-pipe role may be. The other option is to develop a well-executed content strategy, which will require a significant change in mindset and considerable investment in IT, people and processes in order to facilitate a well-executed mobile content strategy.

Dobardziev concluded: “What is not an option for telcos is to carry on pursuing both access and content strategies but failing to do either effectively.”

–ENDS—

NOTES TO EDITORS

*Monetizing mobile content in emerging markets

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 0161 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.   

Enterprises are not taking threat of cyber espionage seriously enough, Ovum finds

Enterprises are not taking the threat of cyber espionage seriously enough, and many have not taken adequate steps to prevent an attack, according to Ovum.

In a new study*, the independent technology analyst claims that cyber espionage is a major threat to enterprises. But despite this, it has been overlooked, leaving many vulnerable.

Graham Titterington, author of the report and Ovum principal analyst, said: “The threat of cyber espionage must be addressed by enterprises as it is as relevant to them as it is to national security organisations.

“Cyber criminals are graduating from stealing credit cards and banking credentials to targeting corporate plans and proprietary information. They want valuable information such as product and technology blueprints, customer lists, or information that can be used to embarrass or disadvantage a victim.

“Almost every organisation has sensitive information that would damage it if it were to be leaked out; however, many have overlooked cyber espionage in their preoccupation with preventing the theft of financial data. This needs to change, and enterprises need to wake up to the danger posed or risk losing valuable information and having to deal with the consequences.”

Cyber espionage is usually aimed at key individuals within an organisation, who are sent ‘spear phishing’ emails containing malicious links or attachments that infect their machines. The criminals then use malware to identify assets, decrypt login details and steal the target information.

Titterington commented: “The home computer networks and personal lives of key individuals may be the weakest part in the corporate security defenses. Personal information may reveal passwords and other credentials, and individuals may be susceptible to blackmail.”

The report advises enterprises to increase their awareness of cyber espionage, restrict the distribution of sensitive information, vet users who have access to high-value information, protect data held on third third-party sites and conduct a risk analysis, including mobile devices and removable media.

The report also warns enterprises that holding large amounts of data can increase the risk of falling victim to cyber espionage, and they should look to minimise volumes. Titterington added: “Every piece of stored data and every copy of this data is a potential leakage incident as it gives spies more potential targets to attack. The increasing volume of data makes it harder to manage the entire data estate.

“The growth in data volumes should be examined critically. At minimum, organisations should make more use of shared data infrastructure and services so individual users can be discouraged from creating their own copies.”

-ENDS—

NOTES TO EDITORS

*Protecting Against Cyber Espionage

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 0161 238 4081, or email klivesey@datamonitor.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 Datamonitor group.

CIOs warned to implement SaaS for right reasons

CIOs should ensure their decision to implement SaaS is based on a strong business case and not on the back of industry hype to avoid costly project failures, warns Ovum

In a new report* on the SaaS delivery of IT management capabilities, the independent technology analyst states that CIOs should only implement SaaS if it is right for their organisation and they are clear about the business outcome they want to achieve.

According to the report, CIOs that do not take the right approach to SaaS could find that their application is more expensive, slower and worse than before.

Stephen Mann, Ovum analyst and author of the report, said: “There is currently a buzz around SaaS, but CIOs need to ensure their decision to introduce it is based on a strong business case, rather than on the back of industry hype.

“SaaS is now becoming a mainstream part of the corporate IT mix but using it for the right reasons, in the right places and in the right way within an organisation is crucial. CIOs need to establish this before embarking on an implementation project.”

The report acknowledges the many benefits that SaaS can bring, such as allowing IT resources to be focused on business-critical services rather than on systems that support IT operations and the subscription-based pricing model it offers. However it states that while it may give the illusion of being cheaper, faster and better, in the long-run outcomes can be more expensive, slower and worse if a strong business case is not formed.

Mann said: “In our view SaaS is the biggest shift in the IT management product landscape in the last five years. However, CIOs need to ensure applications are used within the right functions and in the right way so that it is a welcome addition. There are many issues to consider and CIOs need to ensure they are on the front foot on areas such as policy guidance for employees when they take the plunge.”

-ENDS—

NOTES TO EDITORS

*Exploiting IT management –as – a – service

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on 0161 238 4081, or email klivesey@datamonitor.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 Datamonitor group.

The top ten enterprise IT trends for 2011

Security, cloud services and sustainability will be three of the most important trends in enterprise IT in 2011, according to Ovum.

The independent technology analyst has named its top ten trends for the coming year, which also include mobility, data management and data centre transformation.

Business analytics, collaboration, IT financial management and context-aware computing also make the list and author Mark Blowers believes the trends provide both opportunities and challenges.

“These are the key trends that will define the IT landscape for CIOs in 2011. If CIOs do not have a strategy for how they intend to take advantage of the opportunities they provide, and deal with the challenges they bring, then they should form one as an urgent priority.”

Security

Security continues to be high on the IT agenda as the number of threats to businesses increases rapidly. “New technologies such as mobility, social media and cloud computing present new opportunities, but also vulnerabilities,” believes Blowers. “No amount of investment in technology alone can prevent attacks from criminal gangs and cyber espionage. In 2011, CIOs should adopt an approach that brings together technology, policy and people.  The wider picture for corporate protection must also include risk, compliance and regulatory issues.”

Data management

Data management will be a key area due to the sheer volumes now passing through enterprises. “The management of data will come to a head for CIOs in 2011, who will realise that it is an issue that can no longer be ignored,” predicts Blowers. “The issue of hardware capacity and the drain on resources will see data management make it on to the investment agenda for IT departments in 2011. We believe they need to address both master data management and storage management to deal with the issue effectively.”

Business analytics

“Business analytics will remain an important tool for organisations that want to differentiate themselves from the competition in 2011,” says Blowers. “The technologies’ ability to improve decision-making, identify new business opportunities, maximise cost savings and detect inefficiencies is driving its importance for organisations.”

Mobility

In IT management, the mobility challenge in 2011 will be to embrace the new technology while developing a strategy that maintains a balance between user preference and productivity and corporate security and compliance. “As well as challenges, there is a big opportunity for enterprises to revolutionise business processes and customer interaction using new mobile apps,” says Blowers.

Data centre transformation

The role of the data centre is witnessing a dramatic shift as the cloud computing era heralds a new dawn in the delivery of IT services in 2011. “The impact of this shift will be to transform current organisational thinking about the value of building and operating large complex data centres,” predicts Blowers.

Cloud services

Cloud computing will continue to grow steadily in 2011. Ovum believes that it is no longer a question of whether or not enterprises will use cloud computing, they already are. However, it is still early days for both providers and CIOs, who will grapple to take advantage in 2011.

Collaboration

To cater for changes in work practices, an integrated approach to collaboration is needed which includes social networking and video conferencing. “In 2011, enterprises will move from a traditional hierarchy based on command and control, to looser structures using collaboration and teamwork,” says Blowers.

Sustainability

New opportunities will continue to emerge in 2011 which allow organisations to work in a more environmentally-friendly way. “IT management with the use of new technologies will take more of a leading role in helping the organisation to meet sustainability expectations and save money,” says Blowers.

IT financial management

The CIO should talk the language of business and put in place better IT financial management in 2011. “Changes are needed to improve the IT department’s relevance to an organisation and prove the value of investment to the business. Better financial management can help with this.”

Context-aware computing

In 2011, CIOs should be looking to instrumentation, metering and wireless technologies to play a significant role in providing the context which can lead to automated business processes and increased productivity. “It is also important to fully understand the impact increased contextual data will have on the IT environment and applications, as well as back-end infrastructure.”

-ENDS—

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 0161 238 4081, or email klivesey@datamonitor.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 Datamonitor group.

New threats dictate a different approach to security

Businesses will struggle to keep up with the growing list of threats such as cyber espionage unless they adopt a different approach to tackling them, according to Ovum.

In a new report*, the independent technology analyst states that there is an ever-increasing list of security threats to businesses and to keep up they must develop a new line of defence.

Ovum identifies cyber espionage and online fraud as among the most urgent security threats in a long list that companies need to tackle. Other priorities include compliance and the protection of intellectual property,

Graham Titterington, Ovum analyst and author of the report, said: “Security needs are growing fast. Businesses are facing a large-scale, well-organised and well-resourced criminal network which is intent on defrauding them and their customers.

“On top of this there is the growing threat of cyber espionage and the need to meet ever more stringent compliance requirements. In addition, while cloud services and virtualisation have many advantages, they also bring their own dangers. We believe this ever-growing list of new threats needs a new approach to security and the focus should now be on protecting assets rather than defending perimeters.”

According to the report, cyber espionage is now a major problem for business and is no longer just a concern for governments. Titterington said: “State sponsored cyber attacks are now a threat to the commercial world, which should be as concerned about them as governments are.”

Examples of state sponsored attacks on businesses include the strike against Google in China in early 2010. According to the report, there have been similar attacks on at least 34 US corporations and Fortune 500 companies are coming under constant attack.

According to Titterington, to deal with the ever-growing list of new security threats, businesses should adopt a risk management strategy that allows them to manage threats when they become a risk, rather than limiting their impact. He believes vendors have a key role to play and should ensure they are addressing the changing priorities of businesses in the products and services they provide.

He added: “Businesses are looking to vendors to provide leadership and advice to help them through the fast-moving security landscape. There are also significant new opportunities for vendors in securing new mobile devices such as tablet computers and smartphones. In addition, the range of emerging data and content services also represent a good opportunity for vendors.”

-ENDS—

NOTES TO EDITORS

*2011 Trends to watch: security

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 0161 238 4081, or email klivesey@datamonitor.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 Datamonitor group.

New industries to open up for CRM outsourcing in 2011

Healthcare, government and utilities will emerge as the industries with the strongest growth for the CRM outsourcing market in 2011, according to Ovum.

In a new report*, the independent technology analyst claims it is these industries that will grow at the fastest rate for CRM outsourcers over the next 12 to 15 months.

Peter Ryan, author of the report and an Ovum lead analyst, said: “Healthcare, government and utilities are the industries most likely to grow their CRM outsourcing footprints in 2011. In fact their growth rate will be well in excess of the overall industry rate for the next few years.”

In the US, Ryan believes that the growth in healthcare will be driven by an increase in calls from members of the public keen to find out how President Obama’s reforms will affect them. He also believes that the burgeoning US Hispanic market, which is currently underserved with healthcare services, represents a significant opportunity for CRM outsourcers.

He said: “CRM outsourcers that can provide bi-lingual agents stand to prosper as they will be an attractive proposition to stretched agencies looking for a CRM partner.”

Ryan believes use of CRM outsourcing services will increase at all levels of government in 2011. He said: “This will be driven by the need to reduce operating costs in the face of an increase in the number of calls from the public seeking advice on schemes such as unemployment benefits. At a time of economic uncertainty, we believe that government decision makers will view outsourcing overhead heavy contact centres as a wise move.”

Meanwhile the utilities market holds significant promise, according to Ryan’s findings, as most companies are using antiquated and costly systems which are no longer viable in the face of budgetary constraints.

Ryan added: “With utility firms offering more products than ever, the only way to keep up is through the use of third parties to provide customer-facing services.”

-ENDS—

NOTES TO EDITORS

*Trends to Watch 2011 – CRM outsourcing

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 0161 238 4081, or email klivesey@datamonitor.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 Datamonitor group.

Bad data costing US businesses $700 billion a year

Bad data is costing US businesses hundreds of billions of dollars a year and is affecting their ability to ride out the tough economic climate, according to Ovum.

In a new report* the independent technology analyst claims that poor quality data is now costing US businesses an estimated $700 billion a year due to the inefficiency it causes and through lost customers, sales and revenue.

Madan Sheina, author of the report and an Ovum lead analyst, said: “Bad data is a growing problem for businesses due to the sheer volume and pace at which it is now moved between organisations.

“We now estimate that bad data costs US companies 30 per cent of their revenues – a massive $700 billion per year and a figure that is set to increase.

“With such a high cost, it is imperative that businesses get to grips with this issue. If more did, the economy would be in a better position to recover from the downturn, and emerge more competitive when the upturn arrives.”

Bad data includes incorrect and outdated values, missing data and inconsistent formats. Costs mount as it wastes time and leads to poor targeting of resources and flawed pricing strategies.

While there are many data quality tools available to help businesses reduce the effect on their bottom line, according to Sheina, choosing the right one is half the battle.

He said: “Not all the software solutions that are available are equal and as the cost of investment can be high, businesses need to ensure that they are opting for the best technology available to meet their needs.”

-ENDS—

NOTES TO EDITORS

*Best practices for evaluating data quality tools

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on 0161 238 4081, or email klivesey@datamonitor.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 Datamonitor group.

A new report* by the independent technology analyst states that banks have been saddled with multiple, often overlapping systems providing glimpses of insight into their customers. In addition, as research** by Ovum’s parent company Datamonitor has revealed, many consumers have lost trust in their banks and are more willing since the credit crunch to shop around for financial products.

Ovum believes banks must actively embrace service improvement activities; whether through improved targeting of the “right” customers, greater emphasis on providing a better integrated experience by synchronising contact channels, or recommending appropriate financial products without taking an obvious ‘hard sell’ approach.

“All these improvements aim at greater customer understanding which will ultimately translate into improved trust and maximised profits”, said Jaroslaw Knapik, senior analyst at Ovum and report co-author.

“Banks must attract new customers who will stay active not for a few months, but for years. Additionally, providers must reassess their approach to retaining existing customers; they must not simply retain but further monetise existing customers through gaining a better understanding how to more effectively cross-sell and up-sell their products and services.”

The Ovum report states that the growth of multichannel propositions presents banks with the opportunity to gain a more complete understanding of core customers. The challenge is to integrate all transaction information, web analytics and marketing data, so that data from various channels can be correctly analyzed and interpreted. To achieve this, banks must aggregate all customer data and event details from all systems in one place.

However, it is not just the bank that requires information. It should be a two way process that actively engages customers, allowing them to submit feedback, ask questions or request product information through these same channels.

“Banks should be confident that customer data is complete, accurate and up-to-date”, said Knapik. “Getting there requires banks to treat customer data as a strategic asset that is managed as a shared resource.”

Ovum sees Customer Intelligence (CI)*** as the next logical step in the development of the customer-centric bank, as it expands on the promise of Customer Relationship Management (CRM) by aggregating data beyond the customer interactions that are managed by most CRM implementations, providing deeper insight into the behaviour and experiences of a bank’s customer base.

Ovum expects spending by retail banks on multichannel integration and customer information systems (MI/CIS) to grow at a CAGR of 4.6% between 2009 and 2014, with the market size increasing from $4.9 billion globally to $6.1 billion over the period. Spend on MI/CIS is expected to grow at faster rates than most other business areas. Only technology spending on online banking (5.5% CAGR 2009/14) and management information systems (5.1%) is expected to grow at a faster rate.****

The study, which involved 150 local and national government agencies across Europe and North America being surveyed, found that security is the most significant barrier to Web 2.0.

When asked about the main obstacles to implementation of Web 2.0 technologies, 44% of respondents cited security concerns.  In Europe the figure was above 50%, revealing that security is an even greater concern here than in North America.

Jessica Hawkins, associate analyst at Ovum, said: “As agencies seek to improve collaborative outcomes across departments, governments are beginning to explore the capabilities of Web 2.0.

“While 16% of the agencies surveyed have already adopted Web 2.0, a further 42% have plans to implement it in future. However, data security continues to be a major barrier for some and indeed is by far the biggest obstacle.

“Fear around the security of data is a real issue and the risk can never be entirely eliminated. This may go some way to explaining why 41% of agencies have no plans to adopt Web 2.0 in the foreseeable future.”

Other obstacles cited include a lack of training resources (8%), restrictive regulations and a lack of ‘buy-in’ from senior decision-makers (both 5%).

Blogs, social networking and RSS feeds are the most popular Web 2.0 tools across the survey area. Some differences between Europe and North America exist, with European agencies seeing far greater take-up of wikis and blogs, whereas their North American counterparts are making more use of social networking.

Local government agencies are using social networking and blogging more often, while there is greater take-up of wikis among agencies at the national level. Citizens and recipients of services are the most frequently cited target at all levels.

Despite current reservations, Ovum expects to see increasing Web 2.0 activity at larger government agencies over the next 12 months as security fears are gradually overcome and fresh attempts are made to connect with citizens.

The independent technology analyst has warned in a new report* that cloud governance is suffering from the same flaws that are affecting other IT governance areas.

Ovum believes a new approach is needed as cloud computing, the latest in a series of disruptive trends affecting IT departments, cannot thrive without an effective governance framework that promotes and ensures coordination between IT teams.

Laurent Lachal, Ovum senior analyst and report author, said: “Most IT governance efforts are prompted by new regulations or by the need to keep up with uncontrolled SOA software services, virtual machines or public cloud services – whereby governance starts when the public cloud bill is much higher than expected.

“The use of public clouds is a good example of that. Despite growing interest in IT transitioning from managing technology to providing technology as a service, neither business nor IT executives have been particularly proactive in managing the various changes that such a transition requires at all levels.”

Cloud computing makes IT governance more difficult by introducing an additional layer of complexity that businesses need to control in order to make the most of its benefits. Cloud governance best practices – like cloud computing itself – are still in their infancy and Ovum believes the focus should, in future, be on enabling flexibility.

“Public as well as private clouds’ ability to make it faster and easier to procure, develop, deploy and hardware and software assets will make the biggest difference. Cost and quality of service issues are critical but cloud computing governance should not over emphasize them at the expense of enabling firms to strike the right balance between effectiveness and innovation”, said Lachal.

“Cloud governance is not just about control and keeping an eye on individuals to make sure that they behave as expected. It should also be about empowerment, based on a realignment of objectives and incentives to encourage behavioral change.”

Ovum does not expect a ‘big bang’ implementation of cloud governance, but rather a gradual build-up that provides an opportunity to launch and/or reinvigorate other governance efforts.

A global survey* by the independent technology analyst has found that organizations are contemplating reducing the outsourcing of security and other IT management applications.

Of more than 500 CIOs surveyed by Ovum, only 7% said they were considering outsourcing IT security over the next two years, down from 18% currently.

Rhonda Ascierto, senior analyst at Ovum, described the planned reduction in IT security outsourcing as one of the most striking trends revealed by the survey.

She said: “The main reason for this shift away from IT security outsourcing is most likely a lack of confidence. Organisations are now more subject to compliance considerations in the form of both formal external and internal policy-driven requirements, particularly in the wake of the US banking controversies and other financial scandals.

“Some may find it difficult to obtain a measurable security metric from an outsourced provider because security is often reported only after negative security occurrences. If security is not breached then there is nothing to report.

“The reversal of outsourcing security is also likely to be due to some organizations grappling for more control over their IT operations, of which security is a central aspect.”

Additionally, contractual clauses from outsourcers often do not give the quantitative assurance that organisations need or desire. This may be viewed as a problem with IT outsourcing in general, rather than IT security specifically, since any failings impact the whole business while the contract is limited to the aspects of the IT operation that are outsourced.

Ovum believes this may have contributed to growing unease about the security of outsourced IT in general, with IT security outsourcing simply being the first part of the spectrum to feel this change of mood.

CIO attitudes towards IT spending vary by country and vertical industry, yet some important commonalities have emerged.

• The rising sentiment that the global economy is starting to show signs of recovery is having a positive impact on planned IT budgets in 2010.
• The perception gap between forecast and actual changes in IT expenditure has widened.
• IT spending trends vary wildly by region, yet all vertical industries have suffered from lower IT spending compared to pre-recessionary levels.

IT budgets are rising, yet many enterprises remain vulnerable

Fundamentally, IT spending is trending upwards, however most increases – as well as decreases – will be slight, between 1% and 5%.

The vast majority of enterprises will continue to experience flat (0%) budget growth in 2010.   Rhonda Ascierto, senior analyst at Ovum, said: “The survey data, while promising, does not translate into an IT spending recovery.   “Realistically, the numbers more likely reflect the effect of previously deep budget cuts, during 2008 and the first half of 2009, which left many IT departments operating at ‘bare-bones’ capacity.”

Furthermore, the survey data shows that the proportion of CIOs that forecast slight decreases and significant increases in IT budgets remained unchanged last year.   Combined with the high percentage of respondents that will leave their IT budgets unchanged in 2010, which is rising slightly to 42%, it shows that many enterprises remain vulnerable and are uncertain about near-term business prospects.

The perception gap between forecast and actual changes in IT expenditure has widened

Decision makers are typically adept at forecasting IT spending trends: their predictions usually deviate 5% or less from actual IT budget expenditure.    However, Ovum’s survey shows that the perception gap between forecast and actual IT budget changes widened considerably last year, following the financial crisis of 2008.

“Clearly, the negative effects of the economic downturn were greater than expected and businesses were not prepared”, said Ms Ascierto.   “Many businesses made short-term cost savings by reducing their operational costs.

“The extent to which IT budgetary expectations were miscued in 2009 is likely to mar the collective psyche of IT decision makers today. The confidence of CIOs in their ability to predict IT spending with a reasonable level of accuracy has been splintered, if not shattered.

“Consequently, Ovum believes that 2010 will be a year of reckoning for IT expenditure.”

IT projects that are most likely to be readily green-lighted are those that do not require a forklift upgrade of existing IT systems and business processes, but rather those that make modifications within existing and proven boundaries in an incremental manner and in response to business changes.

Results in a nutshell: 

• Software and IT Services revenues were $28.3 billion, up 3.6% sequentially, down 4.9% versus 3Q08.  Fujitsu, H-P, and IBM led the segment in market share.
• Business Process Consulting were $18.6 billion, up 2.4% sequentially, and down 6.6% versus 3Q08. IBM, Accenture, and CSC led this segment in market share.
• Telecom Infrastructure services were $12.8 billion, up 0.6% sequentially, and down 8.6% versus 3Q08. T-Systems, Cisco, Ericsson, NSN, and Alcatel-Lucent each held more than 10% share in this segment in 3Q09.

Ovum’s complete 3Q09 ICT services market share spreadsheet is now available on Ovum’s Telecoms Knowledge Center. It shows historical revenues and market share for the 24 leading providers of ICT services, in three horizontal and three vertical segments.

Melbourne – According to global advisory and consulting firm Ovum, many organisations that are looking to process improvement methods in the current economic environment are too late. While commonly used approaches such as Agile and Lean can reduce waste in IT systems and software development, they don’t offer the rapid efficiency gains that CFOs are increasingly demanding of CIOs. Their implementation takes too long and is too resource-intensive for an organisation that’s currently reviewing its IT processes.

“A lot of CFOs have heard that process improvement can cut the cost of IT processes, and in the current economic environment, that’s very appealing,” says Dr Alexander Simkin, a senior analyst and process improvement specialist within Ovum’s IT Services practice. “What they don’t realise is that becoming Agile or Lean takes time and requires major change management. If you’re starting from a base of traditional processes, these approaches won’t provide rapid cost reduction. The efficiency of your processes may even get worse before they get better. CFOs need to know that and it’s a CIO’s job to educate them,” he adds.

Organisations that already have an established process improvement programme aimed at waste reduction in IT have a competitive advantage in the current economic situation. However, when the economy eventually improves, the cost-cutting agenda will wane and other priorities such as improving the quality of processes will come to the fore. “Organisations that are only now seeking to improve their IT processes should consider methods that are optimum now and beyond the recession, that is, that both cut costs and improve quality. Lean Six Sigma is a good choice,” advises Simkin, based in London.

Methods that audit and certify the maturity of an organisation’s IT processes such as the Capability Maturity Model Interactive (CMMI) and the International Organisation for Standardisation’s ISO 20000 are also attracting renewed interest in the recession. These methods provide CIOs with evidence to C-level colleagues and other stakeholders that investments in process improvements are providing returns.

For ITS service vendors, they have another advantage: they make those vendors eligible for contracts that stipulate minimum levels of process maturity. Two sectors in which IT service contractors typically have to certify the maturity of their processes are defence and healthcare – especially in the US. “Defence and healthcare have been relatively unscathed by the recession, so being able to bid for contracts in those sectors is increasingly important. Hence some of the extra attention that audit methods are currently receiving,” Simkin explains.   

Ovum’s study reveals that companies are now starting to rethink their approach to risk management and are placing a more strategic focus on its implementation and deployment to drive it from a siloed approach to an enterprise approach. As a result, risk management promises to become an even more central part of planning, managing and running a business.

“The financial crisis has provided a very high profile example of how poor risk management practices can severely impact not only a business but also a whole industry sector”, says Helena Schwenk, senior analyst at Ovum and author of the report. “While the banking system recovers and readjusts from the crisis and moves to a more tightly controlled and regulated risk management environment, other industry sectors are advised to take heed of the risk management lessons learnt from this painful episode.”

Much of the failure around past and current risk management practices does not point to a failure of risk management as such, but to a lack of understanding about the discipline and how it should be applied correctly. The financial crisis has highlighted the dangers of managing various risk types in isolated silos, each with its own set of tools, applications and models. Hence much of the failure around risk management lies in the inability to have a more holistic view of risk management and understanding the inter-dependencies of risk across different lines of business.

“The current economic crisis has also underscored the need to treat risk management not just as a strategic ideal, but also as an operational imperative”, says Schwenk. “Businesses need to make sure that risk management trickles down from high-level business strategy, objectives and goals to the operational coalfaces of the organisation so that all employees, at all levels, gain a company-wide perspective on risk”, Schwenk concludes.  

“The global economic recession has spurred a paradigm shift in the way organizations evaluate, budget for and deploy green IT”, says Rhonda Ascierto, senior analyst at Datamonitor and the report’s author. “The downturn has also resulted in green IT trends for datacenters, client devices and asset lifecycle management, as well as re-shaped return on investment (ROI) models.”

Green IT that eliminates capital expenditure is increasing in demand

Current green IT investments are driven by compliance with environmental legislation and cost savings. In particular, green IT that eliminates the need for capital expenditure (capex), such as datacenter virtualization, datacenter design and layout, and asset lifecycle management, has become increasingly important as IT budgets remain constrained. 

Datamonitor research shows IT budgets are likely to remain flat in 2009, which means cost-effective green IT is likely to increase in demand. As such, organizations no longer regard green IT and cost-effective IT as being mutually exclusive. This represents a significant paradigm shift and bodes well for the future evolution of the global green IT market.

Restrained IT budgets also mean that green ROI models are becoming compulsory and shorter. In order for green IT vendors to satisfy new ROI requirements, they are being forced to develop more efficient and greener IT solutions.

Green IT is becoming more important in the datacenter

Flat IT budget growth also means that organizations that face critical datacenter limitations, such as a shortage of floor or rack space, are looking to software or outsourcing alternatives to building new datacenters or upgrading existing facilities. Those alternatives include IT leasing, managed services, virtualization software, cloud computing and software-as-a-service (SaaS).

Datamonitor believes datacenter resources will increasingly be hosted in a cloud computing environment, which should – at least theoretically – fall under the green IT banner.

However, the greatest demand for datacenter green IT will be for datacenter virtualization. Datacenter virtualization is becoming more holistic, whereby various assets, including servers, storage, communications infrastructure, and business applications, are being virtualized across a pool of datacenter hardware. Datamonitor believes business applications are the next frontier of datacenter virtualization.

With the cost reduction benefits from staff offshoring beginning to fade, software development expertise is becoming more important for Business Process Outsourcing (BPO) services providers. This is according to a new report from Ovum, the global analyst and consulting company.

The report, “The role of proprietary software in BPO”, highlights the increased use of software development in support of BPO services provision. It provides examples of BPO services providers including Capita, Atos Origin, and Tata Consultancy Services’ use of software development to enhance their BPO service delivery.

“The extensive use of low-cost offshore resources by all BPO providers is serving to level the playing field across the market. Software development is the new battleground for BPO services providers who wish to differentiate their services”, says Samad Masood, IT Services senior analyst and author of the report.

Ovum’s research reveals how both IT services and BPO services providers are using software development within the “process layer” in order to improve delivery efficiencies without having to significantly modify their client’s underlying enterprise software platform.

In the same way, software development expertise is also key to vendors ability to use “cloud computing” technologies to offer their BPO services on a modular basis. This is giving rise to new models of BPO provision and serving to shift the competitive landscape between software, IT services and BPO services vendors.

“Proprietary software development is key for BPO services providers to future-proof their business, and provide ongoing cost efficiencies above and beyond the standard ‘labour arbitrage’ provided by offshoring”, says Masood.

“Most importantly, the use of proprietary software is also shifting the model of BPO services delivery, as it can significantly reduce the cost and/or requirement for significant technology platform transformation when transitioning to a BPO services provider.”

“This is not the first time that we have seen attempts to hack into enterprise and carrier networks by infiltrating network routers”, says Graham Titterington information security principal analyst at Ovum. “At the time of the Athens Olympic Games, rogue software in four mobile switching centres illegally intercepted calls by Greek politicians, including the Prime Minister, for a year. After the discovery of the software, both the network operator and the equipment vendor were fined several million euros. More recently, the US government detected an attack on IT systems in the Pentagon in 2007 in which 1,500 computers were found to have been compromised.”

These attacks can have serious consequences for enterprises, but when they attack carrier networks, they also have implications for national security. They threaten the commercial health of the communications service provider and its major customers. “The risk is much greater in this age of IP-based communications than it was with traditional telecommunications networks because network control and payload are not segregated”, explains Graham Titterington.

“There must be a relationship of trust between vendors and their customers, ideally based on a culture of partnership. Customers, in both the service provider and enterprise communities, need to place trust at the top of their criteria when selecting suppliers”, Titterington suggests.

Ovum’s report highlights that enterprises and carriers alike are dependent on the integrity of their suppliers and the trust relationship is crucial to both parties. “Vendors who fail to establish their integrity should be struck off supplier short lists.”

Enhanced network audit procedures would uncover this spook account type of exploit, but a vendor hacker could turn to embedding the spyware in the code of the product, making it much more difficult to detect.

Insofar as this threat impacts on critical national infrastructure and national security we can expect governments to take an increasing interest in this issue. However any response will be fragmented due to the limits of jurisdiction of any government. “The United States is likely to lead the way in government oversight. President Obama’s recent announcement on cyber security shows that the current administration is giving a much higher priority to the problem than previous administrations”, Titterington concludes.

The market for these solutions will be substantial, but delivering them poses complex challenges, and leadership of this emerging market is up for grabs, Ovum has found.

Businesses of all types face growing pressure from consumers, investors and regulators to be “greener” by reducing the raw materials (including energy) consumed and pollutants emitted at each step in their products’ life cycles, Ovum says.  Achieving this goal creates a “green software” opportunity because measuring, analyzing, reporting and optimizing for environmental factors is a business process similar to those already managed by applications such as enterprise resource planning, business intelligence and supply chain management.

“The largest software vendors are beginning to recognize this opportunity and are moving to exploit it. But their products are far from mature, and no one has yet established leadership in this market,” explains Warren Wilson, research director at Ovum and author of this research.

Supply chain management solutions will be crucial to sustainability because of the need for accurate “cradle to grave” environmental information for products of all types. But the challenge is complex because meaningful results require common standards and methodologies, as well as coordination across industry, geographic and regulatory boundaries.

At the moment, various industries, governmental and non-governmental organizations are developing standards for aggregating environmental data over the product life cycle. But it’s not clear which of these efforts will gain traction, so both vendors and customers must familiarize themselves with as many as they can and understand the challenges and opportunities that will result.

Enterprise application vendors must acquire or partner for environmental expertise if they want to retain the role of strategic advisor. They must offer solutions that can be easily tailored to different industries’ unique requirements, which will favour service-oriented platforms to replace rigid legacy systems. Meanwhile, the need to analyze environmental data alongside financial and business-process information will favour integrated solutions over stand-alone applications. It will take several years for mature solutions to develop, but vendors with foresight are moving now to position themselves in this emerging market.

LONDON – Ovum, the global analyst and consulting company, today announced the results of a major study regarding the impact of Service-Oriented Architecture (SOA) governance on application lifecycle management (ALM). According to the new report, “ALM and SOA: Lifecycles in a parallel universe“, the push to apply governance to the SOA lifecycle threatens to create a separate island of governance apart from the software development lifecycle (SDLC).

Ovum’s research findings indicate that all too often, SOA development continues to be treated as a special case, confined to an elite group of architects and developers, well beyond the pilot phase. Such duplication costs IT organizations money that they can ill afford, while delaying time-to-benefit.

“Full blown SOA governance often recreates duplication that SOA architecture was supposed to eliminate,” says Tony Baer, senior analyst at Ovum and author of the report. “The disconnect of SOA from the mainstream of the software development lifecycle has contributed to the backlash that it has suffered over the past 12 – 18 months.”

The SDLC could benefit from practices associated with SOA governance. Examples include architected development that design services for potential reuse, or utilization of service contracts that provide explicit awareness of service performance at runtime. Both are examples of practices that could improve application lifecycle management.

Yet, adjustments will be necessary to common SDLC practices and methodologies to benefit from best practices of SOA lifecycle governance. Classic waterfall development methodologies support the comprehensive, upfront architectural planning that is essential for successful SOA implementation, but fall short in supporting the iterative change that keeps services aligned with business needs. Conversely, iterative and agile development approaches provide the lifecycle flexibility, but at the cost of architectural development.

“Middle ground approaches that apply principles of agile development to enterprise architectural practices are the solution,” explained Baer.

“The APAC region is well poised to emerge from the global recession and resume its rise: its manufacturing capacity and increasing financial strength mean that growth will recommence quickly with an upturn in consumer markets, says Damian Shaw-Williams Financial Services Technology Senior Analyst with Datamonitor and the report’s author. ”With a rebalancing of economies, no longer will the world’s fortunes be so closely tied to those of the US. APAC banks are taking the downturn as an opportunity to revisit IT systems and capabilities to both realize cost savings now, and provide an infrastructure that can grow as economies expand and demand a wider range of financial services.”

Capital market integration will drive investment in infrastructure and market data solutions

The maturation of capital markets must continue so as to support future growth and provide investment opportunities in the region. There must be further development of regional institutions and regulatory frameworks to promote growth and stability. Measures such as pension reform, exchange consolidation and the deepening of the region’s bond and equity markets will be important steps in improving access to investment and its efficient allocation. Key imperatives are towards exchange consolidation, consolidation of market intermediation services, and reduction of trading costs.

Strong APAC banks on the acquisition trail will present IT integration opportunities

The retreat of the global banks is providing an opportunity for assets that have been painstakingly built to be picked up at very good prices; Nomura Holdings’ purchase of Lehman Brother’s European and Asian assets, and the retreat of HBOS from the region, are examples. The strong capitalization of the Chinese and Australian banks puts them in a prime position to pick up further choice assets as the global banks retreat. 

Integrated reporting and analytics can bring benefits across risk, finance and operations

Compliance-reporting functions and day-to-day performance management needs are becoming more closely intertwined. What were previously reactive risk- and compliance-reporting functions are extending into real- or near-real-time processing, closed-loop systems in order to give risk managers a greater degree of control. An integrated reporting and analytical suite provides benefits across a range of business needs. By integrating risk and finance management capabilities, significant benefits can be achieved. A risk-based pricing framework, when integrated with finance, provides a complete economic perspective on new business profitability, including the market price of the risks being taken on, the economic capital required to write the product, and the cost of commission and other expenses.

Shaw-Williams concludes:

“The APAC region will still perform comparatively strongly in 2009 and 2010, and although Japan has been heavily impacted, other newly industrialized and emerging Asian markets – particularly China and India), will remain attractive in comparison to other markets. With regard to the nature of compliance changes post-crisis, the report notes it is certain there will be increased transparency and  more stringent reporting requirements. In addition, regulators will become more proscriptive with ongoing operations as opposed to solely periodic reporting.

From the point of financial institutions, there will be a shift in focus from purely short term profitability to demonstrating ongoing stability, by showing how today’s requirements are being met as well as tomorrow’s through extensive scenario testing and modelling. “The necessity of testing extreme scenarios should now be obvious to all.”

 “There has been significant focus on the limited availability of broadband as the main factor in creating digital divides” says Charlie Davies, senior analyst with Ovum’s Consumer Practice and author of the report. In fact, Ovum, as well as other consumer surveys and studies, have shown other factors such as a lack of demand as being a more significant barrier”.

Globally, overwhelming evidence that broadband is ‘good for the economy and good for the nation’, has made connecting society via broadband Internet a major government goal. In many developed markets, broadband penetration is now well over 50%; however, overall broadband growth is slowing despite the fact that broadband availability is at an all-time high. This, according to Ovum is due to either a significant minority of people not being interested in taking up broadband or them facing significant barriers in doing so.

Ovum’s report outlines a number of different strategies that will help to bridge the digital divides:

• Less tech- more everyday. Many people without broadband or the Internet are put off by overly complex devices and interfaces that cater to the technically literate. In addition, users with disabilities are largely under-served. Inclusive design needs to play a much greater role; this is achievable through widespread adoption of successful design standards and principles, shared R&D and increased collaboration between commercial companies, not-for-profit organisations and public agencies.
• Embed broadband into other social and economic programmes. Strategies to promote Internet usage need to work as part of wider inclusions effort: embedding broadband into education, employment, care and other programmes designed to empower the socially excluded.
• Community relevance: from marketing to grassroots activity. In most cases, operators will play a key role in broadband inclusion activity, but this will be in partnership with other commercial companies, public agencies, NGOs and user groups. For example, efforts to target elderly people can involve old-age charities, targeted media coverage, local care agencies and companies specialising in solutions designed for elderly users.

Companies in the ICT sector, including broadband providers and consumer electronic companies, face the double challenge of reduced consumer spending and saturation of their core customer bases (early adopters and the mass market). “The growth opportunities that lie in serving this “last 10-30%” of the market globally are there; nonetheless, they are the most challenging segments to sell to, with higher acquisition costs and lower returns”, concludes Davies. “However, those who have the finances, acumen and resources to pursue these segments in partnership with others, can reap benefits that go beyond additional incremental revenue and Corporate Social Responsibility fulfilment, including building strength in inclusive design and additional brand value.”