IT Service Management: At the Forefront of Managing IT as a Business (Strategic Focus)

• Provides an overview of the most important trends affecting the ITSM market, including an assessment of the competitive dynamics.
• Delivers a comprehensive evaluation of the current state of the ITSM market and the changing preferences of end-users.
• Presents Datamonitor's view on the future of the industry value chain and recommends specific go-to-market strategies.

• Gain an in-depth knowledge on the dynamics of the ITSM market
• Understand the changing preferences of users and technology evolution in the ITSM space
• Appreciate potential adjustments to go-to-market strategies to address the current market challenges

Overview

Catalyst

Summary

Key Messages

ITSM as a discipline and ITIL as a framework are gaining broad enterprise recognition

Growth outlook is positive, with ITSM expected to augment presence in the SME space

Multiple benefits, including cost savings and service benchmarking, are driving adoption

ITSM is seen as a readiness measure for both outsourcing and utility computing models

Uncertain returns remain a dampening factor, especially in the current investment climate

The market remains very competitive in spite of the disproportional presence of the big four

Enterprises focused on standardization and systems simplification embrace ITSM the most

On-demand solutions are gaining ground but are a long way from market dominance

Table of Contents

Table of Figures

Table of Tables

Market Opportunity

IT service management: philosophy, frameworks and the software eco-system

Mapping the extended ITSM market

Cost savings, gains in productivity and utilization are the prime movers of ITSM adoption

Organizational resistance and slow realizations of returns are major inhibitors of adoption

Market growth is expected to decelerate until 2010, before hitting its peak in 2014

Investment outlook in the short and medium term is positive, with SMEs the bright spot

Technology Evolution

The release of ITIL version 3 has ushered in significant changes in the ITSM domain

Vendors take the lead in providing support frameworks for ITIL adoption and compliance

ITSM assimilates standalone tool segments and moves towards convergence with BPM

Competitive Landscape

The fragmented dynamic of the market is driven by many vendors with origins outside ITSM

BMC, CA, IBM and HP are clear market leaders in the ITSM space

Mid-tier and point-solution vendors offer ITSM alternatives with high solution maturity

Market consolidation is likely, while convergence and integration emerge as the key themes

Customer Adoption

Systems simplification and infrastructure standardization initiatives drive ITSM deployment

Go-to-Market

Enterprise size in terms of revenue is a clear indicator of ITSM channel preference

On-site deployments continue to dominate the ITSM solution space...

...but an increasing number of vendors have begun offering SaaS and hosted solutions

Conclusions

The state of ITIL adoption suggests that integrated modular solutions will remain in vogue

Open-source point solutions abound, but the model fails to make a significant impact

SOA and ITSM are increasingly seen as synergistic philosophies for functional governance

BPM is gaining prominence as an essential operational constituent of ITSM

Recommendations

Vendors need to reassess their messaging strategies to better tune into enterprise needs

Returns on investment need to be fully quantified, and communicated effectively to buyers

Process consulting and training services will need to be the norm rather than the exception

Appendix

Definitions

Methodology

Further reading

Ask the analyst

Datamonitor consulting

Disclaimer

List of Tables

Table 1: ITSM license revenues by region ($m)

Table 2: Enterprise incidence of ITSM in 2008 and 2009 by revenue band

Table 3: The ITSM capabilities of the leading four vendors

Table 4: ITSM presence of mid-tier vendors

Table 5: ITSM is more common in companies focused on using IT for efficiencies and revenue growth

Table 6: Investment plans for service management solutions across enterprises rating various IT spending objectives as 'very important', as count and proportion of respondents

Table 7: ITSM solutions are more common in companies focused on standardizing infrastructure

Table 8: Investment plans for service management solutions across enterprises rating various IT strategic objectives as 'very important', as count and proportion of respondents

Table 9: Systems management channel preferences by size-band, within firms that have an ITSM footprint

Table 10: Penetration of service management solutions across enterprises with stated spending objectives

Table 11: Deployment models offered by ITSM vendors

List of Figures

Figure 1: The extended ITSM solution domain

Figure 2: The global ITSM market opportunity by region, $m

Figure 3: Year-on-year growth rates for the ITSM market

Figure 4: Proportion of enterprises planning to make ITSM investments

Figure 5: Comparison of ITSM incidence in enterprises by revenue band

Figure 6: ITIL v3 introduces a lifecycle approach to ITSM

Figure 7: A comparison of MOF 4.0 and ITUP frameworks

Figure 8: Evolution of the ITSM solution space

Figure 9: Global ITSM market revenue share by vendor segmentation

Figure 10: ITSM incidence is highest across enterprises trying to achieve process efficiency gains

Figure 11: Investment plans are positively uniform across enterprises with various spending objectives

Figure 12: ITSM incidence is highest across enterprises focused on systems simplification & standardization

Figure 13: Investments are most aggressive across segments with a high incidence of ITSM

Figure 14: Channel preferences for systems management solutions, within firms that have an ITSM footprint

Figure 15: Systems management channel preferences by size-band, within firms that have an ITSM footprint

Figure 16: Delivery preferences by enterprise size