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Savvis IT Infrastructure




2013 EMEA IT Leadership Report




                                        IT Outsourcing in 2013
                    A Proven Way to Fast-Forward to Business Success in Europe
IT Outsourcing in 2013                                                                                              Financial Implications of Owning
                                                                                                                    Your Own IT Infrastructure
                                                                                                                                                                                          Looking back over the past year, CIOs have
                                                                                                                                                                                          regrets over some IT decisions. IT leaders
                                                                                                                                                                                          reported that they had made mistakes when
A Proven Way to Fast Forward to Business Success in Europe                                                          Over the next 12 months, IT leaders need
                                                                                                                                                                                          spending their IT budget. Specifically, most
                                                                                                                    to facilitate three critical goals: to increase
                                                                                                                                                                                          admitted that purchasing IT assets turned out to
                                                                                                                    collaboration throughout their entire organisation,
                                                                                                                                                                                          be a mistake, and in retrospect, outsourcing IT
A message from Savvis                                  budget through outsourcing, with similar savings             to enable operational efficiencies at all
                                                       expected in EMEA too. It’s not surprising CIOs                                                                                     infrastructure would have been the wiser choice.
                                                                                                                    organisational levels, and to achieve competitive
CIOs target three critical areas when developing       view IT outsourcing as a business enabler when               advantage in the marketplace (Figure 1).                              Indeed, looking forward, CIOs now say they
strategy for organisational growth:                    it boosts IT budget by a quarter, helping them                                                                                     predict to save a quarter of their entire IT budget
                                                       deliver more value to the business.                          Globally, CIOs reported in 2011 that budgets were
•	Increase collaboration within IT and the                                                                                                                                               through outsourcing, and that after looking back,
                                                                                                                    less restrictive than in 2010, when more than half
   rest of the organisation.                           Beyond cost savings, CIOs look for other benefits,                                                                                 they now see a better path for fast forwarding
                                                                                                                    (55 percent) of organisations faced the challenge
                                                       such as access to specialist skills and increased agility,   of doing more with less budget. This dropped to                       their organisations to business success.
•	Deliver operational efficiencies at every           as well as the flexibility to focus on core company          29 percent in 2011, and has remained at a similar
   level and function.                                                                                                                                                                    Owning infrastructure results in higher costs
                                                       work and specialist projects. IT leaders now clearly         level (28 percent) in 2012.
                                                       understand the full range of benefits accessible by IT
                                                                                                                                                                                          and wasted resources
•	Align IT activities to increase
                                                       outsourcing, and many are leveraging them to meet            In the UK, 45 percent of IT leaders in 2012 say                       Conventional IT wisdom has been that owning and
   competitive advantage.
                                                       short and long term objectives.                              they will have to do more with less budget over                       operating your own IT infrastructure is more cost-
IT leaders in 2012 tell us strategic business issues                                                                the next twelve months, and although the figure                       effective than outsourcing. In fact, our 2012 survey
are back on the agenda, in contrast to two years       Cloud continues to be a popular way to access                has dropped from 63 percent in 2010, it is still                      shows that most IT leaders’ experience has been
ago when the focus was on simple survival and          flexible, efficient and cost effective computing.            well above the global average of 28 percent.*                         the opposite. Globally three in five CIOs surveyed
the need to navigate difficult financial waters.       Like a utility service, cloud adapts to the needs of         The economy in the UK and Europe and austerity                        reported that owning and operating their own IT
As IT plays a bigger part in business strategy,        the business through ease of use, does not require           measures throughout the region are having a big                       infrastructures resulted in higher costs and wasted
CIOs have the opportunity to influence the board       a long term contract, charges only for services              impact, so it’s not surprising the UK public sector                   precious resources (Figure 2).
and embed technology at a strategic level in           used, reduces waste, and saves valuable CapEx                cited IT budget as one of the highest priorities.
                                                       that can be invested in other areas of the business.         Conversely in Germany, however, the number one                        Interestingly, although 45 percent of IT leaders
their organisation.
                                                                                                                    constraint for CIOs over the next twelve months is                    in the UK are having to do more with less budget
In addition, CIOs globally are reporting that          The good news is that more industries are                    a shortage of IT staff (31 percent).                                  over the next 12 months, these organisations are
budgets are less restrictive and that they now         benefitting from cloud computing and that cloud                                                                                    among the least likely to understand that owning
have more flexibility to invest. In Europe, however,   outsourcing will be a major force within industry in         “T budget has been an issue for many years
                                                                                                                     I                                                                    IT infrastructure wastes resources (49 percent). In
IT leaders in the UK remain constrained by             10 years’ time — in every region of the world.                since the financial crisis began. We are now                         Germany, 53 percent of organisations felt owning
budget, and although less of an issue now than in                                                                    getting used to budget restrictions and have                         IT wasted resources while the US and Singapore
                                                       Outsourcing is at the heart of what Savvis does.              had to adapt our spending accordingly.”
2010, budget limitation is still high on the agenda.                                                                                                                                      realised it the most.
                                                       We offer clients a full suite of managed hosting and
This is not surprising given the poor economic                                                                                                             2012 Survey Respondent
                                                       enterprise cloud services that are best of breed, and
growth, tough austerity measures, and the
                                                       meet every level of need. From shared, dedicated
uncertain market outlook in Europe.
                                                       and hybrid cloud solutions to fully virtualised data
CIOs expect IT outsourcing to help them                centres, Savvis offers a complete portfolio of IT
differentiate their organisation, whether that’s       solutions that includes managed services, colocation,          Figure 1: Global Total
stretching IT budget to invest in innovation and       consulting services and network services.                      Key issues faced by IT organisations in the next 12 months
revenue generating projects or simply delivering
                                                       Whether you are taking your first foray into
outstanding infrastructure performance. What’s
                                                       outsourcing or cloud, or whether you are ready                       Having to do more with less budget
clear is that CIOs use outsourcing as a way to
                                                       to embark on a complete transformation of how
compete, and the areas they seek to outsource                                                                                           Increasing collaboration
                                                       your IT operations are managed, Savvis will work                                  across the organisation
across the organisation are set to increase. That’s
                                                       with you to understand your business and design                          Gaining efficiencies throughout
as true for Europe as it is on a global scale.
                                                       solutions to achieve meaningful results. We look                                            the company
Within five years, IT leaders predict as much
                                                       forward to hearing from you.                                    Focusing our resources on activities that
as 40 percent of their IT infrastructure will be                                                                          will provide a competitive advantage
outsourced, a growth of 15 percent from today’s        Best regards,                                                                  Recruiting the best people
                                                                                                                                          with the right skill set
outsourcing footprint. In Europe the trend is the      Neil Cresswell                                                       Supporting business expansion and
same but with more modest growth; 11-14 percent        Managing Director EMEA                                                         aggressive development
in the UK and 6-13 percent in Germany.                                                                                    Finding the best breed of suppliers to
                                                                                                                                 deliver cost-effective solutions
That’s not surprising given the return on                                                                                                                            0%   5%        10%            15%         20%         25%         30%
investment IT leaders expect from outsourcing.
On average CIOs predict a 26 percent saving of IT

                                                                                                                    *Full survey results available.


IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe	2                                        IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe	3
If budget is taken out of the equation, CIOs can turn    Cost Savings and Other Benefits to                                  IT leaders from smaller companies plan to
  Figure 2:                                                        their attention to increasing collaboration within the   Outsourcing IT                                                      increase their outsourcing over the next five
  The number that agree that owning                                organisation; promoting projects to become more                                                                              years at a much faster rate than those from larger
                                                                                                                            Given the number of benefits, it is not surprising
  their own IT infrastructure creates                              agile and drive activities to differentiate and better                                                                       organisations (16% increase over the next 5 years
                                                                                                                            that within five years IT leaders expect a huge
  higher costs and wasted resources                                compete in the marketplace — as shown in Figure 1                                                                            for the smallest organisations compared to just
                                                                                                                            40 percent of their infrastructure will be
  varies across the globe                                                                                                   outsourced, a global average rise of 15 percent
                                                                                                                                                                                                13% in the largest), implying that there is some
                                                                   Of all the countries surveyed, IT leaders in the                                                                             catching up to do.*
       80%
                                                                   UK are the second ‘most likely’ to be hampered           from 25 percent, that is currently outsourced now.
       70%                                                         by budget constraints, second only to Japan (45                                                                              In Germany, CIOs from the largest organisations
       60%                                                         percent and 48 percent respectively). In Germany,                                                                            predict an increase of 6 percent in outsourcing over
                                                                   however, CIOs look to satisfy a shortage of IT staff,      Figure 4:                                                         the next five years, compared to 13 percent among
       50%
                                                                   rather than an inadequate IT budget (31 percent            The percentage of outsourced IT                                   those with lower revenues. The UK forecasts
       40%                                                         versus 22 percent respectively).*                          infrastructure will rise over the next five                       a similar trend, with the largest organisations
       30%                                                                                                                    years as organisations realise fiscal rewards                     predicting an additional 11 percent of infrastructure
                                                                   However, for leaders in both the UK and Germany,                                                                             will be outsourced in five years’ time, compared to
       20%                                                         a lack of IT budget is far less of an issue now than                                                                         14 percent among smaller organisations.*
       10%                                                         it was in 2010, but perhaps surprisingly there has
                                                                                                                                                                            14%
                                                                   been little change since 2011. It is likely that with                            USA
                                                                                                                                                                                                At a global level, CIOs are presently outsourcing
        0%
                 USA      UK      Germany Hong   Japan Singapore
                                                                   a prolonged and slowly progressing economic                                                                                  around a quarter of their IT infrastructure (Figure
                                          Kong                     situation and on-going austerity measures in both                                                                            4) and by doing so, they anticipate saving
                                                                   European countries, budget became less of an                                                          13%                    an average of 26 percent of their IT budget
                                                                                                                                                     UK
The larger the organisation, the more likely their IT              issue between 2010 and 2011, but is still a dominant                                                                         (Figure 5). The expectation from US IT leaders is
leaders agreed that owning IT infrastructure wasted                limitation today.                                                                                                            particularly high — they anticipate saving twice
resources and incurred unnecessary cost, with 66                                                                                                                      12%                       as much as their colleagues in Singapore (31
percent of organisations with a global turnover of                 When asked if owning and operating their own                                Germany
                                                                                                                                                                                                percent vs. 16 percent), with the UK and Germany
$50B-$100B agreeing, compared to 56 percent of                     IT infrastructure creates higher costs and wastes                                                                            expecting a 24 and 25 percent saving respectively.
organisations with a global turnover of $1B-$25B.                  resources, around half the IT leaders in Germany and
                                                                                                                                                                     14%
                                                                   the UK agreed with this (53 percent and 49 percent                       Hong Kong
Furthermore, year-on-year, IT leaders are                          respectively). However, European CIOs tend to lag                                                                             Figure 5:
increasingly aware that owning and maintaining                     behind their counterparts in the US and Singapore
                                                                                                                                                                      14%                        Organisations predict to save an
their own IT infrastructure is costly. Between 2012                in their views (73 and 74 percent respectively).*                              Japan                                          average of 26 percent of their IT budget
and 2010 alone, the number of IT leaders who
                                                                   When looking back at previous purchases of IT                                                                                 through outsourcing
agreed with this increased from 38 to 60 percent.
                                                                   equipment, Figure 3 shows us that more CIOs in                                                              26%               35%
                                                                   the US regret purchasing IT equipment compared                            Singapore
Half of organisations admit to previous
unnecessary infrastructure purchases                               to colleagues in other parts of the world (66                                                                                 30%

                                                                   percent). Just under half of European IT execs                                         0%   10% 20% 30% 40% 50% 60%
An important insight from the survey is that half of                                                                                                                                             25%
                                                                   regret IT purchases, 47 percent in the UK and 48                Average percent of infrastructure currently outsourced
CIOs admit to having IT equipment that they now
                                                                   per cent in Germany; followed by Singapore with                 Average percent of infrastructure estimated to be             20%
regret purchasing.                                                                                                                 outsourced in five years
                                                                   the least (35 percent).                                         Estimated percentage increase of outsourced infrastructure
                                                                                                                                   in five years                                                  15%
“ e prioritise outsourcing because the companies
 W
 we outsource to provide better services than we                                                                                                                                                 10%
                                                                    Figure 3:
 could ever offer in-house — and for a reduced cost.”
                           2012 Survey Respondent                   Organisations who agree that they have                                                                                        5%
                                                                                                                            The private healthcare industry currently
                                                                    IT equipment they now regret purchasing,
                                                                                                                            outsources the largest amount of infrastructure                       0%
Once again, it is CIOs from the largest                             by country
                                                                                                                            (28 percent) and companies in that sector                                   USA     UK   Germany Hong   Japan Singapore
organisations that are more likely to agree that they                  70%                                                                                                                                                   Kong
                                                                                                                            are predicted to have the smallest increase in
regret IT purchases (56 percent among those with
                                                                       60%                                                  outsourcing over the next five years. It is actually
a global turnover of $50-$100billion, compared to
                                                                                                                            organisations in the automotive industry in
46 percent with a global turnover of $1-$25billion).*                  50%
                                                                                                                            Germany who predict the largest increase, and by
If more organisations used outsourcing to free up                      40%
                                                                                                                            quite a margin (23 percent compared to 11 and 15
money from their budgets, they could focus their                       30%                                                  percent in other sectors).*
attention on strategic issues, not only because                        20%
they would have more budget available to do
more, but because outsourcing frees up their                           10%

time to focus on core activities.                                       0%
                                                                              USA    UK   Germany Hong   Japan Singapore
                                                                                                  Kong
*Full survey results available.                                                                                             *Full survey results available.


IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe	4                                                IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe	5
Globally, media firms predict to save the most                          Globally, organisations are warming to the idea that
(29 percent), and public sector and government                          outsourcing delivers numerous benefits — all of                Figure 9: Global Total
the least (22 percent). The public sector and                           which combine to make them more cost effective,                Elements currently being outsourced versus those being evaluated
automotive industries are the two sectors where                         efficient and competitive. We saw this reflected
                                                                                                                                                                   Test and development
every Head of IT interviewed expected to make a                         in the fact that 59 percent of the IT leaders we
                                                                                                                                                                                  Websites
saving through outsourcing (see Figure 6).                              surveyed agreed that new IT applications and
                                                                                                                                                          Back-up and disaster recovery
                                                                        services should be outsourced — an increase of 12                                                           Storage
 Figure 6: Global Total                                                 percent, when in 2011 only 47 percent agreed new                                                        eCommerce
                                                                        IT applications and services should be outsourced.                              Non-mission critical applications
 The average IT budget savings predicted as
                                                                                                                                                                                    Mobility
 a result of outsourcing varies across the                              CIOs from Singapore and the US appear to
                                                                                                                                                                       Regional applications
 verticals                                                              be ahead in their thinking when it comes to
                                                                                                                                                                          Big Data analytics
                     Finance                                            prioritising an outsourced infrastructure for new                                       Production infrastructure
                                                                        products or services they deploy, with 78 percent                                     Mission critical applications
       Media, ent. publishing
                       retail
                                                                        and 76 percent agreeing respectively. Just over                                     Pre-production infrastructure
                                                                        half of IT leaders in Germany and just under half                                                                      0%             10%               20%                   30%          40%               50%
                Public sector
                government
                                                                        in the UK agreed with this (53 and 44 percent
                                                                                                                                                                                                We are currently outsourcing infrastructure for this area
                                                                        respectively), (see Figure 8).                                                                                          We are evaluating outsourcing for it
                  Healthcare
                public sector

                  Healthcare                                             Figure 8:                                                   Drivers and Inhibitors to Outsourcing                                                   So why is this? CIOs tell us contractual obligations are
               private sector
                                                                         Those who agree that companies should                       Between 27 to 48 percent of IT leaders currently                                        the main barrier to outsourcing, whereas in previous
                                                                         prioritise an outsourced infrastructure                     outsource each area of IT (Figure 9) and, globally,                                     years, company culture was the most common
                    Software
                                                                         solution over owned IT infrastructure for                   the top three areas to outsource are Test and                                           inhibitor. This indicates a major shift in thinking, but
       Automotive transport                                              new applications/services it deploys                        Development, Back Up and Disaster Recovery and                                          there are exceptions. In the UK, company culture has
        logistics (GER only)
                                                                                                                                     Websites (49 percent, 44 percent and 44 percent                                         been the number one barrier to outsourcing for the
                                                                            90%
                                 0% 5% 10% 15% 20% 25% 30% 35%
                                                                                                                                     respectively). However, if we look at a country                                         past three years, combined with an unwillingness to
                                                                            80%
                                                                                                                                     level, 43 percent of UK CIOs currently outsource                                        relinquish control.
Cost savings are not the only reason                                        70%                                                      their Test and Development, compared to 59                                              So, keeping a sense of control over IT is still an issue;
organisations are turning to outsourcing                                    60%                                                      percent in the US and 58 percent in Japan. In                                           with over 40 percent of all IT leaders stating lack of
                                                                                                                                     Germany and Hong Kong, IT Leaders are most                                              control as a reason not to outsource. In particular,
For CIOs in the UK and Germany, cost savings are                            50%
                                                                                                                                     likely to outsource websites.*                                                          Heads of IT in public healthcare and the software
not the only benefit to outsourcing. UK IT leaders
                                                                            40%
are much more likely to be driven by the need to                                                                                     Looking to the future, and what IT leaders are                                          industries are most likely to decline outsourcing
increase IT agility to address changing business                            30%
                                                                                                                                     actively evaluating or plan to outsource, between                                       because they feel more in control if they manage
needs, than their counterparts in Germany (50                               20%                                                      31 percent and 38 percent of organisations are                                          the infrastructure themselves.*
percent vs. 34 percent). In fact, a key challenge for                                                                                considering outsourcing each area of IT (Figure 9).
                                                                            10%
German IT leaders is a lack of IT staff, and therefore                                                                               It is significant that more and more CIOs are
much more likely to be a driver for them than agility                        0%                                                      evaluating newer, emerging technologies such as
                                                                                     USA     UK   Germany Hong     Japan Singapore
(35 percent vs. 19 percent respectively) (Figure 7).                                                      Kong                       Big Data analytics, implying a huge demand for                                             Figure 10:
                                                                                                                                     outsourcing as new technologies are introduced.                                            At least a third of organisations are currently
                                                                                                                                     In the UK, back up and disaster recovery (43                                               NOT outsourcing applications that they think
 Figure 7:                                                                                                                           percent compared to the global average of 36                                               they should be
                                                                                                                                     percent) is the application most evaluated for
 Reasons that drive organisations’ need to increase the percentage of infrastructure they outsource                                                                                                                                                                                        Global total
                                                                                                                                     outsourcing and in Germany Mobility (43 percent                                              Network devices
                                                                                                                                                                                                                                                                                           Germany
                  Increase IT agility to address                                                             Global total            compared to the global average of 33 percent) is                                                      Storage
                                                                                                                                                                                                                                                                                           UK
                      changing business needs
                                                                                                                 Germany             the most likely to be outsourced.*
                     Eliminate dependence on                                                                                                                                                                                    Data centre space
                         legacy infrastructures                                                                  UK

                  Need to shift CapEx to OpEx
                                                                                                                                     Contractual obligations are the main                                                        Big Data analytics
                                                                                                                                     barrier to outsourcing                                                                            Enterprise
       To refocus resources on core strengths
                                                                                                                                     One of the most interesting findings from our 2012                                               applications
                     Mitigating compliance risk
                                                                                                                                     survey is that at least one third of organisations                                                       SAP
                Gain transparency and control
                             over cost models                                                                                        worldwide are not outsourcing applications that                                         Laptops  PDA/smart
                                                                                                                                                                                                                                 phones/desktops
                                   Lack of IT staff
                                                                                                                                     they feel should be outsourced (Figure 10).
                                                                                                                                                                                                                                      eCommerce
                       Need to expand globally
                                                                                                                                                                                                                                                      0%    10%   20%    30%   40%     50%
                                                      0%    10%   20%        30%           40%       50%           60%
                                                                                                                                     *Full survey results available.


IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe	6                                                         IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe	7
Benefits of a utility-based, pay-per-use                                                                                                           Table 14:
outsourcing model                                                        Figure 12: Global Total                                                   The future of outsourcing in the UK and Germany
Outsourcing services can be delivered in a variety                       Organisations are more likely to be using, or
                                                                         partly using, private cloud than public cloud                              Location of
of ways. An increasingly popular model for                                                                                                          the majority IT
                                                                                                                                                                                                              UK                                           Germany
outsourcing is “utility-based”, in which the use of                                                                                                 infrastructure now
                                                                                                                                                                                    In-house/ owned                Outsourced cloud        In-house/ owned         Outsourced cloud
IT services flexes and adapts to business needs.                               Back-up and                                         Public cloud
                                                                                                                                                    and in the future.
Rather than paying a fixed upfront CapEx or long-                          disaster recovery                                                        Currently                                51%                           2%                   67%                           4%
                                                                                                                                   Private cloud
term contract fee, the cost varies with the amount                         Batch processing
                                                                                                                                                    In 2 years                               18%                           15%                  17%                          19%
of services used — a true ‘pay as you go’ model.                                                                                                    In 10 years                              14%                          45%                   25%                          33%
                                                                          Big Data analytics
Globally, IT leaders told us the top three benefits
of a utility based model are cost reduction                                   Mission critical                                                     Right now, over half (51 percent) of UK CIOs keep                                          “ loud providers are constantly developing
                                                                                                                                                                                                                                               C
                                                                                applications
and containment (39 percent), infrastructure                                                                                                       their IT infrastructure in-house but that is set to                                         and offering more specialist services for the
scalability and flexibility (39 percent) and                                     Non-mission                                                       change to just 14 percent over the next 10 years                                            applications we use. I think cloud is becoming
                                                                         critical applications
improved quality of service (37 percent). However,                                                                                                 (Table 14). IT leaders in the software industry are                                         more secure and it’s certainly significantly
the benefits are perceived differently around the                                    Storage                                                       most likely to keep infrastructure in-house (80                                             more widely available than ever before.”
world, with 76 percent of CIOs in Singapore saying                                                                                                 percent), probably for control reasons, compared                                                                                        2012 Survey Respondent
                                                                                   Test and
that cost reduction and containment is a benefit,                              development                                                         to around half that (44 percent) for the private
compared to 39 percent in the UK, 32 percent in                                                  0%   10%    20%    30%   40%       50%
                                                                                                                                                   healthcare sector.*
Germany and 27 percent in the US (Figure 11).
                                                                                                                                                   Looking to the future of outsourcing in the UK                                             Benefits of cloud computing
In Germany, over 45 percent of CIOs cited enhanced                                                                                                 and Germany those CIOs planning to put the
                                                                                                                                                                                                                                              Scalability was the number one benefit of cloud
security as the biggest benefit of utility computing,                   Cloud on the horizon: the coming juggernaut                                majority of their infrastructure in the cloud over
                                                                                                                                                                                                                                              cited by IT leaders across most countries (Figure
whereas their UK counterparts expect to see                             in outsourcing                                                             the next ten years, is due to rise dramatically
                                                                                                                                                                                                                                              16) with increased reliability and enhanced security
increased infrastructure scalability and flexibility                                                                                               — from 2 to 45 percent for the UK and 4 to 33
                                                                        Building on this growth trend at a global level,                                                                                                                      following closely behind. In Europe, the anticipated
(38 percent). This suggests that not only are there                                                                                                percent for Germany. Concern about security is
                                                                        IT leaders indicated cloud outsourcing will be a                                                                                                                      benefits are slightly different, with UK IT leaders
multiple benefits to outsourcing, but these benefits                                                                                               the main impediment to cloud adoption, but CIOs
                                                                        major force within 10 years and those who plan to                                                                                                                     citing scalability (30 percent), faster time to
can aid organisations in different ways.                                                                                                           are also worried about their ability to manage
                                                                        use cloud for the majority of their infrastructure                                                                                                                    market (26 percent) and reduced administration
                                                                                                                                                   and control cloud deployments, and some have
                                                                        will increase from 4 percent today to 43 percent in                                                                                                                   time (26 percent); and German CIOs looking for
                                                                                                                                                   concerns about the legal and compliance issues
                                                                        10 years’ time (Figure 13)                                                                                                                                            enhanced security (35 percent), faster provisioning
                                                                                                                                                   that could arise when storing or processing
  Figure 11:                                                                                                                                                                                                                                  time (30 percent) and lower TCO for the whole
                                                                                                                                                   workloads remotely (Figure 15).
  There are several benefits of outsourcing IT                                                                                                                                                                                                infrastructure (25 percent).
  infrastructure using a utility-based model                             Figure 13: Global Total
                                                                         Where organisations expect the majority of                                  Figure 15: Global Total                                                                   Figure 16: Global Total
                                                                         their IT infrastructure to sit in ten years time                            Reasons why organisations are not using                                                   Important benefits of cloud computing for
           Cost reduction
           or containment                                                   60%                                                                      cloud computing                                                                           enterprises
  Infrastructure scalability
             and flexibility                                                                                                                                                                                                                     Ability to scale up  down consumption
                                                                                                                                                                                  Security concerns                                                       to manage fluctuating demand
         Improved Quality                                                                                                                                 Legal/compliance issues about processing                                                                 Improved reliability
          of Service (QoS)                                                  40%                                                                        workloads in an unknown geographic location
                                                                                                                                                            Concerns over how much management                                                                      Enhanced security
        Enhanced security                                                                                                                                         and control resource is required

                                                                                                                                                           Anticipated difficulty of integration with                                                    Reduced administration time
                                                                                                                                                                              existing infrastructure
  Reduced administration                                                                                                                                                                                                                           Lower TCO for whole infrastructure
                   time                                                     20%                                                                                     Application compatibility issues
                                                                                                                                                                                                                                                                    Low cost of entry
    Faster time-to-market                                                                                                                                   Cloud services are not enterprise ready
                                                                                                                                                                                                                                                        Environmental considerations
                                                                                                                                                                  Cloud computing is an unprovem
                                                                                                                                                                 concept for the larger organisation                                                            Faster time-to-market
                               0%    10%       20%   30%    40%   50%        0%
                                                                                        Currently           In 2 years         In 10 years                            We have no budget to deploy
                                                                                                                                                                                   cloud services                                                               Flexible billing models
                                Global total    Germany    UK
                                                                                       In-house/owned       Outsourced cloud                                             Data back-up and disaster
                                                                                                                                                                             recovery implications                                                                                        0%   10%   20%   30%   40%

                                                                                                                                                                                 Costs are too high


                                                                                                                                                                                                        0%   10%   20%   30%   40%   50%




*Full survey results available.                                                                                                                    *Full survey results available.


IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe	8                                                                       IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe	9
Figure 17:
                                                                                              The research identified that although marginally      Conclusion                                             Collectively, these capabilities address enterprises
                                                                                              more organisations in Germany use cloud               Strategies for IT outsourcing have come a long         that have substantial fluctuations in web traffic
  Types of cloud use vary by country                                                          compared to the UK, both countries have seen an                                                              and mission-critical computing requirements from
                                                                                                                                                    way in the last 12 months. IT outsourcing —
           50%                                                                                increase in cloud use since 2011.* Whilst private     whether through public, private or hybrid cloud        heavy business-day peaks or unplanned events.
                                                                                              cloud services are most popular, organisations        delivery is now on the strategic agenda, as
           40%                                                                                in Germany are more likely to be using a hybrid                                                              About Savvis
                                                                                                                                                    CIOs look more and more to technology as the
                                                                                              cloud than those in the UK; however, those in the     engine to drive the business forward. IT leaders       Savvis, a CenturyLink company, is a global leader
           30%                                                                                UK are more likely to be using a public cloud, than   clearly understand how outsourcing enables             in cloud infrastructure and hosted IT solutions
                                                                                              their German counterparts (Figure 17).                them to focus and improve other areas of the           for enterprises. Nearly 2,500 unique clients,
           20%
                                                                                                                                                    business, and by redirecting resources away from       including more than 30 of the top 100 companies
                                                                                              When it comes to deciding what applications                                                                  in the Fortune 500, use Savvis to reduce capital
                                                                                              should be outsourced to which type of cloud,          infrastructure to core competencies, they improve
            10%                                                                                                                                     collaboration, enhance operational efficiencies,       expense, improve service levels and harness the
                                                                                              public or private, German CIOs are more likely to                                                            latest advances in cloud computing.
                                                                                              use public cloud for Big Data Analytics and Back-     and align funds to more revenue generating
                                                                                              up and Recovery Solutions, and UK CIOs are more       projects that drive the business forward.
            0%
                   Global total        Germany                 UK                                                                                                                                          Savvis IT Outsourcing Solutions
              Private cloud services   Public cloud services        Hybrid model              likely to use private cloud for Storage, Mission      Fast forward 10 years to view the IT landscape,        At Savvis, our Strategic ITO specialists know
                                                                                              Critical Applications and Back-up and Disaster        and we see that cloud based outsourcing                infrastructure and applications for large
                                                                                              Recovery (Table 18).                                  promises to play a dominant role in enterprise IT      enterprises. While you focus on your core
                                                                                              Whilst IT leaders in the UK are more likely to be     around the world. However, for these forecasts         strengths and developing products that
                                                                                              using public cloud in some capacity, German           to come true, organisations need to first address      differentiate your company, let us provide the IT
                                                                                              organisations that use public cloud, do so for a      some key challenges: alleviating security concerns     infrastructure and applications that sharpen your
                                                                                              greater number of applications, suggesting they       and convincing stakeholders they can safely            competitive edge in today’s demanding, ever-
                                                                                              have adopted public cloud more fully.                 relinquish control of their IT infrastructure to a     changing global marketplace.
                                                                                                                                                    trusted provider.
                                                                                                                                                                                                           Savvis offers a broad set of services that helps
                                                                                                                                                    This is also true in Europe, where outsourcing         large enterprises to:
                                                                                                                                                    and cloud services are set to grow, albeit at a        •	Increase business agility. Respond to changing
                                                                                                                                                    slightly slower rate than the rest of the world.          needs and opportunities in real-time with
                                                                                                                                                    Despite some reservations around relinquishing            a tailored yet flexible infrastructure. Gain
                                                                                                                                                    control, UK and German CIOs see the benefits              transparency, predictability and control over
Table 18:                                                                                                                                           of outsourcing and cloud, and plan to exploit             your cost models, time-to-market, product
Organisations in EMEA have adopted different                                                                                                        them to achieve scalability, greater flexibility and      portfolio and many other business drivers.
types of cloud for different applications                                                                                                           security. Growth in outsourcing is coming from
                                                                                                                                                    enterprises of all size, with high adoption expected   •	Maximise IT flexibility. Savvis offers one-stop-
                                                                                                                                                    from smaller enterprises.                                 shop convenience across a broad portfolio of
                                                                                                                         Using / partly using                                                                 services for cloud, network, managed hosting,
                                                                                   Using / partly using public cloud
  Applications for which organisations                                                                                      private cloud           Trusted outsourcing providers like Savvis can             colocation, security and application services
  have adopted cloud computing                                                                                                                      amplify these benefits, reduce the risks, and allay       — all with predictable and reliable enterprise-
                                                                                     Germany               UK          Germany            UK        the concerns of organisations by offering a broad         class performance and security, and with
                                                                                                                                                    range of flexible, high-performing, and secure            customisable service-level agreements (SLAs).
  Back-up and disaster recovery                                                        30%                16%           39%              39%
                                                                                                                                                    solutions capable of meeting business needs both
                                                                                                                                                                                                           •	Mitigate risk. Maintain business continuity with
  Batch processing                                                                     20%                 5%           36%              24%        today and in the future.
                                                                                                                                                                                                              our proven migration approaches, integration
  Big Data analytics                                                                    31%               19%           37%              31%        We offer a full suite of enterprise-class cloud           and governance best practices, regulatory
                                                                                                                                                    services, engineered and deployed to meet global          know-how and SLA expertise — for the life of
  Mission critical applications                                                         26%               16%           44%              39%
                                                                                                                                                    computing needs of any size of organisation               your contract and all tailored to adapt to your
  Non-mission critical applications                                                     26%               21%           32%              37%                                                                  changing business and customer needs.
                                                                                                                                                    large or small. From integrated and hybrid cloud
  Storage                                                                               28%               23%           45%              44%        solutions to fully virtualised cloud data centre       •	Grow globally. With more than 50 data centres
  Test and development                                                                 20%                 9%           37%              35%
                                                                                                                                                    solutions, Savvis cloud services can be used              in North America, Europe and Asia (including
                                                                                                                                                    standalone or in a hybrid environment of more             India), we’re already where you want to be —
                                                                                                                                                    than one service, to meet every need. When                with proactive monitoring and management
                                                                                                                                                    combined with our low-latency distribution                as well as round the clock and onsite support.
                                                                                                                                                    network and consultative business model, Savvis           And, with our globally-consistent standardised
                                                                                                                                                    delivers a converged cloud that meets end-to-end          ITIL processes, we ensure seamless delivery
                                                                                                                                                    enterprise requirements for application security,         and operational support.
*Full survey results available.
                                                                                                                                                    privacy and performance.



IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe	10                                                                       IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe	11
Savvis provides:                                                                      About the Research
•	 Commercially flexible contract terms                                               This independent survey was commissioned by
•	 Option to tailor SLAs                                                              Savvis and conducted with 550 CIOs, IT Directors,
•	 Pay-per-use utility models                                                         Heads of IT and Senior IT Managers of global large
                                                                                      enterprises based in the USA (200), UK (100),
•	 Support for hybrid infrastructures
                                                                                      Germany (100), Japan (50), Hong Kong (50) and
•	Broadest product portfolio with                                                    Singapore (50), and was completed in August
   enterprise‑grade quality-of-service                                                2012. The research was conducted by Vanson
•	 Global network and data centres                                                    Bourne, a research based technology marketing
•	 Globally-consistent standardised ITIL processes                                    consultancy offering clients analysis and advice
                                                                                      based on incisive, rigorous research into their
•	Team of large enterprise IT outsourcing
                                                                                      market environment. The research used a
   specialists
                                                                                      combination of online fieldwork methodology and
•	Expertise in Banking and Financial Services,                                       telephone interviewing. All research carried out by
   Media, Consumer Brands, Government and                                             Vanson Bourne adheres to the latest MRS Code
   Software sectors                                                                   of Conduct. Demographic detailing respondent
Learn more at: www.savvis.co.uk/StrategicITO                                          communities includes industry sector, country
                                                                                      in which the respondents were based, and size
                                                                                      of business.


                                                                                      About the Report
                                                                                      The results of this report are presented in four
                                                                                      sections, with each section highlighting different
                                                                                      aspects of the research findings. Particular
                                                                                      emphasis has been given to the data gathered
                                                                                      from organisations in Europe and particularly the
                                                                                      UK and Germany; however, to offer greater insight
                                                                                      each section presents a global view and outlines
                                                                                      implications for Europe. To view the global report
                                                                                      please visit www.savvis.com.




                                                                 To find out more about Savvis
                                                                           visit www.savvis.co.uk
                                                            email us at emea-sales@savvis.com
                                                                    or call +44 (0)118 322 6000

Global Headquarters                Canada                          EMEA                                Asia Pacific                          Japan
1 Savvis Parkway                   6800 Millcreek Drive            Eskdale Road                        50 Raffles Place                      7th Floor
St. Louis, MO 63017                Mississauga, ON                 Winnersh Triangle                   Singapore Land Tower                  Kyodo Building
                                   L5N 4J9                         Wokingham                           #36-01                                (Jinbocho 3cho-me)
Tel 1.800.SAVVIS.1
                                                                   Berkshire RG41 5TS                  Singapore 048623                      3-29 Kanda Jinbocho
(1.800.728.8471)                   Tel 1.877.387.3764
                                                                   United Kingdom                                                            Chiyoda-ku
www.savvis.com                     www.savvis.ca                                                       Tel +65 6768 8000
                                                                                                                                             Tokyo 101-0051
                                                                   Tel +44 (0)118 322 6000             www.savvis.sg
                                                                                                                                             Japan
                                                                   www.savvis.co.uk
                                                                                                                                             Tel +81.3.5214.0151
                                                                                                                                             www.savvis.jp


© 2012 CenturyLink, Inc. All Rights Reserved. The Savvis mark, logo and certain Savvis product names are the property of CenturyLink, Inc.
All other marks are the property of their respective owners. -1-

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IT Outsourcing in 2013

  • 1. Savvis IT Infrastructure 2013 EMEA IT Leadership Report IT Outsourcing in 2013 A Proven Way to Fast-Forward to Business Success in Europe
  • 2. IT Outsourcing in 2013 Financial Implications of Owning Your Own IT Infrastructure Looking back over the past year, CIOs have regrets over some IT decisions. IT leaders reported that they had made mistakes when A Proven Way to Fast Forward to Business Success in Europe Over the next 12 months, IT leaders need spending their IT budget. Specifically, most to facilitate three critical goals: to increase admitted that purchasing IT assets turned out to collaboration throughout their entire organisation, be a mistake, and in retrospect, outsourcing IT A message from Savvis budget through outsourcing, with similar savings to enable operational efficiencies at all expected in EMEA too. It’s not surprising CIOs infrastructure would have been the wiser choice. organisational levels, and to achieve competitive CIOs target three critical areas when developing view IT outsourcing as a business enabler when advantage in the marketplace (Figure 1). Indeed, looking forward, CIOs now say they strategy for organisational growth: it boosts IT budget by a quarter, helping them predict to save a quarter of their entire IT budget deliver more value to the business. Globally, CIOs reported in 2011 that budgets were • Increase collaboration within IT and the through outsourcing, and that after looking back, less restrictive than in 2010, when more than half rest of the organisation. Beyond cost savings, CIOs look for other benefits, they now see a better path for fast forwarding (55 percent) of organisations faced the challenge such as access to specialist skills and increased agility, of doing more with less budget. This dropped to their organisations to business success. • Deliver operational efficiencies at every as well as the flexibility to focus on core company 29 percent in 2011, and has remained at a similar level and function. Owning infrastructure results in higher costs work and specialist projects. IT leaders now clearly level (28 percent) in 2012. understand the full range of benefits accessible by IT and wasted resources • Align IT activities to increase outsourcing, and many are leveraging them to meet In the UK, 45 percent of IT leaders in 2012 say Conventional IT wisdom has been that owning and competitive advantage. short and long term objectives. they will have to do more with less budget over operating your own IT infrastructure is more cost- IT leaders in 2012 tell us strategic business issues the next twelve months, and although the figure effective than outsourcing. In fact, our 2012 survey are back on the agenda, in contrast to two years Cloud continues to be a popular way to access has dropped from 63 percent in 2010, it is still shows that most IT leaders’ experience has been ago when the focus was on simple survival and flexible, efficient and cost effective computing. well above the global average of 28 percent.* the opposite. Globally three in five CIOs surveyed the need to navigate difficult financial waters. Like a utility service, cloud adapts to the needs of The economy in the UK and Europe and austerity reported that owning and operating their own IT As IT plays a bigger part in business strategy, the business through ease of use, does not require measures throughout the region are having a big infrastructures resulted in higher costs and wasted CIOs have the opportunity to influence the board a long term contract, charges only for services impact, so it’s not surprising the UK public sector precious resources (Figure 2). and embed technology at a strategic level in used, reduces waste, and saves valuable CapEx cited IT budget as one of the highest priorities. that can be invested in other areas of the business. Conversely in Germany, however, the number one Interestingly, although 45 percent of IT leaders their organisation. constraint for CIOs over the next twelve months is in the UK are having to do more with less budget In addition, CIOs globally are reporting that The good news is that more industries are a shortage of IT staff (31 percent). over the next 12 months, these organisations are budgets are less restrictive and that they now benefitting from cloud computing and that cloud among the least likely to understand that owning have more flexibility to invest. In Europe, however, outsourcing will be a major force within industry in “T budget has been an issue for many years I IT infrastructure wastes resources (49 percent). In IT leaders in the UK remain constrained by 10 years’ time — in every region of the world. since the financial crisis began. We are now Germany, 53 percent of organisations felt owning budget, and although less of an issue now than in getting used to budget restrictions and have IT wasted resources while the US and Singapore Outsourcing is at the heart of what Savvis does. had to adapt our spending accordingly.” 2010, budget limitation is still high on the agenda. realised it the most. We offer clients a full suite of managed hosting and This is not surprising given the poor economic 2012 Survey Respondent enterprise cloud services that are best of breed, and growth, tough austerity measures, and the meet every level of need. From shared, dedicated uncertain market outlook in Europe. and hybrid cloud solutions to fully virtualised data CIOs expect IT outsourcing to help them centres, Savvis offers a complete portfolio of IT differentiate their organisation, whether that’s solutions that includes managed services, colocation, Figure 1: Global Total stretching IT budget to invest in innovation and consulting services and network services. Key issues faced by IT organisations in the next 12 months revenue generating projects or simply delivering Whether you are taking your first foray into outstanding infrastructure performance. What’s outsourcing or cloud, or whether you are ready Having to do more with less budget clear is that CIOs use outsourcing as a way to to embark on a complete transformation of how compete, and the areas they seek to outsource Increasing collaboration your IT operations are managed, Savvis will work across the organisation across the organisation are set to increase. That’s with you to understand your business and design Gaining efficiencies throughout as true for Europe as it is on a global scale. solutions to achieve meaningful results. We look the company Within five years, IT leaders predict as much forward to hearing from you. Focusing our resources on activities that as 40 percent of their IT infrastructure will be will provide a competitive advantage outsourced, a growth of 15 percent from today’s Best regards, Recruiting the best people with the right skill set outsourcing footprint. In Europe the trend is the Neil Cresswell Supporting business expansion and same but with more modest growth; 11-14 percent Managing Director EMEA aggressive development in the UK and 6-13 percent in Germany. Finding the best breed of suppliers to deliver cost-effective solutions That’s not surprising given the return on 0% 5% 10% 15% 20% 25% 30% investment IT leaders expect from outsourcing. On average CIOs predict a 26 percent saving of IT *Full survey results available. IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe 2 IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe 3
  • 3. If budget is taken out of the equation, CIOs can turn Cost Savings and Other Benefits to IT leaders from smaller companies plan to Figure 2: their attention to increasing collaboration within the Outsourcing IT increase their outsourcing over the next five The number that agree that owning organisation; promoting projects to become more years at a much faster rate than those from larger Given the number of benefits, it is not surprising their own IT infrastructure creates agile and drive activities to differentiate and better organisations (16% increase over the next 5 years that within five years IT leaders expect a huge higher costs and wasted resources compete in the marketplace — as shown in Figure 1 for the smallest organisations compared to just 40 percent of their infrastructure will be varies across the globe outsourced, a global average rise of 15 percent 13% in the largest), implying that there is some Of all the countries surveyed, IT leaders in the catching up to do.* 80% UK are the second ‘most likely’ to be hampered from 25 percent, that is currently outsourced now. 70% by budget constraints, second only to Japan (45 In Germany, CIOs from the largest organisations 60% percent and 48 percent respectively). In Germany, predict an increase of 6 percent in outsourcing over however, CIOs look to satisfy a shortage of IT staff, Figure 4: the next five years, compared to 13 percent among 50% rather than an inadequate IT budget (31 percent The percentage of outsourced IT those with lower revenues. The UK forecasts 40% versus 22 percent respectively).* infrastructure will rise over the next five a similar trend, with the largest organisations 30% years as organisations realise fiscal rewards predicting an additional 11 percent of infrastructure However, for leaders in both the UK and Germany, will be outsourced in five years’ time, compared to 20% a lack of IT budget is far less of an issue now than 14 percent among smaller organisations.* 10% it was in 2010, but perhaps surprisingly there has 14% been little change since 2011. It is likely that with USA At a global level, CIOs are presently outsourcing 0% USA UK Germany Hong Japan Singapore a prolonged and slowly progressing economic around a quarter of their IT infrastructure (Figure Kong situation and on-going austerity measures in both 4) and by doing so, they anticipate saving European countries, budget became less of an 13% an average of 26 percent of their IT budget UK The larger the organisation, the more likely their IT issue between 2010 and 2011, but is still a dominant (Figure 5). The expectation from US IT leaders is leaders agreed that owning IT infrastructure wasted limitation today. particularly high — they anticipate saving twice resources and incurred unnecessary cost, with 66 12% as much as their colleagues in Singapore (31 percent of organisations with a global turnover of When asked if owning and operating their own Germany percent vs. 16 percent), with the UK and Germany $50B-$100B agreeing, compared to 56 percent of IT infrastructure creates higher costs and wastes expecting a 24 and 25 percent saving respectively. organisations with a global turnover of $1B-$25B. resources, around half the IT leaders in Germany and 14% the UK agreed with this (53 percent and 49 percent Hong Kong Furthermore, year-on-year, IT leaders are respectively). However, European CIOs tend to lag Figure 5: increasingly aware that owning and maintaining behind their counterparts in the US and Singapore 14% Organisations predict to save an their own IT infrastructure is costly. Between 2012 in their views (73 and 74 percent respectively).* Japan average of 26 percent of their IT budget and 2010 alone, the number of IT leaders who When looking back at previous purchases of IT through outsourcing agreed with this increased from 38 to 60 percent. equipment, Figure 3 shows us that more CIOs in 26% 35% the US regret purchasing IT equipment compared Singapore Half of organisations admit to previous unnecessary infrastructure purchases to colleagues in other parts of the world (66 30% percent). Just under half of European IT execs 0% 10% 20% 30% 40% 50% 60% An important insight from the survey is that half of 25% regret IT purchases, 47 percent in the UK and 48 Average percent of infrastructure currently outsourced CIOs admit to having IT equipment that they now per cent in Germany; followed by Singapore with Average percent of infrastructure estimated to be 20% regret purchasing. outsourced in five years the least (35 percent). Estimated percentage increase of outsourced infrastructure in five years 15% “ e prioritise outsourcing because the companies W we outsource to provide better services than we 10% Figure 3: could ever offer in-house — and for a reduced cost.” 2012 Survey Respondent Organisations who agree that they have 5% The private healthcare industry currently IT equipment they now regret purchasing, outsources the largest amount of infrastructure 0% Once again, it is CIOs from the largest by country (28 percent) and companies in that sector USA UK Germany Hong Japan Singapore organisations that are more likely to agree that they 70% Kong are predicted to have the smallest increase in regret IT purchases (56 percent among those with 60% outsourcing over the next five years. It is actually a global turnover of $50-$100billion, compared to organisations in the automotive industry in 46 percent with a global turnover of $1-$25billion).* 50% Germany who predict the largest increase, and by If more organisations used outsourcing to free up 40% quite a margin (23 percent compared to 11 and 15 money from their budgets, they could focus their 30% percent in other sectors).* attention on strategic issues, not only because 20% they would have more budget available to do more, but because outsourcing frees up their 10% time to focus on core activities. 0% USA UK Germany Hong Japan Singapore Kong *Full survey results available. *Full survey results available. IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe 4 IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe 5
  • 4. Globally, media firms predict to save the most Globally, organisations are warming to the idea that (29 percent), and public sector and government outsourcing delivers numerous benefits — all of Figure 9: Global Total the least (22 percent). The public sector and which combine to make them more cost effective, Elements currently being outsourced versus those being evaluated automotive industries are the two sectors where efficient and competitive. We saw this reflected Test and development every Head of IT interviewed expected to make a in the fact that 59 percent of the IT leaders we Websites saving through outsourcing (see Figure 6). surveyed agreed that new IT applications and Back-up and disaster recovery services should be outsourced — an increase of 12 Storage Figure 6: Global Total percent, when in 2011 only 47 percent agreed new eCommerce IT applications and services should be outsourced. Non-mission critical applications The average IT budget savings predicted as Mobility a result of outsourcing varies across the CIOs from Singapore and the US appear to Regional applications verticals be ahead in their thinking when it comes to Big Data analytics Finance prioritising an outsourced infrastructure for new Production infrastructure products or services they deploy, with 78 percent Mission critical applications Media, ent. publishing retail and 76 percent agreeing respectively. Just over Pre-production infrastructure half of IT leaders in Germany and just under half 0% 10% 20% 30% 40% 50% Public sector government in the UK agreed with this (53 and 44 percent We are currently outsourcing infrastructure for this area respectively), (see Figure 8). We are evaluating outsourcing for it Healthcare public sector Healthcare Figure 8: Drivers and Inhibitors to Outsourcing So why is this? CIOs tell us contractual obligations are private sector Those who agree that companies should Between 27 to 48 percent of IT leaders currently the main barrier to outsourcing, whereas in previous prioritise an outsourced infrastructure outsource each area of IT (Figure 9) and, globally, years, company culture was the most common Software solution over owned IT infrastructure for the top three areas to outsource are Test and inhibitor. This indicates a major shift in thinking, but Automotive transport new applications/services it deploys Development, Back Up and Disaster Recovery and there are exceptions. In the UK, company culture has logistics (GER only) Websites (49 percent, 44 percent and 44 percent been the number one barrier to outsourcing for the 90% 0% 5% 10% 15% 20% 25% 30% 35% respectively). However, if we look at a country past three years, combined with an unwillingness to 80% level, 43 percent of UK CIOs currently outsource relinquish control. Cost savings are not the only reason 70% their Test and Development, compared to 59 So, keeping a sense of control over IT is still an issue; organisations are turning to outsourcing 60% percent in the US and 58 percent in Japan. In with over 40 percent of all IT leaders stating lack of Germany and Hong Kong, IT Leaders are most control as a reason not to outsource. In particular, For CIOs in the UK and Germany, cost savings are 50% likely to outsource websites.* Heads of IT in public healthcare and the software not the only benefit to outsourcing. UK IT leaders 40% are much more likely to be driven by the need to Looking to the future, and what IT leaders are industries are most likely to decline outsourcing increase IT agility to address changing business 30% actively evaluating or plan to outsource, between because they feel more in control if they manage needs, than their counterparts in Germany (50 20% 31 percent and 38 percent of organisations are the infrastructure themselves.* percent vs. 34 percent). In fact, a key challenge for considering outsourcing each area of IT (Figure 9). 10% German IT leaders is a lack of IT staff, and therefore It is significant that more and more CIOs are much more likely to be a driver for them than agility 0% evaluating newer, emerging technologies such as USA UK Germany Hong Japan Singapore (35 percent vs. 19 percent respectively) (Figure 7). Kong Big Data analytics, implying a huge demand for Figure 10: outsourcing as new technologies are introduced. At least a third of organisations are currently In the UK, back up and disaster recovery (43 NOT outsourcing applications that they think Figure 7: percent compared to the global average of 36 they should be percent) is the application most evaluated for Reasons that drive organisations’ need to increase the percentage of infrastructure they outsource Global total outsourcing and in Germany Mobility (43 percent Network devices Germany Increase IT agility to address Global total compared to the global average of 33 percent) is Storage UK changing business needs Germany the most likely to be outsourced.* Eliminate dependence on Data centre space legacy infrastructures UK Need to shift CapEx to OpEx Contractual obligations are the main Big Data analytics barrier to outsourcing Enterprise To refocus resources on core strengths One of the most interesting findings from our 2012 applications Mitigating compliance risk survey is that at least one third of organisations SAP Gain transparency and control over cost models worldwide are not outsourcing applications that Laptops PDA/smart phones/desktops Lack of IT staff they feel should be outsourced (Figure 10). eCommerce Need to expand globally 0% 10% 20% 30% 40% 50% 0% 10% 20% 30% 40% 50% 60% *Full survey results available. IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe 6 IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe 7
  • 5. Benefits of a utility-based, pay-per-use Table 14: outsourcing model Figure 12: Global Total The future of outsourcing in the UK and Germany Outsourcing services can be delivered in a variety Organisations are more likely to be using, or partly using, private cloud than public cloud Location of of ways. An increasingly popular model for the majority IT UK Germany outsourcing is “utility-based”, in which the use of infrastructure now In-house/ owned Outsourced cloud In-house/ owned Outsourced cloud IT services flexes and adapts to business needs. Back-up and Public cloud and in the future. Rather than paying a fixed upfront CapEx or long- disaster recovery Currently 51% 2% 67% 4% Private cloud term contract fee, the cost varies with the amount Batch processing In 2 years 18% 15% 17% 19% of services used — a true ‘pay as you go’ model. In 10 years 14% 45% 25% 33% Big Data analytics Globally, IT leaders told us the top three benefits of a utility based model are cost reduction Mission critical Right now, over half (51 percent) of UK CIOs keep “ loud providers are constantly developing C applications and containment (39 percent), infrastructure their IT infrastructure in-house but that is set to and offering more specialist services for the scalability and flexibility (39 percent) and Non-mission change to just 14 percent over the next 10 years applications we use. I think cloud is becoming critical applications improved quality of service (37 percent). However, (Table 14). IT leaders in the software industry are more secure and it’s certainly significantly the benefits are perceived differently around the Storage most likely to keep infrastructure in-house (80 more widely available than ever before.” world, with 76 percent of CIOs in Singapore saying percent), probably for control reasons, compared 2012 Survey Respondent Test and that cost reduction and containment is a benefit, development to around half that (44 percent) for the private compared to 39 percent in the UK, 32 percent in 0% 10% 20% 30% 40% 50% healthcare sector.* Germany and 27 percent in the US (Figure 11). Looking to the future of outsourcing in the UK Benefits of cloud computing In Germany, over 45 percent of CIOs cited enhanced and Germany those CIOs planning to put the Scalability was the number one benefit of cloud security as the biggest benefit of utility computing, Cloud on the horizon: the coming juggernaut majority of their infrastructure in the cloud over cited by IT leaders across most countries (Figure whereas their UK counterparts expect to see in outsourcing the next ten years, is due to rise dramatically 16) with increased reliability and enhanced security increased infrastructure scalability and flexibility — from 2 to 45 percent for the UK and 4 to 33 Building on this growth trend at a global level, following closely behind. In Europe, the anticipated (38 percent). This suggests that not only are there percent for Germany. Concern about security is IT leaders indicated cloud outsourcing will be a benefits are slightly different, with UK IT leaders multiple benefits to outsourcing, but these benefits the main impediment to cloud adoption, but CIOs major force within 10 years and those who plan to citing scalability (30 percent), faster time to can aid organisations in different ways. are also worried about their ability to manage use cloud for the majority of their infrastructure market (26 percent) and reduced administration and control cloud deployments, and some have will increase from 4 percent today to 43 percent in time (26 percent); and German CIOs looking for concerns about the legal and compliance issues 10 years’ time (Figure 13) enhanced security (35 percent), faster provisioning that could arise when storing or processing Figure 11: time (30 percent) and lower TCO for the whole workloads remotely (Figure 15). There are several benefits of outsourcing IT infrastructure (25 percent). infrastructure using a utility-based model Figure 13: Global Total Where organisations expect the majority of Figure 15: Global Total Figure 16: Global Total their IT infrastructure to sit in ten years time Reasons why organisations are not using Important benefits of cloud computing for Cost reduction or containment 60% cloud computing enterprises Infrastructure scalability and flexibility Ability to scale up down consumption Security concerns to manage fluctuating demand Improved Quality Legal/compliance issues about processing Improved reliability of Service (QoS) 40% workloads in an unknown geographic location Concerns over how much management Enhanced security Enhanced security and control resource is required Anticipated difficulty of integration with Reduced administration time existing infrastructure Reduced administration Lower TCO for whole infrastructure time 20% Application compatibility issues Low cost of entry Faster time-to-market Cloud services are not enterprise ready Environmental considerations Cloud computing is an unprovem concept for the larger organisation Faster time-to-market 0% 10% 20% 30% 40% 50% 0% Currently In 2 years In 10 years We have no budget to deploy cloud services Flexible billing models Global total Germany UK In-house/owned Outsourced cloud Data back-up and disaster recovery implications 0% 10% 20% 30% 40% Costs are too high 0% 10% 20% 30% 40% 50% *Full survey results available. *Full survey results available. IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe 8 IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe 9
  • 6. Figure 17: The research identified that although marginally Conclusion Collectively, these capabilities address enterprises more organisations in Germany use cloud Strategies for IT outsourcing have come a long that have substantial fluctuations in web traffic Types of cloud use vary by country compared to the UK, both countries have seen an and mission-critical computing requirements from way in the last 12 months. IT outsourcing — 50% increase in cloud use since 2011.* Whilst private whether through public, private or hybrid cloud heavy business-day peaks or unplanned events. cloud services are most popular, organisations delivery is now on the strategic agenda, as 40% in Germany are more likely to be using a hybrid About Savvis CIOs look more and more to technology as the cloud than those in the UK; however, those in the engine to drive the business forward. IT leaders Savvis, a CenturyLink company, is a global leader 30% UK are more likely to be using a public cloud, than clearly understand how outsourcing enables in cloud infrastructure and hosted IT solutions their German counterparts (Figure 17). them to focus and improve other areas of the for enterprises. Nearly 2,500 unique clients, 20% business, and by redirecting resources away from including more than 30 of the top 100 companies When it comes to deciding what applications in the Fortune 500, use Savvis to reduce capital should be outsourced to which type of cloud, infrastructure to core competencies, they improve 10% collaboration, enhance operational efficiencies, expense, improve service levels and harness the public or private, German CIOs are more likely to latest advances in cloud computing. use public cloud for Big Data Analytics and Back- and align funds to more revenue generating up and Recovery Solutions, and UK CIOs are more projects that drive the business forward. 0% Global total Germany UK Savvis IT Outsourcing Solutions Private cloud services Public cloud services Hybrid model likely to use private cloud for Storage, Mission Fast forward 10 years to view the IT landscape, At Savvis, our Strategic ITO specialists know Critical Applications and Back-up and Disaster and we see that cloud based outsourcing infrastructure and applications for large Recovery (Table 18). promises to play a dominant role in enterprise IT enterprises. While you focus on your core Whilst IT leaders in the UK are more likely to be around the world. However, for these forecasts strengths and developing products that using public cloud in some capacity, German to come true, organisations need to first address differentiate your company, let us provide the IT organisations that use public cloud, do so for a some key challenges: alleviating security concerns infrastructure and applications that sharpen your greater number of applications, suggesting they and convincing stakeholders they can safely competitive edge in today’s demanding, ever- have adopted public cloud more fully. relinquish control of their IT infrastructure to a changing global marketplace. trusted provider. Savvis offers a broad set of services that helps This is also true in Europe, where outsourcing large enterprises to: and cloud services are set to grow, albeit at a • Increase business agility. Respond to changing slightly slower rate than the rest of the world. needs and opportunities in real-time with Despite some reservations around relinquishing a tailored yet flexible infrastructure. Gain control, UK and German CIOs see the benefits transparency, predictability and control over Table 18: of outsourcing and cloud, and plan to exploit your cost models, time-to-market, product Organisations in EMEA have adopted different them to achieve scalability, greater flexibility and portfolio and many other business drivers. types of cloud for different applications security. Growth in outsourcing is coming from enterprises of all size, with high adoption expected • Maximise IT flexibility. Savvis offers one-stop- from smaller enterprises. shop convenience across a broad portfolio of Using / partly using services for cloud, network, managed hosting, Using / partly using public cloud Applications for which organisations private cloud Trusted outsourcing providers like Savvis can colocation, security and application services have adopted cloud computing amplify these benefits, reduce the risks, and allay — all with predictable and reliable enterprise- Germany UK Germany UK the concerns of organisations by offering a broad class performance and security, and with range of flexible, high-performing, and secure customisable service-level agreements (SLAs). Back-up and disaster recovery 30% 16% 39% 39% solutions capable of meeting business needs both • Mitigate risk. Maintain business continuity with Batch processing 20% 5% 36% 24% today and in the future. our proven migration approaches, integration Big Data analytics 31% 19% 37% 31% We offer a full suite of enterprise-class cloud and governance best practices, regulatory services, engineered and deployed to meet global know-how and SLA expertise — for the life of Mission critical applications 26% 16% 44% 39% computing needs of any size of organisation your contract and all tailored to adapt to your Non-mission critical applications 26% 21% 32% 37% changing business and customer needs. large or small. From integrated and hybrid cloud Storage 28% 23% 45% 44% solutions to fully virtualised cloud data centre • Grow globally. With more than 50 data centres Test and development 20% 9% 37% 35% solutions, Savvis cloud services can be used in North America, Europe and Asia (including standalone or in a hybrid environment of more India), we’re already where you want to be — than one service, to meet every need. When with proactive monitoring and management combined with our low-latency distribution as well as round the clock and onsite support. network and consultative business model, Savvis And, with our globally-consistent standardised delivers a converged cloud that meets end-to-end ITIL processes, we ensure seamless delivery enterprise requirements for application security, and operational support. *Full survey results available. privacy and performance. IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe 10 IT Outsourcing: A Proven Way to Fast Forward to Business Success in Europe 11
  • 7. Savvis provides: About the Research • Commercially flexible contract terms This independent survey was commissioned by • Option to tailor SLAs Savvis and conducted with 550 CIOs, IT Directors, • Pay-per-use utility models Heads of IT and Senior IT Managers of global large enterprises based in the USA (200), UK (100), • Support for hybrid infrastructures Germany (100), Japan (50), Hong Kong (50) and • Broadest product portfolio with Singapore (50), and was completed in August enterprise‑grade quality-of-service 2012. The research was conducted by Vanson • Global network and data centres Bourne, a research based technology marketing • Globally-consistent standardised ITIL processes consultancy offering clients analysis and advice based on incisive, rigorous research into their • Team of large enterprise IT outsourcing market environment. The research used a specialists combination of online fieldwork methodology and • Expertise in Banking and Financial Services, telephone interviewing. All research carried out by Media, Consumer Brands, Government and Vanson Bourne adheres to the latest MRS Code Software sectors of Conduct. Demographic detailing respondent Learn more at: www.savvis.co.uk/StrategicITO communities includes industry sector, country in which the respondents were based, and size of business. About the Report The results of this report are presented in four sections, with each section highlighting different aspects of the research findings. Particular emphasis has been given to the data gathered from organisations in Europe and particularly the UK and Germany; however, to offer greater insight each section presents a global view and outlines implications for Europe. To view the global report please visit www.savvis.com. To find out more about Savvis visit www.savvis.co.uk email us at emea-sales@savvis.com or call +44 (0)118 322 6000 Global Headquarters Canada EMEA Asia Pacific Japan 1 Savvis Parkway 6800 Millcreek Drive Eskdale Road 50 Raffles Place 7th Floor St. Louis, MO 63017 Mississauga, ON Winnersh Triangle Singapore Land Tower Kyodo Building L5N 4J9 Wokingham #36-01 (Jinbocho 3cho-me) Tel 1.800.SAVVIS.1 Berkshire RG41 5TS Singapore 048623 3-29 Kanda Jinbocho (1.800.728.8471) Tel 1.877.387.3764 United Kingdom Chiyoda-ku www.savvis.com www.savvis.ca Tel +65 6768 8000 Tokyo 101-0051 Tel +44 (0)118 322 6000 www.savvis.sg Japan www.savvis.co.uk Tel +81.3.5214.0151 www.savvis.jp © 2012 CenturyLink, Inc. All Rights Reserved. The Savvis mark, logo and certain Savvis product names are the property of CenturyLink, Inc. All other marks are the property of their respective owners. -1-