Spending on Integrated Platforms Expected to Soar

By Karen A. Frenkel  |  Posted 01-06-2014 Email Print this article Print

To drive innovation and growth despite limited budgets, many organizations will opt for integrated platform solutions (IPSs), using technology as-a-service solutions rather than building them themselves, according to a new report from Gartner, "Market Insight: Integrated Platform Solutions Are the Frontier for IT Services Providers.” IPSs are ready to deploy for specific business problems and are offered by IT services providers, such as Accenture, Infosys and SAP. They usually address processes aimed at growth and innovation, rather than cost savings, and are delivered as software-as-a-service or business-process-as-a-service offerings. Gartner expects 20 percent of spending on new technologies to focus on fully integrated as-a-service platforms by 2018. Digital marketing, mobile wallet, white-label app stores and data-intensive applications are creating new opportunities for IPSs because they require new business processes, models and real-time insights. "New technologies—cloud, mobile, analytics, social, sensors and in-memory computing—promise innovation and creation of competitive advantages," says Susan Tan, research director at Gartner. "However, enterprises face challenges to their adoption. Organizations still struggle with tight budgets and inflexible legacy systems, and many lack resources, skill sets, appetite and time to adopt these new technologies in a conventional manner." For the Gartner report, (subscription required), click here.

  • Reasons for Investment in IPSs

    Last year, 37% of companies surveyed by Gartner said efficiency and reducing costs were the most important factors for investing in as-a-service platforms for the front office, compared to this year's 34%.
    Reasons for Investment in IPSs
  • New Business Models

    Another reason, enabling new business models, remained the same between 2013 and 2014. 13% of respondents last year, compared to 14% of respondents this year, say that is the most important reason for solution investments for the front office.
    New Business Models
  • Personalized Relationships With Customers Become Key

    While efficiency and reducing costs plateaued as main factors, creating more personalized relationships with consumers and customers became a priority: last year 22% said it was the most important factor, whereas this year 29% said so.
    Personalized Relationships With Customers Become Key
  • What Ready-to-deploy IPSs Do

    IPSs provide easily implemented solutions for specific problems, such as how to leverage mobile marketing for CMOs, using the latest technologies for mobile access and analytics.
    What Ready-to-deploy IPSs Do
  • Integrated OSs and Apps

    The platform's underlying infrastructure—OS, database management systems, storage, processing, networks and security—and applications and services are standardized.
    Integrated OSs and Apps
  • Providers Supply Software and End-to-end Services

    Providers offer the software platform, initial implementation, migration, hosting, maintenance and upgrades. They run the platform from a private or public cloud.
    Providers Supply Software and End-to-end Services
  • Niche Market Opportunities

    The platform targets markets too small to be of interest to traditional SaaS providers and independent service vendors.
    Niche Market Opportunities
  • Intellectual Property

    The platform includes the service provider's intellectual property and can be combined with other independent service vendors' tools and also enriched with third-party data sources such as Nielsen, Facebook and Google Maps.
    Intellectual Property
  • Experimenting, Then Scaling Up

    Clients can start with proof-of-concept tests and scale up according to their needs. Pricing is based on pay-per-transaction or is subscription based.
    Experimenting, Then Scaling Up
  • Advantages of Integrated Ready-To Deploy Services

    The benefits include: Lower upfront investment, Consumption-based pricing limits risks, Quicker time-to-market and reduced implementation costs, No need to hire and train IT staff to build and develop a department, nor to maintain and upgrade the solution.
    Advantages of Integrated Ready-To Deploy Services
  • Benefits to Service Providers

    The pros include: A nonlinear business model, with templates, frameworks and tools enabling extra revenue to be obtained through additional labor and increased operating margins. Outcome-based pricing and risk-sharing differentiates IPS providers from other service providers.
    Benefits to Service Providers
  • Challenges to Service Providers

    New business models assume more risk than traditional time and materials contracts. Even though service providers seek large volumes, volume selling remains a challenge. Also, competition from traditional and emerging SaaS providers remains, but service providers offer a more holistic solution and already have clients.
    Challenges to Service Providers
Karen A. Frenkel writes about technology and innovation and lives in New York City.


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