Published on March 11, 2014
Topic: Remote Infrastructure Management – “RIMO is Dead, Long Live RIMO” Copyright © 2013, Everest Global, Inc. EGR-2013-4-PD-1011 IT Outsourcing (ITO) Market Report: December 2013 – Preview Deck
Copyright © 2013, Everest Global, Inc. EGR-2013-4-PD-1011 2 Our research offerings for global services Subscription information The full report is included in the following subscription(s) – IT Outsourcing (ITO) In addition to published research, a subscription may include analyst inquiry, data cuts, and other services If you want to learn whether your organization has a subscription agreement or request information on pricing and subscription options, please contact us: Corporate Headquarters Office: +1-214-451-3000 email@example.com European Headquarters Office: +44-207-129-1318 firstname.lastname@example.org 1 Banking, financial services, and insurance Custom research capabilities Benchmarking | Pricing, delivery model, skill portfolio Peer analysis | Scope, sourcing models, locations Locations | Cost, skills, sustainability, portfolio – plus a tracking tool Tracking services | Service providers, locations, risk Other | Market intelligence, service provider capabilities, technologies, contract assessment Finance & accounting Procurement Human resources Recruitment process PricePointTM Global sourcing Locations InsiderTM Contact center Transaction Intelligence Healthcare information technology Information technology Cloud VistaTM BFSI1 business process BFSI1 information technology Market VistaTM Global services tracking across functions, sourcing models, locations, and service providers – industry tracking reports also available
Copyright © 2013, Everest Global, Inc. EGR-2013-4-PD-1011 3 Background and scope of the research Background of the research This research focuses on the Remote Infrastructure Management Outsourcing (RIMO) model and its growing impact on the broader infrastructure services market With the advent and evolution of RIMO, it is no longer a “niche” or “separate” service delivery model and buyers believe it can serve most of their demands. Therefore, the RIMO, as the industry knew it, is well and truly dead RIMO brought positive changes in the infrastructure services market. These principles and tenets will get imbibed across services, and therefore, the model will live on in its spirit This research will help buyers to understand the growing impact of remote model, its significant maturity, and therefore, plan their sourcing. Service providers will benefit by the market growth analysis and its eventual implications on their business models The scope of the analysis includes: Evolution of the infrastructure services model Advent and growth of RIMO Key differentiating factors RIMO vis-à-vis the traditional models Death of the RIMO model, as the industry knows it Analysis of RIMO principles, living on forever
Copyright © 2013, Everest Global, Inc. EGR-2013-4-PD-1011 4 Table of contents (page 1 of 2) Background and methodology 5 Executive summary 6 Summary of key messages 7 Implications for key stakeholders 9 Section I: Traditional infrastructure services 10 Summary 11 Evolution of infrastructure services models 12 Traditional infrastructure services models 13 Newer infrastructure services models 14 Difference in various infrastructure services models 15 Section II: Advent of RIMO 16 Summary 17 Birth of RIMO 18 Early steps of RIMO 19 Characteristics of the newborn RIMO 20 Fundamental tenets of the newborn RIMO 21 RIMO enablers 22 Positioning of RIMO vs. IMS (Infrastructure Management Services) 23 Section III: Adoption and growth 24 Summary 25 RIMO market size 26 Topic Page no.
Copyright © 2013, Everest Global, Inc. EGR-2013-4-PD-1011 5 Table of contents (page 2 of 2) Section III: Adoption and growth (continued) Adoption by buyer geography 27 Adoption by buyer industry 28 Adoption by buyer size 29 Section IV: Death of RIMO 30 Summary 31 Evolution of RIMO 32 Strategic convergence of RIMO and traditional models 33 Evidence of convergence 34 Buyer verdict – RIMO is dead 39 Section V: Long live RIMO 40 Summary 41 RIMO principles will live on 42 RIMO approach will be pervasive 43 Universal adoption of RIMO characteristics 44 RIMO will live on in its spirit 45 Appendix 46 Glossary of key terms 47 ITO research calendar 49 References 50 Topic Page no.
Copyright © 2013, Everest Global, Inc. EGR-2013-4-PD-1011 6 Summary of key messages (page 1 of 2) Birth of RIMO Infrastructure models evolved from traditional focus on assets to a focus on services. The birth of RIM services was helped by challenges in the traditional models and general buyer frustration Multiple factors such as cost, engagement flexibility, focusing on “run the business”, helped the birth of RIM. It differed from traditional models in terms of the profile, model, and delivery of the engagement Remote Infrastructure Management has evolved to a degree where buyers do not consider it to be a “niche” service model suitable for specific services. Buyers now believe that RIM can serve most of their infrastructure service demands and therefore, the term RIMO, that was born as a “low-cost, asset-light, simple scope, run the business” alternative to the traditional models, is dead. The principles of the RIM model, such as client centricity will always live on. Buyers will find this research useful to benchmark the RIM adoption against their industry and develop suitable sourcing strategy. Service providers will benefit by understanding the evolving RIM landscape and growing expectation of buyers Some of the findings in this report, among others, are: Growth of RIMO RIMO market is expected to reach ~US$8.4 billion in 2014 with a healthy CAGR of ~18%. Moreover, buyers across geographies, industries, and sizes are adopting RIM The broad adoption signified growing confidence of buyers in the abilities or RIM services to cater to most of their infrastructure services demand
Copyright © 2013, Everest Global, Inc. EGR-2013-4-PD-1011 7 Summary of key messages (page 2 of 2) Though the RIMO as a specific term representing niche service model, is dead, the principles it introduced will always live on These principles focused on efficient service delivery than recouping the asset investments. Moreover, RIM brought the focus back on clients and services to be delivered unlike the complex labyrinth of earlier traditional models With the evolution of the RIM model, its earlier definition focusing purely on low- cost, simpler services, and limited scope of contract has become irrelevant Buyers believe that RIM as they knew it before, is truly dead. The infrastructure services market has witnessed convergence of different service delivery models and its difficult to segregate one from the another Death of RIMO Long live RIMO
Copyright © 2013, Everest Global, Inc. EGR-2013-4-PD-1011 8 This study offers five distinct chapters providing a deep dive into key aspects of RIMO market; below are four charts to illustrate the depth of the report Source: Everest Group (2013) RIMO adoption and growth Infrastructure service models have converged Buyers verdict – RIMO is dead Long live RIMO Worldwide offshore-centric providers’ infrastructure revenue growth US$ billion 2009 2010 2011 2012 2013(E) 2014(E) RIMO players Traditional IO players Strategic convergence Increasing access to large enterprises Decline of big bang outsourcing Maturation of transformational capabilities Recessionary impact on large enterprises Increasing openness to offshoring Maturation of offshore capabilities Sustaining growth beyond AO services Buyers pushing for simpler contracts RIMO serves all buyer needsRun the business Change the business Operational efficiency Process improvement Prepare for future Focus on client and not internal operations Service providers should not get “lost” in their internal complexity and must always have the benefit of clients as the foremost consideration. Tell buyers they are not always right Buyers are willing to learn that they may be wrong, and therefore, require a collaborative solution rather than a typical request for proposal. Win the trust of the client Transparency and ownership of mistake makes a relationship stronger. Service providers will realize the importance of being transparent in terms of different engagement parameters. Throw out arrogance Arrogance arises out of market domination. Buyers do not appreciate arrogance in providers and need humility and listening ability.
Copyright © 2013, Everest Global, Inc. EGR-2013-4-PD-1011 9 ITO research calendar Topic Release date Published Current Immigration Reform: Game Changer Afoot for India-centric IT Service Providers? July-2013 ITO – RIMO: “RIMO is Dead, Long Live RIMO” December-2013 Infrastructure Services PEAK Matrix Assessment Q4-2013 Service Integration and Management – An Idea Whose Time Has Come July-2013 Mid-sized Indian Service Providers: Stepping Up in Changing Times September-2013 Application Outsourcing (AO) – Annual Report 2013: “Declining Productivity Rising Anti-incumbency” September-2013 Webinar Deck: Value-chain Digitization in the Pharmaceutical Industry Is Causing Tectonic Shifts in ITO Strategy October-2013 Infrastructure Outsourcing (IO) – Annual Report 2013: “Automating the Next Horizon” November-2013 Renewal Intelligence Q1-2014 Next-generation Application Service Q1-2014 Buyer Next-generation Technology Adoption Q1-2014
Copyright © 2013, Everest Global, Inc. EGR-2013-4-PD-1011 10 The following documents are recommended for additional insight into the topic covered in this research. The recommended documents either provide additional details on the topic or complementary content which may be of interest 1. Infrastructure Outsourcing (AO) – Annual Report 2013: “Automating the Next Horizon” (EGR-2013-4-R-0994); 2013: This annual research deep dives into the infrastructure outsourcing landscape. It provides data-driven facts and perspectives on the overall market. The research covers IO adoption trends, demand drivers, key trends such as automation, real time analytics, and rising anti-incumbency. The research analyzes buyer challenges, trends shaping the market, and also provides an outlook for 2014 for the broader IT as well as IO market 2. Remote Infrastructure Management: “Gearing Up for the Big League 2012 (EGR-2012-4-R-0757); 2012: This annual research focuses on the RIMO market. The data-driven insights cover demand drivers for RIMO, challenges, service provider strategies, and buyer perspectives. This research analyses the growing adoption of RIMO models and how they are disrupting the traditional infrastructure services market and entering the big league Phone: +1-214-451-3110 Email: email@example.com Everest Group Two Galleria Tower 13455 Noel Road, Suite 2100 Dallas, TX 75240 For more information on this and other research published by the Everest Group, please contact us: Jimit Arora, Vice President: Chirajeet Sengupta, Practice Director: Yugal Joshi, Practice Director: Additional research recommendations firstname.lastname@example.org email@example.com firstname.lastname@example.org
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