A Springboard To Services

The secret for IBM is what this does from a competitive point of view. HP can in certain areas match this strategy, and in infrastructure have matched it, and will have a leadership role with IBM. In the process and application side of the marketplace it is a little harder for the competition. If Infosys (or any  of the Indian players) were to triple revenues, to say US$8-9B, it would mean  that their workforce would number about 200,000 without significant steps to automation a HR and process issue with limited parallel given the revenues. The issue for them is that they do not have the tools to enable that jump to automation, and will have to partner, unless they rapidly acquire software firms. Perhaps even more interestingly is that I believe that Accenture is going to have to radically challenge its strategy, they will soon miss the mark or rely overwhelmingly on partners to provide such automation services. This is going to be a big challenge for them as the fight for partnerships continues across the industry, and the lack of differentiation that strikes many partnerships.

Bottom line, if you have a virtualization/consolidation or automation software product expect plenty of attention from vendors in the very near future.

However we have noted the second coming, particularly of KPMG and PWC. What makes KPMG unique is that the push has come not from New York, but from where the IT consulting group sits. The difference in the second generation model is that they have no interest in implementation of a solution, be it a security solution or ERP, but to help guide and drive the executive level strategy. This of course has both positive and negative perceptions in the market, it provides vendor neutrality, but by contrast some enterprises want their firm of choice to engage the solution from consult, through design, build, deploy and run.

How big a threat are these players, in general, they are more of an "annoyance" almost for the major services providers at this stage, but with strong hiring and growth plans, it is clear that they will increase their influence. Will PwC consulting ever grow large enough that HP will be willing to pay US$18Billion for them, perhaps not, but the remaining Big 4, will be in a position to guide IT strategy moving forward at an even greater rate then now.

In speaking with a range of key players in the Thai markets, Springboard Research believes that the growth for IT Services in for 2007 and at last the first half of 2008 will be severely muted. Whilst some others have increased their forecast for the market substantially, we cannot at all see these levels of growth. The multinational IT firms are generally well managed and respected in , with HP seemingly having good product growth, but for services the sentiment is not that strong.

Bottom line any investment in needs to be carefully risk managed and considered in the current economic and political environment