Productization of Services

Challenges and Opportunities in the Small and Medium-Sized Business Segment

Publication Date	July 2008
Publisher	IDC
Product Type	Report
Pages	22
ISBN Number	not applicable
Product Code	IDC04385

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Summary

This IDC study assesses the market opportunities and challenges for adoption and implementation of productization in a service environment, as well as its impact on the small and medium-sized business (SMB) segment. It questions the fundamental ideas and assumptions that prevail in the market today, while it engages in the SMB space and provides analysis and critic on the productization concept. This study also analyzes the impact of productization in the industry, as well as the new models that can help drive the bottom-line growth for vendors. It explores the strategic elements around change, transformation, innovation, and channel management.

"The key questions answered in this study include: (1) How is the buying behavior of the SMBs evolving?, (2) Why is productization relevant in the SMB context?, (3) What are the vendor strategies?, and (4) How can productization impact the bottom line? Productization should be the preferred route for large service vendors to address the SMB segment because it holds strong prospects for better profitability and sustainable competitive advantage. However, there is a caution that productization is not the panacea. Modularization of people, processes, and technology into assets, as well as their integration and profit and loss (P/L) ownership, will determine the level of success of a productization strategy," says Mayur Sahni, senior market analyst, IT Services Opportunities Research, IDC Asia Pacific.

Content

IDC Opinion
In This Study
- Methodology
  - Demand-Side Methodology
  - Supply-Side Methodology
  - IDC Methodology
Situation Overview
- Current Industry Dynamics
- Figure: Asia/Pacific (Excluding Japan) IT Spending Trends: Distribution of Companies by Size and IT Spending
  - Segmentation of the Small and Medium-Sized Business Market
    - Small and Medium-Sized Business Clusters
  - Small and Medium-Sized Business Drivers and Buying Behavior
  - Reasons Small and Medium-Sized Business Space Are Important to Consulting and Systems Integration
  - Figure: Asia/Pacific (Excluding Japan) IT Spending Trends 2008 Forecast: Spending Distribution
  - Table: Estimated Small and Medium-Sized Business Spending on Consulting and Systems Integration for 2007 and 2008
- Productization of Services  A Tool to Achieve Long-Term, Sustainable Competitive Advantage
  - Relevance of Productization for Targeting Small and Medium-Sized Businesses
    - Benefits of Productization
    - Table: Comparison of Small and Medium-Sized Business Buying Behavior with Prospective Benefits Associated with Productization
    - Challenges of Productization
- Vendors and Their Strategies
  - IBM
  - TCS
  - Cisco
Future Outlook
- Industry Impact
- Table: Asia/Pacific (Including Japan) IT Services Spending by Small and Medium-Sized Businesses, 2008-2012 Forecast (US$M)
  - Challenges
Essential Guidance
- Actions to Consider
Learn More
- Related Research
- Definitions
  - IT Consulting
  - Systems Integration
  - Custom Application Development
- Synopsis