IT industry: Structure and trends. Eetu Luoma University of Jyväskylä

Transcription

1 IT industry: Structure and trends Eetu Luoma University of Jyväskylä

2 Structure of the tradi?onal IT industry is determined by the ac?vi?es you could outsource. Designing Using Implemen?ng Opera?ng Deploying

3 Introduc?on of Internet technologies and Cloud Compu?ng has turned the value chain upside down. Traditional value chain for software applications (Messerschmitt & Szyperski, 2003) marketing sales transactions production ISV SI CSP Customer New value chain for cloud software applications (Mell & Grance, 2011) marketing sales transaction IaaS provider PaaS provider SaaS provider production Customer

4 IT is for communica?on, informa?on and produc?vity.

5 IT is also for recrea?on and entertainment. ü Spending on consumer electronics approx. 930 billion USD. ü Spending on seven key technologies approx. 754 billion USD. ü Spending on mobile tech approx. 586 billion USD. Source: Consumer Technology Associa?on (2017).

6 Tradi?onally, changes in IT have followed the developments in hardware

7 Now, we pay more azen?on to customer needs and value. Source: Böhmann (2017).

8 Conclusion: Industry can be divided into hardware manufacturers, so[ware manufacturers, IT services firms (B2B) and internet services firms (B2C).

9 So[ware industry: Finland and Europe Eetu Luoma University of Jyväskylä

10 The Finnish So[ware and IT services industry is growing. Annual growth of the so[ware and IT services industry 200 Quarterly growth of the so[ware and IT services industry Index, 2010 = Index, 2010 = Source: Sta?s?cs Finland, Industry code 62 Source: Sta?s?cs Finland, Industry code 62

11 Claim: Startups are the key to economic growth. Mikroyritykset (0-9 henkeä) PK-yritykset ( henkeä) Suuret yritykset (yli 250 henkeä) Microsized (0-9 empl.) SMEs ( empl.) Large firms (over 250 empl.) Henkilöstö Employees Liikevaihto Revenue # Yrityksiä of firms 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

12 Wrong. Growth-oriented firms lead the growth and change. Mean growth rate over 3 years (CAGR) -100% -75% -50% -25% 0% 25% 50% 75% 100% Less Willingness to grow More..but the correla?on is not very strong.

13 Source: Eurostat

14 Network externali?es affect the industry structure. Dominant design Market Share Cri?cal mass Time

15 Industry is dominated by large companies.

16 (in million of US $) (in million of US $) Rank Company Country HQ SoCware revenue Total revenue SoCware / Total 1 MicrosoC United States $58, $72, % 2 IBM United States $28, $104, % 3 Oracle United States $27, $37, % 4 SAP Germany $16, $21, % 5 Ericsson* Sweden $8, $34, % 6 Symantec United States $6, $6, % 7 HP United States $5, $119, % 8 EMC (excluding VMware) United States $5, $17, % 9 Adobe United States $4, $4, % 10 CA Technologies United States $4, $4, % 11 VMware (a subsiduary of EMC) United States $4, $4, % 12 Fujitsu Japan $3, $55, % 13 Salesforce.com United States $2, $2, % 14 SAS United States $2, $2, % 15 Hitachi Japan $2, $116, % 16 Intuit United States $2, $4, % 17 Infor United States $2, $2, % 18 Siemens Germany $2, $100, % 19 Dassault Systemes France $2, $2, % 20 Autodesk United States $2, $2, % 21 Citrix United States $2, $2, % 22 Cisco United States $1, $47, % 23 BMC United States $1, $2, % 24 NEC Japan $1, $38, % 25 Sage United Kingdom $1, $2, % 26 Intel United States $1, $53, % 27 Synopsys United States $1, $1, % 28 Apple United States $1, $164, % 29 Wolters Kluwer Netherlands $1, $4, % 30 SunGard United States $1, $4, Source: 32.70% PwC

17 Conclusion: The disintegra?on of European market has lead to dominance of large (and mostly US-based) firms.

18 Digitaliza?on: Defini?ons and capabili?es Eetu Luoma University of Jyväskylä

19 Simplifying things, digitaliza?on concept consists of: 1. Technologies. 2. Informa?on. 3. Change. 4. Value. Source: Koski (2017).

20 The poten?al changes include improving customer experience, improving organiza?onal efficiency and entering new markets (Westerman et al. 2014). These may be translated to digital innova?on capabili?es, that is, an organiza?on may or may not have the capability to successfully change one or many aspects of its business. Sources of these capabili?es can be traced to very tradi?onal technochange management capabili?es; ability to envision the change, ability to design technologies, ability to implement and lead the change and ability to maintain the technology and exploit the change. Ability to use modern technologies increase the likelihood of successful change, bring flexibili?es and speed. For instance, envisioning process can be supported by modern data analy?cs tools.

21 Implica?ons: running IT business Eetu Luoma University of Jyväskylä

22 What s needed to succeed in IT business?

23 What s needed to succeed in IT business?