Economic Outlook: IT systems management (Market Focus)

The sustained growth in the complexity of IT infrastructure is driving the demand for organized governance, monitoring and management of IT assets and processes. In this brief, Datamonitor provides an analysis of the main trends affecting the market for IT systems management applications and advises vendors on how to respond to the changing market conditions.



Report Highlights
IT systems management plays an important part in maintaining mission-critical IT infrastructure. Despite a high penetration rate, the volume of enterprises investing in IT systems management solutions is still considerable. Although the growth of investment is flat, the sheer volume of opportunities will ensure a positive outlook for vendors. The demand for IT systems management will be sustained through the continuing complexity IT infrastructure and increasingly strategic approach to IT systems management. Issues such as compliance, infrastructure efficiency and standards-based formal management frameworks will gain in importance. The market can be segmented by enterprise size bands. Most of the spending is still concentrated within larger enterprises, but the demand within small and medium enterprises will grow. Vendors need to consider the optimal way to meet this demand, perhaps by adopting a bolder approach to SME channel and vertical strategies.


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DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 2
Market definition 2
IT systems management is a framework that enables organizations to manage IT assets and processes 2
IT systems management is closely related to adjacent technology areas 3
Market development 4
IT systems management has the third highest penetration out of Datamonitor's technology coverage 4
Despite high penetration there are plenty of up-sell and cross-sell opportunities 5
The number of enterprises investing in IT systems management is decreasing slightly 6
Enterprises with fewer than 1,000 employees plan to increase their investment in the medium term 7
Market trends 9
Enterprises demand more compliant, agile and efficient IT infrastructures 9
Enterprises are seeking better alignment between IT and business 9
Operational Dynamics are requiring more agile IT systems 10
Compliance frameworks are impinging directly on IT systems management 11
The emphasis on energy efficiency leads to increased demand 11
The demand for IT systems management is growing among enterprises with fewer than 1,000 employees 12
The continuous increase in IT infrastructure complexity contributes to demand 12
Supply-side: New deployment models, best practice frameworks and changing competitive dynamics 13
Best practice frameworks are rendering IT systems management more strategic 13
Server virtualization creates demand for a new type of IT systems management 13
New models of licensing and delivering IT systems applications are appearing 13
The competitive landscape is shaped by ongoing M&A activity and recent market entrants 14
Go-to-market strategies 15
Vertical strategies need to extend beyond the core industries 15
SME sector strategies should be articulated more boldly 15
Market size 16
Despite a faster growth rate among SMEs, most revenues can be attributed to larger enterprises 17
SUMMARY 18
The IT systems management market is mature but is buoyed by an increasingly strategic approach 18
APPENDIX 19
Definitions 19
Methodology 19
Further reading 19
Ask the analyst 20
Datamonitor consulting 20
Disclaimer 20

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Table 1: Penetration by technology area - Technology Trends surveys 2006 and H1 2007 4
Table 2: The number of IT systems management solutions deployed 6
Table 3: Which of the following technologies do you currently have or use, and which would you have in six months to 24 months time? 7
Table 4: Which of the following technologies do you currently have or use, and which would you have in six months and 24 months time? - by enterprise size 8
Table 5: IT systems management revenue model ($ millions, license and maintenance revenues) 16
Table 6: IT systems management revenue model ($ millions, product license only) - by enterprise size 17


Figure 1: IT systems management covers IT infrastructure, management processes and services 2
Figure 2: IT systems management is among the best-penetrated technology areas 4
Figure 3: Over a third of enterprises have deployed no more than two IT systems management solution areas 5
Figure 4: The number of enterprises investing is high, but decreasing slightly 6
Figure 5: Investment outlook is much brighter among enterprises with fewer than 1,000 employees 7
Figure 6: The strategic evolution of IT systems management is towards IT operating as a profit center 10
Figure 7: The Sarbanes-Oxley Act Section 404 directly recommends IT systems management control 11
Figure 8: The IT systems management market is set for further growth over the next three years 16
Figure 9: Enterprises with fewer than 250 employees will significantly increase their spending 17

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