Overview 1
Catalyst 1
Summary 1
Key Messages 2
ITSM as a discipline and ITIL as a framework are gaining broad enterprise recognition 2
Growth outlook is positive, with ITSM expected to augment presence in the SME space 2
Multiple benefits, including cost savings and service benchmarking, are driving adoption 2
ITSM is seen as a readiness measure for both outsourcing and utility computing models 2
Uncertain returns remain a dampening factor, especially in the current investment climate 2
The market remains very competitive in spite of the disproportional presence of the big four 3
Enterprises focused on standardization and systems simplification embrace ITSM the most 3
On-demand solutions are gaining ground but are a long way from market dominance 3
Table of Contents 4
Table of Figures 5
Table of Tables 5
Market Opportunity 6
IT service management: philosophy, frameworks and the software eco-system 6
Mapping the extended ITSM market 8
Cost savings, gains in productivity and utilization are the prime movers of ITSM adoption 10
Organizational resistance and slow realizations of returns are major inhibitors of adoption 11
Market growth is expected to decelerate until 2010, before hitting its peak in 2014 12
Investment outlook in the short and medium term is positive, with SMEs the bright spot 13
Technology Evolution 15
The release of ITIL version 3 has ushered in significant changes in the ITSM domain 15
Vendors take the lead in providing support frameworks for ITIL adoption and compliance 17
ITSM assimilates standalone tool segments and moves towards convergence with BPM 19
Competitive Landscape 21
The fragmented dynamic of the market is driven by many vendors with origins outside ITSM 21
BMC, CA, IBM and HP are clear market leaders in the ITSM space 22
Mid-tier and point-solution vendors offer ITSM alternatives with high solution maturity 24
Market consolidation is likely, while convergence and integration emerge as the key themes 26
Customer Adoption 28
Systems simplification and infrastructure standardization initiatives drive ITSM deployment 31
Go-to-Market 33
Enterprise size in terms of revenue is a clear indicator of ITSM channel preference 34
On-site deployments continue to dominate the ITSM solution space... 35
...but an increasing number of vendors have begun offering SaaS and hosted solutions 36
Conclusions 37
The state of ITIL adoption suggests that integrated modular solutions will remain in vogue 37
Open-source point solutions abound, but the model fails to make a significant impact 37
SOA and ITSM are increasingly seen as synergistic philosophies for functional governance 37
BPM is gaining prominence as an essential operational constituent of ITSM 38
Recommendations 39
Vendors need to reassess their messaging strategies to better tune into enterprise needs 39
Returns on investment need to be fully quantified, and communicated effectively to buyers 39
Process consulting and training services will need to be the norm rather than the exception 40
Appendix 41
Definitions 41
Methodology 42
Further reading 42
Ask the analyst 42
Datamonitor consulting 42
Disclaimer 42
List of Tables
Table 1: ITSM license revenues by region ($m) 9
Table 2: Enterprise incidence of ITSM in 2008 and 2009 by revenue band 14
Table 3: The ITSM capabilities of the leading four vendors 23
Table 4: ITSM presence of mid-tier vendors 24
Table 5: ITSM is more common in companies focused on using IT for efficiencies and revenue growth 29
Table 6: Investment plans for service management solutions across enterprises rating various IT spending objectives as 'very important', as count and proportion of respondents 30
Table 7: ITSM solutions are more common in companies focused on standardizing infrastructure 31
Table 8: Investment plans for service management solutions across enterprises rating various IT strategic objectives as 'very important', as count and proportion of respondents 32
Table 9: Systems management channel preferences by size-band, within firms that have an ITSM footprint 34
Table 10: Penetration of service management solutions across enterprises with stated spending objectives 36
Table 11: Deployment models offered by ITSM vendors 36
List of Figures
Figure 1: The extended ITSM solution domain 8
Figure 2: The global ITSM market opportunity by region, $m 9
Figure 3: Year-on-year growth rates for the ITSM market 12
Figure 4: Proportion of enterprises planning to make ITSM investments 13
Figure 5: Comparison of ITSM incidence in enterprises by revenue band 14
Figure 6: ITIL v3 introduces a lifecycle approach to ITSM 15
Figure 7: A comparison of MOF 4.0 and ITUP frameworks 17
Figure 8: Evolution of the ITSM solution space 19
Figure 9: Global ITSM market revenue share by vendor segmentation 21
Figure 10: ITSM incidence is highest across enterprises trying to achieve process efficiency gains 28
Figure 11: Investment plans are positively uniform across enterprises with various spending objectives 29
Figure 12: ITSM incidence is highest across enterprises focused on systems simplification & standardization 31
Figure 13: Investments are most aggressive across segments with a high incidence of ITSM 32
Figure 14: Channel preferences for systems management solutions, within firms that have an ITSM footprint 33
Figure 15: Systems management channel preferences by size-band, within firms that have an ITSM footprint 34
Figure 16: Delivery preferences by enterprise size 35