Last week Microsoft announced the acquisition of Nuance for an estimated USD 19.7 billion. This is Microsoft’s second largest acquisition ever, after they acquired LinkedIn in 2016. Nuance is an established name in the Healthcare industry and is said to have a presence in 10,000 healthcare organisations globally. Apart from Healthcare, Nuance has strong capabilities in Conversational AI and speech solutions to support other industries. This acquisition is in line with Microsoft’s go-to-market roadmap and strategies.
Microsoft’s Healthcare Focus
Microsoft announced their Healthcare Cloud last year and this acquisition will bolster their Healthcare offerings and market presence. Nuance’s product portfolio includes clinical speech recognition SaaS offerings – Dragon Ambient eXperience, Dragon Medical One and PowerScribe One for radiology reporting – on Microsoft Azure. The acquisition builds on already existing integrations and partnerships that were in place over the years.
“Microsoft Cloud for Healthcare offers its solution capabilities to healthcare providers using a ‘modular’ approach. Given how diverse healthcare providers are in their technology maturity and appetite for change, the more diverse the ‘modules’, the greater the opportunities for Microsoft. This partnership with Nuance also brings to the table established relationships with EHR vendors, which will be useful for Microsoft globally.
The Healthcare industry continues to struggle as the world negotiates the challenges of mass vaccination. But on the upside, the ongoing Healthcare crisis has given remote care a much-needed shot in the arm. Clinicians today will be more open to documentation and transcription services for process automation and compliance. The acquisition of Nuance’s Healthcare capabilities will definitely boost Microsoft’s market presence in provider organisations.
However, Healthcare is not the only industry that Microsoft and Nuance are focused on. The Microsoft Cloud for Retail that was launched earlier this year aims to offer integrated and intelligent capabilities to retailers and brands to improve their end-to-end customer journey. Nuance has omnichannel customer engagement solutions that can be leveraged in Retail and other industries. As Microsoft continues to verticalise their offerings, they will consider more acquisitions that will complement their value proposition.“
Microsoft’s Focus on Conversational AI
Microsoft already has several speech recognition offerings, speech to text services, and chatbots; and they continue to invest in the Conversational AI space. They have created an open-source template for creating virtual assistants to help Bot Framework developers. In February, Microsoft announced their industry specific cloud offerings for Financial services, Manufacturing, and Non-Profit, and also introduced a series of AI and natural language features in Microsoft Outlook, Microsoft Teams, Microsoft Office Lens and Microsoft Office mobile to deliver interactive, voice forward assistive experiences.
“There is no slowing down in this space and the acquisition clearly demonstrates the vision that Microsoft is building with Nuance – a vendor that has made speech recognition, text to speech, conversational AI the foundation of the company. This is a brilliant move by Microsoft in the Conversational AI space and a win-win for both companies.
This move could also mark further inroads for Microsoft into the contact centre space. With Teams now being integrated into contact centre technologies, working with large customers using speech and conversational AI, Dynamics 365 could herald the start of more acquisitions for Microsoft to bolster a wider customer engagement vision.
The Conversational AI war is heating up and various other cloud vendors such as Google and AWS are starting to get aggressive and have made investments in recent years to enhance their Conversational AIcapabilities. Google Dialogflow has been seeing rapid uptake and they now have deep partnerships with Genesys, Avaya, Cisco and other contact centre players. Microsoft coming into the game and acquiring a company with years of history and IP in the speech space, demonstrates how the cloud battle and the war between Google, Microsoft and AWS is heating up in the Conversational AI. All of a sudden you have Microsoft as a powerhouse in this game.”
The Microsoft Cloud for Retail aims to offer integrated and intelligent capabilities to retailers and brands to improve their end-to-end customer journey. It brings industry-specific capabilities to the Microsoft suite including Microsoft Azure, Microsoft Power Platform, Microsoft 365, and Microsoft Dynamics 365 – and is aimed at the growing need for “intelligent retail’. Microsoft’s partner ecosystem will also be involved in the new platform to address challenges in the sector and future proof the retail evolution.
In The Top 5 Retail & eCommerce Trends for 2021, Ecosystm notes that while retailers will focus on the shift in customer expectations, a mere focus on customer experience will not be enough this year. From the customer experience angle, they will strongly focus on omnichannel, catering to ‘glocal’ consumption, using location-based services, and improving both their onsite and online customer experience. They will also have to work on their supply chain and pricing capabilities, as distribution woes continue. These trends are seeing a deeper need for transformational technologies and leading cloud providers are introducing solutions targeted at the industry. Google has introduced its cloud retail solutions aiming to help retailers get more from data. Similarly, AWS has cloud offerings for the retail industry leveraging its retail domain experience and cloud deployment services.
“Global cloud vendors continue to “move up the stack” to provide more of the technology landscape for organisations. The focus of these tech giants is on adding unique value to customers by tailoring the combination of the different cloud services they can provide to specific industries. Providing the full-stack will mean higher customer retention rates – as the implementation time should be lower than traditional on-premises implementations. Microsoft has a diverse range of capabilities. Having a software company and implementation partner that can deliver the full stack of technology and business processes should improve the time to value for organisations.
But I see three key difficulties in implementing systems such as these:
People adapting effectively to use the new processes
Migrating enough high-quality data to leverage the new capabilities
Integrating the new capabilities into an organisation’s existing landscape.
This is why it is likely that initial use will come from Microsoft’s existing Retail customers as they expand the range of services they use. New adopters of these Microsoft solutions will find that much of the complexity and cost of implementing a new business solution will remain.
However, these value-added cloud services open access to smaller organisations. If Microsoft is able to work with their partners to simplify the implementation of these capabilities, it will allow smaller organisations to access these complex capabilities affordably.“
“The Ecosystm Digital Priorities in the New Normal Study aims to determine how optimistic industries are about successfully negotiating these uncertain times (Figure 1). The industries that are rated the most optimistic fall into two clear categories. In the first category, there are industries, such as Healthcare that had to transform urgently – mostly in an unplanned manner. This has led to a greater appetite for change and optimism in these industries. Then there are industries, such as Retail, that had some time to re-focus their technology roadmap when the crisis hit. These industries have a strong customer focus and had started their digital journeys before the pandemic.
Microsoft’s industry focus appears to be spot-on. Their first two vertical clouds target enterprises that have had to – and will continue to – pivot. The ‘modular’ approach taken in the Microsoft Cloud for Healthcare offering allows providers to choose the right capability for their organisation – whether it is workflow automation, patient engagement through virtual health, collaboration within care teams or better clinical and operational insights. As healthcare organisations across the world negotiate the challenges of mass vaccination, they may well find themselves leveraging these industry-specific capabilities as they revamp their workflows, processes, and data use.”
Get to know the right research, insights and technologies for you to be one step ahead in this new world of retail in our top 5 retail trends for 2021 that represent the most significant shifts in 2021
Human-centricity Will be Front and Centre of Organisational Priorities
2020 saw immense humanitarian disruption. Enabling remote work was a key component of business continuity. Both organisations and their employees have a better understanding now of the implications of remote working and how it can be made to work. They are also aware of the challenges of remote working. Monitoring productivity, maintaining the right work-life balance and ensuring employee emotional well-being have been challenging. Despite the challenges, hybrid/blended working is definitely here to stay. Employees will expect more options on the location of their work, often choosing to work where they are most productive.
All decisions related to the organisation, filtered through the lens of human-centricity, will drive better employee engagement – and engaged employees provide better customer experience. Organisations that will operationalise this at scale and across cultures will emerge as success stories.
Technology Will Bond with Facilities and Operations – Connecting with HR Will be a Challenge
There has to be an alignment between the Business, People, Work Environment and Technology to make an organisation truly empowered to handle sudden pivots that will be required in 2021 as well (Figure 1).
This will require cross-departmental coordination and synergy. Tech teams have traditionally driven the Digital Workplace strategy; now they will have to work closely with Operations and Facilities Management teams on “Smart and Safe Office” strategies. That may not be the real challenge given that there are overlaps between these three teams – they have a shared language and similar KPIs. The real challenge will be the need for Tech teams and HR to work more closely to improve the overall employee experience, including a focus on employee productivity and wellness. Human-centricity makes the role of HR even more important – IT will find it challenging to find common grounds as there have traditionally been few shared KPIs between these two departments.
Office Spaces Will Become Truly Digital
The hybrid/blended workplace model means that the physical workplace is not disappearing soon. Even as the model evolves for each organisation, what becomes clear is that employee expectations have changed drastically in the last year, and the traditional employee experience expectations of Salary, Recognition, and Job Satisfaction may not be enough. Employees will now expect flexibility, social cohesion, and effective communication. If they are to return to the physical office, they will expect the same benefits as working from home.
This will drive the adoption of digital tech to ensure the office space is safer, more effective and a productive environment for the employees and the business. Two key areas of focus will be on seamless access to information and employee control over work environment.
Providers Will Deepen Digital Workplace Offerings, but the Market Will Not Consolidate
Key tech providers in the digital workspace space (such as Microsoft, Google, Zoom, Cisco, AWS and so on) will broaden their capabilities and make it easier to procure and use solutions. It will no longer be a “tool-centric” approach (chat, video, document sharing, online meetings, whiteboards and so on) – it will become a platform play. Information workers will be able to choose the approach that best fits the problem they are trying to resolve, without being limited by the capabilities of the tool. E.g. documents will be sharable and editable within chats; whiteboards will be integrated into all other communication services and so on.
Tech providers will deepen and strengthen their capabilities organically and acquisitions will mostly be about buying market share, customers and not the technology.
Industry-centric Digital Workplace Services Will Emerge and Witness Rapid Growth
The Services industry has been leading in the adoption of digital workplaces – but blue-collar roles and front-line employees will also start benefiting from these technologies. In 2021, new digital workplace capabilities will extend beyond the employee base to systems that drive better connectivity and communication with customers. This will open the market up for smaller, niche players (and this may well run counter to the previous trend). Tech teams will focus on employees and a platform-based approach to collaboration, while Customer teams and others will implement tools and platforms to better communicate outside of the business. The next few years will bring the traditional “employee-centric” collaboration players into direct competition with the “customer-centric” ones. Those that play across both today (such as Google) will be better positioned to win the enterprise-wide “Future of Work” style deals.
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Ecosystm Principal Advisor, Darian Bird says, “The announcement of Nutanix Clusters on Azure is another piece of the hybrid puzzle that will allow Nutanix clients to extend their private cloud environments into public infrastructure. Organisations want the control associated with a private cloud but with the flexibility to scale up and down in the public cloud. Key to hybrid cloud is an additional layer that enables applications to be shifted from one cloud to another, either to prevent lock-in or to choose the best environment depending on the circumstances.”
The deal will also broaden the sales and support experience for Microsoft and Nutanix. “Nutanix has emphasised licence portability as a key characteristic of its hybrid cloud strategy. Microsoft clients will be able to use Azure credits to pay for Nutanix software, while those already with Nutanix licences will be able to port those over to Clusters on Azure. Simplified cloud procurement will be critical for IT departments looking to optimise cloud expenditure across multiple providers.”
Bird adds, “Organisations will now be able to manage servers, containers, and data services on Nutanix HCI, on prem or in the cloud through a single control pane with Azure Arc. Microsoft has realised that producing a true hybrid cloud system requires it to manage as many types of infrastructure as possible, whether they come from niche partners or major competitors. IT departments want the choice of supplier without adding complexity to their systems.”
Last year, Nutanix partnered with HPE for the general availability of HPE’s integrated hybrid cloud as a service offering, HPE GreenLake for Nutanix, and the HPE ProLiant DX solution.
Earlier in the month, Nutanix launched its global partner multi-cloud program – Elevate – to bring Nutanix’s global partner ecosystem under one integrated architecture managed through consistent tools, resources and platforms, to accelerate their clients’ multi-product, multicloud roadmap in their transformation journeys.
“Nutanix has made great strides in its shift from hardware vendor to HCI provider and it’s now focused on delivering tools that enable the shift to cloud. These recent moves will help Nutanix catch up to VMware and become a viable alternative in a hybrid cloud environment,” says Bird.
Identifying emerging cloud computing trends can help you drive digital business decision making, vendor and technology platform selection and investment strategies.Gain access to more insights from the Ecosystm Cloud Study.
The European Union (EU) founded the GAIA-X Foundation to build a unified system of cloud and data services to be protected by EU Laws – including GDPR, the free flow of non-personal data regulation and the Cybersecurity Act. France and Germany kicked off the GAIA-X cloud project last year and the system is open for participation to national and European initiatives for exchange of data across industries and services such as AI, IoT and data analytics. GAIA-X took another step towards becoming a real option for European organisations with the establishment as a legal entity in June. Founding members of GAIA-X include Atos, Bosch, BMW, Deutsche Telekom, EDF, German Edge Cloud, Orange, OVHcloud, SAP, and Siemens. Non-European providers, such as AWS, Microsoft, Google, and IBM will also have the opportunity to join GAIA-X. The UK Crown Commercial Service (CCS) has also been entering into agreements with public cloud platform providers to encourage increased cloud adoption in cash-strapped public sector organisations. It is a good time to evaluate organisations’ perception on cloud and their adoption patterns.
Ecosystm research finds that while most organisations have migrated at least some simple workloads to the cloud, the sophistication of these systems ranges from SaaS deployed as shadow IT, all the way up to cloud-native applications that are core to a digital business strategy. When asked about the maturity of their cloud deployments, 36% of organisations in EMEA consider themselves advanced, leaving the remaining 64% with more basic environments. These figures vary by business size with only 31% of SMEs considering their deployments advanced, rising to 40% for large enterprises.
Cloud technology providers should segment the market according to the maturity of their client’s systems. Those in the early stages of modernising their infrastructure will be seeking different benefits and will have different concerns than those already using cloud to underpin their digital transformation.
In the mature economies in the region, 75% of those with advanced deployments, considered improved service levels and agility as a key benefit of cloud. These organisations have moved beyond simply replacing legacy systems with cloud infrastructure and now look to the IT department to provide a platform on which new, client-facing services can be delivered. In the emerging economies, the most-reported benefits of cloud are flexibility and scalability, and standardised systems, both at 68% of respondents. These could be viewed as benefits expected from organisations not as far along in the cloud journey. The benefit of reduced IT costs was important in both mature EMEA (67%) and emerging EMEA (62%).
Looking at those who consider their cloud deployments as still basic, security is the leading challenge to greater adoption and by a large margin. Of those respondents in mature EMEA, 73% cited security as a key challenge, more than 20 percentage points higher than the next greatest difficulty. In emerging EMEA, a similar trend was evident, with 61% of respondents considering security as a key challenge. Moreover, data privacy is the second-most significant concern for those who do not consider their cloud deployments advanced. This was visible in both mature EMEA (51%) and emerging EMEA (48%). As organisations look to shift more critical workloads to the cloud, they will be increasing their attack surfaces and at the same time will face greater consequences if a breach does occur.
Services providers targeting organisations with less developed cloud environments should include security early in the conversation to push them along to the next stage of maturity.
The challenge that varied most according to market maturity and business size was the concern that cloud-based services were more expensive that traditional licencing or in-house solutions. Only 29% of respondents with basic cloud deployments in the mature economies, held this view, while in emerging economies the figure rose to 43%. Competition in those mature markets has in some cases put pressure on prices or at least resulted in wider choice. While 29% of SME respondents considered cost a key challenge, 41% of large enterprises did. Migrating larger, more complex environments to cloud will be viewed as more costly than the status quo due to organisational inertia.
The perception that cloud can be more costly, provides an opportunity for cloud management including expense optimisation services.
Organisations looking to move from a basic cloud environment to one that adopts a cloud-first model should begin with a maturity assessment. Understand what your systems will look like at the next stage, what the benefits will be, and what are the risks. More importantly, decide on the long-term business goal that you are trying to achieve, particularly how IT can be a critical player in the organisation’s digital strategy.
Note: Mature economies – France, Germany and the UK/ Emerging economies – Middle Eastern countries, Russia and South Africa Identify emerging cloud computing trends that can help you drive digital business decision making, vendor and technology platform selection and investment strategies.Gain access to more insights from the Ecosystm Cloud Study.
The five-year partnership will involve Microsoft and NAB sharing development costs and investments to migrate around 1,000 out of 2,600 applications from the NAB and BNZ stacks, on Microsoft Azure. By 2023, NAB aims to run 80% of its application on the cloud, build a robust cloud foundation, and enable customers to access applications and services on the cloud.
The partnership aims to support NAB’s commitment to continuous improvement and innovation, leveraging the Microsoft global engineering team. It also involves setting up of the NAB Cloud Guild program, where Microsoft will train 5,000 NAB and BNZ technologists to equip them on cloud and allied technology skills.
NAB and Microsoft have previously collaborated to improve the experience for NAB customers, through cloud-based applications. NAB’s cloud-based AI powered ATM was the result of a proof-of-concept (PoC) developed on Microsoft Azure’s cognitive services, in 2018. It involved general ATM security captures along with facial biometrics to enable customers to withdraw cash without a card or a phone.
Ecosystm Principal Advisor, Tim Sheedy says, “If ever there was a sign that multicloud is the predominant approach for businesses, this is it. NAB is a big AWS client – in Australia and New Zealand. They lead the way for businesses in training thousands of employees on AWS technologies through their Cloud Guild. But now Azure is also developing a strong foothold in NAB – the public cloud services market is not a one-horse race!”
“Many businesses that have standardised on – or preferred – a single cloud vendor will find that they will likely use multiple cloud environments, in the future. The key to enabling this will be the adoption of modern development environments and architectures. Containers, microservices, open-source, DevOps and other technologies and capabilities will help them run their applications, data and processes across the best cloud for them at the time – not just the one that they have used in the past.”
Sheedy thinks, “NAB’s competitive advantage will not come from whether they are using AWS or Azure – it will come from the significant time and effort they are investing in giving their employees the skills they need to take advantage of these environments to drive change at pace. Too many businesses are increasing their cloud usage without making the necessary investments to upskill their employees – if you know you are planning to spend more on the cloud, then start now in reskilling and upskilling your staff. There is already a real shortage of cloud skills and it is only going to get worse.”
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Initiatives such as the UK Crown Commercial Service (CCS) and Google Cloud agreement will also help in the recovery phase. This allows qualified public sector agencies to avail of a discounted price for their Google Cloud deployments. Earlier in the year CCS entered into a price arrangement with Microsoft as well. If Cloud has to be the vehicle for economic recovery, such arrangements will benefit cash-strapped public sector organisations.
The recovery will also require the entire technology ecosystem to engage not only with large enterprises but also small and medium enterprises (SMEs). Alibaba Cloud announced an investment of US$ 283 million to revamp its global partner program. They plan to introduce new partner-customer communication processes to enhance response time and bring more opportunities to independent software vendors (ISVs) managed service providers (MSPs) and system integrators (SIs) as partners.
Europe Emerging as a Cloud Hub
As a fallout of the current political scenario, Europe is pushing for more cloud independence and to become an innovation hub as a vendor-neutral network for cloud computing providers and their customers.
GAIA-X Foundation is a federated data infrastructure project initiated to build a unified system of cloud and data services to be protected by EU Laws – including GDPR, the free flow of non-personal data regulation and the Cybersecurity Act. France and Germany kicked off the GAIA-X cloud project last year and the system is open for participation to national and European initiatives for exchange of data across industries and services such as AI, IoT and data analytics. GAIA-X took another step towards becoming a real option for European organisations with the establishment as a legal entity in June. Various organisations – including Dassault, Orange, Siemens, SAP, Atos, Scaleway and Deutsche Telekom are a part of this non-profit platform, working together on Cloud applications, high-performance computing as well as edge systems. The project is expecting to release a working model by early 2021 and will be further enhanced in phases.
Global Cloud leaders are also focusing on expanding their presence in Europe. In February, Microsoft announced a new data centre in Spain leveraging Telefónica infrastructure. In a similar move, Google Cloud announced its plans to expand in the region in partnership with Telefónica. Telefonica and Google are expected to jointly work on Spain’s digitalisation through edge infrastructure and 5G for consumers and telecom infrastructure.
Cloud Providers Bolstering their Cybersecurity Capabilities
2020 has witnessed a host of cybersecurity threats and data breaches. While Cloud providers have always evolved their cybersecurity capabilities, it has become important for them to become vocal about these measures to build trust in the industry.
To complement the Microsoft Azure IoT security, Microsoft acquired IoT security specialist CyberX, last month. The acquisition will enable greater security for the IoT devices connected to the Microsoft network and will help their customers to gain visibility through a map of devices thus allowing them to gather information on security risks associated with thousands of sensors and connected devices. This will enhance smart grid, smart manufacturing and digital assets and profiles and reduce vulnerabilities across production and supply chain.
In another move which will benefit the ISV and SI ecosystem, NetFoundry’s zero trust networking API is now available on RapidAPI. RapidAPI’s marketplace enables developers to easily find, connect to, and manage the APIs they need to build a range of applications. Now the ISV and developer community can access NetFoundry’s software-only, zero trust models on RapidAPI.
More Partnerships between Software/Industry Solutions Providers and Cloud Providers
The COVID-19 crisis has had a far-reaching impact on several industries. The technologies that are expected to see the most uptake are IoT and Future of Work technologies.
Ecosystm Principal Advisor, Kaushik Ghatak says, “COVID-19 has brought to the fore the need for managing risks better. And the key to managing risks is to have better visibility and drive data-driven decisions; the sweet spot for IoT technologies.”
Last week, Microsoft and Hitachi announced a strategic alliance to accelerate the digital transformation of the Manufacturing and Logistics industries across Southeast Asia, Japan and North America. The first solutions are expected to be made available in Thailand as early as this month. Hitachi brings to the table their industry solutions, such as Lumada, and their IoT-ready industrial controllers HX Series. These solutions will be fully integrated with the Microsoft cloud platform, leveraging Azure, Dynamics 365 and Microsoft 365.
Another sector that has seen significant disruption is Real Estate. Ecosystm Principal Advisor, Andrew Milroy in his blog Proptech: Driving Digital Transformation in the Wake of COVID-19 sees a real opportunity for the sector to transform. “Many activities within the property ecosystem have remained unchanged for decades. There are several opportunities for digital engagement and automation in this sector, ranging from the use of robots in construction to the ‘uberisation’ of the residential property customer journey.”
June saw Honeywell and SAP partner to create a joint cloud-based solution based on Honeywell Forge and SAP cloud. The cloud solution is aimed at real estate operators and customers providing aggregated financial and operational insights in real-time. The solution leverages the Honeywell Forge autonomous buildings solution and the SAP Cloud for Real Estate solution, enabling facility managers and building owners to reposition their real estate portfolios through parameters such as cost savings and energy efficiency and help improve the tenant experience.
As organisations struggle to maintain operations during the ongoing crisis, there has been an exponential increase in employees working from home and relying on the Future of Work technologies. Ecosystm principal Advisor, Audrey William says, “During the COVID-19 pandemic, people have become reliant on voice, video and collaboration tools and even when things go back to normal in the coming months, the blended way of work will be the norm. There has been a surge of video and collaboration technologies. The need to have good communication and collaboration tools whether at home or in the office has become a basic expectation especially when working from home. It has become non-negotiable.”
AWS and Slack announced a multi-year partnership to collaborate on solutions to enable the Workplace of the Future. This will give Slack users the ability to manage their AWS resources within Slack, as well as replace Slack’s voice and video call features with AWS’s Amazon Chime. And AWS will be using Slack for their internal communication and collaboration.
Delivering excellent customer experience in the midst of the crisis has proved to be difficult for organisations. Customer care centres have been especially impacted by high volumes of customer interactions – through voice and non-voice channels. This will see a major rise in adoption of cloud contact centre solutions. Contact centre providers are ramping up their capabilities in anticipation. Genesys selected AWS as their preferred cloud partner to deliver new features to customers and build a global and secure infrastructure.
The industry can expect more news from Cloud providers in the next few months as they ramp up their capabilities and channel their go-to-market messaging.
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Our ongoing Ecosystm study on Digital Priorities in the New Normal shows how the crisis has forced organisations to re-evaluate their cybersecurity risks and measures. It also showed that the IT environment of most organisations was woefully unprepared for the changes that occurred (Figure 1). Perhaps unsurprisingly, fewer than 7% said that their IT environment was fully prepared and close to 40% reported lacking scale, capacity and IT skills in-house.
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The combination of these shortcomings may very well push more organisations to outsource their security management to Managed Security Service Providers (MSSPs) – a service space that has been growing rapidly in recent years.
Many IT organisations are fairly familiar with MSSPs, but COVID-19 may have forced many to re-evaluate their choices as the work and threat landscapes have changed.
This new tool can help technology buyers understand which vendors are leading this space, which are the ones that have market momentum and which are executing and delivering on their promised capabilities. Unlike similar vendor evaluations on the market, the positioning of vendors in Ecosystm VendorScopes is based solely on quantifiable feedback given by the Tech Buyer community, in the global Ecosystm Cybersecurity Study, that is live and ongoing on the Ecosystm platform. It is thus independent of analyst bias or opinion or vendor influence – customers directly rate their suppliers in our ongoing market benchmarks and assessments.
It is also free to access and share for all Ecosystm subscribers!
Fragmented Asia Pacific MSSP Market
The VendorScope clearly shows how fragmented the MSSP market is. Not only is the number of vendors that have a customer base significant enough to appear on the grid very large (22) – but about half of them are in, or verging on being in, the “Front Runner” segment (Figure 2).
There are a few key factors that contribute to this picture:
The services they offer tend to align well with the customers’ organisational strategies and to integrate well with existing systems. This, basically, can be boiled down to one word: Cloud. Most organisations have IT strategies revolving around multiple and/hybrid cloud deployments and using MSSPs makes a lot of sense.
Momentum for this service segment is generally high. The MSSP space is experiencing high growth these days and we see a fairly high number of mentions for both current and planned deployments with many of the vendors in the study.
Despite the large number of vendors in the “Front Runner” segment, a famous few stick out. IBM appears to have a higher market momentum than its competitors and together with Microsoft, they have the largest share of mind with potential customers in this space.
But other vendors are hot on their heels. AWS and F5 stand out with their relatively high presence in the region, and TCS and Huawei appear to have stronger than average pipelines.
Where we do see weak spots with most vendors is in quality of service and the connected customer experience, which historically have proven to be a potential Achilles’ heel for many vendors in high growth areas. As the MSSP space matures, we would expect customer experience to become increasingly important when customers choose a service provider.
We would certainly encourage any organisation that is looking into managed security to not ignore or downplay the customer service and support aspect. IT security is a complex area – even if it is managed by a service provider – and the service providers’ ability and flexibility in this area can make a huge difference.
Fujitsu and HPE stick out with regards to QoS and customer service. These two are also good examples of how the vendors differ and seemingly could complement each other. In a sense, one could almost see the MSSP VendorScope as an early blueprint for which mergers and acquisitions (M&As) would make sense – at least for those that are driven by the pursuit of skill sets and competencies and not just market share.
In the Top 5 Cybersecurity and Compliance Trends for 2020, Ecosystm predicted that 2020 will witness a significant uplift in M&A activities in the cybersecurity market. Of course, with the global pandemic, all bets are off, and the predicted M&A wave may have been delayed by a year or so.
But the MSSP space certainly appears ripe for consolidation.
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