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Annual Review 2014

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Annual Review 2014 Annual Review 2014 Status quo Disruptive innovation The ‘organisation’ as we know it is changing Disruptive innovation Businesses are having to adapt at an accelerated pace to keep up with constant changes in technology and services. Often beginning in the ‘consumer’ space, these changes are making the jump to the ‘enterprise’ space and this convergence can create disruption to the status quo, altering the way businesses do things. Not every emerging technology will alter the business landscape – but some will have the potential to significantly disrupt the status quo, wiping out traditional established business models and reshaping the competitive environment. It’s going to be an exciting journey to build competitive advantage in this new age and only those with winning strategies will succeed. Disruptive innovation should be embraced as a positive move toward the technological transformation of tomorrow. 01 Disruptive innovation 18 Logicalis’ international presence Contents 02 IDC – the Third Platform 20 Business model – 04 Transformational business agility building competitive advantage 06 Service defined 22 Financial overview 08 Embracing change 24 Corporate responsibility 10 Performance stories 26 Board of Directors 12 Chairman’s statement 28 Financial results 14 President’s Q&A IBC Our subsidiaries Annual Review 2014 Logicalis 1 WWW.IDC.COM Value will continue to shift dramatically as the Third Platform cannibalizes huge Second Platform markets and as value migrates within the Third Platform itself: up the “stack,” from infrastructure to developer platforms and marketplaces, from applications to data, and from broad applications to industry-specific solutions and communities. Of course, the most dramatic value migration driven by the Third Platform will not be that within the IT industry but within virtually every other industry on the planet: enabling the delivery of innovative new oerings, redefining competitive advantage, INNOVATIVE and driving major disruptions. THE THIRD INDUSTRY SOLUTIONS PLATFORM Third Platform disrupting every industry IDC predicts that by 2018, one-third of the top 20 market share leaders in most industries will be significantly disrupted by new competitors (and “reinvented” incumbents) that use the Third Platform to create new oerings, new business With all players’ eyes now firmly on models, and new cost structures to drive revenue growth and expand value. the Third Platform, and leadership of the IT industry for the next two decades so obviously at stake, now it is all FUTURE about pitched battles across the Third Platform: in mobility, in Big Data and social technologies, in the datacenters BIG DATA CLOUD that will support the Third Platform, in a ANALYTICS new generation of industry-transforming SOCIAL killer solutions, in rising customer groups MOBILITY BUSINESS (emerging markets, line-of-business executives, and cloud service providers Smartphones and tablets Cloud spending will The “Digital Universe“ By 2017, 80% and developers) driving growth and new will continue to dwarf grow a remarkable of data will continue to of Fortune 500 requirements, and around the PCs, with tablets and 25%, reaching over explode, growing by companies will have smartphones outselling $100 billion. Public 50% to about 6 billion an active (social “Internet of Things” — the new frontier, PCs by about 2.5 to 1. cloud will win 75% terabytes in 2014. technologies–enabled) stretching the reach and impact of the PRESENT more deals than customer community. Third Platform. private. LAN/ INTERNET CLIENT/ SERVER 15%29% 89% Third Platform driving the present and future Spending on mobile, cloud, Big Data, and social and related oerings will grow 15%, drive 29% of IT spending, and drive 3RD IT IT SPENDING 89% of IT spending growth. PLATFORM SPENDING GROWTH Line-of-business executives driving more IT spending In 2014, and continuing through 2017, IT spending by groups outside of IT departments will grow at over 6% per year MAINFRAME TERMINAL — almost 2.5 times the rate of the IT department — led by marketing, customer service, and sales groups. PAST BY 2020, 30 BILLION AUTONOMOUSLY CONNECTED ENDPOINTS WILL BE DEPLOYED DRIVING $8.9 TRILLION IN REVENUE GLOBALLY. 2 Logicalis Annual Review 2014 WWW.IDC.COM Value will continue to shift dramatically as the Third Platform cannibalizes huge Second Platform markets and as value migrates within the Third Platform itself: up the “stack,” from infrastructure to developer platforms and marketplaces, from applications to data, and from broad applications to industry-specific solutions and communities. Of course, the most dramatic value migration driven by the Third Platform will not be that within the IT industry but within virtually every other industry on the planet: enabling the delivery of innovative new oerings, redefining competitive advantage, INNOVATIVE and driving major disruptions. THE THIRD INDUSTRY SOLUTIONS PLATFORM Third Platform disrupting every industry IDC predicts that by 2018, one-third of the top 20 market share leaders in most industries will be significantly disrupted by new competitors (and “reinvented” incumbents) that use the Third Platform to create new oerings, new business With all players’ eyes now firmly on models, and new cost structures to drive revenue growth and expand value. the Third Platform, and leadership of the IT industry for the next two decades so obviously at stake, now it is all FUTURE about pitched battles across the Third Platform: in mobility, in Big Data and social technologies, in the datacenters BIG DATA CLOUD that will support the Third Platform, in a ANALYTICS new generation of industry-transforming SOCIAL killer solutions, in rising customer groups MOBILITY BUSINESS (emerging markets, line-of-business executives, and cloud service providers Smartphones and tablets Cloud spending will The “Digital Universe“ By 2017, 80% and developers) driving growth and new will continue to dwarf grow a remarkable of data will continue to of Fortune 500 requirements, and around the PCs, with tablets and 25%, reaching over explode, growing by companies will have smartphones outselling $100 billion. Public 50% to about 6 billion an active (social “Internet of Things” — the new frontier, PCs by about 2.5 to 1. cloud will win 75% terabytes in 2014. technologies–enabled) stretching the reach and impact of the PRESENT more deals than customer community. Third Platform. private. LAN/ INTERNET CLIENT/ SERVER 15%29% 89% Third Platform driving the present and future Spending on mobile, cloud, Big Data, and social and related oerings will grow 15%, drive 29% of IT spending, and drive 3RD IT IT SPENDING 89% of IT spending growth. PLATFORM SPENDING GROWTH Line-of-business executives driving more IT spending In 2014, and continuing through 2017, IT spending by groups outside of IT departments will grow at over 6% per year MAINFRAME TERMINAL — almost 2.5 times the rate of the IT department — led by marketing, customer service, and sales groups. PAST BY 2020, 30 BILLION AUTONOMOUSLY CONNECTED ENDPOINTS WILL BE DEPLOYED DRIVING $8.9 TRILLION IN REVENUE GLOBALLY. Disruptive innovation Outdated IT business models Transformational b u si n e ss a g i l it y 4 Logicalis Annual Review 2014 Line-of-business managers will Cloud presenting more opportunities have more influence over IT spend for line-of-business executives It is clear today the relationship between The ‘cloud’ is presenting more IT and their business customers is opportunities for line-of-business changing. The experience ‘users’ have executives to identify and procure of IT is being driven now more by what’s software and infrastructure solutions available from the Apple store, than without the need to engage with what is on offer from the CIO and the the CIO or the IT department. IT department. Business executives This is particularly so in the adoption and line-of-business leadership now of business-cloud applications such have new expectations of what their as file sharing, business productivity IT experience should deliver. tools, customer relationship management (CRM), marketing automation, social Logicalis commissioned a survey business and collaboration. in September 2013* that highlighted a shift in IT buying power from the CIOs having to keep up with IT department to line-of-business business demand – efficiency, executives. Line-of-business employees productivity and agility are taking on technology projects, In the last few years, the emergence partly due to the increased influence and rapid adoption of cloud technologies that technology holds over business has given new life to the theory that processes, but also, in many cases, the average IT operation is too old and due to the ease of access, slow to keep pace with user demands. implementation and operation. IT operations are having to compete with ‘new model’ service providers, who do Enterprises are demanding much not have the burden of managing legacy more from IT: it has to both cut costs IT infrastructure and investments. and enable business growth and faster time to market. The upshot of this is However, out of the promise and the that business leaders are beginning threat of the cloud, a new kind of IT to play a much more significant role leader and department is set to emerge. in IT decisions. (See IDC Insight on They will be the conduit between the pages 2 and 3). In a world where organisation, its IT infrastructure and business leaders are becoming more services, and a portfolio of specialist involved with business issues, the CIO technology
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