The Services Innovation Gap by JB Wood SRII

Percentage of Total Company Revenue From g p y Services
100% 80% 60% 40% 20% 0% 22%
1999
63% 34% 35% 27%
2000
66%
66%
71%
40% 30%
2001
46% 36%
2002
51% 37%
52% 39%
100% 80% 60% 40% 20% 0% SSPA TPSA AFSMI SRII ASU Conf CSI U of M SSME Conf 94% 81% 75% 61% 39% 31% 17% 17%
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14
Over the past three years, how many times has your service organization engaged with an academic institution to conduct service research? i i i d i h?
3% 30% 6 % 67%
No
Yes
Not sure
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6
Practice
1. Percentage of respondents that have a formal Service Strategy document 2. Percentage of respondents with a dedicated SR&I group 3. Percentage of services SR&I groups that are independent entities 3. Percentage of services SR&I groups that are independent entities 4. Percentage of respondents with a dedicated budget for SR&I 5. Percentage of respondents that can measure the impact of investments in SR&I
60% 50% 40% 30% 20% 10% 0% None One Two to five Six to ten More than ten 8% 6% 3%
50% 31%
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How many academic institutions does your company engage with to tailor undergraduate and graduate curriculum to suit the employment needs of technology service organizations/companies?
Value
34% 31% 3% 25% 39%
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Which challenges to services research and innovation exist within your organization?
60% 50% 40% 30% 20% 10% 0% 53% 44% 42% 42% 36% 36% 28%
$900 $800 $700
2009 REVENU UE IN $ BILLION NS
+4%
$724B
+3%
$815B
$600 $ $500 $400 $300 $200 $100 $0
IT Hardware Products IT Software Products Medical Devices Consumer Technology Electronics Services
36%
2004
36%
Q106
36%
Q107
36%
Q108
2003
Q109
SW Cos % Rev from Services
HW Cos % Rev from Services
Source: The TSIA Service 50
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5
Is there a group in your company that is dedicated to services research and innovation? to services research and innovation?
The Services Innovation Gap
A Landmark Research Study Q2 2009 J.B. Wood
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Research Overview
36 global companies researched Research conducted between Q4 08 and Q2 09 HW, SW and Pure Service providers in All over $1B i revenue
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Revenue Cost of Revenue R R&D S&M G&A OpEx 61% 53% 30% 5% EPS 70% 61% 64% 55% 17% 19% 70% 22% 28% 20% 10% 22% 17% 21% 41% 16%
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AFSMI/SSPA M i t Maintenance P i i P Pricing Practices Survey – ti S
Initial Analysis and Review, 3 Sept. 2009
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Respondent (Aided) Awareness of Services Innovation Related Organizations and Concepts Innovation Related Organizations and Concepts
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Has financial investment in service research and development/innovation in your organization been ...
3%
5% 31%
61%
Decreasing
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No people
No budget
No tools
No metrics
SRI not No exec No shared unique support definition
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Current P iti C t Position: Tech Margin Map T hM i M
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What Is the Largest Industry In Tech?
$900 $800 $700
2009 REVENU UE IN $ BILLION NS
$815B $724B
$600 $ $500 $400 $300 $200 $100 $0
IT Hardware Products IT Software Products Medical Devices Consumer Technology Electronics Services
New Product
Maintenance
Services
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AFSMI/SSPA M i t Maintenance P i i P Pricing Practices Survey – ti S Initial Analysis and Review, 3 Sept. 2009
70% 60% 50% 40% 30% 20% 10% 0% 67%
17%
17% 0% 0%
None
One
Two to five
Six to ten More than ten
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With what frequency do you get information on services science, education, research or innovation from … or innovation from …
100% 80% 60% 40% 20% 0%
89% 11% Indust Assoc
86% 14% Bus Mag
61% 39% Acad Journals
53% 47% Search Engines
31% 69%
ቤተ መጻሕፍቲ ባይዱ
Acad Inst
Never or Seldom
Sometimes or Frequently
Sources: AFSMI SSPA TPSA
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Next Ten Years: Maintenance Decline Begins
Sources: AFSMI SSPA TPSA
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What Is At Stake?
Profit Model: NetApp (Source: 10k FY09)
Sources: Gartner, CEA, Medical Products Outsourcing
FLAT