INPUT Definition of Terms PDF
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INPUT Terms and Definitions 1997 INPUT TERMSANDDEFINITIONS Publishedby INPUT 1881LandingsDrive MountainView,CA 94043-0848 UnitedStatesofAmerica InformationServicesMarketAnalysisProgram INPUTTermsandDefinitions Copyright©1997byINPUT.Allrightsreserved. opPrurbiblnyitceaadntyiionmntemhaeansyU,nbioetrersdetpSortroaedtdueicsneodafoAdrmaetdraiibscatrasi.ebuoNtreordeptiarnriatevnoayfltfhoerm, system,withoutthepriorwrittenpermissionofthe publisher. bTyhethienfeomrpmlaotyieoensporfovainddedwiitnhtihnisthreepcourrtresnhtalclobrepoursaetdeonly satnryucottuhreeroofrgIaNnPiUzTat'iSoncloiernptse,rsaonndiwniclllundoitngbepadriesnctl,osedto csoubnssiednitaorfyIoNrPaUffTi.liatedorganizationwithoutpriorwritten iInNfPorUmTatiexoenrcpirsoesviditesdbiensttehfifsorrtsepoirntpraenpdarabteliioenveosftthhee iIminnaNffyPoorrUmmrTaaettssiiuholoatnnllpcfrhoroanovvtimeadienindone.cdloimhapbeilrleeitityennfetoosrsabneoyralcocisunsraaoctrceue.rxapceHynoswoeefvtethrha,et 1997 DEFINITIONOFTERMS INPUT Table of Contents A Introduction B. OverallDefinitionsandAnalyticalFramework 1 1. InformationServices 2. MarketForecasts/UserExpenditures 3 3. Product/ServiceCategories ^ ^ 4. MarketSectors 5. TradingCommunities ^ 6. TheInternet ^ C. Product/ServiceCategoriesandSubcategories 5 1. SoftwaiBProducts a. SystemsSoftwareProducts b. ApplicationsSoftwareProducts 9 2. TurnkeySystems ^ 3. ProcessingServices 12 4. Outsoui-cing 5. SystemsIntegration(SI) 6. ProfessionalSei-vioes 1^'7 7. NetworkServices ^ 8. EquipmentServices D. ComputerEquipment 9^1 E. SectorDefinitions ^ 1. IndustrySectorDefinitions 2. Cioss-IndustiySectorDefinitions 26 a. Accounting b. HumanResources 26 c. EducationandTraining 27 d. OfficeSystems 27 e. Engineerii^andScientific 29 £ Plannir^andAnalysis 29 g. SalesandMarketing 29 3. Produd/Sei-viceCategoryRepoi-tingbySector 30 l^l^pg ©1996byINPUTReproductionProhibited DEFINITIONOFTERMS INPUT Exhibits -1 InformationServioesIndustryStructure 6 -2 SystemsSoftwareProductsMarketStructure 8 -3 ApplicationProductsandTurnkeySystemsMarketStructure 10 -4 TheCustomizationSpectrum 11 -5 ProcessingServicesMarketStructure 12 -6 OutsourcingComponents 13 -7 ProductsandServioesIncludedinSystemsIntegrationProjects 16 -8 ProfessionalServioesMarketStructure 17 -9 NetworkServicesMarketSti-ucture 19 -10 IndustrySectorDefinitions 23 -11 Product/ServiceCategoryversusMarketSectorFormistContent 31 ii O1996byINPUTReproductionProhibited, MMDS DEFINITIONOFTERMS INPUT Definition of Terms Introduction INPUT'SDefinitionofTermsprovidestheframeworkforallofINPUT'S marketanalysesandforecastsoftheinformationservicesindustry. Itis usedforaUU.S.programs,inEurope,andforINPUT'sworldwideforecasts. TheinformationservicesindustrystructureisdiagrammedinExhibit1. Ooictfhnsateihnneogdfeuustnshtdaereryresltsmyrtaierndnugegct,tmhuatsrrheoekfayeIntadNrsPemiUzacTiakn'regSesfamuncladlhryakfnodegroteeccsauanmisafteltnydhstaeiteysad.asareEnervadricecthqehuseyieirnsaeerdtw.hIedNWecPhfoiUnensTniitsirtoeenvnsiceyws andforecastsreconciledtothepriordefinitionsandforecasts. INPUTclients havethebenefitofbeingabletotrackmarketforecastdatafromyeartoyear againstaprovenandconsistentfoundationofdefinitions. B OverallDefinitionsandAnalyticalFramework 1. InformationServices InformationServicesarecomputer/telecommunications-relatedproductsand servicesthatareorientedtowardthedevelopmentoruseofinformation systems. Informationservicestypicallyinvolveoneormoreofthefollowing: • Packagedsoftwareproducts,includingsystemssoftwareorappUcations software(calledSoftwareProducts) • Acombinationofcomputerequipment,packagedsoftwareandassociated supportservicesthatwillmeetanapplicationsystemsneed(called TurnkeySystems) • Peopleservicesthatsupportusersindevelopingandoperatingtheirown informationsystems(calledProfessionalServices) MMD5 1996byINPUTReproductionProhibited. 1 DEFINITIONOFTERMS INPUT • Acombinationofproducts(softwareandequipment)andservicesin whichthevendorassumestotalresponsibihtyforthedevelopmentofa customintegratedsolution,orpartofasolution,toaninformation systemsneed(calledSyste?nsIntegration) • Servicesthatprovideoperationandmanagementofallorasignificant partofauser'sinformationsystemsortelecommunicationsfunctions underalong-termcontract(calledOutsourcing) • Useofvendor-providedcomputerprocessingservicestodeveloporrun apphcationsorprovideservicessuchasdisasterrecoveryordataentry (calledProcessingServices) • NetworkServiceshastwocomponents: - Servicesthatsupportthedehveryofinformationinelectronicform- typicallynetwork-orientedservicessuchasvalue-addednetworksand electronicmail(calledNetworkApplications) - Servicesthatsupporttheaccessanduseofpubhcandproprietary informationsuchason-hnedatabasesandnewsservices(called ElectronicInformationServices) • Servicesthatsupporttheoperationandmaintenanceofcomputerand digitalcommunicationequipment(calledEquipmentServices) Ingeneral,themarketforinformationservicesdoesnotinvolveproviding equipmenttousers. Theexceptioniswhentheequipmentispartofan overallserviceofferingsuchasaturnkeysystem,anoutsourcingcontract,or asystemsintegrationproject. Theinformationservicesmarketalsoexcludespuredatatransportservices (i.e.,dataorvoicecommunicationscircuitssuchasT-1carriers). However, whereinformationtransportisassociatedwithanetwork-basedservice(e.g., electronicdatainterchangeservices),orcannotfeasiblybeseparatedfrom otherbundledservices(e.g.,someoutsourcingcontracts),thetransportcosts areincludedaspartoftheinformationservicesmarket. Theanalyticalframeworkoftheinformationservicesindustryconsistsofthe followinginteractingfactors:overallandindustry-specificbusiness environment(trends,eventsandissues);technologyenvironment;user informationsystemrequirements;sizeandstructureofinformationservices markets;vendorsandtheirproducts,servicesandrevenues;distribution channels;andcompetitiveissues. 2 1996byINPUTReproductionprohibited. MMDS DEFINITIONOFTERMS INPUT 2. MarketForecasts/UserExpenditures AfalobrlouiintnfftoohrremmaapttriiooopnnersseeprrlvvaiiccceeesstoemxcaporrukenesttstefhdoerasesecaMesxatprseknaedrtietSeuisrzteeis.m,aWItheNsePnoUfTquusaeesdrtdireoexnspsseenasdriitstheuermes fromtheuser'sviewpoint-thatis,expendituresarecategorizedaccordingto whatusersperceivetheyarebuying. Byfocusingonuserexpenditures,INPUTavoidstwoproblemsthatare relatedtothedistributionchannelsforvariouscategoriesofservices: • Doublecounting,whichcanoccurbyestimatingtotalvendorrevenues whenthereissignificantreseUingwithintheindustry(e.g.,software salestoturnkeyvendorsforrepackagingandresaletoendusers) . Missedcounting,whichcanoccurwhensalestoendusersgothrough indirectchannelssuchasmailorderretailers CaptiveInformationServicesUserExpendituresareexpendituresfor pcroorpdourcattsioanndassetrhveicuesserp.roTvhiedseedbexypaenvdeintduorresthaarteinsoptairntcolfudtehedisnamIeNPpUarTent forecasts. NoncaptiveInformationServicesUserExpendituresareexpendituresthatgo tovendorsthathaveadifferentparentcorporationthantheuser. Itisthese expenditures,generaUyregardedasopentocompetitivebid,thatconstitute theinformationservicesmarketanalyzedbyINPUTandthatareincludedin INPUTforecasts. 3. Product/ServiceCategories Product/ServiceCategoriesaredefinedasgroupingsofproductsand servicesthatsatisfyagivenuserneed. WhileMarketSectorsspecifywhothe buyeris,Product/ServiceCategoriesspecifywhattheuserisbuying. Ofthenineproduct/servicecategoriesdefinedbyINPUT,sixareconsidered primaryproductsorservices: • ProcessingServices • NetworkServices • ProfessionalServices • ApplicationsSoftwareProducts • SystemsSoftwareProducts • EquipmentServices MMDS ©1996byINPUTReproductionProhibited. 2 DEFINITIONOFTERMS INPUT Theremainingthreeproduct/servicecategoriesrepresentcombinationsof theseproductsandservices,inconjunctionwithequipment,management and/orotherservices: • TurnkeySystems • Outsourcing • SystemsIntegration SectionCdescribestheproduct/servicecategoriesandtheirstructurein moredetail. 4. MarketSectors MarketSectors,ormarkets,aregroupingsofthebuyersofinformation services. Therearethreetypesofusermarkets: • VerticalIndustrymarkets,suchasbankingandfinance,transportation, utihties,etc. Thesearecalled"industry-specific"markets. • FunctionalApplicationmarkets,suchashumanresources,accounting, etc. Thesearecalled"cross-industry"markets. • Othermarkets,whichareneitherindustry-norapphcation-specific,such asthemarketforsystemssoftwareproductsandmuchoftheon-Une databasemarket. SpecificmarketsectorsusedbyINPUTaredefinedinSectionE,below. 5. TradingCommunities Informationtechnologyisplayingamajorroleinreengineering,notjust companies,butthevaluechainorTradingCommunitiesinwhichthese companiesoperate. Thisreengineeringisresultinginelectroniccommerce emergingwhereinterorganizationalelectronicsystemsfacihtatethebusiness processesofthetradingcommunity. • Atradingc—ommunityisthegroupororganizations—commercialandnon- commercial ^involvedinproducinggoodsorservices. • ElectroniccommerceandtradingcommunitiesareaddressedinINPUT'S ElectronicCommerceProgram. ©1996byINPUT.Reproductionprohibited. MMDS INPUT nEFINITIONOFTERMS 6. TheInternet TheInternetisexpectedtobeamajor,ifnotthedominant,communications andapphcationsresourceofthenextmillennium. Althoughinthemid- 1990sInternetcommercialapplicationsarehmited,bytheyear2000the WorldWideWeb(WWW)andtheInternetareexpectedtobethe applicationsandcommunicationsplatformsofpreferencefornotonly Americanbusiness,butalsoforglobalcommerce,personalcomputingand communicationsactivities. Asaplatformthatfacihtatescommunications betweenbusinesses,theInternetwillhaveanimpactoneachofthenine product/servicecategoriesdiagrammedinINPUTsinformationservices industrystructurechart(Exhibit1). Internet-relatedexpenditureswiUbe subsetsoftheappropriateproduct/servicecategoryorsubcategory,as determinedbytheirusewithorapplicabilitytoInternet-basedor-related businessactivities. BecauseoftheubiquitousnatureoftheInternetand Internet-relatedinformationservicesspending,noseparateInternet definitionswillbeprovidedinthisDefinitionsbook,since,dependingupon context,anyofINPUT'SinformationservicescategoriescouldhaveInternet applicability. Product/ServiceCategoriesandSubcategories Exhibit1providestheoverallstructureoftheinformationservicesindustry asdefinedandusedbyINPUT. ThissectionoftheDefinitionofTerms providesdefinitionsforeachoftheproduct/servicecategoriesandtheir submodesorcomponents. 5 MMD5 1996byINPUTReproductionProhibited. DEFINITIONOFTERMS INPUT Exhibit1 InformationServicesIndustryStructure 1996 SSoyfsttweamrse AppSloifctawtiaornes STyusrtnekmesy ProSfeersvsiicoensai InStyesgrtaetmiosn Outsourcing PrSoecrevsisciensg (SiNenerctvlwiuodcirenskg EqSeurivpimceenst Internet) SCyosnttreomls EnSteerrvperrisse Equipment ConsuIlSting Equipment Platform Transaction IEnSlfeeorcrvtmiracoteniisocn EnSteerrvperrisse MOapneargaetimoennst DepSaerrtvmeernstal SPorfotdwuacrtes &EdTurcaaitniionng SPorfotdwuacrtes Applications Utility AppNleitcwaotrikons DepSaerrtvmeernstal Applications DevTeoloolpsment Clients PrSoefrevsiscioensal DeSvoefltowpamreent ProSfeersvsiicoensal SDeersvkitcoeps Ottier Clients MaDnaatgaebamseent Other MaNneatgweomreknt EnvSierrovnimceenstal Applications Management Business Operations Source:INPUT 1. SoftwareProducts INPUTdividesthesoftwareproductsmarketintotwoproduct/service categories: systemssoftwareandapplicationssoftware. Thetwocategorieshavemanysimilarities. Bothinvolvepurchasesof softwarepackagesforin-housecomputersystems. Includedarebothlease andpurchaseexpenditures,aswellasexpendituresforworkperformedby thevendortoimplementormaintainthepackageattheuser'ssites. Vendor-providedtrainingorsupportinoperationanduseofthepackage,if partofthesoftwarepricing,isalsoincludedhere. 6 1996byINPUT.Reproductionprohibited. MMDS
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