IT Services Taxonomy 2019

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IDC Services Taxonomy
Peru, IT Services, IDC Services Taxonomy, Market Segments, 2019

IT Education & Training (ITET)

Education & Training
Support
Hardware Deploy and Support (HWDS)
IT Deploy and Support Software Deploy and Support (SWDS)

Foundation Markets
Secondary Markets
IT Macromarket

IT Consulting IT Consulting (ITC)

Project
Application Custom Application Development (CAD)
Oriented Development
Systems & Networks Network Consulting and Integration (NCI)
Implementations Systems Integration (SI)

IT Outsourcing (ITO)
Managed Technology Network and Endpoint Outsourcing (NEO)
Services Outsourcing
Hosting Infrastructure Services (HIS)
Application Management (AM)
Hosted Application Management (HAM)

Processing Services
Business Services Business Process outsourcing
Business Consulting

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Definitions
12 Foundation Markets
1. IT Consulting
IT consulting includes business consulting services around information technology. IT consulting is organized in three main areas:
IT strategy — examples include strategic planning, IT road map design, and governance.
IT operations — examples include infrastructure rationalization, shared services, project portfolio management, and vendor relationship management.
Enterprise application strategy.
Exceptions and Exclusions
There are no exceptions or exclusions. Versus other project services, the scope of IT consulting ends where the application strategy actually translates into the a choice of
application.

2. Systems Integration
IDC defines SI as a process that includes the planning, design, implementation, and project management of a solution that addresses a customer's specific technical or business
needs.
IDC defines SI as a process that includes the planning, design, implementation, and project management of a solution that addresses a customer's specific technical or business
needs. It involves systems and custom application development as well as implementation and integration of enterprise packaged software.
SI projects typically involve different platforms and technologies. The solution may include hardware, software, and services. An SI project is formalized by a contract that is
constructed around solution specifications and often demands certain levels of performance against technical or business goals. The end result of an SI project is the delivery of a
system that meets a stated objective and fulfills solution specifications. It is difficult to place a minimum dollar limit, but SI projects in this category usually exceed $100,000.
SI projects can include any of the following activities:
Planning and design. IT process improvement, IT operations assessment, IT benchmarking, IT needs assessment, IT strategy, IT capacity planning, IT change management, IT
maintenance planning, IT design, IT supplier analysis, business strategy, and process improvement
Implementation. IT site preparation, IT project management, test and debug, system configuration, IT installation, software reengineering, custom software development,
packaged software customization, application interfacing and integration, IT relocation services, systems migration, IT documentation, and user experience design and analysis
Support and training. Ongoing support and IS/technical skills training
Exceptions and Exclusions
There are no exceptions or exclusions.

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Definitions
12 Foundation Markets

3. Network Consulting and Integration Services

Network consulting and integration services are defined as those activities associated with planning for, designing, and building enterprise local and wide area data
networks.
Network consulting and integration services are defined as those activities associated with planning for, designing, and building enterprise local and wide area data
networks (commonly known as LANs and WANs), including multiservice, converged wireless, and wireline networks that allow for voice, video, and data applications (such as
VoIP and unified messaging) to be propagated across a single, common infrastructure.
Specifically, the NCIS market includes services provided to the telecommunications network access and transport providers for the planning and building of the public
integrated voice, data, and wireless access network infrastructures. These services will be presented as a separate line item within the NCIS market size and forecast.
Exceptions and Exclusions
Excluded from this definition are services provided for the planning, building, or operations of traditional circuit switched enterprise voice networks and their supporting
devices (e.g., traditional PBXs).

4. Custom Application Development

CAD services focus on delivering custom application development or modification of applications and interfaces as well as enhancements to existing packaged applications
or preengineered templates.
CAD services focus on delivering custom application development or modification of applications and interfaces as well as enhancements to existing packaged applications
or preengineered templates. However, configuration activities performed within the context of a software deploy and support project are not included in this segment.
Application development that is performed as part of a broader SI or IS outsourcing engagement is also not included in the custom application development segment. This
market includes services delivered as part of a defined project or by a contract programmer hired on a per-hour basis.
Exceptions and Exclusions
There are no exceptions or exclusions.

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Definitions
12 Foundation Markets

5. IT Outsourcing
IT outsourcing services involve a long-term, contractual arrangement in which a service provider takes ownership of and responsibility for managing all or part of a client's IS
infrastructure and operations based on
a service-level agreement.
IS outsourcing services involve a long-term, contractual arrangement in which a service provider takes ownership of and responsibility for managing all or part of a client's IS
infrastructure and operations based on a service-level agreement (SLA). Services are provided in a one-to-one model. An IS outsourcing contract typically includes datacenter
operations (either mainframe based or through a "server farm") and usually also includes two or more of the following services:
Desktop management
Local and wide area network (LAN and WAN) operations management
Help desk support
Application management
Hosted application management
Disaster recovery services
Hosting services
IS outsourcing contracts can also include related consulting and systems integration activities. Along with activities performed by the outsourcer's employees, an IS
outsourcing contract includes ongoing capital spending for new equipment and also typically involves the transfer of assets and people from the client to the service provider.
Exceptions and Exclusions
To maintain consistent IDC definitions, if only the network and desktop environment are outsourced, IDC captures the spending in the network management services and
desktop management services category (collectively known as network and desktop outsourcing). Likewise, if only the application environment is outsourced, IDC captures the
spending in the applications outsourcing category. IS outsourcing captures only those contracts for which a large portion of the IS environment is outsourced, usually over a
five- to 10-year period. The IS outsourcing category captures spending on customized, one-to-one IS outsourcing engagements. Spending on discrete hosting services or other
hosted, one-to-many service models is captured elsewhere in IDC's spending methodology.

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Definitions
12 Foundation Markets

6. Network and Endpoint Outsourcing Services

NEOS involve the set of activities associated with outsourcing the support and management of one or more elements
of the client/server and network communications infrastructure of an organization.
Network and desktop outsourcing services involve the set of activities associated with outsourcing the support and management of one or more elements of the
client/server and network communications infrastructure of an organization.
NEOS may be further segmented into network management services and endpoint management services (NEOS = network management services + endpoint management
services):
NEOS = network management services + endpoint management services
Network management services. Network management services are the activities, skills, facilities, and network infrastructure captured within a contract associated with
outsourcing the operations of a specific segment or entire network communication system of a company. The scope of work includes the installation and management of
network tools that automatically monitor active nodes, traffic, revision management, and security.
The service supplier also assists with fault isolation and resolution and enables the business to optimize the efficiency of the network and avoid any downtime. As part of
the network management contract, the service supplier installs and configures the network management system and manages user moves, adds, or changes on the
network, network software, and hardware upgrades.
Endpoint management services. A desktop management contract might include needs assessment, asset management, systems management, procurement and
deployment, onsite hardware maintenance, and onsite software support services. As with the IS outsourcing category, IDC views desktop management services from a
contract perspective. Desktop management captures only those contracts for which several desktop services are outsourced to the same supplier.
Exceptions and Exclusions
The network operations provided as part of a larger IT outsourcing contract are not captured in the network management services category. Additionally, the network
equipment support and maintenance contracts that are not associated with network operations outsourcing contracts are not captured in this category. The hardware
support and installation service category captures the majority of network product support.

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Definitions
12 Foundation Markets

7. Application Management
AM services are designed to provide for the day-to-day operations, support, and maintenance of enterprise applications. AM services contain a number of discrete
components, including but not limited to end-user support, proactive and reactive application maintenance, proactive application enhancements, and remote or onsite
application monitoring whether at the customer's or vendor's premise. Various project-based activities can also occur within an AM contract, including but not limited to
application development, package customization, implementation and integration, portfolio optimization, and legacy modernization. AM engagements sometimes, but not
always, involve the transfer of employees from the customer to the service provider. The main value proposition of AM services is that they free customer IT budget and
staff from the usually high cost of managing enterprise applications and allow customers to benefit from the generally higher quality levels and application management
expertise offered by AM vendors.

Exceptions and Exclusions

Often, AM services are embedded in much larger contracts that could encompass such services as datacenter or infrastructure outsourcing, desktop and hosting services,
or business process outsourcing (BPO). In such cases, IDC would not count the data as part of the discrete AM forecast.

The following should also be noted:

Maintenance is a term that is often used in a variety of contexts. When IDC refers to maintenance, it is describing a type of activity taking place within a services contract.

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Definitions
12 Foundation Markets

8. Hosted Application Management

Hosted AM comprises services where a customer's packaged applications are hosted and managed out of a vendor-managed datacenter. There are major differences
between hosted AM, which is a standardized service, and "traditional" AM, which is a customized outsourcing engagement.
There are major differences between hosted AM, which is a standardized service, and "traditional" AM, which is a customized outsourcing engagement. With hosted AM:
Customer applications are hosted out of the vendor's datacenter.
Support resources and certain elements of the low-level infrastructure are shared across customers (a one-to-many model).
The vendor uses automated provisioning, management, monitoring, and maintenance technologies to create economies of scale in managing across multiple customer
environments, thus reducing costs when compared with traditional outsourcing models.
In most cases, the vendor sets a flat price per user (depending on a host of variables, including promised uptime and support response times), and contracts are typically for
a shorter time period.
The main value proposition of the hosted model versus traditional AM is that because the vendor has complete ownership and control over the hardware environment,
customers are freed from the costs and time associated with managing the systems upon which their applications are running.
Exceptions and Exclusions
IDC views software as a service (SaaS) as a delivery model for software rather than a specific, individual market. SaaS refers to the ongoing support of applications whose
core value to the customer pertains to alleviating the maintenance and daily technical operation and support of business and consumer software. IDC recognizes two main
types of SaaS, with SaaS being the umbrella category: 1) Hosted application management, and 2) Software on demand (which is excluded from the Services Taxonomy).
Software on demand is characterized by the software, services, and support offerings that are specifically built and designed for one-to-many delivery over the Internet.
The major difference between hosted AM and software on demand is that hosted AM services are designed for the management of traditionally licensed packaged
applications, whereas software on demand is a new model of Web-delivered software offered via subscription instead of traditional licensing. Additionally, Software on
demand is typically run with a single, shared application instance — shared applications — whereas hosted AM offers customers private application instances —
single-tenancy applications.
software on demand is typically run with a single, shared application instance — shared applications — whereas hosted AM offers customers private application instances —
single-tenancy applications.

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Definitions
12 Foundation Markets

9. Hosting Infrastructure Services

Hosting infrastructure services include the management of servers and networking solutions in a third-party or enterprise datacenter. To the extent that hosting
infrastructure services are provided as integral parts of larger hosting deployments these services include the management of shared or dedicated Web presence, the
facilitation of ecommerce, content, remote back-up and recovery services, and security management services. Hosting infrastructure services also include any hosting
services provided via a utility or virtualized infrastructure, as opposed to traditional dedicated infrastructure.

Hosting infrastructure services also includes colocation services and related remote network and systems management. Colocation services are defined as a customer's
use of a third party's physical floor/cage/rack space, network capacity, and HVAC/power infrastructure (i.e., the listed equipment is owned by a third-party datacenter and is
located at the third party's facility) to support operation of the customer's servers/storage/network equipment, etc.

Exceptions and Exclusions

Collocation services provided by third parties other than dedicated datacenters (e.g., office rental companies providing access to the internet as part of the charge for office
space) are not included.

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Definitions
12 Foundation Markets

10. Hardware Deploy and Support

This market captures hardware deployment services and support services. Hardware is comprised of the following five segments:
Client Devices IDC considers a client to have three primary characteristics:

▪ Single-user device. A client is an end-user device that accesses services via the network. Although clients may be shared by multiple users serially, they are
typically used by one person at a time.

▪ User interface. Unlike a server, clients have a user interface intended for human-machine interaction.

▪ Toward the "edge" of the network. To varying degrees, clients may act as standalone devices but typically rely on access to the network for some of their
functionality. A pure telephone, for example, does work only when it is attached to a network, but new converged phones have imaging and other
capabilities that operate in local-only mode. The potential ambiguity raised by the issue of the degree of a client’s network dependence begs us to look
anew at what a client really does and to take the client apart and reduce it to a bundle of functionality optimized for a class of end users.
Networking Equipment. IDC categorizes Networking into three categories:

▪ Enterprise networking equipment provides the classifications and definitions for the four major markets covered in IDC’s Enterprise Networks research:
routers, LAN switches, enterprise VoIP equipment, and wireless LAN equipment.

▪ DataCenter Networks A datacenter can be located at a service provider or an enterprise. The components of a datacenter infrastructure include network
equipment, servers, and storage. Datacenter network infrastructure forecasts the network infrastructure that is purchased by enterprise and service
provider datacenters. This includes spending on network equipment such as routers, LAN switching, secure content and application delivery, WLAN, optical,
and network management/OSS as well as spending on enterprise connectivity software and products that provide the network infrastructure for IBM
mainframes.

▪ Telecommunications Infrastructure The key areas of coverage within the service provider infrastructure market are as follows: Access infrastructure,
WAN infrastructure, Optical networks infrastructure, VoIP infrastructure, Wireless and mobile infrastructure, OSS and billing infrastructure

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Definitions
12 Foundation Markets
10. Hardware Deploy and Support, continued…
Servers - This category comprises all server hardware sales for all purposes, applications, and industries, including volume (servers with and ASP of less than $25,000), midrange-enterprise (servers
with an ASP of between $25,000 and $500,000), and high-end enterprise servers (Servers with an ASP of over $500,000). Primary server segmentations are based on server class/price band, chip type,
and operating system (OS).

Storage - IDC categorizes storage technology into three major categories . storage mechanisms, storage systems, and storage network infrastructure

▪ Storage Mechanisms IDC measures specific storage mechanisms that are the building blocks of a storage system. Specifically, IDC tracks the following storage mechanisms: Hard disk drives
(HDDs), including 3.5, 2.5, 1.8, and 1.0in. media, Tape drives and automation, Optical/removable drives, including CD/DVD-ROM, CD-Rec and DVD-Rec, Zip/magneto-optical [MO]/removable,
and large form factors (5.25in. optical, 12/14in. WORM), and Solid state drives (SSDs)

▪ Storage systems include disk storage systems, tape automation and tape libraries, and optical automation.

▪ Storage Networking Infrastructure. These are switches based on the Fibre Channel or FICON standards that connect servers, storage systems, and other devices to a storage area network.

Peripherals and Other IDC defines peripherals as devices that plug into a computer to capture, print, or view content. This segment is comprised of Hardcopy Peripherals, Projectors and OC
Monitors

For more greater detail on the hardware categories, please see IDC’s Worldwide Hardware and Network Infrastructure Taxonomy, 2007 (IDC # 206156, June 2007).

Deployment Services

Deployment services consist of the installation and basic configuration of hardware. The configuration can occur either at the customers facility or at the vendor. Examples of the configuration at
the vendors facility are HP's Factory Express offering and the Sun Factory Integration offering.

Support Services

Support services is comprised of telephone support, remote diagnostics, electronic support, onsite support, predictive/preventive maintenance, parts repair, and inventory/asset management
services. IT help desk services dedicated to supporting a customer's application are considered support services. Hardware support services can be provided by either the hardware vendor or a
third party and are either attached to the hardware or included in a site agreement.

Exceptions and Exclusions

IDC excludes the base warranty purchased with the product from hardware deploy and support spending.

If a vendor or third-party assumes responsibility for a customer's entire IT help desk operations, this service is excluded because it is considered BPO.

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Definitions
12 Foundation Markets

11. Software Deploy and Support

Software deploy and support services are activities, expertise, and systems all aimed at providing the customer with proper installation and configuration of all types of
software as well as appropriate ongoing support and access to resources.

Typical activities associated with software support services are as follows:

Telephone support

Remote diagnostics

Electronic support

Support-related software maintenance (see note that follows)

Onsite software support

Predictive and preventive maintenance

Note: Support-related maintenance is when a software vendor provides, generally online or by telephone, remedial assistance — which may include a software patch or
maintenance release — for software end users (see Table 5).

This market can be divided into four sub-markets:

Deployment Services - Deployment services consist of the installation and configuration of packaged software or upgrades. This does not include integrating the software
with other packages or legacy systems at the customers site.

Application Support Services - Application support services comprise support for packaged application software. Packaged application software includes consumer,
commercial, industrial and technical programs and codesets designed to automate specific sets of business processes in an industry or business function and to improve
group or individual productivity in an organization. Application software also supports entertainment, education or data processing in personal activity. The packaged
application market includes the consumer, collaboration, content, and enterprise applications subsegments. The enterprise applications segment, in turn, is made up of the
enterprise resource management, supply chain management, operations and manufacturing, engineering and CRM applications markets.

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Definitions
12 Foundation Markets
11. Software Deploy and Support, continued……
Application Development and Deployment Support services - Application Development and Deployment Support services are primarily centered around software
and tools used in the software development process. IDC categorizes the market as follows:

▪ Information and data management software is used to manage a common set of defined data kept in one or more databases driven by specific data definitions
and rules. These systems can involve single databases accessed directly by applications or distributed databases accessed by multiple applications in multiple
locations.

▪ Application development software includes software, tools, and development environments used by developers, business analysts, and other professionals to
create both web-based and traditional applications.

▪ Application deployment software consists of software and tools used by developers, business analysts, and administrators to create, deploy, and manage web-
based and traditional applications built on both legacy and modern architectures.

▪ Data access, analysis and delivery software are end-user oriented tools for ad hoc data access, analysis and reporting as well as production reporting. These
products are most commonly used by information consumers or power users rather than professional programmers.

▪ Quality and life-cycle tools support the process of software development and deployment through testing, quality assurance and configuration management
functions.

▪ Other development tools including various standalone development tools and utilities.

Systems Infrastructure Software Support Services - The market for services related to systems infrastructure software can be divided into four primary categories:

▪ System and network management software is used to manages all computing resources for the end user, small business, workgroup, or enterprise, including
systems, applications, and the network infrastructure. Please note that it does not include storage management and other storage software.

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Definitions
12 Foundation Markets

11. Software Deploy and Support, continued……

▪ Security software includes a wide range of technologies used to improve the security of computers, information systems, internet communications, networks
and transactions. It is used for confidentiality, integrity, privacy and assurance.

▪ Storage software manages and assures the accessibility, availability and performance of information stored on physical storage media. It does not include
operating systems or subsystems.

▪ System software is the foundation of software products that collectively operate the hardware on which business applications are built. It includes operating
systems and subsystems, clustering and availability software, virtual machine and user interface software, and remote control software.

Exceptions and Exclusions

The software deploy and support services definition captures the support of all packaged software products — not custom software support, which is captured in the
custom application development definition. Also, packaged software product support for operating systems, development tools, databases, and application packages
that are bundled as part of a broader outsourcing contract is captured in the network and desktop outsourcing, IS outsourcing, or application management. Further,
the deployment of packaged software, as part of a broader systems integration contract or any of the outsourcing foundation markets, is reported within each of
those markets. Traditional software maintenance, an agreement between the licensee and software developer through which the developer continues to improve
the packaged software product by repairing known faults and errors or enhancing and updating the product, is not included in the software deploy and support
market. Traditional software maintenance is generally priced as a percentage of either the net or list license cost and includes software updates, upgrades, and
patches

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Definitions
12 Foundation Markets

12. IT Education and Training

IT education and training services include the content processes or structures that support employee, client, or supply chain development to meet identified business
requirements related to developing, administrating, or using information technology.

Exceptions and Exclusions

This category excludes business skills training, learning services, or learning infrastructure engagement per IDC's Worldwide Corporate Education Taxonomy, 2008:
Framework and Research Guide (IDC # 1827558 , June 2008).

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