Unlocking Business Success: Competitive Intelligence

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What is competitive intelligence, and why is it important. In this blog, we highlight three reasons why CI is crucial to business success and how best to leverage CI I your strategy.

Understanding Competitive Intelligence for Business Success

Competitive intelligence is a broad concept: Think of it as any intelligence that improves your business’s performance in the market. Insight on what, how and where competitors are operating is one aspect of competitive intelligence, but it is also important to include the role of partners and the perspective of end customers to establish an all-encompassing view of the overall market.

 

Most markets are imperfect, with complexity across regions and verticals as well as the need for a myriad of vendors to work together to create solutions. Due to that market complexity, information on what is occurring in the space and why can be difficult to ascertain. Competitive intelligence is one method to extract points of clarity that can serve as guideposts as you set objectives for your business.
 

Click the image below to hear more about competitive intelligence for business success from TBR Principal Analyst Allan Krans

Why Is Competitive Intelligence Important?

Competitive intelligence can be the best proxy for your own business decisions. Gaining a deeper understanding of individual vendors and the broader set of competitors in the market landscape can inform your decision making in a powerful way.

 

  1. Competitors as a proxy

Anticipating where the market opportunity is moving and how to capitalize on that is a challenging proposition, especially in dynamic, quickly evolving markets like IT. It is difficult to make complicated and/or significant investments, and the risks are always high. In quickly evolving markets, one of the best ways to reduce risk and increase the confidence of the overall organization in making business decisions is to look at how your competitors are handling the same situations. Understanding how and in which markets your peers and competitors are investing can provide a number of benefits.

First, this information validates strategic directions your own business is considering. It may not guarantee the success of an investment but at least it can provide reassurance that competitors are weighing the risk-reward ratio in a similar manner. Second, understanding the intent and strategy behind different decisions can be even more important for competitive intelligence. No two businesses are the same, so this context can allow your business to translate the intent of different competitor strategies into something that works for your business. The third benefit is gaining information about the outcomes of competitor strategies in real financial terms — one of TBR’s specialties. Revenue, expenses and profit margins are concrete metrics that can help you gauge the effectiveness of competitor strategies and understand whether the outcomes align with your business’s overall financial goals.
 

  1. Markets inform opportunity

Looking holistically at markets and how different peers and competitors operate within them can provide value competitive intelligence. This broad view can help you gain insights into where and how a group of key competitors operate within a market and with what results. TBR’s benchmark and market forecast reports are examples of this type of competitive analysis, illustrating the size, growth and strategies of a given group of peers within a market segment.
 

  1. Competitive intelligence can guide business strategies

A combination of competitive intelligence activities, including deep dives into segment leader strategies, broad coverage of other peers in the space and an analysis of the different objectives for those peers, can be used as a powerful tool for business strategy road mapping. These combined activities can illustrate the objectives, investments, outcomes and landscape against which your business will be competing across different endeavors. Just because your peers are going in a certain direction does not mean that is the best path for your business. Likewise, just because competitors are not making certain decisions does not mean your business should not consider them. However, an awareness of what is occurring can be an important source of intelligence.

Conclusion

There is no perfect customer, no perfectly aligned competitor, and no clear market opportunity, especially in IT. In a world where no perfect decision exists, competitive intelligence can be an informative window into how businesses in similar markets are operating their businesses.

 

Having market perspectives to consider, strategies to evaluate, and approaches to both emulate and avoid can be valuable. Competitive intelligence can provide these benefits and more, helping organizations plan future investments and reduce overall risk.

 

 

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CGI Leverages AI Expertise for GenAI Success

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In early March, TBR met with CGI’s Diane Gutiw and Frederic Miskawi, both VPs of Global AI Enablement, for a discussion about CGI’s evolving generative AI (GenAI) capabilities and offerings, as well as the executives’ views of the changing market around digital transformation, IT services and consulting, and AI overall. The following reflects both that discussion and TBR’s ongoing research into CGI and peers across the IT services and broader technology ecosystem.

What CGI Brings to the GenAI Game: Innovation and Experience in AI

In describing the current market for IT services and technology-enabled solutions, Gutiw and Miskawi noted that clients emerged from 2023’s GenAI hype cycle feeling overwhelmed by proofs of concept (PoCs). Many emerging technology-centric engagements stalled at the PoC and pilot stages, stymied by challenges around data, change management and uncertain (or slow) ROI.

 

As a result, enterprise IT leadership, already saddled with a vested interest in maintaining relationships with current vendors (think: Amazon Web Services [Nasdaq: AMZN], Microsoft [Nasdaq: MSFT] and others), relies on current vendors and partners for guidance, even in an emerging area like GenAI. This echoes TBR’s findings in our December 2023 AI & GenAI Market Landscape.

 

Gutiw and Miskawi pointed out that in the current market, CGI (NYSE: GIB) can lean on two long-standing strengths: its culture of innovation rooted in governance and methodology, and its expertise and experience with AI, which predates the emergence of GenAI and the subsequent hype cycle. Bringing specificity to assertions about innovation, Gutiw and Miskawi described CGI’s thinking around “digital triplets.”

 

As Gutiw explained, CGI is “taking our digital twins that already exist and extending it by adding the generative AI and explainable AI as the third sibling.” In TBR’s view, this approach to harnessing technology in which clients have already invested — and in which CGI has proven expertise — and multiplying the benefits by leveraging GenAI and explainable AI should be a successful strategy for CGI to expand its footprint at existing clients and solidify its reputation as an innovative leader in the AI market.

 

Reinforcing CGI’s strength around established AI capabilities and scale, Miskawi added that CGI is seeing a “multi-model ecosystem where, depending on the nature of the industry that you’re in, the nature of even the group within the enterprise that you’re working with, you have different types of needs, different types of fine-tuning that CGI is doing, mixing specialized AI models, which are more the legacy AI models, with the generative AI models where we’re seeing LLMs [large language models] interacting with the data inside categorization models … that ecosystem is evolving in front of our eyes and accelerating.”

 

Gutiw and Miskawi explained that while CGI’s GenAI practice resides within the company’s Data practice, CGI is undertaking GenAI efforts globally. This is in contrast to the proximity model that differentiates CGI from other IT services vendors. Gutiw said CGI understood that GenAI could not be stuck in one silo or isolated by client and that the technology would bring the most value internally and to clients only through a global approach to accelerating processes and disseminating knowledge around AI.

 

Bolstering this approach, CGI is focused on more than simply GenAI and is innovating on and delivering Frontier AI, according to Gutiw and Miskawi. In TBR’s view, 2023’s relentless hype around GenAI probably makes IT services and technology buyers more likely to look beyond the exciting new trends and instead find credibility in an approach that leverages established AI expertise.
 

TBR principal analysts discuss how the GenAI disruption is similar to prior disruptions, as well as how it is different, and which technology vendors are best positioned to win and why. Watch now by clicking the image below.

Customer Zero and Partnering in a Complex Ecosystem

The CGI GenAI leaders also touched on two aspects of the current IT services and technology ecosystem that TBR believes are critical to vendors’ success: customer zero and technology agnosticism. TBR’s research has shown that the most resonant GenAI use cases start with the vendor testing the solution itself, serving as customer zero for the services or products before bringing them to clients.

 

Gutiw described CGI’s take on this idea, noting that the company innovates, develops and tests GenAI-enabled solutions internally, like other vendors, but ensures clients understand that CGI views this investment as a way to save clients’ money: “We always talk about fail fast. We’re doing that on our dime because we would not fail fast on your dime.” Gutiw described a solution CGI developed for responding to RFPs, called BidGenAI, which pulls from the company’s own database of wins and losses, shortening the time needed to pull together a (hopefully winning) response.

 

While requiring customizations to fit a client’s specific data environment, industry needs and compliance requirements, the BidGenAI tool undoubtedly can be applied across a wide range of enterprises. While not the first or only IT services vendor using the customer-zero approach (think: Accenture [NYSE: ACN] and IBM [NYSE: IBM]), CGI was explicit about the financial benefits clients will realize when CGI foots the innovation — the fail fast — bill.

 

The second aspect, technology agnosticism, has long been a feature of the consulting and IT services market, in which vendors shy away from aligning too closely with any one technology supplier for fear of alienating clients looking for the best-fit solution, not just the tech solution that most benefits the IT services vendor’s or consultancy’s bottom line.

 

Post-pandemic, TBR has seen a pronounced shift among some leading IT services vendors and consultancies toward much closer and more publicly embraced partnerships. Exclusivity remains rare, but something akin to most favored nation status or first among equals has permeated the IT services ecosystem. In this evolving landscape, CGI’s AI leaders described the company’s approach as “technology flexible” and noted strategic partners in the AI space include IBM, Microsoft, Google (Nasdaq: GOOG), SAP (NYSE: SAP), Oracle (NYSE: ORCL) and Amazon Web Services, as well as a slew of smaller technology players.

 

In TBR’s view, CGI’s emphasis on flexibility addresses the need to work with a range of technology partners to meet clients where they are while assuring clients CGI has invested fully in the training and capacity-building necessary for a robust AI practice.

Embracing Transformation While Rooted in Solving Business Problems

Two aspects of CGI’s approach to GenAI struck TBR as significant in understanding the company’s likely path forward and potentially its position within the IT services and GenAI market.

 

First, Miskawi, speaking about GenAI as understood and deployed within CGI itself, said simply, “It is transformative.” One could understand that to be obvious after more than a year of relentless hype. Or one could hear echoes of the famous “Mad Men” line, “It is toasted,” and consider CGI is embracing how much change will be necessitated by adopting GenAI across its own enterprise. Every other IT services vendor could do the same, but it remains to be seen if they can do it with the same welcoming embrace as CGI.

 

Second, TBR noted that during the entire discussion, Gutiw and Miskawi remained focused on business outcomes — for CGI and for its clients — a mindset and approach frequently ascribed to but rarely done. At one point, Gutiw noted that “it’s really understanding how we can use [CGI’s own capabilities and partner technologies] safely and how we can help solve business problems leveraging the technology.”

 

CGI’s challenge, of course, is ensuring that leaders across the company understand how to stay focused on clients’ business problems and how to recognize when a business challenge could be addressed through a GenAI-enabled solution.

CGI and GenAI: Investments, Approaches and Designs

In addition to the wide-ranging discussion, CGI’s GenAI leaders shared specifics about the company’s GenAI practice, including:

 

  • Over 10,000 professionals globally engaged on Data Analytics and Data Engineering projects with clients
  • CGI’s AI Advisory Services include AI Enterprise Governance OCM, Data and AI journey design and implementation, AI Business Consulting services with AI strategy road maps, and Responsible Use of AI frameworks.
  • CGI’s enterprise AI investments have focused on operational excellence; training and teaming; foundational capabilities around data, platforms and processes; and solution/use-case development.
  • CGI has invested in a Responsible AI Framework and an AI Strategy Framework to guide itself and its clients through the complexities of AI governance and risk.

 

In TBR’s 1H24 CGI Federal Vendor Profile, we noted that “CGI Federal’s parent company announced in July 2023 it would invest $1 billion over the next three years to fuel AI-based growth. CGI’s forthcoming outlays will fund the expansion of its AI-based advisory capabilities — particularly around the company’s Responsible Use of AI framework, which would resonate well with federal agencies. CGI Federal is facing a shifting competitive landscape in federal digital consulting, as General Dynamics Information Technology (GDIT) (NYSE: GD) is standing up a new advisory practice that will push adoption of its AI-related digital accelerators and ManTech is leveraging its 3Q23 acquisition of Definitive Logic Corp. to launch an AI-focused Data Analytics and Artificial Intelligence Solutions Practice.”

 

In addition, TBR notes that CGI Federal won a deal with the U.S. Department of State in October 2023 to provide on-site processing functions for consular services in Australia, Fiji, Japan, New Zealand and South Korea, leveraging the CGI Atlas360 solution’s AI capabilities to help enhance the visa application process.

 

The Telecom Industry Faces a Reckoning

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Overarching Takeaways from Mobile World Congress 2024

Mobile World Congress 2024 (MWC24) brought together more than 2,700 exhibitors and 101,000 attendees from across the global ICT sector, including representatives from many other industries that are pursuing digital transformation. TBR notes that MWC Barcelona is closing in on the pre-pandemic high-water mark for attendance and exhibitors set in 2019.

 

The MWC ecosystem has proved resilient, confirming MWC Barcelona’s role as the most important, must-attend event in the world for all things related to mobile technology. The most popular topics discussed at MWC24 included generative AI (GenAI), traditional AI, network APIs, private networks, satellite connectivity, sustainability and cloud transformation.

 

TBR notes that hyperscalers (particularly Amazon Web Services [AWS] [Nasdaq: AMZN], Microsoft [Nasdaq: MSFT] and Google [Nasdaq: GOOGL]) kept a lower profile at MWC this year, a marked change from the loud and flashy presence they had at MWC23. Hyperscalers also continued to double down on positioning themselves as partners with communication service providers (CSPs).

 

Additionally, TBR notes that the AI/GenAI hype feels tangible and is unlikely to fall by the wayside like the metaverse, crypto, blockchain, and other hyped-up concepts and technologies that have come and gone in years past. Many use cases and business cases for AI and GenAI in the telecom industry make logical sense and have the potential to produce profoundly significant business outcomes, especially related to cost efficiency. Technological readiness for and commercialization of AI and GenAI are in process, and much more innovation is in store.

 

One of the most interesting takeaways TBR analysts observed from MWC24 was how little 5G, 5G-Advanced and 6G were discussed. While AI/GenAI, network APIs and private networks dominated mindshare at the event, as was widely expected, the lack of content about cellular technology market development was striking and underscores the challenges the telecom industry continues to face with revenue growth and ROI. This lack of discussion also underscores how CSPs are loathe to make further investments in 5G, especially 5G-Advanced, pending measurable ROI, and that vendors see this and are concerned 5G-Advanced will not generate significant revenue.

 

Though CSPs continue to talk a big game about B2B use cases, network slicing, private networks, cloud-native transformation, AI/GenAI and network APIs as key enablers of the digital economy and new revenue for themselves, their loud, echoing chorus rings hollow and is losing credibility as they do not have anything of significant, sustainable value to show for their efforts in these areas. This is forcing the vendor community, hyperscalers and some enterprises to hedge their bets and seek alternative routes to meet their business objectives.

 

TBR notes that the situation CSPs find themselves in is becoming increasingly dire, and as an industry CSPs are reaching a point where they will have to reckon with two decades of underachieving on transformation initiatives and weakening business metrics. Additionally, with the cost of capital now at levels last reached nearly 20 years ago in most major markets, CSPs’ financial pictures are worsening, and this will likely prompt a new wave of M&A as well as bankruptcies and structural reorganizations. CSPs also have a people problem, which is arguably the primary reason CSPs have been unable to realize their objectives of shifting from telcos to techcos.

 

TBR’s research indicates that the telecom industry has entered a period of rationalization and that the operator and vendor landscape, as well as the telecom business model, will fundamentally change over the next decade. The anti-pragmatic, restrictive and often hostile regulatory environment, coupled with macroeconomic headwinds (especially the relatively high cost of capital), and the inability for CSPs to truly transform into cloud-native digital service providers have brought the industry to this precipice.

 

By the end of this decade, TBR expects the telecom industry to look much different than it looks now, with fewer, but larger and stronger, CSPs and vendors remaining and new business models for network connectivity and related technology enablers disrupting the status quo enjoyed by the industry for decades.
 

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TBR Insights Live - MWC Debrief: AI, Private Networks, Cloud, Network APIs and More

Impact and Opportunities

AI Will Help CSPs Significantly Reduce Costs

Myriad use cases for AI and GenAI were discussed at MWC, spanning all aspects of a CSP. Use cases related to call centers and customer lifecycle management present the biggest opportunity to move the cost savings needle. OSS and BSS, which underpin customer lifecycle management, will be key domains through which AI/GenAI evangelization will take place within CSPs. Network-oriented use cases for AI/GenAI are also numerous but will take a bit longer to materialize compared to call center and customer lifecycle management use cases. The bigger issues surrounding AI/GenAI pertain to governance, privacy and societal considerations, any of which could stifle market development.

 

Labor will ultimately be significantly impacted by AI/GenAI, but TBR expects gradual attrition, with vacated positions not being filled, rather than abrupt, large-scale layoffs at CSPs. Importantly, the AI and GenAI outputs shown in use cases demonstrated at MWC24 essentially all required vetting by human resources, at least at this stage of market development.

CSPs Have a People Problem

Shifting from a telco to a techco requires cultural, talent and mindset changes at CSPs. For example, to become a techco, CSPs would need to think and behave like a techco and have a workforce that understands techco concepts such as CI/CD (continuous integration, continuous delivery) pipelines, agile workflow methodology, cloud, APIs, software engineering, computer programming languages like Python, as well as containers and microservices.

 

Change management initiatives, including at the senior management level, are likely to become more prevalent as leading CSPs attempt to cross this chasm, and management consultancies are poised to play a key role in facilitating this change. Though the presence of unions among some CSPs could stifle this shift, CSPs have had more than a decade to make progress toward this human resource transition.

 

Upskilling and reskilling are viable, partial solutions to address these issues, but these types of initiatives need more formalized structure, investment, and executive sponsorship and oversight to deliver relevant and meaningful results. TBR also expects more CSPs to adopt “cap and fizzle” or “captive” strategies to make this shift from telco to techco, whereby the legacy is wound down and separate entities are stood up in a more techco-oriented structure.

Still No “New Deal” or “Digital Single Market” for Europe’s Telecom Industry

Europe-based operators continued to use MWC as a mouthpiece to plead with governments and related institutions on the continent for regulatory reform (especially regarding consolidation, spectrum policy and evolving outdated regulations, some of which date back many decades). However, while some additional M&A is likely to be approved that may not have been allowed pre-pandemic (such as the Vodafone-3 U.K. and MasMovil-Orange Spain deals), no significant changes are visible on the horizon.

 

Using history as a guide, structural changes at the level hoped for by the telecom industry will likely only occur when macroeconomic deterioration forces governments into action and drives broader restructuring and change management at organizations. Said differently, the only way Europe’s telecom industry (and quite frankly, the global telecom industry) will see broad regulatory and structural changes is amid a catalyst moment, which tends to occur during periods of unprecedented economic stress.

 

For example, the last significant, large-magnitude industrial changes across major societies occurred during the Great Depression of the 1930s, which reshaped labor and industrial dynamics, and the Great Recession of 2007-2009, which reshaped the financial services industry. Telecom will, unfortunately, need a similar economically driven crisis to bring about the structural changes that the industry seeks.

Telco-led Initiatives Are Unlikely to Have Staying Power

CSPs continue to attempt to band together in key areas, such as network APIs via CAMARA and the Open Gateway API program, and on telco-specific large language models (LLMs) via the Telco AI Alliance, a recently created consortium spearheaded by SK Telecom and joined by several other major CSPs.

 

Using history again as a guide, initiatives such as these are unlikely to gain critical mass due to competitive, cultural and resourcing reasons, both between CSPs and within CSPs. For example, the recent past has seen AT&T’s (NYSE: T) Enhanced Control, Orchestration, Management & Policy (ECOMP)/ONAP (Open Network Automation Platform) and Deutsche Telekom’s (DT) MobiledgeX initiatives falter, with both being taken over by hyperscalers (Microsoft took over ONAP via its strategic arrangement with AT&T, and Google acquired MobiledgeX). The last major telco-led initiative to gain broad, global traction and yield significant benefits across the industry was the SMS initiative over 20 years ago.

 

TBR continues to believe that the best-suited players to make network APIs and LLMs relevant and outcome producing at scale are the hyperscalers, with CSPs likely to partner with hyperscalers for their boundarized portion of the overall market opportunity. Most CSPs are likely to remain technology consumers instead of technology producers, keeping them confined to connectivity providers and dependent on the vendor community and other players like hyperscalers for innovation.

CSPs Continue to Put the Cart Before the Horse with Enterprise Use Cases and Lack Focus on More Promising Consumer Opportunities, such as FWA

Most CSPs still have not deployed 5G standalone (SA) at scale, and those that have are not running truly cloud-native, microservices-based 5G cores. New enabling technologies, such as network slicing, are dependent on the adoption of cloud-native 5G core in a 5G SA architecture. This means that most CSPs globally are still not prepared to deliver on the promises of 5G for enterprise or to capitalize on the technology’s benefits.

 

CSPs can and should focus more on consumers, where fixed wireless access (FWA) is a proven, ROI-positive and scalable use case that is broadly relevant in most countries worldwide. CSPs’ current 5G non-SA networks and noncloud-native 5G SA networks are capable of supporting 5G FWA at scale, and this use case should be garnering more investment to drive more immediate revenue growth.

FWA Remains the Largest Revenue-generating Use Case for 5G and has Room to Scale

Though CSP deployment of 5G FWA is growing, most CSPs continue to underestimate the potential of the technology, likely because FWA ties up a lot of spectrum resources for relatively low average revenue per user (ARPU). TBR continues to believe that FWA represents one of the biggest opportunities for mobile network operators to monetize their 5G investments and drive scalable revenue growth.

 

Technological innovations currently available (e.g., multiband carrier aggregation, beamforming, extended range millimeter wave) and coming in the not-too-distant future (e.g., New Radio Unlicensed [NR-U], integrated access backhaul, silicon advancements) are likely to bring dramatic improvements in network performance, energy efficiency, and the usability of spectrum to support services such as FWA at large scale.

 

TBR maintains that 5G FWA should be thought of as wireless fiber and that the notion of having to deploy fiber to every business and residential premise globally is not only economically unfeasible but also unrealistic from a pure time-to-market standpoint to meet digital equity initiatives. 5G FWA can address these challenges and is a far more realistic and economically feasible technology to help the world bridge the digital divide, bring more competition in the global broadband market and support new use cases.

Finance Industry Indirectly Drives Investment in Private Cellular Networks

TBR analysts learned at MWC24 that the financial services industry is indirectly driving investment in private cellular networks. For example, the ability to track and obtain information from disparately located assets using IoT connectivity, such as heavy machinery and automobiles, is enabling businesses such as agriculture companies, fleet operators, mining companies, logistics companies and auto manufacturers to become eligible for various financial products, such as asset insurance and extended warranties, as well as lower premiums on existing insurance policies. Situations such as these are incentivizing the aforementioned types of businesses to invest in their own private cellular networks or pull CSPs into hybrid network situations.

Conclusion

The telecom industry is entering a new, more precarious phase of uncertainty. What CSPs and their vendors should be doing, they have been unable to do (or are moving far too slow), and what they should not be doing, they continue to cling to and do. If structural changes do not occur in the telecom industry in the next couple of years, the probability grows that other players (e.g., hyperscalers, software-centric vendors) will increasingly circumvent CSPs to pursue their own digital transformation-related interests.

 

The only players TBR has seen that have the financial and talent wherewithal, ability and credibility to deliver digital transformation and technological innovation at scale in the industrial internet era are hyperscalers and is likely to remain exclusively hyperscalers.

Expectations for GenAI Deployment in IT Services in 2024

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Current State of GenAI Deployment

Generative AI (GenAI) has been unavoidable, but the early 2023 hype has now been tempered by concerns around cost, technology challenges and ethics. To keep clients interested, IT services vendors and consultancies have pivoted from art-of-the-possible to business-backed use cases.

 

Persistent challenges around deploying actual GenAI-enabled solutions at scale have not abated, even as IT services vendors, consultancies and their clients have become more familiar with AI’s potential and limitations.

Watch 2024 Professional Services Predictions session – GenAI Hype in 2024: A Deep Dive into IT Services Industry Predictions

GenAI Adoption in 2024

Early investments by technology companies in hardware and software, by IT services vendors and consultancies in skills and business cases, and by clients in trying to understand how GenAI will change their business created a foundation for sustained opportunities around GenAI.

 

However, accelerated adoption will not happen until costs come down and data management improves. Concurrent with efforts to address early challenges, TBR anticipates a shift by IT services vendors and consultancies from selling use cases to selling outcomes, an approach more aligned with the evolving IT services and consulting value proposition.

 

As GenAI hype becomes a reality in 2024, outcome-based pricing as a preferred — and not occasional — commercial arrangement will accelerate. Vendors and their clients will expect AI, automation and analytics to provide greater transparency, which is always the most significant hurdle in outcome-based pricing arrangements.

Conclusion

At its core, GenAI depends on good data. Numerous surveys, including TBR’s Digital Transformation: Voice of the Customer Research, indicate that only a small percentage of enterprises sufficiently collect, manage and understand their internal data. Efforts to adopt GenAI-enhanced solutions will persistently run into data issues, opening the door for consultancies and consulting-led IT services vendors to assist with data orchestration. Cleaner data will allow for greater transparency around enterprises’ IT needs and the business results of GenAI-enabled digital transformations.

 

With greater transparency will come increased pressure — especially from C-Suite leaders sold on the promise of GenAI — for outcome-based pricing arrangements. Those IT services vendors and consultancies that are nimble enough with their business models and financially stable enough to take on risks will begin setting the standard, gradually — and then rapidly — replacing time and materials with an outcome-based pricing model.

 

To learn more about TBR’s predictions for IT services and consulting markets in 2024, download your free copy of Top Professional Services Predictions for 2024, featuring a look at GenAI pressures and talent challenges in the markets in the new year.

6G Transition: Preparing for Next-Gen Networks

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Current State of 6G

As the development cycle of the 5G era reaches the halfway mark (Check out this infographic!), the telecom industry has begun positioning for the commencement of the 6G era. The first set of 6G specifications is expected to be established in 2028 as part of the 3GPP (3rd Generation Partnership Project) Release 21 and initial commercial 6G network deployments are expected by 2030.

 

The telecom industry and global government entities have begun preparing for the 6G era via initiatives including determining criteria for standards development, establishing research consortiums and other strategic partnerships, identifying probable spectrum bands to support 6G, and exploring potential 6G use cases.

Telecom Industry and Government Entities Have Begun Preparing for 6G

Government Initiatives

Numerous countries and regions have begun pursuing initiatives to be at the forefront of 6G development. For example, in the U.S. the Federal Communications Commission’s (FCC) Technology Advisory Council established a 6G Working Group to provide recommendations to the FCC for 6G development. The Biden administration also recently announced the National Spectrum Strategy, which identifies potential future spectrum to support 6G (and 5G).

 

Other examples include South Korea launching a $325 million 6G commercialization and standardization R&D strategy; India establishing its Bharat 6G Vision, which aims for the country to launch 6G services by the end of 2030; and the European Union funding the Hexa-X research consortium, which includes leading vendors and operators. China has also begun embarking on research initiatives and experimentations to launch 6G by its target of the end of 2030.

Identifying 6G Spectrum

The clearance of additional spectrum in global markets will be essential in supporting escalating data traffic long-term as 6G is projected to support a 10x increase in usage on networks. Spectrum in the upper midband range (7GHz-24GHz) is being targeted as prime spectrum to support 6G as it is expected to provide an ideal balance of speed, propagation, coverage range and capacity.

 

Additional spectrum being considered for 6G includes lower-band spectrum (below 7GHz) due to its more widespread coverage range as well as millimeter wave spectrum due to its high bandwidth and capacity and low latency. Sub-terahertz spectrum (90GHz-300GHz) is also being explored for 6G, which would be able to support extremely high data rates though deployments would likely be limited to specific localized use cases, such as supporting holographic communications in a hospital or factory.

Use Case Exploration

6G is expected to support various use cases in areas including holographic communications, digital twins, AR/VR and autonomous robotics. Many of these types of use cases will have initially released to market during the 5G era but will gain greater adoption during the 6G era due to evolved network capabilities as well as supporting players such as device vendors providing more advanced accompanying solutions.

 

Network as a sensor is also being targeted, which will enable 6G networks to sense their surroundings to support a variety of use cases including public safety, healthcare and security. 6G will also enable operators to more cost-effectively support escalating data traffic on their networks as 6G provides advanced AI/machine learning (ML) capabilities and is more energy efficient than 5G.
 

Watch the Video Below to Learn How to Navigate the Telecom Industry as a Whole in 2024

Primary Driver for CSPs to Deploy 6G

Members of the telecom industry are cautiously optimistic about 6G due to its expected network efficiencies, ability to support escalating data traffic and potential 6G use cases. However, they are also voicing uncertainty and reservations around 6G, which is largely due to the high investment costs and limited monetization opportunities communication service providers (CSPs) have experienced in the 5G era.

 

Though 6G technical specifications and expected use cases are still in the developmental stages, TBR believes operators will be more calculated and tactical in investing in 6G compared to 5G, with a deeper emphasis on ensuring a clear line of sight to ROI before significant spending occurs.

 

The telecom industry has begun exploring 6G use cases, though the time frame for commercial readiness and the willingness of customers to pay for these solutions remain unknown. AR/VR use cases are a targeted area for 6G, including the metaverse and real-world simulations to provide training for users such as military personnel and first responders. Use cases around autonomous vehicles, advanced robotics, drones and 8K video are also key solutions being explored.

 

TBR expects the most beneficial use cases for 6G will involve the provisioning of advanced technologies that will enable operators to more cost-efficiently support rising traffic on their networks. For instance, deeper implementation of AI and ML technologies will enable operators to enhance self-optimizing network (SON) capabilities to realize cost efficiencies.

 

6G is also expected to result in deeper implementation of digital twins, which will help operators better anticipate potential outcomes to their networks and optimize their operations in areas including site management and field operations. Additionally, 6G is expected to be significantly more energy efficient compared to 5G, which will enable operators to improve cost efficiencies while helping to support corporate sustainability goals.

Conclusion

The telecom industry is on the cusp of the 6G era, with the first set of specifications expected to be established in 2028 and initial commercial deployments projected by 2030. Governments and industry players are actively preparing for this transition, with initiatives ranging from spectrum identification to use case exploration.

 

While there is cautious optimism about the potential of 6G, there are also concerns about the high investment costs and limited monetization opportunities that characterized the 5G era. However, with advancements in AI/ML capabilities, energy efficiency and the promise of transformative use cases, 6G is expected to offer significant benefits, including cost efficiencies and improved network performance.

 

As the industry continues to evolve, it will be crucial for stakeholders to carefully assess the ROI and strategic value of 6G investments.

 

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AI Impact on IT Infrastructure in 2024

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Expectations for AI and IT Infrastructure

2023 was a challenging year for server and storage OEMs, marked by weak demand across enterprise and SMB customers. The market recovery at large will be a slow one in 2024, partially accelerated by the boom in demand for AI-enabled compute and, to a lesser extent, customers’ desire to rebalance their portfolios with less reliance on costly public cloud services.

Watch TBR Principal Analyst Angela Lambert Discuss Expectations for AI’s Impact on IT Infrastructure in 2024

Predictions for the IT Infrastructure Industry in 2024

Prediction: AI-enabled infrastructure will create opportunities for new solutions

Enterprises will rush to acquire as much AI-capable hardware as possible, opening doors for a new portfolio of consulting, design, implementation and managed services.

Prediction: Cloud customers are looking for ways to decrease IT complexity and cost

As public cloud rates continues to rise, enterprises will continue to reevaluate workload placement to optimize performance and cost.

Prediction: Coopetition will continue to bring true multicloud environments closer to reality

Vendors are increasing investments with the top three cloud providers to expand their presence in cloud marketplaces and revamp hybrid cloud solutions with new levels of automation and integration.

 

TBR’s IT Infrastructure market and competitive intelligence research covers the financial performance and product and partner strategies of the world’s leading infrastructure vendors across server, storage, networking and hyperconverged markets. Specific topics include infrastructure vendor benchmarking, infrastructure strategy customer research, hyperconverged platforms customer research and infrastructure consumption services. Additionally, we publish individual analysis on Dell Technologies, Hewlett Packard Enterprise, IBM and Lenovo Group.

 

To learn more about TBR’s predictions for the IT infrastructure industry in 2024, check out our recent interview with TBR Principal Analyst and Infrastructure Practice Lead Angela Lambert.

Strategic Insight: Navigating the IT Services Market Using Competitive Intel

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Understanding Current IT Services Market Dynamics

Overall IT services revenue growth decelerated in 2023 as the market outlook remained uncertain, clients tightened budgets, and IT services vendors re-evaluated talent strategies in areas including hiring, composition and training. The majority of clients focused spending on run-the-business managed services as well as the integration of AI and digital solutions that provide more efficient ways of working, reducing overall expenses.

 

Additionally, cloud migrations and transformation-led activities helped clients reduce tech debt and consolidate cloud and application environments. According to TBR’s 3Q23 IT Services Vendor Benchmark, published on Jan. 16, “Enterprises are looking to establish strong and secure digital cores, paving the way for vendors to continue capitalizing on the need for cloud migration, applications modernization and data transformation services as well as cybersecurity opportunities. Vendors continue to experience profitability pressures due largely to rising labor and SG&A costs.”

 

In 2024, the needs emerging out of limited client budgets and centered on AI and efficiency will continue to guide IT services vendors’ portfolio expansion and talent development.

The Crucial Role of Competitive Intelligence in the IT Services Sector

To ensure business segments and portfolios are aligned with client needs, IT services vendors forge partnerships, such as with the hyperscalers, to create the ability to work within and across clients’ multicloud environments. For example, forging large-scale partnerships with Google Cloud, Amazon Web Services, Microsoft, Oracle and SAP equips vendors to deliver at scale across client needs and more easily support transformation projects even in a mature IT environment. With clients being more cost conscious, vendors that can seamlessly take over peer-driven transformations will be more successful in capturing new client engagements.

 

Acquisitions have proved to be a vital way for vendors to quickly add in-demand services and solutions as well as talent to better deliver on clients’ emerging needs. While overall acquisition activity slowed for most vendors during 2023, purchases that were finalized brought in specific capabilities that complemented existing strengths while also infusing new portfolio offerings. More specifically, vendors looked to deepen their capabilities and presence around cloud, security and AI, a trend we expect to continue — and possibly gain speed — in 2024.

 

Lastly, taking note of peers’ talent strategies and overall organizations enables vendors to effectively develop internal abilities and practices and strengthen client relationships. According to TBR’s special report IT services and consulting in 2024: Traversing GenAI pressures, talent challenges, and regulatory waves, “To battle employee attrition and take back control, employers ramped up training and other retention-enabling investments. While many tech companies made news by shedding headcount, most global systems integrators (SIs) and consultancies have sought to keep trained and experienced talent, minimize turnover, and prepare for renewed growth from late 2023 into 2024. … The 2023 focus on reskilling and training will pay off in accelerated revenues in 2024 as IT services vendors will have the trained and certified professionals to staff what TBR expects will be growing IT services demand.”

 

While most vendors look to certify employees on partner technologies, keeping pace with peers’ skills and certifications will enable vendors to better pursue software-driven projects. Additionally, efforts to reduce turnover remain similar across vendors, with a focus on training, culture and workplace flexibility. Vendors with more aggressive workplace practices and return-to-office policies may experience higher turnover than their peers. Across the IT services market, talent remains the key asset — vendors must keep in mind their peers’ strategies, investments and composition to successfully deliver client projects.

The Outlook for Competitive Intelligence in the IT Services Market

As uncertainty remains the common thread across market conditions as well as client and ecosystem company activities, vendors need to re-evaluate client retention strategies to ensure service quality standards are met. A focus on client management and success will enable vendors to effectively preserve market share by matching or exceeding peers’ client relationship efforts.

 

Limited budgets require more than communication, pushing vendors to ensure they can deliver on technology-driven transformation that infuses AI and automation capabilities as well as digital workplace services to drive operational efficiency and cost reduction for clients. Ensuring the right talent is in place to support innovation activities and maintain client relationships will be vital for vendors to secure positioning and remain ahead of peers.

 

Internal transformation projects to align business segments more closely with emerging technologies and services, including restructuring talent and spinning out or separating business units, will help vendors reposition and better compete for new opportunities. Additionally, offshoring and nearshoring will support vendors’ ability to deliver more cost-competitive contracts while also improving vendors’ profitability.

Conclusion

Competitive intelligence provides ongoing and context-specific guidance in the face of changing client needs and peers’ strengths and strategies. Keeping track of peer investments continues to increase in strategic importance to help vendors retain market share and capture projects with new clients.. Ensuring talent, business composition and positioning, and partner ecosystems are competitive with peers’ will further improve vendors’ stability by adding services capabilities and expertise, which will facilitate discussions and improve market leverage.

 

Maintaining a broader portfolio of services that address a wider range of digital, AI and cloud needs while also having partner expertise across a variety of IT environments will dictate vendors’ ability to compete effectively, expand presence and preserve existing client relationships.

 

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Unlocking Competitive Insights: Beginner’s Guide

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What Is Competitive Intelligence?

As the term implies, “competitive intelligence” is a set of practices that make your organization more competitive. What competitors are doing is one piece of this intelligence, but not the entirety. The perceptions and behavior of end customers are other important components of competitive intelligence. Since customers are ultimately what drives opportunities and revenue, understanding how your organization and competitors are perceived in the market is necessary to improve competitive positions.

 

Another facet of competitive intelligence is ecosystem intelligence, which includes partnerships. No business in any industry can operate in a silo, making partnerships an integral part of how value is conveyed to customers and the market.

 

Lastly, to truly be effective, competitive intelligence across competitors, customers and partners needs to be wrapped in the context of an organization’s current business situation. This final layer takes a collection of facts and observations and turns it into intelligence that can improve an organization’s competitive position, otherwise known as “competitive intelligence.”

Understanding Competitive Intelligence for Businesses

Importance of Competitive Intelligence for Businesses

Competitive intelligence can provide a number of benefits:

  • Apples-to-apples comparisons: Operating a business on a day-to-day basis can provide a lot of insight and information on competitors, but oftentimes the volume of information can be more challenging to fully understand and put into a useful context. Competitive intelligence that uses a standardized set of criteria, often with financial performance as the comparative metric, gives more rigor and confidence when drawing conclusions about your business’s performance versus competitors’.
  • Strategy development: Mimicking or copying competitors’ business practices is not always a good idea, but understanding what is taking place in the market can be a good way to generate some potential options your business should consider. An awareness of where competitors are investing and what forms those investments are taking can be a sound starting place for evaluating your own strategy.
  • Investment validation: In a similar vein to the benefits of strategy development, understanding how much competitors are investing in certain areas and in which forms can provide support and validation when making investments. This intelligence does not guarantee success or failure but at least provides an external point of reference that confirms other businesses are behaving in a similar fashion.

Key Objectives of Competitive Intelligence

  • Identify a key question or objective for the intelligence: Trying to learn everything about a competitor is not a realistic or feasible objective for intelligence. Breaking down the decisions your organization is trying to make so the intelligence can be targeted is the first step to make competitive intelligence valuable.
  • Identify the right competitors: This will partially be based on the first step above, but it’s a good second step to ensure the intelligence aligns to the outcome. Based on the key premise, understanding which competitors are more valuable than others helps focus the intelligence and research. This is where data points collected during business operations can help guide the decision making: Are there things being heard by the sales team or in customer conversations that warrant a deeper understanding?
  • Connect intelligence to the business operations and planning: Aligning to business strategies and outcomes is how competitive intelligence actually delivers value, so it’s best to have that coordinated early. Competitive intelligence should not be stored in a library but tied into ongoing business improvement and change.

The Process of Collecting and Analyzing Competitive Intelligence

Design and Standardization

Everything about operating in the information technology market is complex, including the offerings themselves, the web of partnerships and alliances involved in solution development and distribution, and finally the customer environments into which these solutions are deployed. For this reason, the boundaries, parameters and definitions of competitive intelligence are important to define upfront.

Research Methodology

After parameters and definitions for the study are defined, it’s important to next outline the methodology to be used for the research. Most times, a thorough secondary research effort provides a baseline for the intelligence. Nowadays, there is a wealth of sources available, including government financial filings, investor presentations, social media content and news outlets, that can provide quite a bit of competitive information.

Beyond those tactics, the broad realm of primary research can be used to dive deeper into specific questions. The target and method for that primary research vary quite a bit, however. If statistical feedback on customer behavior and perceptions is needed, then a survey is the best methodology. For more emerging topics, qualitative interviews can be the best medium. For more competitive studies, understanding key executives’ strategy and logic around taking certain approaches can be invaluable to connect the dots and provide actionable intelligence from the research.

Relevance for Your Business

For every competitive intelligence study, tying the key findings back to your own business is a critical step. No two companies are the same, so learning from competitors’ strategies and investments is helpful but not always directly applicable. To translate research into intelligence that is actionable, you need to take into account the nuances of your organization’s current state in the market, including strengths and weaknesses and existing perception among customers. No changes should be made without considering all the peripheral factors and existing stakeholders. The best way to make intelligence relevant is to include your own organization within the context of the study.

Implementing Competitive Intelligence in Your Business

A well-conducted competitive intelligence study is designed from the outset to be implemented into your business:

  • Definitions and parameters are clear upfront to make sure the findings are relevant to your business, markets and customers.
  • The methodology chosen is best suited to the types of intended actions and outcomes.
  • All internal stakeholders have been informed and included throughout the process to avoid surprises and minimize resistance to new changes and strategies.
  • The findings of the study have been framed within the context of your existing business.

Conclusion

When used effectively, competitive intelligence can be a powerful tool for your business. Operating in a competitive market, there can be a lot of uncertainty. Is your strategy aligned to what customers want? Are you overspending on certain initiatives? Are you missing potential opportunities to earn more revenue or reduce expenses?

 

For all of these fundamental questions, competitive intelligence can provide more certainty when making business decisions and ultimately increase your alignment to prevailing trends in the market. However, for competitive intelligence to deliver that benefit to organizations, the design and context of the intelligence are critical.

 

Narrowing in on key areas of research, with parameters and definitions clearly identified at the onset, is a best practice for getting started with competitive intelligence. On the back end, wrapping those pieces of intelligence in a final layer of context is the most effective way to realize the value from competitive intelligence efforts.

 

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How to Gain Cloud Market Share in 2024

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Current Cloud Market Landscape

The cloud market has been on a more than 15-year growth trajectory that rewarded leaders for establishing scale above all else. Early-to-market vendors, such as Amazon Web Services in infrastructure and Salesforce in SaaS, capitalized on the consistent market expansion to establish themselves as not only some of the largest cloud providers but also the largest vendors in their market segments across all delivery methods.

 

However, those firms also experienced some of the most dramatic slowdowns in revenue growth as the market softened in 2023. Part of that slowdown is undoubtedly the “law of large numbers,” meaning growth slows as size increases, but it also reflects a broader market shift toward growth created by new features, capabilities, and go-to-market programs.

Watch 2024 Cloud Predictions session: GenAI and the Cloud Revolution of 2024

Strategies to Gain Cloud Market Share in 2024

In 2024 we expect vendors that successfully implement the following strategies will become growth leaders in the cloud market:

Effectively Monetize Next-gen Features for AI-led Growth

While the market for GenAI and AI solutions more broadly is still developing, the investments from end customers appear to be very real and meaningful. Despite the intent to invest and spend, there are many hurdles for vendors to clear before they can start recognizing the revenue opportunity.

 

These hurdles include identifying and articulating use cases, measuring benefits and returns, implementing pricing models that work for both vendors and customers, and developing an ecosystem to support all these tactics. Vendors that make progress tackling these challenges stand the best chance of realizing AI-led growth in 2024.

Expand Addressable Markets

The benefits of an ecosystem have been clear for decades, but for many IT and cloud vendors, the changes to their business models have been too significant to overcome. However, in an environment where cloud vendors are experiencing slower growth and still trying to control expense levels, the ecosystem model is even more impactful.

 

Proficiency in orchestrating service partners, ISVs, resellers, and joint solution alliances around core offerings will be another growth driver for vendors in 2024.

Orchestrate Multivendor Partnerships

Managing a customer base that spans traditional legacy solutions and cloud-delivered ones has been a challenging task. To date, it has been simpler and easier for born-on-the-cloud providers to use a disruptive model to sell a simplified set of offerings to establish their position in the market.

 

However, there is now an advantage for multimode providers in controlling the transition to new solutions and delivery methods in a slower-growth environment. In the clearest example of this advantage, SAP has been able to sustain growth in 2023 even as its more cloud-dependent peers have experienced the impacts of the market slowdown.

 

The maturation of AI opportunities will also play a role in this advantage, as customers may end up with data models stored in a variety of places within their IT landscape, based on performance and security requirements.

Conclusion

In 2024 the cloud landscape will become segmented between vendors that can sustain high rates of growth and expansion and those that cannot. Simply providing cloud services at scale is no longer enough for vendors to gain cloud market share. More complex strategies will define the cloud leaderboard in 2024. Additionally, delivering AI-enabled next-generation capabilities and nurturing ecosystems will garner investment despite the slower market growth and macroeconomic uncertainty.

 

To learn more about TBR’s predictions for the cloud market in 2024, download your free copy of Top Cloud Predictions for 2024, featuring a look at GenAI and cloud evolution in 2024 and beyond.

MWC24: AI, Private Networks, Cloud, Network APIs and More

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Mobile World Congress (MWC) is widely regarded as the world’s most important event for the telecom ecosystem. The annual event sets the tone for the industry in key trends and market developments. Indicators suggest MWC24 will highlight some of the ways the telecom industry is leveraging and planning to leverage key technologies and concepts (e.g., AI, 5G-Advanced, 6G, private networks, edge computing, cloud-native networks, and network APIs) to achieve business objectives and outcomes.
 

Join Principal Analyst Chris Antlitz and Senior Analyst Mike Soper Thursday, March 14, 2024, for an exclusive deep dive into their top takeaways from MWC24, including their thoughts on how the aforementioned technologies are likely to drive technology and business model disruption and impact markets.
 

Register Now

In This FREE TBR Insights Live Session on Top Takeaways From Mobile World Congress 2024 You’ll Learn:

  • How the telecom industry intends to derive value from AI
  • How enterprises are progressing in their digital transformations and incorporating private networks
  • How the telecom industry is progressing on its journey to cloudified, AI-driven, next-generation networks

 

TBR webinars are held typically on Thursdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.
For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].