New Research

Summary

This IDC Market Analysis Perspective provides an overview of the size, growth, and key trends impacting the Canadian hosting and colocation services market in 2023.

Summary

This IDC Market Analysis Perspective provides an overview of the size, growth, and key trends impacting the Canadian managed cloud services market in 2023.

Summary

This IDC Market Glance offers a high-level view of the emerging generative AI (GenAI) technology and services landscape. It highlights key technologies in infrastructure, foundation models, GenAI platforms, GenAI applications, and GenAI services. IDC defines generative AI as a branch of computer science that involves unsupervised and semi-supervised algorithms that enable computers to create new content using previously created content, such as text, audio, video, images, and code.

Summary

This IDC Survey examines the IT services budget outlook for the remainder of 2023 and 2024 according to the views held by IT and business leaders as of July 2023. IDC's Global Technology Thought Leadership group conducts a monthly survey (source: IDC's Future Enterprise Resiliency and Spending Survey) to understand how IT and business leaders in enterprises are assessing risks and addressing cost management for their growing portfolio of technology resources. In total, 890 IT executives from North America, Europe, and Asia/Pacific were surveyed, including 104 from Canada.

Summary

This IDC Survey examines the IT services budget outlook for the remainder of 2023 and 2024 according to views held by IT and business leaders as of July 2023. IDC's Global Technology Thought Leadership group conducts a monthly survey (IDC's Future Enterprise Resiliency and Spending Survey) to understand how IT and business leaders in enterprises around the world are assessing risks and addressing cost management for their growing portfolio of technology resources and to gauge IT executives' sentiment on IT investment in the third quarter of the calendar year. In total, 890 IT executives from North America, Europe, and Asia/Pacific were surveyed.

Summary

This IDC Market Presentation highlights key findings from IDC surveys and research on digital sovereignty. Digital sovereignty requires national governments to have control over data, infrastructure, resources, and software created and relied upon to operate in the digital world. IDC defines digital sovereignty as:

• Self-determination — Protecting data, operational assurance, and stability
• Self-sufficiency — Supply chain management of employee skills and critical resources
• National survivability — Sustainability and defending national assets/critical infrastructure

Several use cases of digital sovereignty and national survivability highlighting sustainability are included in this Market Presentation.

"The apex of digital sovereignty is ensuring national survivability through defending national assets and critical infrastructure as well as ensuring national sustainability, says Adelaide O'Brien, research vice president, IDC Government Insights. "While every agency executive should be involved in digital sovereignty, 71% of global governments indicate that the agency CIO either leads the sustainability mission for the organization or is a strong supporter of the mission, "she adds.

Summary

This IDC study discusses digital transformation (DX) in national governments and its influence on prioritizing use cases for investment as well as the mission and strategic priorities that are driving technology spending.

"As national governments invest in digital resiliency, areas of focus will include investments in cloud to extend the reach and reliability of digital services, business intelligence, and AI/ML to better leverage data and improve decision making; modernizing the work environment for employees; and greater investments in technologies that ensure sustainability and assure trust, including cybersecurity." — Adelaide O'Brien, research director, IDC Government Insights.

Summary

This IDC Market Perspective introduces a framework that highlights the path to organizational impact for generative AI. This framework helps organizations work through the key activities that need to be established, illustrates the core technologies required, and proposes how organizations should think about new use cases to deliver organization impact. The report also shows how GenAI will reshape existing technology markets and create new ones over the coming decade, explains how enterprise investment in GenAI will drive value to different types of vendors, and provides guidance for vendors about how to position themselves for success.

"The technology industry stands at a seminal moment with the introduction of generative artificial intelligence (GenAI). In nine short months, GenAI has simultaneously captured the attention, imagination, and concern of most technology and business leaders across the world," said Bob Parker, SVP Research, IDC. "However, questions remain as to how investments will be allocated, how technology markets will adapt, and where the greatest value will be captured."

Summary

This IDC Market Glance provides an overview of the Canadian business and IT services vendor landscape segmented by the 14 IDC services foundation markets in IDC's services taxonomy. This IDC Market Glance shows the top vendors by share of market, as per IDC's Semiannual Services Tracker, for each of the 14 foundation markets and other significant vendors that have strong regional and Canadian operations.

Summary

This IDC Survey Spotlight provides insights from IDC's Future Enterprise Resiliency and Spending Survey, Wave 6, conducted in July on the change in GenAI adoption between March and July 2023, as well as early decisions related to strategic GenAI partners. In what is a seminal moment in the technology industry, GenAI is quickly gaining the attention of technology and business leaders worldwide. The number of companies worldwide making significant GenAI investments or initiating exploratory projects rose meaningfully since March 2023. IT leaders made clear, however, that they have not yet settled on any one type of technology supplier as their preferred partners for exploring and leveraging GenAI. Public cloud providers and IT consulting providers are the most frequently mentioned, but relatively new GenAI tools providers were also cited by a significant number of enterprises.

Summary

This IDC Survey Spotlight highlights worldwide government responses to an IDC survey from June 2023. 91% of government responders indicate that generative AI will have an impact on the organization's work transformation. The greatest impact from generative AI will be to save employees' time and productivity gains by enabling employees to focus on higher-value work.

Summary

On August 8, 2023, Kyndryl hosted an earnings call and disclosed its financial results for the first quarter of fiscal 2024, covering the three months ending June 30, 2023. The earnings call was led by Martin Schroeter, Kyndryl's chairman and chief executive officer, and David Wyshner, Kyndryl's chief financial officer. Kyndryl reported revenue of $4.2 billion, representing a y/y decline of 2% as reported (i.e., current currency) and a year-over-year (y/y) decrease of 1% in constant currency. Adjusted EBITDA for the quarter was $612 million, representing an adjusted EBITDA margin of 14.6%. Kyndryl had adjusted pretax income of $47 million in the quarter, representing an adjusted pretax margin of 1.1%. Kyndryl had a net loss of $141 million for the quarter, a margin of -3.4%. This document analyzes and reports on y/y revenue growth in constant currency for the remainder of this document unless otherwise noted.

Kyndryrl's focus on profitability through productivity gains and margin expansion is paying off. Kyndryl stated that annual losses for the company are behind it. It also expects its adjusted free cash flow to be positive in fiscal 2024. And key margins have increased to their highest levels in 6 quarters. Gross margins in the quarter were 17.7%, 350 basis points higher than in FY 1Q23. Adjusted EBITDA margins were 14.6%, 310 basis points higher than the previous year. Adjusted pretax margins were 1.1%, 230 basis points higher than the previous year. Net income margins were -3.4%, an increase of 250 basis points on the previous year. The trend Kyndryl sees in its profit performance puts it on the path to profitability in fiscal 2024.

Kyndryl also reaffirmed its commitment to delivering revenue growth in calendar year 2025 (Kyndryl's FY26). Kyndryl outlined how it will return to revenue growth that IDC noted. First, Kyndryl expects to retain and redress most of its unprofitable "focus" accounts and not exit these accounts, unless necessary. When Kyndryl spun off from IBM, 40% of its revenue came from accounts that were generating no gross margin and were unprofitable after expenses – which Kyndryl called "focus" accounts. In the earnings call, Kyndryl stated that it expects to remedy the margins on approximately 40% of its "focus" accounts this fiscal year, and 80% of those accounts by March 2027. Second, Kyndryl will reach an inflection point in fiscal 2025 when half of its revenue will be based on post-spin contracts signed by Kyndryl rather than pre-spin contracts it inherited. This is an important milestone as its revenue will be based on pricing discipline that is profitable. The improvements "focus" accounts and continued revenue growth in its service lines is combining to result in revenue growth in calendar 2025.

Additional financial details that IDC noted are as follows:

• Kyndryl reported signings declined 5% in 1Q24 to $2.8 billion but up 9% through the first 4 months of its fiscal year.
• Kyndryl Consult revenue for the quarter grew 20% and represented 14% of Kyndryl's total revenue. Kyndryl is pleased with the results of the Consult business as revenues tend to be higher margin and creates follow on project and annuity revenue streams.
• Kyndryl reported constant-currency revenue growth in one of four geographic segments in 1Q24. Japan grew 2% in the quarter, while the United States was almost flat. Revenue in principal markets (Australia/New Zealand, Canada, France, Italy, Germany, India, Spain/Portugal, and the United Kingdom) declined 2% in the first quarter. The strategic markets segment (other geographies, for example, Brazil, Korea, Nordics, and Singapore) saw revenue decline 3%.
• Security and resiliency is a big business for Kyndryl, representing $2 billion in annual revenue. Kyndryl launched security operations centers in Italy, Canada, Hungary and Spain, and plans to open centers in India and Japan this year.

Kyndryl's upgraded its outlook for fiscal 2024 on profit growth but the outlook for revenue was held steady. It predicts adjusted EBITDA margin of approximately 14%, up 100 to 200 basis points than its outlook as of May 2023. Kyndryl upgraded its adjusted pretax income outlook to be at least $100 million, as compared to being negative to flat. Kyndryl reaffirmed its forecast for fiscal 2024 revenue to be $15.8 to $16.2 billion, representing growth of -6% to -8%.

Progress on Kyndyl's "Three As" Initiatives

Both Schroeter and Wyshner commented on Kyndryl's progress on executing the company's "three As" initiatives of alliances, advanced delivery, and accounts is ahead of pace. IDC is watching Kyndryl's progress on the "three As" because of their importance on the company's revenue growth and improved profitability objectives. The accelerated progress Kyndryl has made on executing these initiatives has enabled its declarations on being profitable in 2024 and growing revenue in 2025. Here are some of the key highlights we noted on the "three As" initiatives from the earnings call:

• Alliances. Kyndryl delivered more than $80 million in hyperscaler-related revenue in 1Q24, on a full year target of $300 million. Kyndryl continues to invest and expand its alliance relationships, as illustrated by its announcement on August 9 that sees it collaborating with Microsoft on generative AI (GenAI) leveraging its joint innovation centers and other capabilities. Today, Kyndryl has 37,000 hyperscaler certifications, up 70% from the previous year.
• Advanced delivery. Kyndryl made progress on its transformation initiative to automate service delivery and upskill delivery resources. Kyndryl has been able to free up more than 6,500 delivery resources through automation and upskilling to address backfill attrition and address new revenue opportunities. The results are a $75 million earnings benefit in 1Q24 over the previous year, and it expects $375 million in annualized savings from automation. Kyndyl Bridge now has more than 500 global enterprise clients onboarded and Kyndryl expects that number to increase to more than 1,000 by March 2024.
• Accounts. Kyndryl's initiative to improve the health of the company's unprofitable "focus" accounts has resulted in a profit improvement of $90 million in 1Q24 over the previous year, representing improved annual profitability of more than $300 million in these accounts, which contributed zero gross margin to Kyndyl's profitability when the company spun-off from IBM. Kyndryl is making deft progress on an account-by-account basis as Kyndyl wants to maintain its clients and abide by the terms of contractual obligations. Sometimes it can enable a change mid-contract by renegotiating pricing or adding higher-profit services like Kyndryl Consult. Other times, it must wait until contract renewal. Schroeter highlighted the importance of brand permission with clients to engage in new ways and illustrated an example of a "focus" account where they added mainframe modernization and cloud services to accelerate the client's digital transformation and improving Kyndryl's profitability on the account.

Summary

This IDC study provides IDC's forecast and spending for the worldwide managed cloud services (MCS) market across eight major regions for the 2023–2027 forecast period. IDC views managed cloud services as an extraction view of IDC's technology outsourcing services markets involving application management (AM), hosted application management (HAM), hosting infrastructure services (HIS), IT outsourcing (ITO), and network and endpoint outsourcing services (NEOS). For details on the definitions of managed cloud services, see the Market Definition section as well as IDC's Worldwide Managed Cloud Services Taxonomy, 2022 (IDC #US48523822, June 2022). This study also includes advice to providers of IT services, an analysis of key market and industry trends by key managed cloud services markets and regions, key market drivers and inhibitors, and significant market developments.

"The combination of client expectations of managed SPs to support an expanding set of cloud needs and greater competition from public cloud providers is placing pressure on managed SPs to make fundamental changes to their business models to ensure success," says David Tapper, program VP, Outsourcing and Managed Cloud Services at IDC. "Ensuring success in the managed cloud services market will require that managed SPs emphasize delivering outcomes, embed financial operations (FinOps) as part of multicloud management, invest in high-level skills with the right organizational structure, provide holistic data assurance, incorporate advanced automation, prepare for changing competitive landscape, create a robust governance structure, build a new operating model, implement an integrated matrix in using public cloud partners, and structure the ecosystem of partners into a cohesive and integrated system."

Summary

This IDC Market Presentation highlights key findings from federal government decision makers' responses to IDC's 2023 Worldwide Industry CloudPath Survey. The presentation takes a deep dive look at the progress agencies are making in deploying cloud, agency roles involved in final decision making, drivers and challenges in deploying multicloud, and top workloads deployed at the edge.

"Security is a key driver for agencies to adopt cloud, the top criteria used to determine if a vendor is trustworthy, and is used to evaluate cloud SPs," says Adelaide O'Brien, research vice president, IDC Government Insights. "Security is also a top challenge associated with multicloud, and it impacts migrating workloads to cloud," she adds.

Summary

IBM's earnings release for 2Q23 reported revenue of $15.5 billion (up 0.4% y/y at constant currency, down 0.4% y/y as reported) — the sections that follow will use constant currency growth unless otherwise noted. Free cash flow year to date (YTD) is $6.4 billion. The financial results were consistent with guidance and on track to meet its stated goal of $10.5 billion of free cash flow for the year.

The emphasis on productivity gains and margin expansion is having an impact as pre-tax operating margin increased 140 basis points, adding to the 130 basis point gain in the first quarter. The quarter had some important announcements including the intent to acquire Apptio (anticipated to close by the fourth quarter; see IBM to Acquire Apptio and Enhance Its Leadership in the Cloud FinOps Space and to Create a Platform for Digital Business and Gen AI FinOps, #, July 2023) and the release of the watsonx family of AI software products. These announcements had only a modest impact, if any, on the second quarter results, but should be important contributors by 2024.

Software revenue grew 8% Y/Y, maintaining steady sequential growth. Interestingly, the more legacy part of the portfolio, transaction processing, grew above the overall number at 10%, which the company equated to the z-series refresh cycles pulling the relevant software through. Hybrid platforms and solutions grew at 7%, up from 5% in the first quarter.

Within the hybrid category, Red Hat continues to be the leading driver of growth (11% y/y), but security software (down 1%) and automation (2%) growth rates appear to be below the overall market in those categories. Data and AI software was up 11%, which is an encouraging increase over the first quarter (3%). It is too early to project the impact of the watsonx offering, but this increase in the rate of growth is evidence that customers are excited, and IBM will likely capture a profitable share of this market.

Consulting

Growth for IBM Consulting remains around market averages at 5.9%. Growth was relatively consistent across the broad categories including business transformation (5%), technology consulting (5%), and application operations (8%). Business transformation is particularly important for IBM to establish strategic relationships and its offerings in this area are very competitive. YTD growth has been very good considering some of the economic headwinds, which impacted discretionary project spending in the United States.

IBM's trailing 12-month book-to-bill ratio was 1.1, which was up from the first quarter. The company reported excellent bookings (what IBM calls signings) growth at 24%, including 50% growth in AI-related projects. The bookings' growth explains the healthy book-to-bill results and growth in AI-related projects, if it can be sustained, bodes well for revenue growth going forward with IBM indicating Consulting full-year revenue growth in the 6–8% range in 2023.

Infrastructure

Summary

This IDC Market Note provides an overview of IBM's Think on Tour Toronto event held on June 21, 2023. The event provided Canadian participants with IBM's viewpoints on a variety of topics (intelligent automation, security, sustainability, hybrid cloud), but emphasis was placed on artificial intelligence, machine learning, and GenAI.

"Artificial intelligence has generated two primary responses for both consumers and businesses: excitement and fear. By pursuing a responsible, ethical, and sustainable AI strategy in its watsonx product and service offering, IBM is bringing to market an AI platform that it believes will address stakeholder concerns while delivering the benefits of advanced AI technology," says Jim Westcott, research manager, Application Solutions, IDC Canada.

Summary

This IDC Survey includes data from the IDC Future Enterprise Spending and Resiliency 2023, Wave 4 survey. This survey of n = 890 in North America, Asia/Pacific, and Western Europe was conducted in late February and early March 2023 while IT leaders were starting to execute their 2023 IT investment plans. They reflect the attitudes and expectations at that moment. This survey was conducted in the weeks after the Silicon Valley Bank (SVB) and other banking difficulties and reflects the preliminary impact those events may have on economic and IT spending outlooks. This report explored the expectations and intentions of Asia/Pacific respondents relating to economic outlook, tech spending, and recession outlook. Finally, the report also offers guidance to technology vendor marketing and sales leaders on how they can leverage the findings and insights from the study to enhance the market messaging and sales value proposition communication for their solutions, services, and engagement models.

Summary

This IDC Survey explores end-user organizations' economic outlook and 2023 budget expectations, comparing European and worldwide survey results. Data is based on IDC's Future Enterprise Resilience and Spending Survey, conducted in May 2023.

Summary

This IDC PlanScape provides federal agencies a framework to make strategic choices regarding the type of AI solutions they should leverage to address the skills gap in federal agencies. This IDC PlanScape highlights several solutions developed by leading federal government technology providers, provides agency examples of successful outcomes, and presents the role of stakeholders involved.

"AI can assist agencies in a life cycle of skill acquisition, from identifying qualified candidates to engaging and upskilling current employees," says Adelaide O'Brien, research vice president, IDC Government Insights.

Summary

This IDC Perspective is the second of three U.S. federal government research documents on digital sovereignty and covers digital sovereignty — self-sufficiency. This includes strengthening and protecting U.S. national security and the digital economy through the supply chain management of critical resources, such as employee skills, and hardware, and software bill of materials.

"National digital sovereignty is evolving because of global events, such as the COVID-19 pandemic, ongoing geopolitical uncertainties, volatility created by climate change–related disasters, viral misinformation, and burgeoning cyberthreats to governments and critical national infrastructures," says Adelaide O'Brien, research VP, IDC Government Insights.

Summary

This IDC Survey examines the IT services budget outlook for the remainder of 2023 and 2024 according to views held by IT and business leaders as of May 2023. IDC's Global Technology Thought Leadership group conducts a monthly survey (IDC's Future Enterprise Resiliency and Spending Survey) to understand how IT and business leaders in enterprises around the world are assessing risks and addressing cost management for their growing portfolio of technology resources. In January 2023, we reached out to IT decision makers as they were making 2023 technology budget decisions in the face of continued concerns about inflation, recession, and skills shortage. We wanted to get early measurement of how investment plans in key technologies and IT service categories were evolving. We repeated the survey in May 2023 to compare the executives' sentiment in the second quarter of the calendar year. In total, 890 IT executives from North America, Europe, and Asia/Pacific were surveyed, including 105 from Canada.

Summary

This IDC Survey examines the IT services budget outlook for the remainder of 2023 and 2024 according to views held by IT and business leaders as of May 2023. IDC's Global Technology Thought Leadership group conducts a monthly survey (IDC's Future Enterprise Resiliency and Spending Survey) to understand how IT and business leaders in enterprises around the world are assessing risks and addressing cost management for their growing portfolio of technology resources. In January 2023, we reached out to IT decision makers as they were making 2023 technology budget decisions in the face of continued concerns about inflation, recession, and skills shortage. We wanted to get early measurement of how investment plans in key technologies and IT service categories were evolving. We repeated the survey in May 2023 to compare the executives' sentiment in the second quarter of the calendar year. In total, 890 IT executives from North America, Europe, and Asia/Pacific were surveyed.

Summary

This IDC Market Perspective provides an overview of business metrics that matter for the services industry. As the saying goes "You can't manage what you can't measure." Tracking and measuring the right set of metrics will maximize chances for success for any organization. Services firms need to consider all sets of stakeholders such as themselves (i.e., tech suppliers), customers (i.e., tech buyers), and third-party analyst firms (i.e., tech/company watchers and shareholders) when looking to track all three sets of metrics. Also, organizations shouldn't look at these metrics as numbers to beat or achieve, it is important to understand the value associated with each metric.

"Without proper performance measurement metrics, it is difficult for any organization to undertake effective decision making. Organizations that aspire to be world class and agile need to track and measure the relevant metrics to achieve growth and meet their strategic objectives," says Nishant Bansal, associate research manager, IDC's Worldwide Services.

Summary

This IDC study provides IDC's forecast for the Canadian application outsourcing services market for 2023–2027.

"The application outsourcing services market is quickly changing in the digital business era. Spending growth was higher than expected in 2022, driven by application modernization initiatives. As the post-pandemic Canadian economy improves, IDC expects the application outsourcing services market to grow over the next five years. Cloud adoption continues to rise, and organizations are working to modernize more of their application portfolios in a hybrid cloud environment. In addition, organizations are struggling to find application-related skills to help modernize and digitize applications and look to external service providers (SPs) to complement their internal capabilities, leading Canadian organizations to use application outsourcing more," says Jason Bremner, research vice president, Industry and Business Solutions.

Summary

This IDC Market Glance provides an overview of the worldwide business and IT services vendor landscape segmented by the 14 IDC services foundation markets in our services taxonomy. This IDC Market Glance shows the top 15 vendors by share of market revenue, as per IDC's Semiannual Services Tracker, for each of the 14 foundation markets and 5 significant vendors identified by the analyst leading IDC's coverage of each foundation market.

The worldwide business and IT services market represents a $1.2 trillion annual revenue opportunity for services vendors. IDC tracks the revenue performance of hundreds of services vendors on an ongoing basis, including more than 550 vendors named in IDC's Semiannual Services Tracker.

Summary

This IDC Perspective highlights topics covered during the UiPath Together Public Sector Summit on May 23 in Washington DC. Well over a dozen federal agency executives took the stage to discuss how they are transforming mission operations through automation ─ creating simple, frictionless experiences for employees and customers; delivering immediate results and mission impact; and building a foundation of innovation to drive more value for their mission.

"This summit enabled UiPath to reinforce its strategic move to an enterprise software provider and position its Business Application Platform as foundational for agencies to automate business processes at scale," says Adelaide O'Brien, research vice president, IDC Government Insights.

Summary

This IDC study provides IDC's forecast for the Canadian infrastructure outsourcing services market for 2023–2027. It is an update of the previous forecast published in Canadian Infrastructure Outsourcing Services Forecast, 2022–2026 (IDC #CA47670022, May 2022).

"The infrastructure outsourcing services market continues to change, and the post-pandemic economy will accelerate change in the market. The decline in 1st and 2nd Platform technologies is leading to slow managed services spending on these areas, while the growth in 3rd Platform technologies to support digital transformation is increasingly incorporated into managed service engagements," says Jason Bremner, research vice president, Industry and Business Solutions at IDC.

Summary

This IDC study reviews the top managed IT SPs in Canada across the five foundation markets.

"The managed IT services market in Canada performed better than expected in 2022. Some vendors capitalized on the market opportunity and grew share, while others lost share. Lowering costs and IT skills shortages continue to be the underlying drivers for spending on managed IT services, a situation that is not expected to abate in 2023 and 2024," according to Jason Bremner, research vice president, Industry and Business Solutions at IDC Canada. "Managed SPs that can evolve to meet changing client needs for discrete managed services — also called selective outsourcing — while also enabling transformation for clients will align to the market opportunity and position themselves to gain more share in this large market."

Summary

On May 17, 2023, Kyndryl held a quarterly earnings call and disclosed its FY 4Q23 and full year 2023 results. The earnings call was led by Martin Schroeter, Kyndryl's chairman and chief executive officer, and David Wyshner, Kyndryl's chief financial officer. Kyndryl reported revenue of $4.3 billion, representing a y/y decline of 4% as reported (i.e., current currency) and a y/y increase of 1% in constant currency. FY 4Q23 revenue growth was better than the full year. For fiscal 2023, Kyndryl reported revenue of $17.0 billion, representing a y/y decline of 7% as reported and 0% growth in constant growth. Adjusted EBITDA for FY 4Q23 was $476 million and FY23 was just under $2.0 billion. Kyndryl has a net loss of $737 million in the fourth quarter and almost $1.4 billion for full year 2023. This document analyzes and reports on revenue growth in constant currency for the remainder of this document unless otherwise noted.

Summary

This IDC Perspective examines the transformation of EllisDon, one of Canada's leading construction and services firms. In response to the shifting priorities of sustainable and responsible business practices, EllisDon has become a leader in the digital business paradigm by transforming its guiding principle as a business that operates in a market that consumes large quantities of natural resources and is responsible for an overly large proportion of greenhouse gas emissions.

"At a fundamental level, the digital business paradigm is about the evolution of business and business operations. As a country, Canada is often associated with a conservative nature that disproportionately favors followers rather than market leaders. EllisDon is an example of a Canadian company that is using the principles of digital transformation and the IDC Digital Business Model and science-backed, data-driven insights to be a market leader in the construction and services industry," says Jim Westcott, research manager, Application Solutions at IDC Canada.

Summary

This IDC Tech Buyer Presentation provides a detailed review of the Canadian Provincial and Municipal Governments ICT market. Background and insight are provided on the market size, structure (provincial ministries and shared service, etc.), and trends.

Summary

This IDC Market Note focuses on the implications of the Wipro FullStride Cloud GBL. Wipro announced a realignment of its two main global business lines into four global business lines to more closely align with customer priorities. The reorganization became effective as of April 1, 2023. Wipro has reorganized into four GBLs to fuel its revenue growth after seeing its revenue grow 45% over the past 10 quarters.

Summary

This IDC Market Presentation provides a detailed review of the Canadian federal government ICT market. Background and insight are provided on the market size, structure (e.g., departments, ministries, Crown corporations), and trends.

Summary

This IDC Market Note discusses SAS' annual analyst conference that returned in person, after a three-year pandemic-driven hiatus, to showcase several pivotal market and technology developments of interest to government.

"In several key software business lines (decisioning intelligence, advanced analytics, and AI), SAS has arguably been ahead of the market, in effect waiting for the broader market to catch up; in others (cloud, open IT, interoperability, and usability), SAS has been trailing and has been focused on regaining ground," said Alison Brooks, research vice president, IDC Government Insights. "The three-year gap afforded by the pandemic provided some perspective on SAS' progress; SAS is indeed both taking its competitive threats seriously and leveraging its core expertise and differentiators."

Summary

This IDC Market Presentation uses a curated selection of IDC Canada's survey data of Canadian IT and line-of-business decision makers to investigate the Canadian financial services sector's current approach of digital infrastructure, ranging from cloud computing to datacenters to application modernization. The financial services sector, which includes banking, financial markets and financial retail, and life and property and casualty insurance, is a growing and critical component of the Canadian economy.

The IDC Market Presentation also provides insights to the enterprise ICT infrastructure vendor ecosystem — manufacturers, value-added resellers, and channel partners — to make decisions around sales, marketing, communications, and go-to-market investments in targeting the Canadian financial services sector.

Summary

This IDC Market Presentation provides a detailed review of the Canadian financial services market. Background and insight is provided on the market size, structure (banking, financial markets, life and P&C carriers, etc.), and trends.

Summary

This IDC Perspective presents the U.S. federal government requirements, laws, and presidential executive orders relating to digital sovereignty as it relates to data, technical requirements of cloud and cybersecurity, operational requirements, and assured workloads and resiliency. Digital sovereignty is a relatively new concept driven by data privacy laws, regulatory needs, and sustainability requirements. This document is the first of three U.S. federal government research documents on digital sovereignty and covers digital sovereignty — self-determination. Additional research reports will cover digital sovereignty — self-sufficiency and digital sovereignty — survivability.

"Digital sovereignty is a journey, not a destination — and requires continuous monitoring, auditing, reporting, and upgrades to stay abreast of the latest requirements, says Adelaide O'Brien, research vice president, IDC Government Insights. "Cloud providers and systems integrators are key in helping agencies meet these challenges," she adds.

Summary

This IDC Survey explores the economic outlook and 2023 budget expectations for professional and managed services and compares European and Worldwide survey results. Results are based on IDC's Future Enterprise Resilience and Spending Survey, conducted in January 2023.

Summary

This IDC Vendor Profile provides an overview of how Salesforce is delivering a 360-degree view of constituents through secure, open data sharing across multiple sources. And by embedding real-time decision support into the benefits and services processes through the composable case management capabilities of Public Sector Solutions, Salesforce enables real-time case team and cross-agency collaboration to create empathetic and holistic pathways for successful outcomes.

Summary

This IDC Perspective looks at the Biden–Harris administration's release of its National Cybersecurity Strategy (NCS) on March 2, 2023, which seeks to address profound shifts in the cybersecurity landscape, specifically growing threats to critical infrastructure, such as those seen in the SolarWinds and Colonial Pipelines ransomware attacks. "As clearly laid out in the NCS, cybersecurity fortification is indeed a precursor to the digital economy," says Alison Brooks, Research VP, IDC Government Insights.

Summary

This IDC Survey Spotlight examines a recent IDC survey on the impact of inflation on global government organizations. The top impact selected by responders is the impact on staffing and labor shortages, selected by 19% of responders. Managing demand for cloud subscriptions in line with budgets is also a top concern. This IDC Survey Spotlight examines these impacts and offers some interpretations. "Government agencies have witnessed staffing and labor shortages for some time," says Adelaide O'Brien, research vice president with IDC Government Insights. "Agencies should take advantage of tech company layoffs of skilled workers with highly transferrable skills as this presents an opportunity for government to hire skills long in demand," she adds.

Summary

This IDC Market Presentation provides the current state of AI adoption in U.S. Federal Government. 43% of agencies surveyed are using AI to develop new products/services, reduce risk, and increase employee productivity and customer experience. Agencies are deploying AI for several key use cases and primarily outsource AI capabilities, developing capabilities/solutions using a third-party software or services provider. Federal agencies ensure ROI from AI by prioritizing key use cases, deploy high-quality data training, and leverage domain expertise.

Summary

This IDC Survey examines the 2023 IT services budget outlook. IDC's Global Technology Thought Leadership group conducts a monthly survey (IDC's Future Enterprise Resiliency and Spending Survey) to understand how IT and business leaders in enterprises around the world are assessing risks and addressing cost management for their growing portfolio of technology resources. In January 2023, we reached out to IT decision makers as they were making 2023 technology budget decisions in the face of continued concerns about inflation, recession, and skills shortage. We wanted to get early measurement of how investment plans in key technologies and IT service categories were evolving. In total, 1,032 IT executives from North America, Europe, and Asia/Pacific were surveyed, including 100 from Canada.

Summary

This IDC Survey examines the 2023 IT services budget outlook. IDC's Global Technology Thought Leadership group conducts a monthly survey (IDC's Future Enterprise Resiliency and Spending Survey) to understand how IT and business leaders in enterprises around the world are assessing risks and addressing cost management for their growing portfolio of technology resources. In January 2023, we reached out to IT decision makers as they were making 2023 technology budget decisions in the face of continued concerns about inflation, recession, and skills shortage. We wanted to get early measurement of how investment plans in key technologies and IT service categories were evolving. In total, 1,032 IT executives from North America, Europe, and Asia/Pacific were surveyed.

Summary

This IDC PeerScape offers advice for IT executives, sourcing executives, and other business executives to employ when procuring remote datacenter hosting services and, specifically, colocation and interconnection services.

"Canadian organizations have been sourcing datacenter operations and management services from providers for many years. The market has evolved from full-scope datacenter outsourcing to managed services using colocation and managed hosting and, increasingly, cloud-hosted services. IDC advises organizations consider implementing the practices listed in this study to increase the value and satisfaction they receive from these services," says Jason Bremner, research vice president of Industry and Business Solutions, IDC Canada.

Summary

On February 8, 2023, Kyndryl held a quarterly earnings call and disclosed its FY 3Q23 results. Kyndryl reported revenue of $4.3 billion, representing a year-over-year (y/y) decline of 6% as reported and a y/y increase of 3% in constant currency. After factoring in post IBM separation adjustments, pro forma revenue growth was 2% in constant currency. Through the first nine months of FY23, Kyndryl reported revenue of $12.8 billion, a decline of 8% but flat 0% growth in constant currency (1% growth in constant currency pro forma revenue). This document analyzes and reports on growth in constant currency pro forma unless otherwise noted. The earnings call was led by Martin Schroeter, Kyndryl's chairman and chief executive officer, and David Wyshner, Kyndryl's chief financial officer.

In summarizing the financial results of the quarter, Wyshner stated, "In short, if it weren't for currency movements this quarter, we'd be reporting year-over-year revenue growth and positive pretax margins." Here are several key quarterly financial details that IDC noted:

• Kyndryl reported sequential revenue growth of 3% (q/q) after four quarters of decline (six quarters without forma adjustments).
• Kyndryl had revenue growth in three of four geographic segments, led by the United States with 7%, Japan with 2%, principal markets (Australia/New Zealand, Canada, France, Germany, India, Italy, Spain/Portugal, and the United Kingdom) with 0%, and strategic markets (other geographies) with 2%.
• Kyndryl includes $3.2 billion in contract signings for the quarter and total signings for FY23 year-to-date signings reaching $8.6 billion.
• Kyndryl Consult accounted for 12% of total revenue in the quarter (approximately $516 million), which represents y/y increase of 19%.
• Kyndryl Consult signings for the quarter were more than $600 million; FY23 year-to-date signings for Kyndryl Consult increased 32% from the prior year period.
• Adjusted EBITDA was $580 million in the quarter, a y/y decline of 1% primarily due to negative currency impacts and partially offset by higher revenue and cost savings from strategic initiatives.
• Kyndryl's signings in the company's Cloud, Security and Resiliency, Network and Edge, Applications, Data and AI, and Digital Workplace service practices accounted for 73% of signings in the quarter.

For FY23, Kyndryl raised its revenue growth by 0.5 percentage points and is projecting FY23 revenue of $16.8 billion to $17.0 billion in constant currency, up $500 million from the previous guidance. And Kyndryl reaffirmed its margin outlook with adjusted EBITDA margin in the range of 12.5% to 13.5% and adjusted pretax margin in the range of -0.5% to 0.5%.

Progress on Kyndryl's"Three As" Initiatives

Both Schroeter and Wyshner commented on Kyndryl's progress on executing the company's "three As" initiatives of alliances, advanced delivery, and accounts. As noted in Monitoring Kyndryl's Performance in 2023 (IDC #US50191523, February 2023), we are watching Kyndryl's progress on the "three As" because of their importance on the company's revenue growth and improved profitability objectives it wants to reach by 2025. Here are some of the key highlights we noted on the "three As" initiatives:

• Alliances. Kyndryl has achieved $750 million in hyperscaler signings, putting it on target to reach its goal of $1 billion in hyperscaler signings in FY23. It is also embedding hyperscaler services and technologies into its install base with the number of customer contracts with hyperscaler-related components up 300% since the beginning of FY23. And Kyndryl's efforts to reskill employees in new capabilities is also paying off, with nearly 32,000 hyperscaler certifications today, up 98% from a year ago, and almost 6,000 hyperscaler certifications added in the quarter.
• Advanced delivery.Kyndryl's initiative to transform service delivery through upskilling and automation made progress in the quarter. More than 4,500 delivery resources have been redeployed to address new revenue areas or backfill resources lost to attrition, up 1,500 resources from the previous quarter. Kyndryl is generating more than $225 million in annualized cost savings from service delivery automation, ahead of its fiscal 2023 objective. Nearly 500 customer accounts are now onboarded to the AIOps component at the core of Kyndryl Bridge, after the company launched the platform in September.
• Accounts. Kyndryl is making progress in accounts initiative, and it is realizing $130 million per year in annualized pretax benefits. It is optimizing its cost base through service delivery standardization and automation. And it is expanding scope of work in some accounts. Kyndryl is expanding margins by "a point or two" in its profitable blueprint accounts. And it is improving margins in some unprofitable focus accounts upon renewal and midcontract, resulting in average gross margins in the "low- to mid-20s" percentage range. Kyndryl anticipates it will take up to four years to remediate profitability in all its focus accounts.

Summary

This IDC Survey presents the results of a cluster analysis of Canadian companies' use of managed network services. The objective of this document is to identify clusters of companies, with respect to their use of managed network services, to allow service providers to specific go-to-market campaigns to address the unique needs of each cluster. Five clusters were identified, and common characteristics and attitudes of the clusters are highlighted in the document. The document is based on IDC Canada's IT Advisory Panel n7, 2021 (fielded in December 2021), in which 301 medium-sized and large Canadian companies were interviewed. This IDC Survey compares the results from a similar analysis in Managed Network Services Clusters in Canada, IDC #CA45677820, February 2020.

Summary

This IDC Tech Buyer Presentation provides a detailed review of the Canadian healthcare market. Background and insights are provided on the market size, structure (e.g., provincial, private, senior care), and trends.

Summary

This IDC Market Note monitors Kyndryl's performance. In 2023, IDC is initiating ongoing coverage of Kyndryl with respect to financial performance as the company has an outsized presence in the markets it competes and partners in. Kyndryl identified several strategic objectives to address its position in the market coming out of its November 2021 spin-off. IDC will provide specific commentary periodically throughout 2023 on how we see its progress against these considerations.

Summary

The top 10 predictions for the IDC FutureScape: Worldwide National Government 2023 Predictions — Asia/Pacific (Excluding Japan) Implications illustrate how the next four years will be revolutionary for operations as governments adapt to the changing needs of citizens and find more efficient ways to serve them. A successful delivery of innovative government services requires an in-depth understanding of citizen needs and the ability to anticipate those needs. Technology is vital in government to facilitate better coordination and cooperation between various government agencies.

To ensure inclusivity and to reap the benefits of digitalization, countries with large populations that have low coverage of internet access should prioritize early investments in digital infrastructure, such as broadband technology. It is important that governments on all levels allocate financial resources to the promotion of digital inclusion to provide citizens with the opportunity to profit from the advantages of the internet and the services available online.

"With the use of advance digital technologies, governments would have the opportunities to explore new models and approaches in providing new or improved services, manage resources effectively, deliver relevant services that are required by the citizens, improve accountability, and as a result gain citizens' trust," says Jezamin Abdul Razak, head of Government Insight, IDC ASEAN.

Summary

This IDC study outlines IDC Canada's forecast for the Canadian information and communication technology (ICT) market for the 2022–2026 period. It updates our previous forecast published in Canadian ICT Forecast, 2021–2025 (IDC #CA47050121, November 2021).

"The Canadian ICT market grew 3.5% in 2021, despite the COVID-19 pandemic. The growth was more than predicted in our previous forecast, led by strong spending on software services by Canadian companies that quickly responded to the challenges that the pandemic brought. The Canadian ICT market is expected to grow through 2026. By 2026, at the end of our current forecast period, ICT spending will reach C$142.6 billion. Inflation, IT supply chain issues, skills shortage, and a probable recession will alter cost assumptions but IT leaders around the world are still more optimistic about increasing ICT budgets rather than delaying technology investments," says Anu Mehta, senior research analyst, IT Markets at IDC Canada.

Summary

This IDC Market Analysis Perspective (MAP) provides detailed information on Canadian customer adoption and spending on hosting infrastructure services. It provides insights into trends affecting the adoption of these services, the competitive landscape servicing customers, and customer needs. This MAP provides guidance for providers of hosting infrastructure services to address customer needs and compete against other vendors.

Summary

This IDC Market Presentation explores IDC Canada's predictions for the Canada market in 2023 and was originally presented as a Web Conference on December 14, 2022. The winds of change affecting the ICT market in 2021 and 2022 have increased into storms of industry, health, social, and economic disruption as we enter the digital business era. Navigating what's ahead will be critical for organizations that want to advance their digital strategies. IDC Canada research leaders unveiled 10 key trends during IDC Canada's annual technology industry predictions webcast, examining the leading priorities of the future enterprise for 2023 and beyond. Speaker notes are included for each slide.

Summary

This IDC Market Note examines the first Google Government Summit hosted by Google Public Sector on November 15, 2022, in Washington, D.C. The recently launched government-specific subsidiary of Google Cloud aimed to showcase its existing relationships with government agencies of all sizes, demonstrate a commitment to the public sector, and share success stories and use cases of its technology being utilized by government. The event featured keynote speeches, hands-on seminars, and sessions led by both Google and government executives, touching on topics such as cloud, cybersecurity, data management/decisioning, climate resilience, and AI.

Summary

This IDC Market Note analyzes Microsoft's announcement of Microsoft Cloud for Sovereignty. Microsoft Cloud for Sovereignty is a new solution that aims to enable public sector customers to build and digitally transform workloads in the Microsoft Cloud while meeting their compliance, security, and policy requirements.

"Microsoft Cloud for Sovereignty is a compelling response to announcements made in the past year by many global cloud providers that are trying to align with the digital sovereignty requirements of many enterprises, particularly public sector organizations and especially in Europe," said Massimiliano Claps, research director, IDC Government Insights.