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©2017 The Alta Group, LLC
MANAGED SOLUTIONS AND CONSUMPTION-BASED
TRANSACTIONS: A CLEAR CONNECTION TO THE 4TH INDUSTRIAL REVOLUTION
Valerie L Gerard,Managing Director
Proprietary and Confidential:
The Alta Group prepared this information solely for our client: 3rd party use is permitted only with explicit advance permission of The Alta Group
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©2017 The Alta Group, LLC
Fourth Industrial Revolution’s Breakthrough Technologies
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©2017 The Alta Group, LLC
Cutting-Edge Technologies Shaping Customer Mindset
Vendor Delivered Solution
Simplified On-Demand Delivery
No Commitment, Pure Consumption
Effective Return on Investment (ROI)
Balance Sheet Flexibility
Proven Technology & Maintenance Skills
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©2017 The Alta Group, LLC
Market Implications Much Wider Than Information Technology
•OEM profit margins shifting to lower price equipment -> need Managed Solutions to grow top line
•Double Digit growth in excess of 20%- Mobile
Devices: 27%- Private Cloud:
22%- Infrastructure:
40%
• Fleet managers expect flexible end-to-end service solutions - will become central to competing
• Example: Navistar On Command -bundledapproach service & after sales support- Better lifecycle
value- Lower TCO
38% of companies use some sort of Managed Solutions structure today
80% of companies say they will adopt Managed Solutions offering in the next 12 months
Managed Solutions is positioned to make up as much as 20% of industry activity
• 75% increase in construction rentals from 2013
•New technology integrates equipment with reporting, diagnostic & security features
•Rising full-service, rental based acquisition model
•Global smart grid managed services market growth forecasted at 45% CAGR 2016-2020
•Deployment of smart meters & integration of renewable energy with smart grids
• End-users of smart grid services are power utilities & IPPs
• Top 20 outsourcing firms realizing double-digit growth annually
•Healthcare companies shifting toward pay-per-use over traditional purchasing of equipment
• Popular among hospitals is integrated radiological floors
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Are Managed Solutions or
Consumption-based
Transactions a Natural
Extension of Industry 4.0?
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Managed Service Continuum
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Where Are You on Continuum?
X% X% X% X%Survey Results
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MST Challenges Meeting “Industry 4.0” Demands
Credit: Credit Assessment of Service Providers and Subcontractors, Service Provider Accreditation
Legal: HOHW, Assignability, Cancelation Flexibility, Documentation & Guarantees
Asset Management: Equipment Churn, Upgrade/Return Flexibility
Pricing: Usage Pricing, Bundled Pricing, Early Termination Charges
Sales & Marketing: Integrated Selling, Training, Market Intelligence
Accounting: Revenue Recognition, Separate Executory Costs
Systems & Infrastructure: Automated Data Capture for All Components, Ability of Back-End System to Bundle
Human Resources: Right Skill Set
Funding: HOHW Protection, Enforcability
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Roundtable Rules
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Roundtable Questions