PUBLISHER: Fairfield Market Research | PRODUCT CODE: 1534543
PUBLISHER: Fairfield Market Research | PRODUCT CODE: 1534543
Digitalization and centralization of enterprise processes have influenced several companies to turn to financial and distributed information technologies. As the world embarks on the innovative journey of digital transformation, disruptive forces are becoming significantly prevalent across almost every industry. Consequently, various companies are seeking ways to integrate their critical services and processes into the same stack.
System integration allows enterprises to arrange a broad array of software and hardware components into a consolidated ecosystem. The approach as a whole is becoming more valuable than ever before, positioning the system integration market for significant expansion.
System Integration Market Trends
Cloud Computing to Remain Cost-effective: Modernizing companies' IT infrastructure involves more than just acquiring new technologies. To boost modernization, market players must help customers shift specific workflows and use cases to the cloud, including procurement, enterprise resource planning (ERP), payroll, and supply chain management solutions. Cloud-based models are essential agents for business transformations and are the deployment model of choice for modernizing existing IT infrastructure. Investments in cloud computing offer economies of scale while providing security for companies' confidential data. While yearly expenditure growth remains steady, the cloud computing market is expected to continue its upward trend.
Growing Adoption of NGOSS: Conventional business support systems and operations face challenges associated with security issues, long process cycles, and low data accuracy. Service providers in the system integration market are deploying New-Gen Operations Systems and Software (NGOSS) to address these challenges. Telecom operators are strategically incorporating NGOSS to facilitate integration with innovative Internet Protocol (IP) based frameworks, potential use cases, and enhance customer service and support. NGOSS enables mobile network operators (MNOs) to streamline and optimize their enterprise processes, particularly from service quality and resource performance perspectives, allowing these processes to grow independently.
Regional Insights
Europe: Europe remains one of the largest markets for vendors with the highest system integration market share. The European Union (EU) has rolled out innovative strategies for energy system integration that are designed to be major investment cornerstones of the Green Deal and the post-COVID-19 rebound. The EU is investing in new technology and trial projects to establish 5G ecosystems, focusing on creating a robust European supply chain for 5G hardware and serving use cases in trans-border automated and connected mobility.
Asia Pacific (APAC): The system integration market in APAC is experiencing robust growth and is expected to surpass Europe's market in the coming years. Supportive government initiatives, such as financial aid and subsidies, have benefited SMEs in the region. Initiatives like the Make in India program emphasize offering subsidies to SMEs, promoting healthy adoption of system integration services in the industrial automation domain. China's five-year plan to provide internet connectivity to rural and underserved areas further boosts the market, with cost-effective labor and raw materials attracting international players to outsource business processes to APAC.
Latin America: Deployment of system integration services in Latin America is accelerating, driven by increasing energy demands and the recognition of energy supply and demand scenarios as a priority. The International Atomic Energy Agency (IAEA) has introduced a regional technical cooperation project to validate the benefits of sub-regional energy integration, such as greater energy security, reduced expenses, and stricter environmental controls. Mexico is a significant player in the system integration market in Latin America.
Key Service Types
Infrastructure System Integration Services: These services continue to lead the global system integration market in terms of revenue share and growth rate, driven by the mass utilization of cloud-based and network management services. Infrastructure system integration is cost-efficient for organizations with limited capital resources to invest in hardware. Building management system integration, in particular, captures a significant market share as it is essential for organizations across various sectors.
Application Integration and Configuration Services: These services will also see significant adoption in the coming decade due to the rising number of cloud-based and mobile applications.
Enterprise Size and Industry Adoption
Large Enterprises: Approximately 80% of system integration services are deployed in large enterprises, and this trend is expected to grow at a tremendous rate. The adoption of cloud-based models as a cost-effective option has triggered the uptake of system integration services among small and medium-sized enterprises (SMEs). Cloud-based models help save costs and eliminate the need for physical hardware investments, enabling service providers to integrate cloud with system integration to reach a larger customer base. Deployment of system integration services in SMEs is expected to register substantial year-on-year growth.
IT & Telecom Industry: This industry accounts for a significant portion of the overall system integration market revenue, driven by the increasing penetration of 4G services and the emergence of 5G infrastructure, which generates large amounts of data. The growing number of telecom subscribers using smartphones and other handheld devices worldwide will positively influence the adoption of system integration services in the IT and telecom industry. Additionally, demand for system integration services will remain substantial in the energy and utilities and government and defense industries.
Competitive Analysis
Other key players in the market include IBM Corporation, Cisco Systems Inc., Cognizant, Fujitsu Limited, DXC Technology, HCL Technologies, Wipro Limited, Deloitte, Infosys, and Tech Mahindra Limited.
Impact of COVID-19 Pandemic
The COVID-19 pandemic has significantly affected services, particularly in transport, tourism, and distribution, due to mobility and travel restrictions and social distancing measures. Disruptions in services are impacting the economy and trade, given the role of services in connecting supply chains and facilitating trade. System integration services can be deployed remotely, resulting in minimal global fluctuations. However, slight declines in growth rates are expected in industries such as BFSI and IT and telecom, with recovery anticipated by the end of 2021. Overall, the system integration market growth rate is expected to remain steady during the pandemic.
Analysts' Viewpoint
Retail businesses harnessing online services capabilities will not experience significant losses during the COVID-19 pandemic. Retailers are procuring system integration services to ensure efficient operations and online sales. Suppliers in the system integration market are enhancing their online businesses as consumers adopt new habits contributing to a long-term shift toward online services.
Market Segmentation