STKI Israel 2017 Study

STKI Israel's IT Market 2017
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Dr. Schwarzkopf has worked during the last 40 years in all areas of Computer Information
Services:
As an Industry Analyst at META Group (Israeli Research Manager) and was named a META Group Research Fellow.
As an academic researcher in Entrepreneurship Sciences; has published and presented in the Academy of Management and
Babson Conferences and Editorial Board Member of the academic journal "International Journal of Opportunity, Growth and
Value Creation".
As a consultant in Arthur Andersen Consulting (USA), Booz Allen (USA) and Kesselman & Kesselman. As a systems professional
in SCS Computers and the R&D Unit of the Israel Defense Forces.
As a sales and marketing professional in Digital Equipment Corporation.
Teaching in the MIS department / TelAviv Yafo Academic College and the Computer School of the IDF.
Entrepreneur founding three companies in the IT arena: STKI, store and forward mail and office information systems.
Dr. Schwarzkopf served on the Board of Directors of Ashot Ashkelon Industries, served as
President of the Gymnazia Herzelia Association, Co-founder of the Mashov Political Movement
and was a member of the Central Committee of the Labor Party. Major (Rav-Seren) in the
reserves, Israel Defense Forces (where he served in an elite unit and later in the R&D unit).
Registered Engineer (IS22881), member of MENSA Israel.
Dr. Schwarzkopf received BSE and MSE degrees (Systems Engineering) from the University of
Central Florida. Received a MSIA (Management Information Systems) and ABD (PhD
Program) in Systems Science (received (twice) the William Larimer Mellon Scholarship/Award)
from Carnegie Mellon University. His doctorate (DM-Management/ Entrepreneurship) he
received from Case Western Reserve University.
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STKIs goal is to help our clients make the right choices in the strategic
and financial management of their information technology systems.
Founded in 1992, STKI is the leading market research and strategic analyst firm in Israel, covering the IT infrastructures, IT applications and IT services industry .
Over 25 years of experience in the IT analyst sector and thousands of annual face-to-face interviews with key industry participants have enabled us to establish solid,
long-standing relationships with our customers.
Our customers include major IT organizations (government, financial institutions, telecoms, manufacturing, medical, education, etc.) and IT suppliers/vendors
(infrastructure and software suppliers, consulting and professional services firms).
STKI works closely with vendor senior management (strategy, business development, and marketing).
Where end users are concerned, STKI meets with CEOs, CFOs, CMOs, CDOs and CIOs (as with all levels of IT decision making) thereby attaining complete information
of technology innovation as well as business transformation.
STKI's mission is to advise and analyze users of information technology as well as their suppliers while conducting original research and providing advisory services
regarding all parts of the information system puzzle.
Israel's foremost IT companies have come to rely on STKI's market-proven experience and expertise.
Our services include:
Face-to-face meetings Vendor Discovery Series (Newsletters and workshops)

STKI Analyst House Calls (for both users and vendors) Vendor Innovation Workshops
CIO STKI "Help Desk" In-house Workshops
Inquiries CIO Annual Bootcamp
Surveys CTO Annual Bootcamp
Strategic Marketing & Positioning Brainstorming Workshops
Round Tables for users STKI Annual Summit
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STKI Methodology: equilibrium model

The sum of all IT expenditures (from users)
has to be equal to all IT sales (from vendors).
most research firms are either a
"demand-based"
(market information based on data from users of IT)
"supply-based"
(market information based on data from IT vendors).
STKI is one of the only research firms using an equilibrium model
and the only one in Israel.
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What our study looks at:

Real revenues of software licenses and maintenance.
Real revenues of hardware sales.
Differentiation between new projects and continuing projects. New projects count
more.
We do not include any work/ products for OEMs and military non-IT projects.
We are learning how to account for cloud usage for IT (Israel) only
We distinguish between work done by the vendor's employees and work
outsourced to another vendor. The revenue is transferred to the vendor actually
doing the work.
Distinguish revenues from projects done in fixed price, cost plus (SLA defined) and
staff augmentation (non SLA) projects.
Differentiate value between work done by high level internal professionals in a
project and staff augmentation employees in the clients IT department.
Take into consideration IT departments view/mindshare of
vendors value in projects/products
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STKI Summit 2017

Israeli IT Market 9
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Israel 2017
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Israel 2017
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Israel 2017
unemployment
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Israel 2017
CORRUPTION
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State of the Economy Index
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State of the Economy Index (% change*)

12/2014 - 12/2016
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Over 65% is BAD
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STKI Summit 2017

Israeli IT Market 18
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2011 2012 2013 2014 number of

2015 2016
number of number of
employees employees employees
v1 number of number of number of number of v2 number of v1 number of
companies companies companies companies companies % of companies % of
subtotals
(paying (paying (paying (paying (paying TOTAL (paying TOTAL
taxes) taxes) taxes) taxes) taxes) taxes)
251+ 1,348 1,476 1,493 1,533 251+ 1,583 0.61% 251+ 1,622 0.63%
4,374
101-250 2,384 2,453 2,525 2,606 101-250 2,685 1.04% 101-250 2,752 1.07%
21-100 3,871 4,088 16,305 16,647 51-100 4,352 1.69% 21-100 17,995 6.98%
70,260
6-20 31,720 33,073 46,920 48,780 10-50 36,268 14.06% 6-20 52,265 20.27% 262,901
up to 5 196,802 194,683 175,925 180,445 up to 9 212,985 82.59% up to 5 192,641 74.70% 192,641
232,393 235,773 243,168 250,011 257,873 267,275

totals
ACCORDING TO ACCORDING TO ACCORDING TO ACCORDING TO
BITUACH LEUMI BITUACH LEUMI BITUACH LEUMI BITUACH LEUMI ACCORDING TO BITUACH LEUMI 2/2016 ACCORDING TO BITUACH LEUMI 2/2017
2/2012 2/2013 2/2014 2/2015
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2011 2012 2013 2014 number of

2015 2016
number of number of
employees employees employees
v1 number of number of number of number of v2 number of v1 number of
companies companies companies companies companies % of companies % of
subtotals
(paying (paying (paying (paying (paying TOTAL (paying TOTAL
taxes) taxes) taxes) taxes) taxes) taxes)
251+ 1,348 1,476 1,493 1,533 251+ 1,583 0.61% 251+ 1,622 0.63%
4,374
101-250 2,384 2,453 2,525 2,606 101-250 2,685 1.04% 101-250 2,752 1.07%
21-100 3,871 4,088 16,305 16,647 51-100 4,352 1.69% 21-100 17,995 6.98%
70,260
6-20 31,720 33,073 46,920 48,780 10-50 36,268 14.06% 6-20 52,265 20.27% 262,901
up to 5 196,802 194,683 175,925 180,445 up to 9 212,985 82.59% up to 5 192,641 74.70% 192,641
SMB
232,393 235,773 243,168 250,011 257,873 267,275
Market
totals
ACCORDING TO ACCORDING TO ACCORDING TO ACCORDING TO
BITUACH LEUMI BITUACH LEUMI BITUACH LEUMI BITUACH LEUMI ACCORDING TO BITUACH LEUMI 2/2016 ACCORDING TO BITUACH LEUMI 2/2017
2/2012 2/2013 2/2014 2/2015
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In order to get the IT Market (what is bought/sold out there) :
25 years of
IT Market Data
What users bought? How much did they sell?

From whom? To whom?
Why? 4
2015,200
1, 7
5
000
For how much?
Competitors?
1% 41,
3.6 1, 4
3 00
201 ,000
%
.72 6, 0
, 26
6
9 4 3
1, 6 200 8% 214
50, 4.4 64,
A RE 1, 3 6, 4
W 00 0
RD 3%
HA AR
E 26, 4.7
TW 3, 1
F ED 13
SO DD 72,
2
E A ES 6, 1
LU IC
VA RV
SE L
TA
TO
IT Departments IT Vendors
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Comparison
Budgets 2013-2017**
**We expect increase mid 2017 for

digital initiatives
not on IT budget now
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2015 Israel IT Market

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VARs or Partners:
NO double bookings for IT market size forecasts
Value Added Resellers

VAR or Partners
are incorporated into
STKIs TIERS.
Both sell into the Israeli
Market.
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Products sold on the cloud

STKI books in on-premises software categories
NO double bookings for IT market size forecasts
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IT Market in Israel
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STKI Summit 2017 2015 Israel Hardware Market
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Vendors: Hardware markets
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Israel: IT Hardware Total Market 2016-2020
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Server Markets
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Servers (manufacturers)
DB/DW, CONVERGED HW
& OTHER APPLIANCES
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Servers (Resellers-VARs)
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Clients (B2B) Markets
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Client Computing (manufacturers) B2B
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Personal Computing (VARs)
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Storage Markets
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storage (manufacturers)
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storage (VARs)
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storage (manufacturers)
VTL Backup , Storage Appliances and Storage Networks
Tape Libraries
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storage (VARs)
VTL Backup , Storage Appliances and Storage Networks
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Security Appliances and

Networking Markets
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Networking Products
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VoIP & other call center equipment
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Printers, Monitors, Self Service & DC Equipment
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Enterprise Printers
Enterprise Printers (manufacturers) Enterprise Printers (VARs)
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DC Equipment, monitors and Video Systems

(VARs & Manuf.)
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POS ,Self-Service Appliances
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Vendors in the Software (on/off premises) markets
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IT Software Total Market 2014-2019
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System Infrastructure Software
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System Infrastructure
Software
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System Software Vendors
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Storage and Backup Software
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Databases (SQL NOSQL)
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Private Cloud and Automation Tools

Private Cloud And Automation Tools
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Middleware Software
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Security Software
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Security Software
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Security/ Cyber Software Vendors
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Security/ Cyber Software (VARs)
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Security/ Cyber Software (VARs 2)
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Office of the CIO & Development Tools
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Development and ALM (including testing tools) VARs: Development and ALM (including testing tools)
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Information Management Applications
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Information Management Applications
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KM (Enterprise portals, ECM, Search, Knowledge Bases)
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BI, Analytics, Cognitive and Data Mgmt Tools
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BI, Analytics, Cognitive and Data Mgmt Tools 2
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Digital Output Management/Customer Communication Management
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Business Applications 1
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2014 2015 2016 2017 2018 2019

ERP 145,000 -1.38% 143,000 -2.10% 140,000 -1.43% 138,000 -2.90% 134,000 -2.99% 130,000
Vertical (Core Business) Applications 125,000 10.40% 138,000 12.32% 155,000 9.68% 170,000 8.82% 185,000 5.41% 195,000
CRM/XRM 45,000 11.11% 50,000 16.00% 58,000 12.07% 65,000 12.31% 73,000 8.22% 79,000
HR/ Talent Mgmt/ LMS 11,500 17.39% 13,500 18.52% 16,000 11.88% 17,900 11.73% 20,000 15.00% 23,000
326,500 5.51% 344,500 7.11% 369,000 5.93% 390,900 5.40% 412,000 3.64% 427,000
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ERP Software (all sizes)
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CRM/XRM
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HR/ Talent Mgmt./ LMS / PAYROLL
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Contact Center and Multi channel engagement tools (chat, bots, Video etc)
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Marketing Automation Software
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Web Content Management + e-Commerce Platforms
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IoT tools and platforms
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Value Added Services Market 2014-2019
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Vendors that sell in the VAS markets
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"Enterprise" CONSULTING:
advice in a particular area not
AUGMENTATION (gulgalot) or IMPLEMENTATION
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"Enterprise" CONSULTING:
advice in a particular area not
AUGMENTATION (gulgalot) or IMPLEMENTATION
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IT Strategy Consulting & Analysts Services
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Digital Transformation Consulting
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(Big) Data Consulting
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IT Infrastructure/Delivery Consulting
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IT Application Consulting
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Cyber/Security Consulting
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Infrastructure Projects
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Consolidation/ Virtualization /Monitoring/ BSM/ Storage/

Hardware/ Data Center Environment/ Networking Projects
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Software integration, middleware, SOA, BPM, ALM, Testing tools, DevOps
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Cyber Security Product Implementation
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Unified Communication (IM, Video, Voice)
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Project Management Services
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Project Management Services
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ALM Q/A & Testing
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IT Training
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HatMaa
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Auditing, Governance & Risk Management
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Business Applications Implementation 1
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ERP (on premise/cloud)
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ERP (on premise/cloud)
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CRM-XRM (on premise/cloud)
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HR and Talent Management
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Contact Center and Multi channel engagement tools
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Data, BI, Analytics
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Data, BI, Analytics
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Marketing Automation (on premise/cloud)
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general software development
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SaaS implementations
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Migrations
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Mobile Development
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UX Design
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Core Vertical Package Implementation
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IoT Projects
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Knowledge Management (ECM, Portals)
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Web & eCommerce
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Web Accessibility
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Managed Services and Outsourcing Services
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Infrastructure Outsourcing Services (Infrastructure, Storage & DBA Services)
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Off-site Data Center (Operational/DRP). (Client owns the HW)
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Help Desk Outsourcing Services
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Cyber security managed services ( SIEM service)
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Printing Outsourcing Services (pay per click)
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On-Demand or Cloud Services
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Business Services as a Service- BSaaS (Salaries, Payments, BPO, etc)
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Platform as a Service PaaS/ Infrastructure as a Service IaaS
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(PARTNERS) Platform as a Service PaaS/ Infrastructure as a Service IaaS
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Software as a Service SaaS
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DRP as a Service
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Staff Augmentation Services
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Gulgalot on-premises & Gulgalot off-premises (Nearsite)
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Nearshore
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Digitally signed
by Dr Jimmy
Schwarzkopf
Location:
Date: 2017-03-23
10:44+02:00
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STKI Israel 2017 Study

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STKI Israel's IT Market 2017

Our services include:

Face-to-face meetings Vendor Discovery Series (Newsletters and workshops)

CIO STKI "Help Desk" In-house Workshops

Inquiries CIO Annual Bootcamp

Surveys CTO Annual Bootcamp

Strategic Marketing & Positioning Brainstorming Workshops

Round Tables for users STKI Annual Summit

STKI Methodology: equilibrium model

What our study looks at:

STKI Summit 2017

State of the Economy Index

State of the Economy Index (% change*)

Over 65% is BAD

STKI Summit 2017

2011 2012 2013 2014 number of

232,393 235,773 243,168 250,011 257,873 267,275

2011 2012 2013 2014 number of

In order to get the IT Market (what is bought/sold out there) :

What users bought? How much did they sell?

**We expect increase mid 2017 for

2015 Israel IT Market

Value Added Resellers

Products sold on the cloud

STKI Summit 2017 2015 Israel Hardware Market

Vendors: Hardware markets

Israel: IT Hardware Total Market 2016-2020

Clients (B2B) Markets

Client Computing (manufacturers) B2B

Personal Computing (VARs)

Security Appliances and

VoIP & other call center equipment

Printers, Monitors, Self Service & DC Equipment

DC Equipment, monitors and Video Systems

POS ,Self-Service Appliances

STKI Summit 2017 2015 Israel Software Market

Vendors in the Software (on/off premises) markets

IT Software Total Market 2014-2019

System Infrastructure Software

System Software Vendors

Storage and Backup Software

Databases (SQL NOSQL)

Private Cloud and Automation Tools

Security/ Cyber Software Vendors

Security/ Cyber Software (VARs)

Security/ Cyber Software (VARs 2)

Office of the CIO & Development Tools

Office of the CIO & Development Tools

Office of the CIO & Development Tools

Information Management Applications

Information Management Applications

KM (Enterprise portals, ECM, Search, Knowledge Bases)

BI, Analytics, Cognitive and Data Mgmt Tools

BI, Analytics, Cognitive and Data Mgmt Tools 2

Digital Output Management/Customer Communication Management

2014 2015 2016 2017 2018 2019

Marketing Automation Software

Web Content Management + e-Commerce Platforms

IoT tools and platforms

STKI Summit 2017

Value Added Services Market 2014-2019

Vendors that sell in the VAS markets

IT Strategy Consulting & Analysts Services

Digital Transformation Consulting