System integration in engineering refers to the process of bringing together the component sub-systems into one system and ensuring that the subsystems function together as a system. It allows companies to acquire low cost, pre-configured components of hardware and software. These small components of software and hardware help companies to achieve key business goals. Currently, some system integrators such as SAP provide more specialized and specific applications and software packages such as enterprise resource planning software and SAP Business Suite.
The global System Integration Market was accounted for US$ 331.8 Bn in terms of value in 2019 and is expected to grow at CAGR of 10.3% for the period (2020-2027).
Market Dynamics- Drivers
IT infrastructure is comprised of servers, storage devices, software, and networking equipment. High investment in IT infrastructure has created distributed IT systems across various enterprises, which in turn, has led to increased demand for distributed IT systems across various enterprises. According to the IT Spending Intentions Survey conducted in 2013, the investment in hardware and software accounted for 20% and 17% respectively of the total investment in IT infrastructure for 2013. High spending on hardware, software, and cloud computing services has resulted in increased number of computing systems. Since a massive amount of work today depends on computers, the absence of system integration creates technical complexities such as data security issues, data theft, redundancy in data, and back-up problems. Thus, these factors are expected to drive growth of the global system integration market during the forecast period.
Automation technologies such as robotics and additive manufacturing (3D printing) can transform work patterns in both developed and emerging economies. There is high demand for automation solutions due to rising industrialization in consumer markets. Furthermore, industries are realizing the importance of modernizing existing production facility, in order to remain competitive in the existing market. According to the International Federation of Robotics, worldwide sales of industrial robots increased by 6% in 2012. Moreover, according to the same source, over 159,000 units were sold in 2011. Therefore, these factors are expected to propel the global system integration market growth in the near future.
North America held dominant position in the global System Integration market in 2019, accounting for 31.6% share in terms of value, followed by Asia Pacific and Europe.
|Base Year:||2019||Market Size in 2019:||USD 331.8 Bn|
|Historical Data for:||2017 to 2019||Forecast Period:||2020 to 2027|
|Forecast Period 2020 to 2027 CAGR:||10.3%||2027 Value Projection:||USD US$ 750.0 Bn|
Accenture plc, Hewlett-Packard Company, BAE Systems plc, Tata Consultancy Services Limited, Fujitsu Limited, Lockheed Martin Corporation, Infosys Technologies Limited, Oracle Corporation, Harris Corporation, and IBM Corporation.
|Restraints & Challenges:||
Figure 1: Global System Integration Market Share (%) in terms of Value, By Region, 2019
Global System Integration Market - Impact of Coronavirus (Covid-19) Pandemic
The COVID-19 Pandemic have adversely affected the economies of several countries around the globe. The global economy is expected to shrink down by 3% percent in the year 2020 compared to year 2019, according to the International Monetary fund Analysis. These economic slowdown expected to affect various sectors such as BFSI and Defence. The growth of the System Integration market is majorly attributed to the BFSI and Defence industry. The COVID:19 pandemic is expected to retrain the System Integration Market growth during the forecast period.
Market Dynamics- Restraints
Since legacy systems are responsible for core business transactions, adequate maintenance and security of legacy systems are required. The cost of redesigning or replacing legacy systems is significantly high due to complexity of functionality. According to a survey conducted by Unisys Center for Innovation in 2011, the U.S. Government invests around US$ 36 billion a year in maintaining legacy systems. This is typically owing to the lack of standards regarding usage of legacy systems. Moreover, the cost of system integration includes cost of software, installations, material, license, and different types of technical labor. There are varieties of factors such as risk, and time associated with integration that influences these costs. Thus, such factors are expected to restrain growth of the global system integration market during the market.
Technological infrastructure across various countries in Asia Pacific is very different. According to Coherent Market Insights’ analysis world’s least networked countries are Cambodia (4.9% internet penetration) and Myanmar (1.1% internet penetration), while the most networked countries are Japan (79.1% internet penetration) and South Korea (84.1% internet penetration). The rural-urban internet penetration gap across Asia Pacific countries remains a major obstacle. Therefore, lack of network infrastructure is expected to hinder the market growth over the forecast period.
China, India, Africa, and Middle East are emerging regions that offer lucrative growth opportunities for major market players. The development and industrialization in these regions, which resulted in the high demand for system integration. In China, local players are dominant in the system integration market, thereby providing less opportunity for foreign system integration companies to enter the market. Government support is a major reason for the growth of system integration market in China. Software as a service (SaaS) market is expected to grow at a high pace.
Healthcare industry stores a lot of information about patients such as medical images, records, bills, prescriptions, insurance claims, medical and research data. Healthcare organizations not only store this data but also maintain and process this data. These organizations have to provide data on demand in addition to delivering their core functions such as patient care and medical services. Moreover, there are many different systems installed and set up at different locations across hospitals.
Figure 2: Global System Integration Market Value (US$ Bn), 2017 - 2027
The global System Integration market was valued at US$ 331.8 Bn in 2019 and is forecast to reach a value of US$ 750.0 Bn by 2027 at a CAGR of 10.3% between 2020 and 2027.
Key companies in the market are focused on mergers and acquisitions, in order to enhance the market presence. For instance, in October 2013, Accenture plc acquired PRION Group, a leading system integrator and consulting firm specializing in Siemens Product Lifecycle Management (PLM) software. Furthermore, in February 2014, Oracle Corporation acquired BlueKai, a leading cloud-based big data platform that enables companies to personalize mobile, online and offline marketing with additional useful information.
Integration of business processes using cloud technologies is the current trend in the market. Every company is willing to integrate their data onto the cloud to get immediate access and an integrated data base at one location. Use of SaaS (Software as a Service) is the popular emerging trend as it offers users access to new services by paying only for the services used, thus improving productivity and efficiency.
Value Chain Analysis
System integrators are the entities who integrate various sub-systems for end users. System integrators buy hardware and software from the equipment providers. Hardware providers buy various sub-components required for hardware manufacturing from sub-component providers. Cisco, Fujitsu, IBM and HP among others are some of the main hardware providers for the system integration market. System integrators require mainly two types of software namely generic software and bespoke software. Generic software is mostly developed by system integrators by their coding teams. Bespoke software, also called customized software coding, can be outsourced by system integrators to various software development firms or can be developed in-house as well. Accenture Plc., Infosys Technologies, and TCS Ltd. among others are some major software developers for the system integration market.
Key players operating in the global system integration market are Accenture plc, Hewlett-Packard Company, BAE Systems plc, Tata Consultancy Services Limited, Fujitsu Limited, Lockheed Martin Corporation, Infosys Technologies Limited, Oracle Corporation, Harris Corporation, and IBM Corporation.
The process of connecting different sub-system into a single system integration. System integration (SI) is concerned with the integration of systems that manage, control, and monitors business operations. This allows companies to acquire low cost, pre-configured components of software and hardware. These small components of software and hardware help companies to achieve key business goals. Currently, some system integrators such as SAP provide more specialized and specific applications and software packages such as enterprise resource planning software and SAP Business Suite.
The growth of the System Integration is majorly attributed to the Emerging technologies such as cloud computing and big data analytics Cloud computing operates on a pay-per-use basis, allowing small institutions and organizations to gain access to the expensive technology infrastructure. According to a survey conducted by IBM in 2011, out of 2,000 mid-sized companies, two-thirds were already planning to deploy cloud-based technology and around 70% were actively pursuing cloud-based analytics. Since cloud computing helps to offload hardware maintenance and hosting to a vendor, system integrators are responsible for bridging the gap between enterprise buyers and cloud solution owners. Moreover, the advent of big data analytics has increased the demand for information management. Organizations such as Microsoft, SAP, IBM, and Oracle have invested over US$ 15 billion to develop solutions for big data analytics. Hence these factors are expected to propel the global system integration market growth over the forecast period. The cloud computing and data analytics technologies are expected to propel the System Integration market growth during the forecast period.
This report segments the global System Integration market on the basis of type, End-user and region. On the basis of type, global System Integration market is segmented into Infrastructure Integration Service (Network Management, Data Center Management, Building Management, Security and Surveillance Management, Cloud Based Integration and Enterprise Management), Application Integration Service (Data integration, Unified communication, Integrated social software and Application integration) and Consulting service (Infrastructure Integration Service, Application Integration Service and Consulting service). On the basis of End-user, the global System Integration market is segmented into Banking, financial services and insurance, Defense, Healthcare, Telecommunication and IT, Oil gas and energy, Transportation, Retail and Others. On the basis of region, global System Integration market is segmented into North America, Latin America, Europe, Asia Pacific, Middle East, and Africa.
Key features of the study:
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