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Israel IT Market: STKI “tiers” 2016 V2
Dr. Jimmy Schwarzkopf
Research Fellow,
STKI
http://index.stki.info/it-tiering
jimmy@stki.info
Tel: 972 9 7907000
2
• 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.
3
STKI’s 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 22 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 IT managers as well as with all levels of IT decision making,
 thereby attaining complete information of processes.
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
 STKI Analyst House Calls (for both users and vendors)
 CIO STKI "Help Desk"
 Inquiries
 Surveys
 Strategic Marketing & Positioning
 Round Tables for users
 Vendor Discovery Series (Newsletters and workshops)
 In-house Workshops
 CIO Annual Bootcamp
 CTO Annual Bootcamp
 Brainstorming Workshops
 STKI Annual Summit

4

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The document discusses the history and evolution of Dr. Jimmy Schwarzkopf's company STKI. It provides details about how STKI began as a market research firm in the 1980s, analyzing Israel's emerging IT market. Over time, STKI expanded its services to include consulting. It was later acquired by Gartner but continued operating in Israel under the STKI name. The document also references Dr. Schwarzkopf's research on technological revolutions and paradigm shifts in computing and their impact on business models and the economy.

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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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› 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 department’s view/mindshare of
vendor’s value in projects/products
What our study looks at:
STKI Summit 2016
Israeli IT Market 8

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Number of Firms in Israel 1/2016
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In order to get the “IT Market” (what is bought/sold out there) :
What users bought?
From whom?
Why?
IT Departments IT Vendors
How much did they sell?
To whom?
For how much?
Competitors?
24 years of
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2013
2014
HARDWARE
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3.61%
1,755,200
SOFTWARE
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6.72%
1,441,000
VALUE ADDED
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4.48%
3,266,000
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4.73%
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industry
STKI IT
Market
Health
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STKI IT
Market
Health
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STKI IT
Market
Health
Index
STKI IT
Market
Health
Index
STKI IT
Market
Health
Index
government $1,350 $1,250 $1,310 $1,350 $1,500
education $250 $230 $235 $230 $260
health $300 $290 $275 $290 $320
banks $900 $815 $835 $850 $800
insurance $350 $400 $425 $430 $400
fin other $200 $190 $215 $245 $246
STKI IT Market
Health Index
Budgets 2013 Budgets 2014 Budgets 2015
Budgets
2016
2012 2013 2014 2015 2016
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$1,770
79.38%
$1,405$1,450
76.32%
$1,820
$1,475
81.04%
$1,446
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69.52%
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Market
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STKI IT
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STKI IT
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STKI IT
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Market
Health
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government $1,350 $1,250 $1,310 $1,350 $1,500
education $250 $230 $235 $230 $260
health $300 $290 $275 $290 $320
banks $900 $815 $835 $850 $800
insurance $350 $400 $425 $430 $400
fin other $200 $190 $215 $245 $246
STKI IT Market
Health Index
Budgets 2013 Budgets 2014 Budgets 2015
Budgets
2016
2012 2013 2014 2015 2016
$1,525
$1,770
79.38%
$1,405$1,450
76.32%
$1,820
$1,475
81.04%
$1,446
81.55%
STKI IT Market Health Index
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VARs or Partners:
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Storage and Networking Markets
storage 2014 2015 2016 2017 2018
Disks (HDD and SSD) 135,000 -3.70% 130,000 -3.08% 126,000 -2.38% 123,000 -2.44% 120,000
VTL Backup and other
Storage Appliances
29,000 -3.45% 28,000 -7.14% 26,000 -3.85% 25,000 -4.00% 24,000
Tape Libraries 11,000 -4.55% 10,500 -4.76% 10,000 -10.00% 9,000 0.00% 9,000
total 175,000 -3.71% 168,500 -3.86% 162,000 -3.09% 157,000 -2.55% 153,000
networking 2014 2015 2016 2017 2018
Enterprise Networking 205,000 0.98% 207,000 1.93% 211,000 -2.84% 205,000 -2.44% 200,000
Security / Cyber 95,000 10.53% 105,000 14.29% 120,000 8.33% 130,000 3.85% 135,000
VoIP/Call Center Equipment 55,000 -9.09% 50,000 -4.00% 48,000 -6.25% 45,000 -4.44% 43,000
total 355,000 1.97% 362,000 4.70% 379,000 0.26% 380,000 -0.53% 378,000
50
Market Players: “storage” (manufacturers)
Disks (HDD and SSD)
VTL Backup, Storage Appliances & networking
Tape Libraries
51
Market Players: “storage” (VARs)
Tape Libraries
VTL Backup, Storage Appliances & networking
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Market Players: Networking Products

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IDC is a global provider of market intelligence and advisory services. It has over 1,100 research analysts located around the world covering 110 countries. IDC's IT Executive Programs consist of research intended to help technology professionals make effective decisions. The programs offer customized research and analyst access to help clients mitigate risks, maximize investments, identify opportunities, and align IT with business objectives. IDC provides benchmarking, sourcing advice, consulting services, and custom research to help clients develop strategies and optimize technology decisions.

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The document appears to be a presentation from STKI IT Knowledge Integrators on the state of Israel's economy and IT market following the outbreak of war in October 2023. It includes data and forecasts from various sources on how the war has negatively impacted Israel's GDP, business activity, and key industries. The original forecast predicted growth in Israel's IT market from 2018-2024, but the forecast has been corrected downward due to the unforeseen economic damage from the war, with the IT market now expected to decline in 2023 and 2024 compared to 2022 levels.

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STKI Israeli Market Study 2023 version 2
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Israel: IT Software Total Market 2014-2018
SOFTWARE
1,515,500 4.39% 1,582,000 4.42% 1,652,000 4.36% 1,724,000 4.76% 1,806,000
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135
VAS: Cloud Services
136
Market Players: BSaaS (many different) B2B Services

Recommended for you

137
Market Players: PaaS & IaaS Services
* partners
138
Market Players: SaaS Services
139
Market Players: DRaaS Services
140
VAS: Staff Augmentation

Recommended for you

141
VAS: Staff Augmentation
141
142
Market Players: “gulgalot”- temps- on premises augmentation
143
Market Players: Nearshore augmentation
144
http://index.stki.info/it-tiering/

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