Gartner Research

Understanding the Gartner Vendor Revenue Profile

Published: 23 April 2019

ID: G00390600

Analyst(s): Inna Agamirzian, Deborah Neitz Daily

Summary

Gartner Vendor Revenue Profiles allocate revenue of approximately 900 IT vendors across a common set of market segments using a rigorous fact-based methodology. Technology and service providers can use them to develop market entry, exit, growth and transition strategies.

Overview

Key Findings
  • The Gartner Vendor Revenue Profile online tool enables dynamic comparisons between, and ranking of, IT vendors by their revenue across market segments, including digital giants and communications service providers.

  • Gartner Vendor Revenue Profiles reflect vendor strategic positioning amid the competitive migration to a digital business world.

  • The Gartner Vendor Revenue Profile online tool presents a consistent view of approximately 900 vendors’ IT product and service portfolios, enabling objective comparisons for competitive benchmarking and validation of important industry trends.

Recommendations

To identify growth opportunities across the IT marketplace, TSPs should exploit Gartner Vendor Revenue Profiles in the following ways:

  • Use them as a complement to other Gartner research when evaluating competitors in support of tactical and strategic business decisions.

  • Leverage them to identify vendors with complementary IT product and service portfolios as potential acquisition targets and to position your company against restructured competitors.

  • Review the vendors you are evaluating, and schedule an inquiry session with the Gartner Vendor Revenue lead analyst to gain further details and insight on a particular vendor.

Analysis

Competitive insight is difficult to glean from published company financials, because the detail is usually insufficient to meaningfully separate business components. Gartner Vendor Revenue Profiles show the diversification of a provider’s revenue and, at a high level, highlight the bright spots (or lack of) in the provider’s revenue streams. Also, they provide the checks and balances that the sum of individual segment revenue does not exceed the total revenue for a provider.

This document is a companion to the Gartner Vendor Revenue Profile tool (see Figure 1). It explains:

  • Why the Gartner Vendor Revenue Profile is important for technology and service providers (TSPs) making decisions about portfolio optimization, potential acquisitions and partnerships

  • How the revenue estimates are created

  • What actions should be taken based on knowledge of the Gartner Vendor Revenue Profile

What Is a Gartner Vendor Revenue Profile?

Gartner Vendor Revenue Profiles represent Gartner’s analysis of a vendor’s reported (where applicable) revenue mapped to Gartner’s technology segmentation. The Gartner Vendor Revenue Profile provides a calendar-year view of a vendor’s merchant sales (that is, product and service sales to external customers) in U.S. dollars across IT, operational technology (OT) and component market segments. Vendor market segments featured in a Gartner Vendor Revenue Profile are nonoverlapping, meaning they can be mapped to only a single segment. These segments are reconciled with the consolidated view of the vendor’s public financial statements (when available). Note that revenue declared by vendors in financial reports excludes captive (intracompany) sales.

Gartner Vendor Revenue Profile estimates are important inputs to market share but are not the same and should not be used to construct a vendor’s market share. Instead, leverage the Gartner Market Share Navigator.

Gartner Vendor Revenue Profiles provide insight into the sources of revenue across a vendor’s technology product and service portfolio and the competitive landscape within various market segments. This insight can be used in business planning, investment prioritization and competitive benchmarking.

However, Gartner does not provide financial investment advice, is not a registered financial investment advisor or broker-dealer, and is not affiliated with a registered financial investment advisor or broker-dealer. The IT research that Gartner provides should not, in any way, be construed or viewed as investment-related guidance.

How to Use Gartner Vendor Revenue Profiles

Gartner Vendor Revenue Profiles are designed to be used by TSPs to make strategic and tactical business decisions. They can help TSPs:

    How Gartner Creates a Gartner Vendor Revenue Profile
    Selecting Vendors

    Gartner develops a Vendor Revenue Profile for:

    • Each vendor named in one of its Market Share reports, which are published on an annual or quarterly basis. The criteria used to name a vendor or not in a Market Share deliverable differ by market.

    • Vendors that Gartner either wants to initiate coverage of and has yet to produce market share analysis for, or is in the process of incrementally expanding its scope of coverage for. Inclusion criteria are reviewed each year and include thresholds such as individual vendor revenue, as well as geographic presence or scope and relevance of the product portfolio.

    Gartner Definition of “Vendor” in the Gartner Vendor Revenue Profile

    Gartner defines a vendor as a trading entity that sells a finished product or delivers a service, either into a channel or directly to end users. Gartner considers subsidiaries (wholly owned trading companies) or joint ventures (trading companies with multiple ownership) with different brands as vendors only if they maintain a marketing, sales and customer support structure independent of the parent company or companies.

    We consider the following as meeting the definition of a vendor:

    • A vendor may design and manufacture its own products, assemble complete systems from components produced by others, or procure products from an original equipment manufacturer (OEM) or contract manufacturer.

    • A vendor may sell IT services, either as a prime contractor or subcontractor.

    • A vendor may create, sell and service a software product, as a perpetual or term license, subscription, or service, and charge maintenance and support fees for such software.

    • A vendor may provide support services for its own products or for other vendors’ products and may also provide business and technical expertise to enable enterprises to create, manage and optimize IT and IT-intensive business processes.

    Developing Vendor Revenue Estimates

    For publicly traded vendors, Gartner uses quarterly revenue from public filings to populate its internal models. If a vendor’s fiscal year is different from the calendar year, Gartner adjusts the vendor’s fiscal year to align with the calendar year. If a vendor’s fiscal quarter breaks across a calendar quarter, Gartner splits the quarters into months and recalculates estimates for calendar quarters and years accordingly, using a simple linear revenue allocation by month.

    For private vendors, Gartner uses a combination of primary and secondary research sources to estimate vendor revenue. Gartner also uses:

    • Publicly available information, such as public financial filings and company websites

    • Interviews with vendors

    • Information and data from online and content aggregators

    • Reports from financial analysts

    • Articles in the general and trade press

    • Government or trade association data

    Gartner creates and maintains average exchange rates on a calendar quarterly basis. These are applied to vendor quarterly financial reports (where applicable) in local currency to generate Gartner’s U.S. dollar revenue estimates. These exchange rates may not align with those used by the vendor, causing differences between a vendor’s internally reported revenue and Gartner’s estimates. The scale of such differences will expand in countries with high exchange rate volatility.

    The data is then mapped to a common set of 25 Gartner-specific technology segments, using published revenue segmentation as a guide. The level of aggregation displayed in the Gartner Vendor Revenue Profile varies by market segment due to the level of detail typically available in vendor financial reports for Gartner to interpret and map to its segmentation. Gartner Vendor Revenue Profile segmentation may be broader in scope than our published Market Share segmentation. For example, the Gartner “Market Share: All Software Markets, Worldwide” report is specific to enterprise software, whereas the software segment in the Gartner Vendor Revenue Profile includes both consumer and enterprise software. See Table 1 for Gartner Vendor Revenue Profile market segmentation.

    Inviting Vendors to Comment on Gartner Estimates

    Before publication, a draft of the Gartner Vendor Revenue Profile is sent to the vendor for comment. Giving vendors the opportunity to review research prior to publication so that they can comment and provide feedback on our estimates is an important part of Gartner’s research vetting process. This external review is in addition to rigorous internal peer review and validation. We understand that there are “fair disclosure” constraints that could limit the amount of guidance that can be provided. Our overriding concern is to ensure that our estimates represent vendors as accurately as possible.

    Publishing the Research

    Gartner Vendor Revenue Profiles are published once a year (after annual market share has been completed) via the Gartner Vendor Revenue Profile online tool.

    How Gartner Uses Vendor Revenue Profiles to Develop Market Share Research

    The vendor revenue estimates developed for the Gartner Vendor Revenue Profile provide an important input into our Market Share research but are not the same as market share estimates because they measure different things. Gartner Vendor Revenue Profiles provide a mapping of vendor revenue as reported to Gartner segmentation and are designed to be used for product and service portfolio analysis.

    Market share estimates provide a total available market (TAM) view of the competitive environment within a market segment. This view is linked to the Gartner Vendor Revenue Profile by making adjustments to account for items such as some intercompany sales, intracompany transfers and sell-through sales.

    Therefore, vendor revenue estimates in Gartner Market Share reports correspond to, but are not equal to, vendor revenue estimates in Gartner Vendor Revenue Profiles.

    The vendor revenue estimates in Gartner Vendor Revenue Profiles are only one of the inputs used to create Gartner Market Share research. For example, when developing market share revenue estimates from Gartner Vendor Revenue Profiles, the following adjustments may be required:

    • Addition of vendor revenue for products embedded in higher-value products/services — Vendor revenue for products embedded in higher-value products/services might be reported in more than one Market Share report. But it is reported in only one segment of its Gartner Vendor Revenue Profile. For example, in the case of a server vendor reporting sales revenue for servers including operating system (OS) licenses, the total revenue would be accounted for solely under the server segment of its Gartner Vendor Revenue Profile. However, in Market Share reports, not only is the total revenue included in the Gartner server Market Share report, but also a separate estimate is made to account for OS revenue in the Gartner enterprise software Market Share report.

    • Removal of sell-through revenue — Market Share reports do not account for sell-through revenue. “Sell-through revenue” is defined as revenue recognized when distributors resell products to end customers. For example, a communications service provider (CSP) reports sales revenue for mobile devices; this revenue would be included in a Gartner Vendor Revenue Profile but excluded from a Market Share report.

    • Addition of captive revenue — Market Share reports may include captive revenue, whereas Gartner Vendor Revenue Profiles do not. “Captive revenue” corresponds to a vendor’s internal sales channel (that is, when a vendor sells products or services to itself). Consolidated revenue declared by companies in their financial reports often eliminates captive sales (usually called “intersegment revenue” in income statements). For example, a multimarket vendor might supply servers to itself for bundling as part of its IT services solution; these captive sales would be accounted for in the server Market Share report.

    The Structure of a Gartner Vendor Revenue Profile

    The Gartner Vendor Revenue Profile tool allows clients to either select a named Gartner Vendor Revenue Profile or compare Gartner vendor revenue estimates in a named market segment.

    Technology segments featured in a Gartner Vendor Revenue Profile are nonoverlapping and are reconciled with the consolidated view of the vendor’s public financials. All data is a Gartner estimate.

    The Gartner Vendor Revenue Profile tool includes basic information associated with the vendor:

    • Location of the vendor’s operational headquarters

    • Reporting currency

    • Type of company (that is, private versus public)

    • Name of the Gartner Vendor Revenue Profile lead analyst responsible for creating the Gartner Vendor Revenue Profile

    The Gartner Vendor Revenue Profile tool does not provide analysis beyond our assessment of revenue by segment.

    Gartner Vendor Revenue Profile Segmentation Descriptions
    Information Technology
    Communications Services

    Fixed network services refer to communications services provided by a CSP in the form of a fixed-line voice call or data transmission. The services can be broadband access to the internet or broadband access to a company wide-area network (WAN) used to connect sites or connect to the cloud.

    It is a term that involves the communication of individuals or individuals within sites or enterprise site data communication, such as email, messaging and applications, rather than machine-to-machine (M2M) communications.

    Fixed network services incorporate consumer voice communication (fixed-line consumer calling), consumer broadband/internet services (the broadband connection and its monthly charge), enterprise fixed-line voice services and enterprise data services.

    This segment also includes:

    • Business, consumer and data fixed connections

    • Monthly service charges and local/long-distance charges

    Mobile services are the connectivity services that CSPs provide to businesses and consumers, using cellular networks, in contrast to fixed network services that rely on a physical connection between the core CSP network and the customer’s IT and communications assets.

    CSPs provide both the actual SIM cards and the connections that come with it, either as a prepaid service where users have to top up their card in order to use their mobile device or as 12- or 24-months contracts.

    Please note that Wi-Fi doesn’t get accounted for as a mobile service.

    Other communications services include wholesale, interconnection revenue and public phone services, as well as value-added services (VASs), such as ringback tones, “find me, follow me” and location-based services.

    This segment also includes enterprise communications applications (ECAs), including unified communications (UC) and other ECAs:

    • UC includes telephony, messaging (voice messaging/unified messaging) and web-conferencing functionality and associated real-time video (including video as a service). It includes both premises-based and cloud-based communications functions, which are used to enable communications within and across organizations. It also includes revenue from audioconferencing, which is a built-in feature of a web-conferencing service.

    • Other ECAs include contact center, business phones (that is, phones on your desk), interactive voice response (IVR), dialers, switchboards, stand-alone audioconferencing services, audioconferencing devices and other miscellaneous appliances attached to telephony systems, such as music on hold. This can also include both on-premises products and cloud-based services.

    Data Center Systems

    Servers are computing hardware whose primary purpose is data processing. This segment includes:

    • x86 servers, which are servers equipped with x86 processors. Examples of the type of hardware that makes up an x86 system are Intel Xeon and AMD Opteron processors, running largely Windows and Linux OSs.

    • Non-x86 servers, which are servers that do not have an x86 processor, such as reduced instruction set computer (RISC) processors or proprietary processors running typically UNIX or mainframe-class OSs. This segment also includes any embedded OSs or components.

    This segment excludes product support, hardware support, service support and software support, and any server hardware sold as part of an integrated system or appliance.

    External storage systems refer to external controller-based (ECB) storage and just a bunch of disks (JBOD) storage systems:

    • ECB is essentially a platform with specially developed software whose purpose is to manage the storing and retrieval of data from disk-based storage devices so that the controller is completely separate from, and external to, the application and host servers.

    • JBODs are disks that are not under the control of redundant array of independent disks (RAID) technology.

    This segment excludes:

    • Assembled components, such as individual disk drives

    • Optical (such as DVD-ROM and Blu-ray) and tape storage

    • Any storage hardware sold as part of an integrated system

    Enterprise networking equipment covers premises-based appliance and virtualized Internet Protocol (IP) data network equipment (hardware and software). The equipment is used by small and midsize businesses (SMBs) and enterprises to provide user and site connectivity, and access control to the enterprise’s own, or third-party, IT systems. The equipment can be purchased by, or leased to, the enterprise, or provided as part of a managed service or outsourcing contract.

    Enterprise networking can be within the data center or campus networking, and it includes network security solutions — namely, firewalls, intrusion prevention systems (IPSs) and intrusion detection systems (IDSs).

    This segment excludes networking products — such as xDSL/broadband-sharing routers and home-based modems — sold to small office/home office (SOHO) users and consumers.

    Integrated systems comprise combinations of server, storage and network infrastructure sold with management software that facilitates the provisioning and management of the combined unit. This segment includes hyperconverged integrated systems (HCISs), integrated infrastructure, integrated stack and reference architecture systems.

    Other data center systems refer to any category of data-center-hardware-centric technology that is not a server, storage or networking.

    Devices

    PCs include desk-based PCs, notebook PCs and workstations. PCs are either “traditional” with separate monitor and input devices, or all-in-one machines:

    • Desk-based PCs are typically immobile and intended for use in a single location.

    • Notebook PCs largely replicate the experience and usage patterns of a desk-based PC, but with reduced physical characteristics, such as screen size and a clamshell form factor, to enable portability. A device with a clamshell or hybrid form factor and a display of 14 inches or more falls into our notebook PC category, along with units weighing more than 1.59 kg.

    Ultramobiles include tablets, hybrids (convertible, detachable and fold-over designs) and clamshells with display sizes typically between 7 inches and 13.9 inches, weighing typically less than 1.6 kg.

    Mobile phones refer to premium phones, basic phones and utility phones, as well as smartphones and feature phones.

    Wearables refer to a computing device that is in some way worn on the body, as opposed to a separate appliance, such as a smartphone carried in a pocket or bag.

    It not only covers well-known devices, such as smartwatches, but also extends to smart clothing, personal accessories (such as smart jewelry, smart footwear, headsets and glasses), safety products (such as the inflatable cycle helmet) and medical/fitness sensors.

    Wearable devices aren’t limited to humans: Smart pet collars for tracking or pet fitness purposes are already available.

    Other devices include home phones, home-based modems, MP3 players, game consoles or handheld game devices, scanners, monitors, scanners, digitizer, webcams, Bluetooth headsets, calculators, keyboards, mice, docking stations, and Blu-ray and DVD players.

    This segment also includes pagers, satellite phones, e-readers, TVs and set-top boxes, and iPods and iPod touch.

    Digital Media Services

    Digital media services include video media services and online music:

    • Video media services refer to paid-for pay-TV and video on demand (VOD) services, such as subscription and transactional VOD. This segment excludes any revenue from advertising or third-party sources.

    • Online music refers to paid-for downloaded and streaming music services. It excludes any revenue from advertising or third-party sources.

    Examples of digital media services include downloaded video, books and music, such as iTunes, Apple Music, Spotify and Kindle content.

    This segment also includes any other paid-for downloaded or streaming media services — such as books, magazines and audio books.

    IT Services

    IT services include enterprise and consumer services:

    • Enterprise IT services refer to the application of business and technical expertise to enable enterprises to create, access, manage, and optimize IT and IT-intensive business processes. It does not include stand-alone product or engineering development services. It does include consulting, implementation, managed services and cloud infrastructure services, and business process outsourcing (BPO) as detailed in the “Gartner Market Databook” published on a quarterly basis.

    • Consumer IT services include consulting, support and repair services sold directly to consumers.

    This segment also includes:

      This segment does not include internal IT staff costs.

      Printers, Copiers and MFPs

      This segment includes enterprise and consumer printer, copier MFP hardware, and it includes any embedded OSs.

      This segment does not include consumables, such as toner, ink and paper. It also does not include print services (see the IT Services section).

      Software

      Software includes enterprise and consumer application and infrastructure software.

      • Enterprise application software includes business intelligence and analytics, customer relationship management, enterprise content management, enterprise resource planning, office suites, project and portfolio management, and supply chain management.

      • Infrastructure software includes application development software, application infrastructure and middleware, data integration tools and data quality tools, database management systems, IT operations management (ITOM), security software, storage management software, and virtualization software. Infrastructure software is used to build, run and manage the performance of IT resources. In this category, we gather software primarily for use by IT professionals.

      This segment also includes:

      • Software clearly purchased by and for consumers, such as mobile apps, gaming software, online gaming, in-app services, and stand-alone mobile and wireless applications

      • Vertical-specific software

      This segment does not include:

        Internet-Based IT Products and Services

        Internet-based products and services include IT products and services, platforms, marketplaces, and customer data, which are wholly reliant on the internet for delivery.

        The types of revenue streams include both direct and indirect sources, such as subscription fees, transaction fees, content charges, advertising and third-party payments. Examples include:

        • Search engines and email (for example, Google or Bing)

        • Social media platforms (for example, Facebook, Instagram or Snapchat)

        • Online communities (for example, LinkedIn)

        • Online marketplaces (for example, Amazon Marketplace, eBay, Alibaba.com and CSP online shopping)

        • Customer data (for example, fitness and healthcare)

        • Payment services (for example, PayPal)

        This segment also includes “data products,” such as credit scores, market feed data streams, consumer financial data and company financial data.

        This segment does not include:

        • Public cloud services, such as Amazon Web Services (AWS)

        • Online music and video, which are included in digital media services

        Other IT

        Other IT includes products and services not elsewhere categorized as IT.

        Also included in this segment are consumables for IT products, such as toner, ink and paper for printers.

        Operational Technology
        CSP Operational Technology

        The CSP OT networking segment includes revenue from CSP dedicated network solutions, including the following:

        • Mobile infrastructure (2G, 3G, 4G/Long Term Evolution [LTE], small cells and mobile core)

        • Fixed access (DSL, fiber access and other fixed access)

        • Service provider routers and switches (SPRS)

        • Optical transport

        • Other networks (such as voice switching and session border controllers)

        This segment excludes solutions that are not CSP-specific, even if bought by CSPs (such as data center solutions).

        CSP OT services include CSP OT software services and CSP network infrastructure services.

        • CSP OT software services encompass services as part of wider transformation efforts, as well as integration services and enhancements of existing legacy environments across multiple technologies covering larger heterogeneous system, application and infrastructure stacks.

        • CSP network infrastructure services include services related to CSP networks, as opposed to CSP software/IT.

        This segment excludes services that are not CSP-specific, even if bought by CSPs (such as data center infrastructure services).

        The CSP OT software segment includes vendor revenue related to:

        • Operations support systems (OSSs)

        • Business support systems (BSSs)

        • Service delivery platforms (SDPs)

        This is revenue generated from new licenses, updates, upgrades, subscriptions and hosting, as well as technical support and maintenance related to particular software.

        CSP OT software also includes:

        • CSP-specific infrastructure software that is used to plan, build, run and support the performance and availability of CSPs’ networks and IT resources

        • CSP-specific OT application software that is used to increase the performance of CSPs’ business resources

        This segment excludes software that is not CSP-specific, even if bought by CSPs (such as customer billing solutions).

        Semiconductor Manufacturing Equipment

        Semiconductor manufacturing equipment includes all types of equipment used to make semiconductors. It is the sum of lithography, deposition, etch/clean and planarization, ion implanter, rapid thermal processing (RTP) and oxidation/diffusion, process control, manufacturing automation, and other wafer fab equipment.

        Semiconductor Manufacturing Foundry Services

        Semiconductor manufacturing foundry services include all types of services used to make semiconductors. It includes semiconductor wafer foundry services, as well as packaging, assembly and test services.

        Other OT

        Other OT refers to OT products, software and services not elsewhere categorized as OT.

        Examples include ATMs in banks, medical equipment, building management systems, navigation systems, point-of-sale terminals and self-check-out hardware.

        Other OT does not apply to technology used by consumers.

        Other OT includes satellites and robotics (including drones).

        This segment also includes Internet of Things (IoT) OT, which consists of four components:

        • IoT OT endpoints: An IoT endpoint is the IoT hardware device at the edge of the IoT network. IoT endpoints are the “things” of the IoT.

        • IoT OT infrastructure: IoT OT infrastructure is defined as network-related infrastructure that is dedicated to IoT applications and not shared with IT applications. There are two components of IoT OT infrastructure: IoT beacons and IoT gateways/controllers.

        • IoT OT software: IoT OT software includes IoT platforms and all other IoT-related software that is not otherwise included in the IT portion of this taxonomy.

        • IoT OT services: IoT OT services consist of M2M connectivity services and professional IoT services.

        IoT is the network of dedicated physical objects (things) that contain embedded technology to sense or interact with their internal state or external environment. The IoT comprises an ecosystem that includes things, communication, applications and data analysis.

        Examples are as follows:

        • Broadcast equipment, including TVs, microwaves and satellites

        • Radar and telemetry

        • Radiotelephones and microfilm equipment

        Components
        Assembled Components

        Assembled components include solid-state drives (SSDs), hard-disk drives (HDDs) and optical drives:

        • SSD is a nonvolatile (typically flash-based) semiconductor replacement for conventional HDDs. SSDs provide the primary storage element that is semipermanent and that stores critical software components. SSD technology is available in various form factors and can feature several interfaces that are compatible with standard HDD interfaces; however, it does not include embedded modules and fully removable media.

        • HDD is the mechanism that controls the positioning, reading and writing of the hard disk, which furnishes a large amount of data storage for PCs and other consumer devices.

        • Optical drives include CD/DVD drives.

        Semiconductors

        Semiconductors include general-purpose chips, application-specific chips, nonoptical sensors and other semiconductors:

        • General purpose — These are general-purpose semiconductor chips. These chips are not specific to an application and include devices such as memory (DRAM, NAND and other memory), analog, discrete, logic, microcontroller units (MCUs), microprocessors and optoelectronic devices.

        • Application-specific — These are chips targeted at a specific application, such as mobile phones, and they include both application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs). ASICs are custom chips sold to only one user/customer, such as Cisco, whereas ASSPs are application-specific chips sold to many companies.

        • Nonoptical sensors — These semiconductor sensors convert measurements of physical, chemical or biological properties into electrical signals. Typical properties measured by sensors include temperature, pressure, acceleration and magnetic field.

        • Other semiconductors include technologies such as carbon nanotubes.

        This segment does not include:

        • Semiconductor foundry

        • Semiconductor assembly and test

        Other Components

        Other components include other assembled components and other semiconductor components and refers to subassembly components, such as graphics cards, power supplies and circuit boards.

        This segment also includes semiconductor intellectual property.

        Other Non-IT/OT
        Non-IT/OT/Components

        Non IT/OT/components refer to products and services not elsewhere categorized as IT, OT or components.

        Examples are as follows:

        • Consumer products, such as refrigerators and washing machines

        • Financial and leasing services

        • Investments, patents and intellectual property revenue

        • Transportation and heavy machinery

        • Insurance and healthcare services

        • Network construction and tower rental revenue from communications services

        This segment also includes:

        • Revenue driven from product rentals

        • Resales that are an aggregation of unknown products that are mostly IT products

        • Resales that are a conglomeration of products that are a mix of IT and anything else

        Frequently Asked Questions

        For conglomerates or holding companies, we typically do not create a Gartner Vendor Revenue Profile. Instead, we aggregate the relevant vendors to create a “vendor group” if we need to analyze the overall IT revenue for a large, complex company. Note that Gartner is initially publishing a Gartner Vendor Revenue Profile for each of the vendors named in its Market Share reports and not for vendor groups. Gartner Vendor Revenue Profiles cover IT, OT and components. Any other revenue will be mapped to “other non-IT” revenue.

        In a Gartner Vendor Revenue Profile, Gartner aligns its vendor revenue estimates with the most recently available financial reports when the merger and acquisition (M&A) activity completes. Gartner generally does not adjust the revenue history of vendors based on pro forma guidance after M&As. However, if, as a result of an M&A, the vendor restates its financial reports and materially changes its reported revenue, then Gartner may choose to update its historical estimates.

        For market share, Gartner estimates the revenue under the acquiring company name as of the first day of the calendar quarter in which the acquisition is completed. We make best efforts to compensate for misalignment with company financial reporting. Gartner does not adjust the financial history of vendors that are acquired by another company.

        In Gartner Vendor Revenue Profiles, Gartner aligns with the most recently available financial reports when the divestment activity completes. Gartner does not generally adjust the revenue history of vendors based on pro forma guidance after divestment. However, if, as a result of a divestment, the vendor restates its financial reports and materially changes its reported revenue, then we may choose to update its historical estimates.

        When Gartner creates its vendor revenue estimates, it uses the most recently available information. If subsequent information is released after we publish Gartner Vendor Revenue Profile data, Gartner will note any changes and incorporate them in the next research cycle — generally, the following year. If Gartner has made an error (for example, has failed to take into account publicly available information), Gartner’s normal correction policies apply.

        Gartner publishes “calendarized” market sizing revenue estimates (that is, January through December of a given year). If a vendor’s fiscal year is different from the calendar year, Gartner adjusts the vendor’s fiscal year to align with the calendar year. If a vendor’s fiscal quarter breaks across a calendar quarter, Gartner splits the quarters into months and recalculates estimates for calendar quarters and years accordingly. We assume equal distribution of revenue across the three months of a given quarter.

        Gartner creates and maintains average exchange rates on a calendar quarterly basis (see Table 2). These are then applied to vendor quarterly financial reports in local/native currency to generate U.S. dollar revenue estimates.

        Vendors are not implementing compliance with ASC 606 in the same way (that is, full retrospective, modified retrospective or cumulative catch-up transition methods) or at the same time. In addition, the Gartner Vendor Revenue Profile estimates are based on calendar-year time periods.

        The majority of vendors in Gartner Market Share have adopted the new ASC 606 (FASB)/IFRS 15 (IASB) accounting standards using the modified approach. This means they did not restate history. Gartner has established the following policy to treat all providers as equitably as possible in our statistical research:

        • Gartner captures revenue numbers reflecting the new accounting standard starting only from the date of adoption by the company.

        • We have not restated our 2017 estimates of individual vendor revenue in instances where a provider adopted the new accounting standard only from 1 January 2018. This applies even where a provider has adopted the full retrospective approach and restated history.

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        Overview

        Key Findings

        • The Gartner Vendor Revenue Profile online tool enables dynamic comparisons between, and ranking of, IT vendors by their revenue across market segments, including digital giants and communications service providers.
        • Gartner Vendor Revenue Profiles reflect vendor strategic positioning amid the competitive migration to a digital business world.
        • The Gartner Vendor Revenue Profile online tool presents a consistent view of approximately 900 vendors’ IT product and service portfolios, enabling objective comparisons for competitive benchmarking and validation of important industry trends.

        Recommendations

        To identify growth opportunities across the IT marketplace, TSPs should exploit Gartner Vendor Revenue Profiles in the following ways:
        • Use them as a complement to other Gartner research when evaluating competitors in support of tactical and strategic business decisions.
        • Leverage them to identify vendors with complementary IT product and service portfolios as potential acquisition targets and to position your company against restructured competitors.
        • Review the vendors you are evaluating, and schedule an inquiry session with the Gartner Vendor Revenue lead analyst to gain further details and insight on a particular vendor.

        Analysis

        Competitive insight is difficult to glean from published company financials, because the detail is usually insufficient to meaningfully separate business components. Gartner Vendor Revenue Profiles show the diversification of a provider’s revenue and, at a high level, highlight the bright spots (or lack of) in the provider’s revenue streams. Also, they provide the checks and balances that the sum of individual segment revenue does not exceed the total revenue for a provider.
        This document is a companion to the Gartner Vendor Revenue Profile tool (see Figure 1). It explains:
        • Why the Gartner Vendor Revenue Profile is important for technology and service providers (TSPs) making decisions about portfolio optimization, potential acquisitions and partnerships
        • How the revenue estimates are created
        • What actions should be taken based on knowledge of the Gartner Vendor Revenue Profile
        Figure 1. Gartner Vendor Revenue Profile

        What Is a Gartner Vendor Revenue Profile?

        Gartner Vendor Revenue Profiles represent Gartner’s analysis of a vendor’s reported (where applicable) revenue mapped to Gartner’s technology segmentation. The Gartner Vendor Revenue Profile provides a calendar-year view of a vendor’s merchant sales (that is, product and service sales to external customers) in U.S. dollars across IT, operational technology (OT) and component market segments. Vendor market segments featured in a Gartner Vendor Revenue Profile are nonoverlapping, meaning they can be mapped to only a single segment. These segments are reconciled with the consolidated view of the vendor’s public financial statements (when available). Note that revenue declared by vendors in financial reports excludes captive (intracompany) sales.
        Gartner Vendor Revenue Profile estimates are important inputs to market share but are not the same and should not be used to construct a vendor’s market share. Instead, leverage the  Gartner Market Share Navigator.
        Gartner Vendor Revenue Profiles provide insight into the sources of revenue across a vendor’s technology product and service portfolio and the competitive landscape within various market segments. This insight can be used in business planning, investment prioritization and competitive benchmarking.
        However, Gartner does not provide financial investment advice, is not a registered financial investment advisor or broker-dealer, and is not affiliated with a registered financial investment advisor or broker-dealer. The IT research that Gartner provides should not, in any way, be construed or viewed as investment-related guidance.

        How to Use Gartner Vendor Revenue Profiles

        Gartner Vendor Revenue Profiles are designed to be used by TSPs to make strategic and tactical business decisions. They can help TSPs:
        • Analyze an IT vendor’s product and service portfolio
          • TSPs can see at a glance how a vendor’s reported revenue is distributed across Gartner IT, OT and component market segments, and how it is changing year over year. This can form the starting point for a deeper analysis of a vendor’s IT product and service portfolio.
        • Analyze the competition
          • The consistent and objective mapping of each vendor’s merchant revenue to Gartner’s segmentation means several vendors can be compared against each other. In this way, TSPs can assess a vendor’s presence and relative strength in each market segment as part of an initial, high-level competitive analysis.
        • Identify potential partners
          • TSPs looking to enter into partnerships as part of a go-to-market strategy can use Gartner Vendor Revenue Profiles to identify vendors with complementary IT product and service portfolios.
        • Analyze acquisition targets
          • TSPs can use Gartner Vendor Revenue Profiles to analyze and identify suitable targets if they are looking for acquisitions to grow their business, or as part of a market entry strategy.

        How Gartner Creates a Gartner Vendor Revenue Profile

        Selecting Vendors

        Gartner develops a Vendor Revenue Profile for:
        • Each vendor named in one of its Market Share reports, which are published on an annual or quarterly basis. The criteria used to name a vendor or not in a Market Share deliverable differ by market.
        • Vendors that Gartner either wants to initiate coverage of and has yet to produce market share analysis for, or is in the process of incrementally expanding its scope of coverage for. Inclusion criteria are reviewed each year and include thresholds such as individual vendor revenue, as well as geographic presence or scope and relevance of the product portfolio.
        Gartner Definition of “Vendor” in the Gartner Vendor Revenue Profile
        Gartner defines a vendor as a trading entity that sells a finished product or delivers a service, either into a channel or directly to end users. Gartner considers subsidiaries (wholly owned trading companies) or joint ventures (trading companies with multiple ownership) with different brands as vendors only if they maintain a marketing, sales and customer support structure independent of the parent company or companies.
        We consider the following as meeting the definition of a vendor:
        • A vendor may design and manufacture its own products, assemble complete systems from components produced by others, or procure products from an original equipment manufacturer (OEM) or contract manufacturer.
        • A vendor may sell IT services, either as a prime contractor or subcontractor.
        • A vendor may create, sell and service a software product, as a perpetual or term license, subscription, or service, and charge maintenance and support fees for such software.
        • A vendor may provide support services for its own products or for other vendors’ products and may also provide business and technical expertise to enable enterprises to create, manage and optimize IT and IT-intensive business processes.

        Developing Vendor Revenue Estimates

        For publicly traded vendors, Gartner uses quarterly revenue from public filings to populate its internal models. If a vendor’s fiscal year is different from the calendar year, Gartner adjusts the vendor’s fiscal year to align with the calendar year. If a vendor’s fiscal quarter breaks across a calendar quarter, Gartner splits the quarters into months and recalculates estimates for calendar quarters and years accordingly, using a simple linear revenue allocation by month.
        For private vendors, Gartner uses a combination of primary and secondary research sources to estimate vendor revenue. Gartner also uses:
        • Publicly available information, such as public financial filings and company websites
        • Interviews with vendors
        • Information and data from online and content aggregators
        • Reports from financial analysts
        • Articles in the general and trade press
        • Government or trade association data
        Gartner creates and maintains average exchange rates on a calendar quarterly basis. These are applied to vendor quarterly financial reports (where applicable) in local currency to generate Gartner’s U.S. dollar revenue estimates. These exchange rates may not align with those used by the vendor, causing differences between a vendor’s internally reported revenue and Gartner’s estimates. The scale of such differences will expand in countries with high exchange rate volatility.
        The data is then mapped to a common set of 25 Gartner-specific technology segments, using published revenue segmentation as a guide. The level of aggregation displayed in the Gartner Vendor Revenue Profile varies by market segment due to the level of detail typically available in vendor financial reports for Gartner to interpret and map to its segmentation. Gartner Vendor Revenue Profile segmentation may be broader in scope than our published Market Share segmentation. For example, the Gartner “Market Share: All Software Markets, Worldwide” report is specific to enterprise software, whereas the software segment in the Gartner Vendor Revenue Profile includes both consumer and enterprise software. See Table 1 for Gartner Vendor Revenue Profile market segmentation.

        Table 1: Gartner Vendor Revenue Profile Market Segmentation

        Level 1
        Level 2
        Level 3
        Information Technology
        Communications Services
        Fixed Network Services
        Mobile Services
        Other Communications Services
        Data Center Systems
        Servers
        External Storage Systems
        Enterprise Networking
        Integrated Systems
        Other Data Center Systems
        Devices
        PCs/Ultramobiles/Tablets
        Mobile Phones
        Wearables
        Other Devices
        Digital Media Services
        IT Services
        Printers, Copiers and MFPs
        Software
        Internet-Based IT Products and Services
        Other IT
        Operational Technology
        CSP Operational Technology
        CSP OT Networking
        CSP OT Services
        CSP OT Software
        Semiconductor Manufacturing Equipment
        Semiconductor Manufacturing Foundry Services
        Other OT
        Components
        Assembled Components
        Semiconductors
        Other Components
        Other Non-IT/OT
        Non-IT/OT/Components
        MFP = multifunction product
        Source: Gartner (April 2019)

        Inviting Vendors to Comment on Gartner Estimates

        Before publication, a draft of the Gartner Vendor Revenue Profile is sent to the vendor for comment. Giving vendors the opportunity to review research prior to publication so that they can comment and provide feedback on our estimates is an important part of Gartner’s research vetting process. This external review is in addition to rigorous internal peer review and validation. We understand that there are “fair disclosure” constraints that could limit the amount of guidance that can be provided. Our overriding concern is to ensure that our estimates represent vendors as accurately as possible.

        Publishing the Research

        Gartner Vendor Revenue Profiles are published once a year (after annual market share has been completed) via the Gartner Vendor Revenue Profile online tool.

        How Gartner Uses Vendor Revenue Profiles to Develop Market Share Research

        The vendor revenue estimates developed for the Gartner Vendor Revenue Profile provide an important input into our Market Share research but are not the same as market share estimates because they measure different things. Gartner Vendor Revenue Profiles provide a mapping of vendor revenue as reported to Gartner segmentation and are designed to be used for product and service portfolio analysis.
        Market share estimates provide a total available market (TAM) view of the competitive environment within a market segment. This view is linked to the Gartner Vendor Revenue Profile by making adjustments to account for items such as some intercompany sales, intracompany transfers and sell-through sales.
        Therefore, vendor revenue estimates in Gartner Market Share reports correspond to, but are not equal to, vendor revenue estimates in Gartner Vendor Revenue Profiles.
        The vendor revenue estimates in Gartner Vendor Revenue Profiles are only one of the inputs used to create Gartner Market Share research. For example, when developing market share revenue estimates from Gartner Vendor Revenue Profiles, the following adjustments may be required:
        • Addition of vendor revenue for products embedded in higher-value products/services — Vendor revenue for products embedded in higher-value products/services might be reported in more than one Market Share report. But it is reported in only one segment of its Gartner Vendor Revenue Profile. For example, in the case of a server vendor reporting sales revenue for servers including operating system (OS) licenses, the total revenue would be accounted for solely under the server segment of its Gartner Vendor Revenue Profile. However, in Market Share reports, not only is the total revenue included in the Gartner server Market Share report, but also a separate estimate is made to account for OS revenue in the Gartner enterprise software Market Share report.
        • Removal of sell-through revenue — Market Share reports do not account for sell-through revenue. “Sell-through revenue” is defined as revenue recognized when distributors resell products to end customers. For example, a communications service provider (CSP) reports sales revenue for mobile devices; this revenue would be included in a Gartner Vendor Revenue Profile but excluded from a Market Share report.
        • Addition of captive revenue — Market Share reports may include captive revenue, whereas Gartner Vendor Revenue Profiles do not. “Captive revenue” corresponds to a vendor’s internal sales channel (that is, when a vendor sells products or services to itself). Consolidated revenue declared by companies in their financial reports often eliminates captive sales (usually called “intersegment revenue” in income statements). For example, a multimarket vendor might supply servers to itself for bundling as part of its IT services solution; these captive sales would be accounted for in the server Market Share report.

        The Structure of a Gartner Vendor Revenue Profile

        The Gartner Vendor Revenue Profile tool allows clients to either select a named Gartner Vendor Revenue Profile or compare Gartner vendor revenue estimates in a named market segment.
        Technology segments featured in a Gartner Vendor Revenue Profile are nonoverlapping and are reconciled with the consolidated view of the vendor’s public financials. All data is a Gartner estimate.
        The Gartner Vendor Revenue Profile tool includes basic information associated with the vendor:
        • Location of the vendor’s operational headquarters
        • Reporting currency
        • Type of company (that is, private versus public)
        • Name of the Gartner Vendor Revenue Profile lead analyst responsible for creating the Gartner Vendor Revenue Profile
        The Gartner Vendor Revenue Profile tool does not provide analysis beyond our assessment of revenue by segment.

        Gartner Vendor Revenue Profile Segmentation Descriptions

        Information Technology

        Communications Services
        Fixed Network Services
        Fixed network services refer to communications services provided by a CSP in the form of a fixed-line voice call or data transmission. The services can be broadband access to the internet or broadband access to a company wide-area network (WAN) used to connect sites or connect to the cloud.
        It is a term that involves the communication of individuals or individuals within sites or enterprise site data communication, such as email, messaging and applications, rather than machine-to-machine (M2M) communications.
        Fixed network services incorporate consumer voice communication (fixed-line consumer calling), consumer broadband/internet services (the broadband connection and its monthly charge), enterprise fixed-line voice services and enterprise data services.
        This segment also includes:
        • Business, consumer and data fixed connections
        • Monthly service charges and local/long-distance charges
        Mobile Services
        Mobile services are the connectivity services that CSPs provide to businesses and consumers, using cellular networks, in contrast to fixed network services that rely on a physical connection between the core CSP network and the customer’s IT and communications assets.
        CSPs provide both the actual SIM cards and the connections that come with it, either as a prepaid service where users have to top up their card in order to use their mobile device or as 12- or 24-months contracts.
        Please note that Wi-Fi doesn’t get accounted for as a mobile service.
        Other Communications Services
        Other communications services include wholesale, interconnection revenue and public phone services, as well as value-added services (VASs), such as ringback tones, “find me, follow me” and location-based services.
        This segment also includes enterprise communications applications (ECAs), including unified communications (UC) and other ECAs:
        • UC includes telephony, messaging (voice messaging/unified messaging) and web-conferencing functionality and associated real-time video (including video as a service). It includes both premises-based and cloud-based communications functions, which are used to enable communications within and across organizations. It also includes revenue from audioconferencing, which is a built-in feature of a web-conferencing service.
        • Other ECAs include contact center, business phones (that is, phones on your desk), interactive voice response (IVR), dialers, switchboards, stand-alone audioconferencing services, audioconferencing devices and other miscellaneous appliances attached to telephony systems, such as music on hold. This can also include both on-premises products and cloud-based services.
        Data Center Systems
        Servers
        Servers are computing hardware whose primary purpose is data processing. This segment includes:
        • x86 servers, which are servers equipped with x86 processors. Examples of the type of hardware that makes up an x86 system are Intel Xeon and AMD Opteron processors, running largely Windows and Linux OSs.
        • Non-x86 servers, which are servers that do not have an x86 processor, such as reduced instruction set computer (RISC) processors or proprietary processors running typically UNIX or mainframe-class OSs. This segment also includes any embedded OSs or components.
        This segment excludes product support, hardware support, service support and software support, and any server hardware sold as part of an integrated system or appliance.
        External Storage Systems
        External storage systems refer to external controller-based (ECB) storage and just a bunch of disks (JBOD) storage systems:
        • ECB is essentially a platform with specially developed software whose purpose is to manage the storing and retrieval of data from disk-based storage devices so that the controller is completely separate from, and external to, the application and host servers.
        • JBODs are disks that are not under the control of redundant array of independent disks (RAID) technology.
        This segment excludes:
        • Assembled components, such as individual disk drives
        • Optical (such as DVD-ROM and Blu-ray) and tape storage
        • Any storage hardware sold as part of an integrated system
        Enterprise Networking
        Enterprise networking equipment covers premises-based appliance and virtualized Internet Protocol (IP) data network equipment (hardware and software). The equipment is used by small and midsize businesses (SMBs) and enterprises to provide user and site connectivity, and access control to the enterprise’s own, or third-party, IT systems. The equipment can be purchased by, or leased to, the enterprise, or provided as part of a managed service or outsourcing contract.
        Enterprise networking can be within the data center or campus networking, and it includes network security solutions — namely, firewalls, intrusion prevention systems (IPSs) and intrusion detection systems (IDSs).
        This segment excludes networking products — such as xDSL/broadband-sharing routers and home-based modems — sold to small office/home office (SOHO) users and consumers.
        Integrated Systems
        Integrated systems comprise combinations of server, storage and network infrastructure sold with management software that facilitates the provisioning and management of the combined unit. This segment includes hyperconverged integrated systems (HCISs), integrated infrastructure, integrated stack and reference architecture systems.
        Other Data Center Systems
        Other data center systems refer to any category of data-center-hardware-centric technology that is not a server, storage or networking.
        Devices
        PCs/Ultramobiles/Tablets
        PCs include desk-based PCs, notebook PCs and workstations. PCs are either “traditional” with separate monitor and input devices, or all-in-one machines:
        • Desk-based PCs are typically immobile and intended for use in a single location.
        • Notebook PCs largely replicate the experience and usage patterns of a desk-based PC, but with reduced physical characteristics, such as screen size and a clamshell form factor, to enable portability. A device with a clamshell or hybrid form factor and a display of 14 inches or more falls into our notebook PC category, along with units weighing more than 1.59 kg.
        Ultramobiles include tablets, hybrids (convertible, detachable and fold-over designs) and clamshells with display sizes typically between 7 inches and 13.9 inches, weighing typically less than 1.6 kg.
        Mobile Phones
        Mobile phones refer to premium phones, basic phones and utility phones, as well as smartphones and feature phones.
        Wearables
        Wearables refer to a computing device that is in some way worn on the body, as opposed to a separate appliance, such as a smartphone carried in a pocket or bag.
        It not only covers well-known devices, such as smartwatches, but also extends to smart clothing, personal accessories (such as smart jewelry, smart footwear, headsets and glasses), safety products (such as the inflatable cycle helmet) and medical/fitness sensors.
        Wearable devices aren’t limited to humans: Smart pet collars for tracking or pet fitness purposes are already available.
        Other Devices
        Other devices include home phones, home-based modems, MP3 players, game consoles or handheld game devices, scanners, monitors, scanners, digitizer, webcams, Bluetooth headsets, calculators, keyboards, mice, docking stations, and Blu-ray and DVD players.
        This segment also includes pagers, satellite phones, e-readers, TVs and set-top boxes, and iPods and iPod touch.
        Digital Media Services
        Digital media services include video media services and online music:
        • Video media services refer to paid-for pay-TV and video on demand (VOD) services, such as subscription and transactional VOD. This segment excludes any revenue from advertising or third-party sources.
        • Online music refers to paid-for downloaded and streaming music services. It excludes any revenue from advertising or third-party sources.
        Examples of digital media services include downloaded video, books and music, such as iTunes, Apple Music, Spotify and Kindle content.
        This segment also includes any other paid-for downloaded or streaming media services — such as books, magazines and audio books.
        IT Services
        IT services include enterprise and consumer services:
        • Enterprise IT services refer to the application of business and technical expertise to enable enterprises to create, access, manage, and optimize IT and IT-intensive business processes. It does not include stand-alone product or engineering development services. It does include consulting, implementation, managed services and cloud infrastructure services, and business process outsourcing (BPO) as detailed in the “Gartner Market Databook” published on a quarterly basis.
        • Consumer IT services include consulting, support and repair services sold directly to consumers.
        This segment also includes:
        • All print services (including managed print services and cloud print services). Note that some print vendors may call this “managed content services.”
        This segment does not include internal IT staff costs.
        Printers, Copiers and MFPs
        This segment includes enterprise and consumer printer, copier MFP hardware, and it includes any embedded OSs.
        This segment does not include consumables, such as toner, ink and paper. It also does not include print services (see the IT Services section).
        Software
        Software includes enterprise and consumer application and infrastructure software.
        • Enterprise application software includes business intelligence and analytics, customer relationship management, enterprise content management, enterprise resource planning, office suites, project and portfolio management, and supply chain management.
        • Infrastructure software includes application development software, application infrastructure and middleware, data integration tools and data quality tools, database management systems, IT operations management (ITOM), security software, storage management software, and virtualization software. Infrastructure software is used to build, run and manage the performance of IT resources. In this category, we gather software primarily for use by IT professionals.
        This segment also includes:
        • Software clearly purchased by and for consumers, such as mobile apps, gaming software, online gaming, in-app services, and stand-alone mobile and wireless applications
        • Vertical-specific software
        This segment does not include:
        • Downloadable content, such as music or video, which is included in digital media services
        Internet-Based IT Products and Services
        Internet-based products and services include IT products and services, platforms, marketplaces, and customer data, which are wholly reliant on the internet for delivery.
        The types of revenue streams include both direct and indirect sources, such as subscription fees, transaction fees, content charges, advertising and third-party payments. Examples include:
        • Search engines and email (for example, Google or Bing)
        • Social media platforms (for example, Facebook, Instagram or Snapchat)
        • Online communities (for example, LinkedIn)
        • Online marketplaces (for example, Amazon Marketplace, eBay, Alibaba.com and CSP online shopping)
        • Customer data (for example, fitness and healthcare)
        • Payment services (for example, PayPal)
        This segment also includes “data products,” such as credit scores, market feed data streams, consumer financial data and company financial data.
        This segment does not include:
        • Public cloud services, such as Amazon Web Services (AWS)
        • Online music and video, which are included in digital media services
        Other IT
        Other IT includes products and services not elsewhere categorized as IT.
        Also included in this segment are consumables for IT products, such as toner, ink and paper for printers.

        Operational Technology

        CSP Operational Technology
        CSP OT Networking
        The CSP OT networking segment includes revenue from CSP dedicated network solutions, including the following:
        • Mobile infrastructure (2G, 3G, 4G/Long Term Evolution [LTE], small cells and mobile core)
        • Fixed access (DSL, fiber access and other fixed access)
        • Service provider routers and switches (SPRS)
        • Optical transport
        • Other networks (such as voice switching and session border controllers)
        This segment excludes solutions that are not CSP-specific, even if bought by CSPs (such as data center solutions).
        CSP OT Services
        CSP OT services include CSP OT software services and CSP network infrastructure services.
        • CSP OT software services encompass services as part of wider transformation efforts, as well as integration services and enhancements of existing legacy environments across multiple technologies covering larger heterogeneous system, application and infrastructure stacks.
        • CSP network infrastructure services include services related to CSP networks, as opposed to CSP software/IT.
        This segment excludes services that are not CSP-specific, even if bought by CSPs (such as data center infrastructure services).
        CSP OT Software
        The CSP OT software segment includes vendor revenue related to:
        • Operations support systems (OSSs)
        • Business support systems (BSSs)
        • Service delivery platforms (SDPs)
        This is revenue generated from new licenses, updates, upgrades, subscriptions and hosting, as well as technical support and maintenance related to particular software.
        CSP OT software also includes:
        • CSP-specific infrastructure software that is used to plan, build, run and support the performance and availability of CSPs’ networks and IT resources
        • CSP-specific OT application software that is used to increase the performance of CSPs’ business resources
        This segment excludes software that is not CSP-specific, even if bought by CSPs (such as customer billing solutions).
        Semiconductor Manufacturing Equipment
        Semiconductor manufacturing equipment includes all types of equipment used to make semiconductors. It is the sum of lithography, deposition, etch/clean and planarization, ion implanter, rapid thermal processing (RTP) and oxidation/diffusion, process control, manufacturing automation, and other wafer fab equipment.
        Semiconductor Manufacturing Foundry Services
        Semiconductor manufacturing foundry services include all types of services used to make semiconductors. It includes semiconductor wafer foundry services, as well as packaging, assembly and test services.
        Other OT
        Other OT refers to OT products, software and services not elsewhere categorized as OT.
        Examples include ATMs in banks, medical equipment, building management systems, navigation systems, point-of-sale terminals and self-check-out hardware.
        Other OT does not apply to technology used by consumers.
        Other OT includes satellites and robotics (including drones).
        This segment also includes Internet of Things (IoT) OT, which consists of four components:
        • IoT OT endpoints: An IoT endpoint is the IoT hardware device at the edge of the IoT network. IoT endpoints are the “things” of the IoT.
        • IoT OT infrastructure: IoT OT infrastructure is defined as network-related infrastructure that is dedicated to IoT applications and not shared with IT applications. There are two components of IoT OT infrastructure: IoT beacons and IoT gateways/controllers.
        • IoT OT software: IoT OT software includes IoT platforms and all other IoT-related software that is not otherwise included in the IT portion of this taxonomy.
        • IoT OT services: IoT OT services consist of M2M connectivity services and professional IoT services.
        IoT is the network of dedicated physical objects (things) that contain embedded technology to sense or interact with their internal state or external environment. The IoT comprises an ecosystem that includes things, communication, applications and data analysis.
        Examples are as follows:
        • Broadcast equipment, including TVs, microwaves and satellites
        • Radar and telemetry
        • Radiotelephones and microfilm equipment

        Components

        Assembled Components
        Assembled components include solid-state drives (SSDs), hard-disk drives (HDDs) and optical drives:
        • SSD is a nonvolatile (typically flash-based) semiconductor replacement for conventional HDDs. SSDs provide the primary storage element that is semipermanent and that stores critical software components. SSD technology is available in various form factors and can feature several interfaces that are compatible with standard HDD interfaces; however, it does not include embedded modules and fully removable media.
        • HDD is the mechanism that controls the positioning, reading and writing of the hard disk, which furnishes a large amount of data storage for PCs and other consumer devices.
        • Optical drives include CD/DVD drives.
        Semiconductors
        Semiconductors include general-purpose chips, application-specific chips, nonoptical sensors and other semiconductors:
        • General purpose — These are general-purpose semiconductor chips. These chips are not specific to an application and include devices such as memory (DRAM, NAND and other memory), analog, discrete, logic, microcontroller units (MCUs), microprocessors and optoelectronic devices.
        • Application-specific — These are chips targeted at a specific application, such as mobile phones, and they include both application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs). ASICs are custom chips sold to only one user/customer, such as Cisco, whereas ASSPs are application-specific chips sold to many companies.
        • Nonoptical sensors — These semiconductor sensors convert measurements of physical, chemical or biological properties into electrical signals. Typical properties measured by sensors include temperature, pressure, acceleration and magnetic field.
        • Other semiconductors include technologies such as carbon nanotubes.
        This segment does not include:
        • Semiconductor foundry
        • Semiconductor assembly and test
        Other Components
        Other components include other assembled components and other semiconductor components and refers to subassembly components, such as graphics cards, power supplies and circuit boards.
        This segment also includes semiconductor intellectual property.

        Other Non-IT/OT

        Non-IT/OT/Components
        Non IT/OT/components refer to products and services not elsewhere categorized as IT, OT or components.
        Examples are as follows:
        • Consumer products, such as refrigerators and washing machines
        • Financial and leasing services
        • Investments, patents and intellectual property revenue
        • Transportation and heavy machinery
        • Insurance and healthcare services
        • Network construction and tower rental revenue from communications services
        This segment also includes:
        • Revenue driven from product rentals
        • Resales that are an aggregation of unknown products that are mostly IT products
        • Resales that are a conglomeration of products that are a mix of IT and anything else

        Frequently Asked Questions

        How does Gartner treat a conglomerate vendor? Will a Gartner Vendor Revenue Profile be developed for each company or for the group of companies?
        For conglomerates or holding companies, we typically do not create a Gartner Vendor Revenue Profile. Instead, we aggregate the relevant vendors to create a “vendor group” if we need to analyze the overall IT revenue for a large, complex company. Note that Gartner is initially publishing a Gartner Vendor Revenue Profile for each of the vendors named in its Market Share reports and not for vendor groups. Gartner Vendor Revenue Profiles cover IT, OT and components. Any other revenue will be mapped to “other non-IT” revenue.
        How do you treat mergers and acquisitions?
        In a Gartner Vendor Revenue Profile, Gartner aligns its vendor revenue estimates with the most recently available financial reports when the merger and acquisition (M&A) activity completes. Gartner generally does not adjust the revenue history of vendors based on pro forma guidance after M&As. However, if, as a result of an M&A, the vendor restates its financial reports and materially changes its reported revenue, then Gartner may choose to update its historical estimates.
        For market share, Gartner estimates the revenue under the acquiring company name as of the first day of the calendar quarter in which the acquisition is completed. We make best efforts to compensate for misalignment with company financial reporting. Gartner does not adjust the financial history of vendors that are acquired by another company.
        How does Gartner treat divestitures?
        In Gartner Vendor Revenue Profiles, Gartner aligns with the most recently available financial reports when the divestment activity completes. Gartner does not generally adjust the revenue history of vendors based on pro forma guidance after divestment. However, if, as a result of a divestment, the vendor restates its financial reports and materially changes its reported revenue, then we may choose to update its historical estimates.
        Vendors sometimes restate their financials. How does Gartner address that situation?
        When Gartner creates its vendor revenue estimates, it uses the most recently available information. If subsequent information is released after we publish Gartner Vendor Revenue Profile data, Gartner will note any changes and incorporate them in the next research cycle — generally, the following year. If Gartner has made an error (for example, has failed to take into account publicly available information), Gartner’s normal correction policies apply.
        How does Gartner convert fiscal-year data into calendar-year data?
        Gartner publishes “calendarized” market sizing revenue estimates (that is, January through December of a given year). If a vendor’s fiscal year is different from the calendar year, Gartner adjusts the vendor’s fiscal year to align with the calendar year. If a vendor’s fiscal quarter breaks across a calendar quarter, Gartner splits the quarters into months and recalculates estimates for calendar quarters and years accordingly. We assume equal distribution of revenue across the three months of a given quarter.
        Which exchange rates did Gartner use to develop its 2017 and 2018 Gartner Vendor Revenue Profile estimates?
        Gartner creates and maintains average exchange rates on a calendar quarterly basis (see Table 2). These are then applied to vendor quarterly financial reports in local/native currency to generate U.S. dollar revenue estimates.
        What is Gartner policy on the changes in accounting standards related to revenue recognition — IFRS 15 (IASB) and ASC 606 (FASB)?
        Vendors are not implementing compliance with ASC 606 in the same way (that is, full retrospective, modified retrospective or cumulative catch-up transition methods) or at the same time. In addition, the Gartner Vendor Revenue Profile estimates are based on calendar-year time periods.
        The majority of vendors in Gartner Market Share have adopted the new ASC 606 (FASB)/IFRS 15 (IASB) accounting standards using the modified approach. This means they did not restate history. Gartner has established the following policy to treat all providers as equitably as possible in our statistical research:
        • Gartner captures revenue numbers reflecting the new accounting standard starting only from the date of adoption by the company.
        • We have not restated our 2017 estimates of individual vendor revenue in instances where a provider adopted the new accounting standard only from 1 January 2018. This applies even where a provider has adopted the full retrospective approach and restated history.

        Table 2: Gartner Exchange Rates Used to Create 2017 and 2018 Gartner Vendor Revenue Profile Estimates

         
        1Q17
        2Q17
        3Q17
        4Q17
        2017
        1Q18
        2Q18
        3Q18
        4Q18
        2018
        Argentinian Peso
        15.67
        15.72
        17.28
        17.54
        16.55
        19.71
        23.52
        32.13
        37.13
        28.12
        Australian Dollar
        1.32
        1.33
        1.27
        1.30
        1.30
        1.27
        1.32
        1.37
        1.39
        1.34
        Brazilian Real
        3.14
        3.21
        3.16
        3.25
        3.19
        3.25
        3.60
        3.95
        3.81
        3.65
        British Pound
        0.81
        0.78
        0.76
        0.75
        0.78
        0.72
        0.73
        0.77
        0.78
        0.75
        Canadian Dollar
        1.32
        1.34
        1.25
        1.27
        1.30
        1.27
        1.29
        1.31
        1.32
        1.30
        Chilean Peso
        655.09
        664.04
        642.11
        633.89
        648.78
        601.96
        621.64
        663.18
        679.41
        641.55
        Chinese Renminbi
        6.88
        6.86
        6.67
        6.61
        6.76
        6.35
        6.38
        6.81
        6.91
        6.61
        Colombian Peso
        2,920.00
        2,919.93
        2,974.10
        2,988.90
        2,950.73
        2,855.37
        2,841.23
        2,959.17
        3,166.07
        2,955.46
        Czech Koruna
        25.35
        24.15
        22.20
        21.77
        23.37
        20.65
        21.49
        22.09
        22.68
        21.73
        Denmark Krone
        6.98
        6.77
        6.33
        6.32
        6.60
        6.06
        6.25
        6.41
        6.54
        6.31
        Euro
        0.94
        0.91
        0.85
        0.85
        0.89
        0.81
        0.84
        0.86
        0.88
        0.85
        Hong Kong Dollar
        7.76
        7.79
        7.81
        7.81
        7.79
        7.83
        7.85
        7.84
        7.83
        7.84
        Hungarian Forint
        290.00
        281.97
        260.74
        264.54
        274.31
        252.87
        266.26
        285.92
        289.64
        273.67
        Indian Rupee
        66.94
        64.47
        64.29
        64.71
        65.10
        64.38
        67.00
        70.11
        72.13
        68.41
        Indonesian Rupiah
        13,352.67
        13,316.00
        13,338.33
        13,541.00
        13,387.00
        13,579.33
        13,954.33
        14,615.33
        14,774.67
        14,230.92
        Israeli New Shekel
        3.73
        3.59
        3.56
        3.51
        3.60
        3.46
        3.58
        3.63
        3.71
        3.59
        Japanese Yen
        113.57
        111.08
        111.01
        112.88
        112.13
        108.27
        109.14
        111.50
        112.77
        110.42
        Malaysian Ringgit
        4.44
        4.33
        4.26
        4.16
        4.30
        3.92
        3.95
        4.09
        4.17
        4.03
        Mexican Peso
        20.32
        18.55
        17.81
        18.97
        18.91
        18.72
        19.41
        18.94
        19.82
        19.22
        New Zealand Dollar
        1.40
        1.42
        1.37
        1.44
        1.41
        1.37
        1.42
        1.50
        1.49
        1.45
        Norway Krone
        8.43
        8.52
        7.96
        8.17
        8.27
        7.84
        8.02
        8.24
        8.44
        8.13
        Polish Zloty
        4.05
        3.84
        3.62
        3.59
        3.78
        3.40
        3.58
        3.70
        3.77
        3.61
        Russian Ruble
        58.73
        57.23
        58.93
        58.44
        58.33
        56.89
        62.05
        65.65
        66.55
        62.79
        Saudi Arabia Riyal
        3.75
        3.75
        3.75
        3.75
        3.75
        3.75
        3.75
        3.75
        3.75
        3.75
        Singapore Dollar
        1.42
        1.39
        1.36
        1.35
        1.38
        1.32
        1.33
        1.37
        1.59
        1.40
        South Africa Rand
        13.22
        13.20
        13.18
        13.62
        13.31
        11.96
        12.65
        14.05
        14.07
        13.18
        South Korea Won
        1,151.15
        1,130.05
        1,131.21
        1,105.35
        1,129.44
        1,071.10
        1,079.64
        1,120.84
        1,126.77
        1,099.59
        Swedish Krona
        8.92
        8.81
        8.14
        8.32
        8.55
        8.12
        8.67
        8.95
        9.05
        8.70
        Swiss Franc
        1.00
        0.99
        0.96
        0.99
        0.98
        0.95
        0.99
        0.98
        1.00
        0.98
        Taiwan Dollar
        31.05
        30.25
        30.25
        30.10
        30.41
        29.28
        29.78
        30.66
        30.83
        30.14
        Thai Baht
        35.10
        34.30
        33.36
        32.92
        33.92
        31.54
        31.92
        32.97
        32.81
        32.31
        Turkish New Lira
        3.70
        3.58
        3.51
        3.80
        3.65
        3.82
        4.37
        5.68
        5.49
        4.84
        U.S. Dollar
        1.00
        1.00
        1.00
        1.00
        1.00
        1.00
        1.00
        1.00
        1.00
        1.00
        Source: Gartner (April 2019)