This week NelsonHall held its quarterly IT Outsourcing (ITO) Index webcast to report on the latest developments in ITO contract activity and present an analysis of spending activity for IT services, professional services (i.e. consulting and systems integration) and ITO. Background ITO Index data shows a steady (but non-linear) decline in Total Contract Value (TCV) from 2002 onwards. The lev[...]

Sopra Steria has announced its financial results for 2014, focusing on its profitability performance (revenues were previously published in February). Our key takeaways from the announcement are discussed here. U.K. Will Continue to Outperform Other Sopra Steria Geographies in 2015 Sopra Steria U.K. had phenomenal growth in 2014 (+18.2% organically) to ~€859m. Profitability was high (ad[...]

NelsonHall has recently completed a series of visits in India, addressing a number of topics including software testing, application management and digital transformation services. NelsonHall met with software testing pure-play, Cigniti Technologies, now the largest of all India-based testing pure plays. The company has a headcount of 1,600, ahead of Maveric Systems (~1,200) and QA Infotech (~8[...]

At Cognizant’s European analyst event in Berlin, the topic of digital transformation and in particular its Horizon 3 services dominated discussions. Horizon 3 services now represent a NelsonHall estimated 10% of revenues (~$1.0bn in 2014). Horizon 3 includes new services such as digital services as well as new business models and new sectors/new geographies. Digital Transformation Cogn[...]

TCS has briefed NelsonHall on the recent launch of its DevOps related IP, Non-Production Environment Tracking and Release Automation (NETRA). With NETRA, TCS Assurance Services Unit (ASU), the main testing unit of TCS, is pursuing its strategy originated with Intelligent Testing Systems (ITS) to develop broad-reaching IPs, encompassing open source software, COTS, and TCS-developed accelerators.[...]

This week NelsonHall held its quarterly IT outsourcing (ITO) Index webcast. We have conducted these calls for the last six years to monitor developments in ITO from a quantitative perspective. When we introduced the Index, ITO had largely moved from full outsourcing to a selective outsourcing approach, and Indian vendors were deploying their land and expand strategy with the occasional one-off meg[...]

NelsonHall, the leading global BPO and IT outsourcing analyst firm, has today launched a new tool to assist strategic sourcing managers in assessing vendor capability in Application Outsourcing (AO) services. This NelsonHall Vendor Evaluation and Assessment Tool (NEAT) is now available to NelsonHall clients, and is also available for a period free-of-charge to buy-side organizations through Nel[...]

Tech Mahindra recently updated NelsonHall on its performance engineering (TMPE) capabilities.  The comments below complement an article on TMPE we wrote in January (see here). TMPE, part of Tech Mahindra’s Testing Services practice, is in high growth mode, having increased its headcount from 450 in early 2014 to 800 currently. Much of this growth has been driven by cross-sell[...]

NIIT Technologies recently briefed NelsonHall on its testing capabilities. Headquartered in Noida, NIIT Technologies had FY 2014 revenues (ending March 31, 2014) of ~$389m, with an operating margin of 15.2%.  H1 FY 2015 revenues were ~$189m. Headcount at the end of H1 FY 2015 was 8.7k. The company is an unusual Indian Outsourcing Service Provider (IOSP) with a specialization i[...]

Tech Mahindra Testing Services (TMTS) has updated NelsonHall on its DevOps capabilities. TMTS continues to work with CA Technologies around this offering, largely around service virtualization (SV), application release management (ARA) and together with other ISVs/open source software around agile testing/continuous integration (CI). (For more information on the offering, please refer to the pr[...]

EVRY has announced its largest shareholders, Posten Norgen and Telenor Business Partner Invest are to sell their shares (representing a combined 70.24% of capital) to Apax Partners. Apax Partners has secured an additional 3.15% of EVRY shares from Folketrygdfondet (Norway’s government pension fund) and is to launch a NOK 16 per share all-cash public tender. The tender values EVRY at ~$6[...]

NelsonHall recently attended Luxoft’s first ever analyst event in New York. Luxoft is a young company - it was founded in 2000 - that is enjoying very fast growth (20%-25% depending on the year). For its FY 2015 it has guided on revenue growth of at least 28% (of which 25% organic) and an adjusted EBITDA margin in the 17% to 19% target range. Luxoft is targeting $1bn in annual revenues[...]

NelsonHall recently met with SQS top management and discussed key priorities in the short, mid- and long-term. Short-Term: India and Delivery Network A short-term priority remains the integration and development of the former Thinksoft Global Services, now SQS India BFSI. The acquisition of Thinksoft increased SQS’ headcount in India to 1.9k or 54% of the overall global headcount. S[...]

IBM recently held its annual IBM Alliances event, focusing on SAP and Oracle (other major IBM-wide partners include Microsoft, Infor, Cisco, Juniper Networks and Citrix). IBM Alliances manages major relationships with technology vendors that cross several IBM service lines, e.g. GBS, GTS, Systems & Technology, and Software. Those seven major partnerships are significant and command ~15% of ove[...]

This week NelsonHall held its quarterly IT outsourcing (ITO) Index webcast. We have conducted these calls for the last six years to monitor developments in ITO from a quantitative perspective. When we introduced the Index, ITO had largely moved from full outsourcing to a selective outsourcing approach, and Indian vendors were deploying their land and expand strategy with the occasional one-off meg[...]

Virtusa recently briefed NelsonHall on its gamification approach within its software testing offering. Virtusa is a fast growing offshore (India and Sri Lanka) oriented service provider. Its FY 2014 (year ended March 31, 2014) revenues were $397m, a growth of 19%. This followed growth of 20% in FY 2013 and 27% in FY 2012. The company has just over 8k employees. Founded in 1996 and headquartered[...]

As part of its Analyst Day, Unisys provided NelsonHall an update on its end-user computing services activities. The company is aiming to enhance its end-user experience, de-emphasizing its traditional service desk approach and aiming to add alternative channels for connecting end-users and support personnel. As part of this initiative, the company is spreading the usage of its Tech Caf&eacut[...]

Tech Mahindra has launched Virtualized Mainframe Testing (vMT), a new service that offers clients savings on their mainframe application development and testing costs, especially for applications that are on a maintenance and enhancement/release mode. vMT mostly focuses on reducing consumption of MIPS. In the context of mainframes, reducing MIPs usage is a key lever for lowering costs, as IBM m[...]

Tieto is to cut ~900 to ~950 roles. 300 to 350 of the job cuts will be in Finland and the remaining 600 in APAC (China and India) and Eastern Europe (Poland and Czech Republic). The job redundancy program results from the decision by a major client, representing several percentage points of Tieto's revenues, to insource some of its R&D services. The financial impac[...]

TCS, Infosys and SQS have recently published their calendar Q1 and H1 2014 revenues, and provided financial details on their software testing revenues (see notes below). In calendar H1 2014 (all numbers below are constant perimeter NelsonHall estimates): TCS: revenues were ~+24% to ~$612m (H1 2013: ~+23%) Infosys: ~+21% to ~$395m (H1 2013: ~+15%) SQS: + 9% to €129m (~$174m) (H1 2[...]