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Testing Platforms – The Emerging Opportunity to Commercialize Vendor Testing IP

 

In recent years, the software development life cycle has become increasingly automated as IT service vendors seek to drive greater efficiencies in software development and maintenance, and increase their ability to scale. This is true for testing as well as for wider software development support.

Initially, as elsewhere, the increasing automation of testing was based on the development of ad hoc proprietary tools for purely internal use. Vendors building such tools included TCS, Infosys, and Capgemini. However, these ad hoc toolsets have now matured to become fully-fledged testing platforms, expanding automation beyond core functional testing execution into DevOps, tester workbenches, and digital (and not just for mobile apps and websites). Indeed, in the last two years, many leading IT services vendors (such as the aforementioned) have launched testing platforms of integrated testing COTS, open source software, and proprietary accelerators.

Testing Platforms are a Cross-Sell, not a Substitution

These testing platforms are now being taken to market, creating a new commercial opportunity for IT services vendors, with a significant number (e.g. TCS, Cognizant, and Infosys) looking to monetize their platforms through the traditional model of license and maintenance fees, or a transaction-based model. The Indian IT services industry is leading on platform monetization as they look to recoup their investments and drive non-linear growth.

However, a platform sale is not necessarily a lost opportunity for testing services. The acquisition and use of a proprietary testing platform by a company can also strengthen the testing services relationship and increase the likelihood of further testing services opportunities downstream. There are opportunities for vendors to bundle the platform sale with related testing services – e.g. Capgemini with SmartQA, and Cigniti with the Gallop series of migration accelerators.

Testing Platforms Require Only Modest Investment

In return, IT service vendors selling testing platforms as software products will need to behave as ISVs, releasing regular security and functionality patches, updates and upgrades. In the software application space, most IT service vendors have been burnt at least once with the R&D investment that COTS require, combined with the sheer volume required to make them a commercial success. Accordingly, not too many of the twenty largest IT service vendors sell enterprise application products: CGI to some degree, while Accenture has now partially divested Duck Creek Software.

However, testing platforms are not core systems of record and do not require the same level of investment, typically requiring a product development team of ten to twenty FTEs. Vendors typically create these testing platform systems of engagement from a base of existing open source software and testing COTS, investing mostly in interfacing/integrating applications, and filling up functionality gaps. R&D investment is therefore limited, though it is still a significant investment by IT services standards.

Software Testing Platforms Need to be Managed Outside the Software Testing Services Organization

Does this mean IT services vendors should refrain from selling testing platforms? No, but there are safeguards to establish.

Firstly, platform development and maintenance activities are better as a separate organizational unit rather than part of the testing practice. Separation makes it easier to focus on deploying the ISV business model. The danger of having a platform unit as part of a testing practice is that the IT service business model prevails.

Secondly, there is the need to evaluate the competitiveness of the in-house toolset to be used as the basis of the testing platform. Is it sufficiently state-of-the-art? If not, testing vendors should consider the option of partnering with, or purchasing, one of the relatively small but innovative tech start-ups or ISVs. A lot of the testing innovation these days has not come from the large testing ISVs but from start-ups and small ISVs (e.g. Experitest, Neotys, TestPlant, Tricentis, SmartBear, SOATSA) right across the world, with innovative functionality and features, a relatively challenging pricing model, and a good value proposition.

Bottom Line: Testing Platforms Are NOT Business As Usual for IT Service Vendors

Testing platforms are a natural and important development within the testing industry, and client acceptance of platforms will accelerate. However, the success of testing platforms in the marketplace does not mean that IT service vendors can afford to be complacent. To achieve success with testing platforms, IT service vendors need to make the switch from regarding testing platforms as an internal toolset and treat them with all the disciplines associated with other software products, with their development managed outside the software testing services organization in which they originally began to take shape.

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