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Qualitest – Software Testing Services: Advanced Automation
Vendor Analysis
published on May 19, 2020
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Report Overview:
This NelsonHall assessment analyzes Qualitest's offerings and capabilities in Software Testing Services
Who is this Report for:
NelsonHall’s Software Testing Vendor Assessment for Qualitest is a comprehensive assessment of Qualitest’s advanced automation offerings and capabilities designed for:
- Sourcing managers monitoring the capabilities of existing suppliers of IT services and identifying vendor suitability for software testing services
- Vendor marketing, sales and business managers looking to benchmark themselves against their peers
- Financial analysts and investors specializing in the software testing sector.
Scope of this Report:
The report provides a comprehensive and objective analysis of Qualitest’s advanced automation service offerings, capabilities, and market and financial strength, including:
- Analysis of the company’s offerings and key service components
- Revenue estimates
- Identification of the company’s strategy, emphasis and new developments
- Analysis of the profile of the company’s customer base including the company’s targeting strategy and examples of current contracts
- Analysis of the company’s strengths, weaknesses and outlook.
Key Findings & Highlights:
In July 2019, Qualitest changed ownership: its former owner, Marlin Equity Partners, sold a majority stake in Qualitest, for an enterprise value estimated as $420m. The buyer was another PE firm, BridgePoint.
In its pre-COVID 19 plans, BridgePoint had bold ambitions for Qualitest and wanted it to reach $1bn in revenues by 2025. Assuming an annual 20%-25% organic growth, which the company says it achieves, Qualitest will need to acquire $400m-500m in inorganic revenues.
Qualitest hints that it will proceed with most of the acquisitions during the 2020-2021 period, and then put most emphasis on integrating the acquired firms during the following three years.
In December 2019, Qualitest purchased its partner AlgoTrace for a NelsonHall estimated $11m. The rationale for buying AlgoTrace was not about scale (AlgoTrace was a small firm with a headcount estimated by NelsonHall to be ~25) but about technical expertise. AlgoTrace brought AI capabilities applicable to QA that Qualitest had already started to deploy as part of its Test Predictor offering. Thanks to the acquisition, Qualitest has jump-started its AI capabilities and changed its service portfolio significantly.
Along with AI, automation is a core element of the strategy of Qualitest, which is planning to achieve a non-linear growth model, where the growth in headcount will be slower than the increase in revenues.
Qualitest has based its commercial positioning on an onshore-based delivery, working initially alongside the client.