Vendor Analysis
published on Aug 15, 2014
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Report Overview:
Germany-headquartered Software Quality Systems (SQS) was founded in 1982 and is the largest software testing pure play in the world. In 2013, SQS had revenues of €226m. At the end of June 2014, headcount was 3.9k.
Who is this Report for:
NelsonHall's Software Testing Vendor Assessment for SQS is a comprehensive assessment of SQS' software testing 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 SQS' software testing 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:
The acquisition in March 2014 of a 53.35% stake in Indian software testing pure-play Thinksoft Global Service for ~€17.5m has significantly changed SQS' profile, in terms of:
- Size and profitability: Thinksoft added calendar year (CY) 2013 revenues of €23.4m to SQS, representing 10% in revenue growth to a pro-forma €249m (~$331m). Thinksoft was also highly profitable in CY 2013 with a PBT of €5.4m, representing ~44% of SQS' own adj. PBT (€12.4m)
- Presence in India: Thinksoft had a headcount of 782 at end of CY 2013, of which 84% was in its three Indian centers (mostly Chennai); this adds to SQS' own ~800 FTEs in Pune. At the end of June 2014 India represented 43% of SQS' 3.9k headcount (including Thinksoft)
- Increased focus on the financial services industry, with complementary delivery locations: Thinksoft is a financial services specialist; banking accounts for 94% of its revenues with delivery exclusively in India. Financial services is a significant vertical for SQS, but accounts for 48% of its revenues. Delivery is typically onsite or nearshore (SQS' client base serviced from India is largely drawn from the manufacturing, retail, telecom service provider and computer games sectors).