Key Findings & Highlights:

Software testing services spending remains strong and growing solidly, by IT services standards, to ~+10%. Growth is fueled by overall interest in software testing and quality assurance, to: 1. improve quality of software that has been developed; 2. enhance quality from the software design phase, as opposed to testing once it has been developed.

In concrete terms, clients are transferring their spending budget from testing activities performed by non-career testers, e.g. business analysis, and developers to work performed by testing professionals.

Spending growth on testing is accelerating in 2014, thanks to better economic conditions.

Client demand for testing services remains largely related to efficiencies and cost savings associated with higher software quality. This is materializing into the set of shared services testing centers or TCoEs, to centralize testing for the client, standardize tools and processes, relocate work to India and drive automation levels.

Approximately 75% of spending is around functional testing, including both manual and automated testing services. Non-functional represents approximately 7% of software testing services spending. New offerings, QA consulting, and test data support services altogether, 19%.

Spending on traditional functional testing is set to grow more slowly than the rest of the market. This is because client budget is shifting towards new types of applications, e.g. mobile apps, website enhancements, new usages: datawarehousing/data testing, to new services: code quality assessment, model-based testing, or to test support activities such as data management, environment provisioning and service virtualization/release management.

Meanwhile adoption of agile testing is growing. Agile testing remains an open territory in terms of best practices, productivity measurement and location.

Looking ahead, two initiatives are to modify the current software testing market: the emergence of platform-based testing servicers and new strategies around proprietary IPs and tools.

The emergence three years ago of mobile app testing has started to change the way testing is conducted, towards a different sourcing approach, where vendors, not clients, will decide on HR including personnel selection and ramp-up. Platform-based testing is to drive centralization of work, from factories with the right tools and practices.

Meanwhile, a number of testing services vendors are reconsidering their IPs and tools, and moving from providing them as part of the services towards selling them as software products. The approach, which is part of a non-linear growth mode from a vendor perspective, needs to be understood in more detail: a key factor to consider is whether price increases in a number of IPs and tools brings benefits to clients, in terms of investment in the tools, and visibility on features and roadmap.