Cost Pressure Drives European Apps Management Demand

New research from Pierre Audoin Consultants (PAC) has found that applications management will be one of the strongest areas of IT services spending during the next three years.

London – November 19, 2008 – Spending on applications management services in Western Europe will surpass €9bn in 2009, according to a new study from PAC.

‘Applications Management in Europe – A Buyer’s Guide’ found that AM is set to be one of the most active areas of the IT services market as clients look to reduce their operating costs, rationalize their applications estates, and improve their software processes.

PAC defines AM as the maintenance and enhancement of existing applications, and can also include initial development work. This differs from applications outsourcing, where a supplier takes responsibility for managing the entire application chain including the server and operating system.

Logica ranks as the largest provider of AM in Western Europe on the back of recent acquisitions in France (Unilog) and the Nordic counties (WM-data), as well as through strengthening its global delivery capabilities. It held an 8.5% share of the €7.63bn spent on AM in the region in 2007, which ranked it ahead of Accenture and IBM, and European rivals Capgemini and Atos Origin.

Nick Mayes, Senior Consultant at PAC, said: “Applications management will remain a robust area of spending for organisations during the current economic downturn, as it can offer a way to reduce operating costs without the commitment and sourcing complexity of a large outsourcing engagement.”

“The AM suppliers that will succeed in the current market will be those that can deliver a ‘blended’ service combining onshore customer intimacy, as well as cost effective offshore skills. They will also be able to go beyond labour arbitrage to deliver long-lasting value in terms of process improvement, industrialization, and resource optimization,” he added.

The report ‘Applications Management in Europe - A Buyer’s Guide’ is a white paper, available from the PAC website at www.pac-online.com.

It provides an overview of AM in Western Europe, including a country-by-country look at market drivers, an assessment of the supplier marketplace, and a supplier checklist to help clients with their AM vendor selection process. Five of the key criteria that PAC believes customers need to address are:

• Pricing – How transparent is your supplier in terms of pricing? How much of the proposed cost savings are to be delivered through labour arbitrage?

• Cost Reduction - What other methods/tools/processes is your vendor going to leverage to deliver additional savings and service improvement?

• Continuous improvement – Will your supplier proactively evaluate and improve the service in terms of efficiency, effectiveness and flexibility?

• Cultural Affinity – Is the supplier going to be able to work with your internal team. Does it share your business values?

• Financial Stability – How secure is the supplier’s current and future financial positioning? Are you comfortable to commit to a multi-year deal?

About Pierre Audoin Consultants (PAC): PAC is the leading European market research and strategic consulting firm for the Software and IT Services Industry (SITSI). We advise IT companies on developing successful end-to-end growth strategies in Europe and in the U.S. through planning, development, implementation, and ongoing support. This is done through market analyses as well as consulting engagements.

Headquartered in Paris, we have been supporting over 300 clients worldwide for over 30 years. We manage our clients through a specialised local network with subsidiaries in Munich, New York, London and Bucharest, as well as partners in Italy, Tunisia, Latin America (Argentina, Brazil and Mexico) and Asia (Australia, China, Japan, India, Pakistan and Singapore).

For more information, please visit our website at http://www.pac-online.com.

Press Contact:
Shelly Wills
Pierre Audoin Consultants (PAC)
15 Bowling Green Lane
EC1R0BD London
United Kingdom
Phone: +44 (0)20 7553 3965
Fax: +44 (0)20 7490 7335
E-mail: s.wills@pac-online.com

Further information:
Nick Mayes
Pierre Audoin Consultants (PAC)
15 Bowling Green Lane
EC1R0BD London
United Kingdom
Phone: +44 (0)20 7553 3968
Fax: +44 (0)20 7490 7335
E-mail: n.mayes@pac-online.com

This release was published on openPR.