Nelson Hall Analysis: Your Next Growth Driver Is Testing Services
Your Next Growth Driver is Testing Services
The business confidence across the globe looks much healthier than it was in 2013. As the fears over the fiscal cliffs in the US, public debt in Europe, choked GDPs in Asia are abated, growth engines across all the industries are revving up. The burning need to increase the efficiencies and competitiveness, to adopt the modernization, to retain the customers anytime – anywhere is re-propelling the investments in the IT sector.
Gartner's worldwide dollar-valued IT spending growth forecast for 2014 is estimated to be 2.1% (or 2.8% when measured in constant currency). Of which the IT Outsourcing, Consulting and Integration services accounts for US $863Billion and is poised to grow at a rate 4.6% CAGR. …show more content…
Organizations have been continuing to increase the proportion of their IT budgets for Testing – increased from 18% in 2011 to 23% in 2013. The net effect of increasing IT spend and increasing portion of testing as part of that bill is resulting a growth of 9.6% year on year till 2018 – which is 2X the IT market growth rate as per Nelson Hall analysis.
What does this means to us?
US $1632 Billion*
Factoring in all the forces that shape the market and growth rates presented by analysts, size of the market for global Testing Market’s prediction is shown in the chart below. Cognizant QE&A can take home US $32 Billion
Year 2013 2014 2015 2016 2017 2018
Total Testing Spend on ITS 863.0 902.7 944.2 987.7 …show more content…
Software testing has been one of Cognizant’s strategic growth initiatives, as part of its Horizon 1 service portfolio. The practice has followed Cognizant’s overall strategy to focus on key accounts and increase market through client intimacy. As a result, Cognizant’s testing practice is well developed in the U.S.; largely in financial services and, to a lower extent, in retail too. The unit is expanding in Europe and APAC, relying on this core focused vertical approach.
Testing practice foothold is strongly evident in its ability to win standalone testing contracts. Currently, 75% of the code tested by Cognizant has been developed by a different firm, by the client’s internal IT or by a third party vendor. This is a high ratio. We ought to continue to play to our strengths, optimize the leadership position and explore innovative customer retention strategies to milk these Cash Cows.
Revenues from “Business as Un-Usual”
The business confidence across the globe looks much healthier than it was in 2013. As the fears over the fiscal cliffs in the US, public debt in Europe, choked GDPs in Asia are abated, growth engines across all the industries are revving up. The burning need to increase the efficiencies and competitiveness, to adopt the modernization, to retain the customers anytime – anywhere is re-propelling the investments in the IT sector.
Gartner's worldwide dollar-valued IT spending growth forecast for 2014 is estimated to be 2.1% (or 2.8% when measured in constant currency). Of which the IT Outsourcing, Consulting and Integration services accounts for US $863Billion and is poised to grow at a rate 4.6% CAGR. …show more content…
Organizations have been continuing to increase the proportion of their IT budgets for Testing – increased from 18% in 2011 to 23% in 2013. The net effect of increasing IT spend and increasing portion of testing as part of that bill is resulting a growth of 9.6% year on year till 2018 – which is 2X the IT market growth rate as per Nelson Hall analysis.
What does this means to us?
US $1632 Billion*
Factoring in all the forces that shape the market and growth rates presented by analysts, size of the market for global Testing Market’s prediction is shown in the chart below. Cognizant QE&A can take home US $32 Billion
Year 2013 2014 2015 2016 2017 2018
Total Testing Spend on ITS 863.0 902.7 944.2 987.7 …show more content…
Software testing has been one of Cognizant’s strategic growth initiatives, as part of its Horizon 1 service portfolio. The practice has followed Cognizant’s overall strategy to focus on key accounts and increase market through client intimacy. As a result, Cognizant’s testing practice is well developed in the U.S.; largely in financial services and, to a lower extent, in retail too. The unit is expanding in Europe and APAC, relying on this core focused vertical approach.
Testing practice foothold is strongly evident in its ability to win standalone testing contracts. Currently, 75% of the code tested by Cognizant has been developed by a different firm, by the client’s internal IT or by a third party vendor. This is a high ratio. We ought to continue to play to our strengths, optimize the leadership position and explore innovative customer retention strategies to milk these Cash Cows.
Revenues from “Business as Un-Usual”