Category: Press Releases

Serious Talent Shortage Deepens in Software Product Engineering, the Fastest Growing Segment of $1.27 Trillion Global Engineering Spend—Everest Group

Tremendous talent shortage anticipated as adoption of next-generation technologies—including cloud, AI/ML, IoT, analytics, cybersecurity, and AR/VR—grows exponentially over the next few years.

Everest Group reports that although a talent shortage exists across the overall engineering, research and development (ER&D) landscape, the supply crunch is much more pronounced for emerging skills, such as cloud engineering, artificial intelligence and machine learning (AI/ML), internet of things (IoT), analytics, cybersecurity, and augmented reality and virtual reality (AR/VR). According to Everest Group, the exponential growth in the adoption of these next-generation technologies over the next couple of years will cause a huge supply shortage in the software product engineering world.

Enterprises globally spent US$1.27 trillion on engineering in 2020, and more than one-third of that spend was on software product engineering. Software product engineering has been the fastest growing segment of engineering spending over the last four years and was the only segment to witness positive growth in 2020, even as overall global engineering spend declined by 2%. Contributing to sustained software engineering spending are commercial software sellers and internet companies as well as enterprises seeking to augment existing products with software-driven features and functionalities.

In its newly published report, “Reaching New Frontiers in Experience-centricity and Resilience –Software Product Engineering Services State of the Market Report,” Everest Group examines the dynamics of global software product engineering services trends prevalent among leading service providers. It includes an overview of the software product engineering market and an in-depth view of outsourcing in this space.

Selected Highlights:

  • Overall enterprise spend for software product engineering has been growing at a robust pace, reaching approximately US$410 billion in 2020.
  • The supply crunch in the software engineering talent market is leading to a price war, where enterprises are having to pay a premium rate to access talent skilled in emerging software engineering themes.
  • The talent shortage in emerging skillsets is also compelling enterprises to explore non-traditional locations to access talent. As a result, nearshore locations have steadily been gaining prominence for talent sourcing.
  • Cloud engineering has emerged as the biggest spend area for enterprises, with more activity around cloud-native engineering, platformization, carve-outs of legacy products and verticalized solutions.
  • The software product engineering services market (i.e., outsourcing) has grown at a rate of 16% over the past year to reach approximately US$23.5 billion, which is 5.7% of the overall enterprise spend.
  • The hi-tech verticals continue to hold a large share of the services market, while the geography split reveals North America to be the largest location.

***Download a complimentary abstract of the report here.***

Talent Shortages in Software Product Engineering

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

Sourcing of Application Services Management Grows Steeply Among Smaller Enterprises —Everest Group

Optimizing applications is a mandate for enterprises of all sizes, but enterprises seek more business value from sourcing engagements.

Enterprises with revenue less than US$5 billion have witnessed a steep increase in adoption of application services (AS), increasing from 55% to 79% in the last two years, according to Everest Group. The growing share of smaller enterprises in AS engagements reinforces the fact that optimizing the application estate has become a universal mandate. The COVID-19 pandemic has also forced many smaller enterprises to undertake modernization initiatives to remain resilient in the wake of another black swan event.

Although AS engagements take the top spot (more than 70%) in an IT services market expected to grow by 5-7%, most enterprises consider application management to be a necessary evil and the sourcing of application management to be solely a cost take-out function. According to Everest Group’s most recent poll of enterprise buyers of application services, enterprises believe service providers have not been able to add value to application management initiatives beyond cost-take out; value addition received the lowest score among assessment criteria. The key value-add benefits enterprises desire from their AS engagements include the following:

  1. Enable better experience for customers
  2. Increase scalabilty and resiliency of existing applications
  3. Facilitate advanced analytics and forecasting capabilities
  4. Increase security, reduce risk and adhere to compliance

To help organizations derive more business value from application services, Everest Group proposes a model that enterprises can use to drive transformation in their AS function. The “Business Value Orchestrator Platform” views application management as one part of a broader initiative comprising other technology towers, operating models, service management solutions, delivery enablement, and next-generation sourcing.

The model is described in detail in Everest Group’s newly published State of the Market Report, “Application Services – Transform Application Management to Drive Digital Success.” In this report, Everest Group also examines the market trends in the AS market, including IT services market size; AS buyer adoption trends across geographies, industry verticals and revenue sizes; and key trends shaping the AS market.

Selected Report Highlights:

 Though enterprises plan to adopt cognitive capabilities in application management functions, only 16% have adopted it thus far. The key challenge is the unavailability of suitable mature AI solutions.

  • Sixty percent of enterprises are integrating site reliability engineering (SRE) with application management.
  • With incumbent application management service (AMS) providers unable to drive more value, enterprises are willing to work with challengers. Everest Group sees nearly 20% of AMS engagements now being signed with challenger service providers rather than incumbents.
  • Discrete application services engagements continue to form 71% of the IT services market.
  • Enterprises continue to prefer short-term AS engagements (less than three years). The proportion of short-term engagements has risen over the last two years from 23% to 36% of all engagements.
  • AS engagements in the North American market continued to decline in comparison to other geographies, but Everest Group expects the North American market to grow faster than other regions as the market recovers from pandemic influences.

***Download a complimentary abstract of the report here.***Application Services

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

Healthcare Payers Enjoy Rising Revenues, but COVID Is Still Taking a Bite Out of the Bottom Line | Press Release

COVID-19 continues to shape Healthcare Payer financials, business strategies and IT investment trends

If profit margins were a theme park attraction, Healthcare Payers would have experienced quite the roller-coaster ride in the last 18 months, according to Everest Group.

Payer margins spiked in Q2 of 2020—rising from 2.6% to 6.8%—as a result of COVID-19 induced deferment of non-emergent procedures. Then, in the second half of 2020, operating and net income dropped to 2.5% as healthcare utilization rebounded. In Q1 2021, healthcare payers reported substantial profits (4.1%) as higher enrollment in government plans drove strong revenue growth, especially for Medicare Advantage (MA) plans, though commercial enrollment was still below pre-pandemic levels. In Q2 2021, despite posting strong revenue growth, payers experienced a drop in operating and net income, with net profit margin falling to 3.2%, due to an increase in COVID-19 care costs for testing, treatment and vaccination. Some payers also cited acquisition costs to explain the drop in income.

These findings are examined in more detail in Everest Group’s recently published State of the Market Report, “Healthcare Payer Enterprise Insights – H1 2021.” In this report, Everest Group examines payer performance in H1 2021, focusing on industry- and account-level financial and Line of Business performance as well as key business and IT investment themes. Payers profiled in the report include Anthem, Centene Corporation, Cigna, CVS Aetna, Health Care Service Corporation (HCSC), Highmark, Humana, Kaiser Permanente, Molina Healthcare and UnitedHealthcare.

COVID-19 Continues to Shape Healthcare Payer Trends
COVID-19 has fundamentally altered the functioning of the healthcare industry by significantly changing who receives care and how they access it.

Evolution of Healthcare Payer Business Strategies

  • In 2020, healthcare payers began looking beyond the immediate issues of cost takeout and capacity utilization toward improving access to care through home care and telehealth capabilities. Payers sought to increase operational efficiency and enhancing member engagement through improved outcomes, increased productivity and lower costs for members.
  • In H1 2021, home care, telehealth and integrated, coordinated and preventative care emerged as key themes. Payers leveraged partnerships and acquisitions to enhance their capabilities and improve member experience. In addition, payers are expanding their Medicare Advantage business by offering virtual and digital health capabilities. Payers also report the launch of various initiatives to tackle vaccine hesitancy and expand vaccination coverage.

Shifting IT Strategies

  • In 2020, the COVID-19 pandemic accelerated the need to future-proof technology, and healthcare payers responded by investing significantly to modernize legacy systems and leverage artificial intelligence (AI), machine learning (ML) and robotic process automation (RPA) technologies to reduce operational inefficiencies and automate time-consuming processes.
  • In H1 2021, healthcare payers continued the modernization quest. More specifically, payers are modernizing legacy platforms by shifting to integrated, cloud-based platforms and cloud-native applications. The payer industry is leveraging blockchain-based public ledger technology to improve transparency and interoperability in healthcare.

***Download a complimentary abstract of the report here.***

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

Despite Financial Setbacks Due to COVID-19, US Healthcare Providers Were Well along the Road to Recovery by End of 2020 | Press Release

Everest Group Delivers Results of 2020 Financial Checkup on US Healthcare Providers

Everest Group has released its findings of a “financial checkup” conducted on the U.S. healthcare industry at the end of 2020, one of the industry’s most challenging years in history. Everest Group reports that U.S. healthcare providers as a whole are well along the road to recovery, but their way of doing business has changed forever.

The U.S. healthcare industry responded to the onset of the COVID-19 crisis with sweeping changes with regards to who receives care, how they access it, and how healthcare organizations (healthcare providers, payers, and community resources) come together to meet the complex and accelerated demand for care. These changes put the industry on a course of healing, despite having sustained heavy financial injuries in the first half of the year.

In its newly published report, “Healthcare Provider Enterprise Insights Q42020 and Q12021,” Everest Group provides a perspective on how providers performed in 2020 and Q1 2021. The report is based on the performance of 10 large healthcare provider systems, with a focus on industry- and account-level financial and Lines of Business (LoBs) performance, key business, and IT investment themes.

Key findings:

Financial Performance: At the onset of COVID-19, providers reported a significant drop in revenue due to deferment of non-emergent procedures. Net income and operating margin declined significantly due to additional costs incurred by the purchase of personal protective equipment and other supplies as well as higher expenditures for temporary staffing and premium pay. However, most of the U.S. providers experienced growth in the second half of 2020 owing to rebound in patient volumes, federal grants received under the CARES Act Providers Relief Fund, strong cost control measures, and implementation of alternate forms of care delivery.

Expansion of outpatient business & telehealth services: Due to the pandemic, the provider industry experienced an uptick in telehealth business as virtual care hesitancy diminished. Although the number of telehealth visits has decreased compared to what it was at the peak of the pandemic, the visits are still far higher than the pre-pandemic levels. Providers are utilizing telehealth services to not just increase access but also provide better quality of care via remote monitoring. In addition, providers remain focused on expanding their outpatient business to provide home care and long-term care opportunities to patients as well as delivering affordable care in remote locations.

Business Themes: The pandemic enabled providers to shift their focus on delivering virtual, home, integrated, and long-term care while investing significantly to reduce costs and improve operational efficiency to offset the impact of COVID-19. Providers are strongly focused on cost takeout measures to enhance the financial predictability of their organization.

IT Themes: In response to COVID-19, providers sought to future-proof their technology with patient care at the heart of the transformation by focusing on IT themes such as modernization, data analytics, cloud and automation.

Healthcare Provider Enterprise Insights
***Download a complimentary abstract of the report here.***

About Everest Group

Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

Process Mining Software Market Posts 60-70% YoY Growth in 2020, Will Triple by 2022 | Press Release

Exponential growth is expected in process mining market as client base expands across industries, geographies, buyer sizes

Process mining—which is the technique of using software to discover and map business processes in order to optimize and automate them—is an emerging market, growing at around 60-70% between 2019 and 2020 to reach a total market size of $320-$340 million.

Everest Group reports that the client base for process mining is rapidly expanding, driving revenue growth in the market. Even in the pandemic hit year, the client base experienced impressive growth at around 60%. Going forward, Everest Group predicts adoption will accelerate across market segments, buoyed by an increasing awareness of the technology, growing use of process mining as an enabler of digital transformation, and snowballing word of mouth of early adopters’ success stories. Everest Group estimates that the process mining software market will triple between 2020 and 2022.

A Wide Variety of Business Processes/Functions Are Adopting Process Mining
Process mining blends the power of data-based analysis techniques, such as data mining and machine learning, to help organizations discover the as-is process along with its variants and identify opportunities for optimization and automation. Process mining technology can be classified in three categories as follows:
  • Classic process mining leverages specialized algorithms to analyze process-related information captured in event logs generated by enterprise systems such as ERP, CRM, and SCM to discover processes and generate process insights at a macro level.
  • Desktop process mining refers to the ability to capture and analyze keyboard, mouse, and potentially other system-level activities performed across multiple users involved in a process to virtually reconstruct the processes and provide process insights at a micro level.
  • Hybrid process mining refers to the ability to combine information from both event logs and user activities for a holistic view into as-is processes; it is carried out across both macro- and micro-levels.

While the need to optimize operations continues to be the most important factor driving process mining adoption, enhancing customer experience has emerged as the second key adoption driver because of the role process mining plays in mapping customer journeys to identify and address customer pain points.

These findings are discussed in more detail in Everest Group’s recently published report “Enabling Data-based Process DNA Analysis: Process Mining State of the Market Report 2021.” The report includes a detailed view of the current state of the market and analyzes it across various dimensions, including market size and adoption trends, buyer satisfaction, product capabilities and trends, solution characteristics, vendor landscape, challenges to process mining adoption, and the outlook for 2021-22.

Market Highlights:

  • Currently 86% of the revenue generated in the process mining market comes from software licenses, with most vendors offering cloud-based access.
  • Continental Europe holds the lion’s share of the market (48%) while North America accounted for the highest growth rate (90-95%).
  • Manufacturing; banking, financial services, and insurance (BFSI); and the healthcare industries are among the leading adopters of process mining solutions, accounting for more than 50% of the market share.
  • Celonis, Minit, Software AG and UiPath are the top providers in terms of process mining software revenue.

***Download a complimentary abstract of the report***

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

After Premiums Dip in 2020, UK Insurance Market Seeks to Drive Recovery with Innovative Products, Digital Experiences | Press Release

New Everest Group report explores how Lloyd’s of London Blueprint 2.0 initiatives will drive digital surge in UK insurance market, providing growth opportunities for technology vendors and IT service providers

Digital Transformation Is Desperately Needed to Address London Insurance Market Stakeholders' Priorities and Challenges
After experiencing a dip in premiums in 2020 on the back of Brexit and COVID-19 induced uncertainties, UK insurance carriers hope to arrest the decline by offering compelling customer experiences and new risk protection products and services for the new digital economy. According to Everest Group, UK insurers and brokers are focusing on transformation with investments in data, cloud, platforms and digital solutions. As a result, technology vendors and IT service providers have a unique opportunity to serve the needs of London market participants.

Impact of “The Future at Lloyds”

The Lloyd’s of London insurance market is the world’s largest (re)insurance hub. In 2019 Lloyd’s of London published its “The Future at Lloyd’s Blueprint One,” describing its plans to build the world’s most advanced insurance marketplace by combining data, technology and new ways of working. In November 2020, Lloyd’s released “Blueprint Two”, which details an ambitious digitalization strategy designed to weaponize technology to remain cost competitive and drive growth and differentiation.

The Lloyd’s transformation initiatives are expected to begin a digital surge for the entire UK insurance market, given that around 70% of companies operate in dual markets, i.e., both in London and company markets.

Everest Group’s State of the Market Report

In its newly published report, “Digital Transformation in the London Insurance Market,” Everest Group examines the market trends in the UK insurance market, including an overview of Lloyd’s of London Blueprint 2.0 initiatives and the implications for market participants, technology vendors and IT service providers. In this report, Everest Group also profiles the capabilities of 12 core insurance platforms and 12 leading IT service providers.

Selected Highlights:

  • The UK insurance market will soon experience accelerated focus on emerging risk underwriting, insurance product innovation, digitization of operations, and ecosystem-led innovation.
  • Cloud, data and digital platforms are at the heart of the radical transformation envisioned for the London market. Analytics and cloud are currently the main levers of digital transformation for brokers and insurers, with artificial intelligence (AI) and blockchain emerging.
  • Customer experience, risk underwriting and claims management are three critical functions carriers are looking to modernize to improve their competitive advantage. These functions were represented in 80%, 70% and 50% of transactions between UK insurance carriers and tech vendors/IT service providers in 2020, respectively.
  • In turn, technology platform vendors are investing in platforms, cloud, analytics and artificial intelligence (AI) in order to gain resonance with UK insurance carriers. These technologies were included in 75%, 50%, 40% and 32% of vendors’ 2020 technology investments, respectively.
  • Technology vendors and IT suppliers need to invest in digital offerings across the insurance value chain, cloud and API capabilities, value-added services and digital talent pool to serve the needs of London market participants
  • The UK insurance market is expected to bounce back, achieving an estimated 5.2% compound annual growth rate in premiums between 2020 and 2023.

Download a complimentary abstract of the report here

About Everest Group

Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

Amid Global Talent Shortage, Everest Group Identifies Skilling Strategies that Drive 3X ROI for Talent-Focused Organizations | Press Release

Five Global Business Services (GBS) organizations are set apart by strategic skilling initiatives that significantly improve business outcomes, employee experience

Exacerbated by COVID-19, the war for talent is more intense than ever. According to Everest Group, the only way enterprises can build the necessary skill base to remain competitive is to realign employee skills with emerging business needs and provide employees with opportunities for personal growth. Easier said than done, but Everest Group has identified five best-in-class Global Business Services (GBS) organizations* that are leading the way.

In its newly published report, “Skilling Strategies for GBS Organizations—Pinnacle Model® Analysis 2021,” Everest Group examines 40 GBS organizations and of those identifies five Pinnacle GBS™  organizations—those best-in-class entities that are achieving superior outcomes because of their advanced skilling capabilities. These Pinnacle GBS organizations have generated three times more cost savings and return on investment (ROI) through their skilling initiatives compared to other GBS organizations.

Everest Group defines skilling efforts as post-onboarding interventions focused on improving employees’ skills and competencies to better deliver existing work and/or to deliver more complex or new work. The mode of intervention can range from self-learning to classroom-based training and beyond, including job rotation and cross-functional assignments.

Pinnacle GBS organizations have been able to achieve significant business impact by effectively driving their skilling initiatives, as differentiated by capabilities and characteristics such as the following:

  • A dedicated skilling team focused on GBS skilling.
  • Commitment and participation from the GBS organization and enterprise senior leadership.
  • Active collaboration with business units on all aspects of the skilling journey (such as funding, program design, skill gap assessment, and content creation and delivery).
  • Periodic assessments of the existing skill inventory and gaps against a standardized skill taxonomy. The study also reveals key skill gaps that GBS organizations are facing.
  • Incentives and career-developing motivators for employees, such as accelerated career paths and internal mobility.
  • Use of technology and ecosystem partners as accelerators for skilling programs and to improve employee experience.

Among those GBS organizations that track cost reduction impacts of skilling initiatives, the contrast among outcomes is significant:

  • ROI on skilling spend: 15-20% for Pinnacle GBS organizations compared to 3-5% for others
  • Reduction in operating costs: 13-18% for Pinnacle GBS organizations compared to 4-6% for others
  • Reduction in hiring costs: 9-13% for Pinnacle GBS organizations compared to 4-6% for others

“The firms we’ve identified as Pinnacle GBS organizations have created unique positions and developed scaled skilling programs to help the overall enterprise. They are developing their GBS organizations into global talent hubs,” said Sakshi Garg, vice president at Everest Group. “In the current Pinnacle Model analysis, we look at skilling strategies that GBS organizations have adopted and highlight those organizations that have achieved superior business outcomes. The journeys of these best-of-the-best companies provide insights into the key enablers needed to achieve desired outcomes and point to the investments required for the greatest speed to impact. Whether companies want to make incremental changes or achieve major transformations, Pinnacle GBS organizations exemplify the way to success.”

***Download a complimentary abstract of the report here.***

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

*Note: For the purposes of this report, Everest Group uses the term GBS to include Shared Services Centers (SSCs), Global In-house Centers (GICs) and Global Capability Centers (GCCs), although distinctions in these business models can be made.

Enterprises Hungry for Automation Solutions Will Drive 40-50% Growth in Intelligent Process Automation (IPA) through 2022 | Press Release

COVID-19 has showcased to enterprises the importance of digital transformation and the need to accelerate automation journeys to ensure business resilience, agility, and growth.

Business adversity can teach important lessons. According to Everest Group, enterprises that were well along their digital transformation journey when the COVID-19 pandemic began have fared far better than others in navigating the challenges of demand fluctuations, remote work, and addressing new customer experience expectations.

This realization is driving organizations to accelerate their automation journeys to not only ensure they are prepared for the next crisis but also to successfully adjust to the new normal. As a result, Everest Group predicts that the Intelligent Process Automation (IPA) market will achieve a compound annual growth rate of 40-50% through 2022, driven by the pent-up enterprise demand for automation.

Everest Group defines IPA as intelligent automation in business processes achieved through any combination of automation technologies such as robotic process automation (RPA) and cognitive/artificial intelligence (AI) based technologies (including natural language processing, machine learning and computer vision). The global IPA market, comprising the sourcing of IPA solutions and services*, surpassed US$4.5 billion at the end of 2020, a year in which growth was subdued due to the COVID-19 pandemic.

The initial adoption of IPA was already underway prior to COVID-19. With widespread adoption of RPA and successful pilots of AI-based solutions such as Intelligent Document Processing (IDP), enterprises started to use RPA in conjunction with AI-based solutions and other ancillary technologies such as process mining and analytics. Since the beginning of the COVID-19 pandemic, enterprises have increased focus on digital transformation and are moving toward widespread IPA adoption, looking to reduce reliance on manual processing in critical business functions.

In addition to pent-up demand, several other factors are contributing to rapid IPA market growth:

  • Rising sophistication of IPA technologies, such as process mining and IDP.
  • Higher availability of pre-packaged solutions and accelerators that provide quick time-to-value for enterprises.
  • Increasing number of solution provider- and vendor-led initiatives to drive improvements in efficiency.

These findings and more are shared in Everest Group’s recently published report, “Powering Business Processes with Intelligent Automation–IPA State of the Market Report 2021.” This report provides comprehensive coverage of the IPA market and analyzes it across various dimensions, such as market overview, adoption trends, solution characteristics, services characteristics, and solution provider landscape, challenges, best practices and future outlook.

Selected Highlights from the IPA State of the Market Report 2021

  • Implementation services account for around half of the IPA revenue; revenue from licensing proprietary and third-party solutions is increasing at a good rate.
  • Banking, Financial Services and Insurance (BFSI) continues to be the largest adopter of IPA solutions and services, followed by healthcare and pharma, consumer packaged goods (CPG) and retail, and telecom.
  • North America is the largest adopter of IPA with 50% of the market share, followed by Continental Europe and the UK.
  • IPA solution providers’ attention is split almost equally between RPA and cognitive automation.
  • Solution providers are offering solutions across RPA, IDP, conversational AI, etc., while rolling out innovative offerings, such as RPA-as-a-service, to address emerging needs in the IPA market.
  • Packaged solutions are gaining traction due to their ease of implementation and quick return on investment.
  • As the demand for holistic automation solutions increases, strategic partnerships between service providers and technology vendors are expected to increase.
  • Because of the travel restrictions imposed due to COVID-19, solution providers are expected to focus more on digital training by developing more self-paced training modules and certifications.

***Download a complimentary abstract of the report here.***

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

*This report does not cover IPA technology products that are licensed independently or embedded within broader BPO deals.

Cloud Services Market Will Accelerate to 24% Growth Rate Through 2024 as Hyperscalers and Non-Hyperscalers Battle for Market Share | Press Release

Hyperscalers will seize more of enterprise IT spend, but other infrastructure vendors will continue to be relevant

Hyperscale public cloud providers have experienced growth rates exceeding 30% for the past few years, and their appetite for enterprise IT spend remains insatiable. Everest Group predicts hyperscalers—namely Amazon Web Services (AWS), Google Cloud, and Microsoft Azure—will seize more of enterprise IT spend as the cloud services market accelerates to 24% compound annual growth rate through 2024. However, enterprises will continue to demand a diverse vendor portfolio to avoid lock-in, address data security and governance concerns, build innovative consumption and commercial models, and take advantage of vendors’ unique strengths.

More than 90% of enterprises already leverage one or more public clouds in their enterprise environment. COVID-19 has further accelerated enterprise migration to the public cloud, with most enterprises reaping business continuity benefits during the pandemic. Hyperscalers plan to capitalize on this growth and dominate the enterprise IT spend by expanding their offerings beyond infrastructure services to full-stack capabilities.

To sweeten their appeal, hyperscalers are offering next-generation services including artificial intelligence (AI), machine learning (ML), Internet of Things (IoT), natural language processing (NLP), augmented reality (AR) and virtual reality (VR), blockchain, and more. In addition, leading hyperscalers are evolving their operating models to attract enterprises, for example by adding financial and technical support, offering A-team talent for professional services, and providing deep resources for enterprise training.

However, enterprise willingness to engage not only with hyperscalers but also with non-hyperscalers indicates the strategic importance of private cloud, multicloud and traditional infrastructure in running their end-to-end enterprise IT landscape. Non-hyperscalers will continue to be relevant with enterprises often choosing non-hyperscalers for their unique capabilities.

These findings and more are shared in Everest Group’s recently published report, “Cloud Hyperscalers: A Critical—But Not the Only—Building Block of Enterprise IT.” This State of the Market report deep dives into the global IT cloud services market, providing data-driven perspectives on the market at large. The report evaluates cloud services trends and demand drivers, analyzes hyperscaler offerings, and describes how hyperscalers have moved beyond providing infrastructure services to now cater to the entire enterprise IT stack, making consuming technology easier.

**Enterprises also need non-hyperscale cloud vendors to run their digital businesses**
Enterprises believe hyperscalers have their sweet spots but other options are also needed to run their end-to-end enterprise IT landscape, according to Everest Group research. Non-hyperscale cloud vendors and IT service providers can capitalize on the advantages they have to offer enterprises, including the following:

  • Innovative commercial models: Most non-hyperscale vendors have transformed their pricing models for on-premise deployments. This change has made enterprises reevaluate their infrastructure sourcing strategy and consider these vendors as an important and viable partner.
  • Easier consumption models: Vendors have learned from cloud hyperscalers to make “as-a-service” consumption a key part of their strategy. Therefore, clients are open to the idea of a “local cloud” that can run independently or extend to form a hybrid edge-to-local distributed cloud architecture.
  • Product innovation: Infrastructure vendors are bringing in innovative service offerings, not to compete with cloud hyperscalers but to demonstrate their capabilities to help clients in building a digital business. These innovations vary and include enterprise-grade security, workload-specific compute, single pane of management, and transparent invoicing. Some non-hyperscalers are also building “software only” platforms that are not tied to their infrastructure but can be deployed on any hosting environment to give flexibility to clients. In addition, many are significantly increasing open source adoption to not only reduce cost of solution but also provide a market standard offering.
  • Enterprise context and consulting skills: Enterprise technology transformation projects are highly complex, require advanced consulting skills and need a combination of technical skills with vertical expertise. IT service providers have developed this skill set, whereas hyperscalers, comparatively, have a lesser understanding of the enterprise IT landscape.
  • Deep industry knowledge: Service providers possess deep industry knowledge and better understand industry-specific challenges, allowing them to cater well to specific enterprise demands.
  • Strategic client relationships: Service providers are viewed as trusted partners by enterprises. Their relationship over the years has witnessed multiple technology transformations. Service providers have proved their execution competency.

***Download a complimentary abstract of the report here.***

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

Intelligent Document Processing (IDP) Adoption Swells as Enterprises Seek to Lower Costs Through Automation; IDP Market to Grow 55-65% in Next Year | Press Release

IDP vendors are expected to offer more out-of-the-box, pre-trained IDP solutions to meet the demand for faster ROI and quicker deployment

The global market for Intelligent Document Processing (IDP), estimated at US$700-750 million in 2020, is expected to grow at a rate of 55-65% over the next year, according to Everest Group. Cost impact is now the key driver for IDP adoption as enterprises seek to realize tangible benefits from the technology, closely followed by improving operational efficiency and productivity.

IDP solutions automate the processing of complex documents with accuracy. These solutions blend the power of artificial intelligence (AI) technologies to efficiently process all types of documents and feed the output into downstream applications. Optical character recognition (OCR), computer vision, machine learning (ML) and deep learning models, and natural language processing (NLP) are the key core technologies powering IDP capabilities. The most common use cases of IDP solutions are invoice processing, Know-Your-Customer (KYC) information, insurance claims, patient onboarding, patient records, proof of delivery and order forms.

Enterprises seeking to leverage IDP technology should seek an enterprise-grade IDP solution comprising the following capabilities:

  • 1.    Training the software: The underlying AI/ML model of an IDP solution has to be trained with sample documents to accurately extract data.
  • 2.    Data extraction and classification: Core IDP capabilities include techniques to extract data from structured, semi-structured and unstructured documents; classification of documents; support for a range of languages; and product configurability.
  • 3.    Interoperability: Integration with enterprise applications—such as Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) systems—and complementary technologies, including Robotic Process Automation (RPA) and cloud, are needed for data ingestion and enabling broader automation.
  • 4.    Monitoring and security: Key capabilities include monitoring the performance of the software and users; assessing the accuracy of algorithms for various document types and drawing insights; and ensuring confidentiality of sensitive data.

IDP solution vendors are heavily investing in technology capabilities as well as expansion of their partner ecosystem. Development trends in IDP products that are delivering benefits to enterprises include the following:

  • Extraction capability for a large set of languages, including Asian and Middle Eastern languages.
  • Increasing maturity for processing unstructured documents.
  • Vertical- and horizontal-specific pre-trained solutions out-of-the-box; app store-like channels for easy access.
  • Software-as-a-service (SaaS) offerings of the solution to lower Total Cost of Ownership for enterprises and increase accessibility.
  • Increased configurability of platforms to provide greater control to enterprise users.
  • Enhanced integration with complementary technology solutions, including RPA, Business Process Management (BPM), and process mining.
  • Dedicated mobile applications to facilitate document processing through handheld devices.
  • Advanced image recognition and processing capabilities using a combination of computer vision and deep learning algorithms.
  • Availability of benchmarking analytics for particular processes such as invoice processing.

These findings and more are shared in Everest Group’s recently published report, “Intelligent Document Processing (IDP) State of the Market Report 2021 – Key to Unlocking Value in Documents.” This report provides comprehensive coverage of the IDP market and analyzes it across various dimensions, such as market size and adoption trends, solution characteristics, product capabilities and trends, buyer satisfaction, vendor landscape, challenges to adoption and future outlook.

IDP Market Adoption Trends

  • Banking and insurance continue to be the largest adopters of IDP solutions and account for approximately 30% and 13% of the IDP market, respectively.
  • Government and the public sector have shown significant growth in 2020, driven mainly by an increased need to improve efficiency and compliance and reduce dependence on manual processing.
  • North America continues to be the largest market for IDP software solutions with over 50% market share, while the Asia Pacific (APAC) market is growing rapidly.
  • Adoption of IDP solutions in industry-specific processes, especially in Banking, Financial Services and Insurance (BFSI) and healthcare, observed significant growth.
  • Large buyers continue to have the highest adoption; however, small and medium-sized businesses (SMBs) are showing the highest growth rate in the adoption of IDP solutions.

***Download a complimentary abstract of the report here.***

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com

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