Tag: Engineering Services

Global 5G Expansion Hits Engineering Services Market, Poised for Multi-Year Boom—Everest Group | Press Release

5G emerges as fastest-growing segment of engineering services market, with 30% annual growth rate forecast for the next four to five years.

Both telecom companies and other enterprises are gearing up for 5G, which is driving a growth boom in the 5G engineering services industry as well, according to Everest Group. Investment in 5G engineering, a nascent and fast-growing market, reached US$12.0 to 12.2 billion in 2021, with 80% of overall spend allocated in house and 20% outsourced. Engineering services spend is expected to show a 30% annual growth rate for the next four to five years, with the outsourcing growth rate stabilizing at approximately 45% by 2022.

5G, the latest in mobile network technology, offers high data transfer speeds and ultra-low latency. Not only are telecommunication entities spending significantly in 5G engineering and deployment, but also enterprises in non-telecom segments are expressing interest in how 5G can be applied to solve industry-specific challenges. Potential use cases span a variety of sectors and include the following:

  • Industrial: Process automation, IIoT systems, remote monitoring, predictive analytics, collaborative robots
  • Consumer electronics: IoT devices and sensors, connected products, wearables technology, edge-enabled devices
  • Automotive: V2X, Autonomous driving, vehicle edge computing, traffic management, HD mapping
  • Public sector: Smart cities and infrastructure, public networks, defense networks, enhanced surveillance, autonomous public transport
  • Media and entertainment: HD and distributed content, remote production, Metaverse and AR/VR, hyper-personalized advertising
  • Energy and utilities: remote critical process control, supply chain monitoring, asset diagnostics, predictive maintenance, field services
  • Healthcare and Others: medical devices, virtual health, remote surgery, education and training, retail and ecommerce

North America, which is home to a high percentage of the large telecom companies participating in 5G, is the largest and most mature market for 5G engineering spend, representing 35-40% of the global market. Europe is the second largest market (30-35%) and is as mature as North America. Asia Pacific, representing 15-20% of the market, is gaining ground quickly.

These findings and more are detailed in Everest Group’s recently published report, “Envisioning the Connected Future – 5G Engineering Services State of the Market Report 2022.” This report assesses the global 5G engineering services market and the trends that are emerging as a result of the increasing number of use cases. The report addresses enterprise expectations, challenges for service providers, the market for 5G engineering services outsourcing, and the investments being made by enterprises and service providers.

“Telecommunications companies and other enterprises recognize the potential of 5G, and 5G has already become the fastest growing market segment within the global engineering services market,” said Akshat Vaid, vice president and lead of Engineering Services research and advisory at Everest Group. “This is opening up a new dimension of engineering services outsourcing, where engineering service providers are helping enterprises and telcos with conceptualization and scaling of various use cases across industries. The opportunities in 5G will boom over the next several years, particularly as enabling technologies advance, private networks expand, and partners collaborate to explore the full potential of 5G applications.”

Additional Market Highlights

  • The overall enterprise spend (comprising telecom and other industries) for 5G engineering services has been increasing steadily year by year; however, COVID-19 caused a slight dip in growth rate during contract year 2020.
  • The major roadblocks to adoption include high setup costs, complex use cases, and the regulatory landscape around 5G.
  • The private network market for 5G is growing fast; and given the benefits that it offers as compared with 4G, enterprise adoption and associated engineering services will also observe strong growth momentum.
  • A variety of 5G-driven use cases have led to collaboration between an ecosystem of network participants for developing solutions and providing services to an ever-growing market.

Outsourcing Landscape

  • Telecom Service Providers (TSPs) and Network Equipment Providers (NEPs) are driving more than 70% of the outsourced services spend in 5G engineering. The remaining investment comes from other enterprises and technology companies looking to build specific use cases, such as IIoT, private 5G, and network assurance and testing activities.
  • Service providers need to develop capabilities in assistive technologies, such as Multi-access Edge Compute (MEC), Software-defined Networking (SDN), and cloud, which are enabling the world of 5G.
  • Service providers are investing heavily in developing strong partnerships, infrastructure, talent, and IPs to cater to the 5G market.

***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 research also covers the technologies that power those processes and functions and the related talent trends and strategies. Our clients include leading global companies, service and technology providers, and investors. Clients use our services to guide their journeys to maximize operational and financial performance, transform experiences, and realize high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com.

Here’s Why 2022 Is the Right Time for NVIDIA’s RTX 40-series GPUs to Launch | In the News

For just about anyone who’s attempted to buy a GPU since 2020, the process has been full of pain, hiked costs, and delayed deliveries. So many of the best graphics cards are out of stock, and have been for the better part of two years. So why, then, are we facing what sounds like the impending launch of NVIDIA’s next big wave?

Despite the bizarre market conditions that computer components have endured since 2020, there is one constant that tech companies can expect: competition from rivals. That, according to Akshat Vaid, Vice President at Everest Group, is one of the key reasons NVIDIA’s upcoming line may arrive before people have had a chance to gather the 30-series cards they’ve wanted for years.

Read more on Windows Central

Everest Group Announces Winners of Inaugural 2022 Engineering Services PEAK Matrix Provider of the Year Awards | Press Release

Capgemini, HCL Technologies and TCS tie for the No. 1 spot on the list of Top 15 Engineering Services Providers.

Everest Group—a research firm focused on strategic IT, engineering services, business services and sourcing—today announced the winners of the 2022 Engineering Services PEAK Matrix Provider of the Year™. The awards, presented for the first time this year, recognize Engineering Services providers who have demonstrated consistent leadership in the PEAK Matrix® reports issued by Everest Group in the previous year (October 2020 to September 2021).

Capgemini, HCL Technologies and TCS tie for the No. 1 spot on the list of Top 15 Engineering Services Providers. Wipro took the No. 4 spot, followed by Tech Mahindra at No. 5. Rounding out the Top 15 are LTTS and Cognizant (tied for No. 6), Accenture (8), Infosys (9), Harman (10), Alten (11), UST (12), Cyient and Tata Elxsi (tied for No. 13) and Persistent (15).

Everest Group determined its rankings by evaluating consistent performance in PEAK Matrix® reports across five segments: Industry 4.0, Software Products, Semiconductor, ACES (autonomous, connected, electric and shared automotive engineering), and 5G. The Top 15 providers were identified based on comparative assessment of over 50 engineering service providers using a consolidated score reflecting points received on individual evaluations.

Everest Group also recognized the Top 5 Challengers—Engineering Services providers that offer credible alternatives for enterprises by focusing on specific solution segments, geographies, and/or industries. DXC Technology, NTT Data and Virtusa tied for the No. 1 Challenger position. KPIT earned the No. 4 spot, followed by Infogain at No. 5.

“The Engineering Services PEAK Matrix Provider of the Year Awards identify the best of the best – Engineering Services providers with strong capabilities and successful services strategies that align well with evolving enterprise engineering needs,” said Akshat Vaid, vice president at Everest Group. “Throughout the year, Everest Group evaluates Engineering Services providers across multiple ER&D domains to help buyers compare and contrast their options. Our evaluations offer guidance and nuanced insights into each provider’s strategies for key business lines, geographies and technologies. Taking these evaluations into account, the Engineering Services PEAK Matrix Provider of the Year Awards recognize the providers that truly set themselves apart by exhibiting consistent leadership and top performance.”

***A complete list of winners are listed in the report, “Engineering Services PEAK Matrix Provider of the Year 2022,” available for complimentary download.***

About the PEAK Matrix

The Everest Group PEAK Matrix® is a proprietary framework for assessing the relative market success and overall capability of service providers based on Performance, Experiences, Ability and Knowledge. Each service provider is comparatively assessed on two dimensions: market success and delivery capabilities. Market success is measured by revenue, number of clients and year-over-year growth. Delivery capability is measured by scale of operations, scope, technology and innovation, delivery footprint and buyer satisfaction. The resulting matrix categorizes service providers as Leaders, Major Contenders, and Aspirants. Companies that demonstrate strong upward movement in successive reports are recognized as Star Performers.

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our research also covers the technologies that power those processes and functions and the related talent trends and strategies. Our clients include leading global companies, service and technology providers, and investors. Clients use our services to guide their journeys to maximize operational and financial performance, transform experiences, and realize high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com.

Everest Group’s PEAK Matrix® Awards Recognize Top Engineering Service Providers for 2022 | Blog

Engineering service providers who demonstrated critical capabilities to enterprises over the past pivotal year are now being recognized for their leadership with the 2022 PEAK Matrix Service Provider of the Year™ awards in engineering services. Read on to find out who’s providing the top engineering services based on Everest Group research.   

Enterprises are accelerating their build of digital platforms and will continually evolve them, creating the need for more and more engineering and IT talent. 2021 proved to be a crucial year for the Engineering R&D (ER&D) industry, as many service providers demonstrated their abilities to enterprises in integrating software and next-generation technologies. During this time, a few engineering service providers stood out as top providers.

We have narrowed down the top 15 services providers and five leading challengers for the inaugural 2022 PEAK Matrix Service Provider of the Year awards in engineering services.

State of the ER&D industry

In 2021, the digitalization wave across industries compelled enterprises to integrate software and next-generation technologies such as Artificial Intelligence (AI)/Machine Learning (ML), Internet of Things (IoT), Augmented Reality and Virtual Reality (AR/VR), and 5G, in their products and offerings.

The need to achieve this while accelerating time-to-market and keeping costs under control added significant pressure on enterprises’ engineering teams. Leading service providers responded and tailored their offerings to make software more central to their portfolios.

As enterprises engaged providers to help them keep pace with rapidly increasing demand and ever-evolving customer expectations, providers became ever more essential to the ER&D process and the product lifecycle, helping enterprises access skilled talent at scale, enhance business resiliency, and reduce time-to-market, all while keeping a lid on costs.

Who did it best

The PEAK Matrix Provider of the Year awards helps enterprises identify leading service providers who have demonstrated strong capabilities and market success across multiple engineering domains.

This year’s results are based on assessments from five PEAK Matrix® reports published by Everest Group from October 2020 to September 2021 that looked at the following key themes influencing ER&D over that period:

  • Industry 4.0 services
  • Software products engineering
  • Semiconductor engineering
  • Autonomous, connected, electric, and shared (ACES) automotive engineering
  • 5G engineering services

The Engineering Services PEAK Matrix Provider of the Year awards were determined by consolidating tiered scores for Leader, Major Contender, Aspirant, and Star Performer positions across each of the individual evaluations mentioned above. The two award categories are:

  • ES Top 15: Engineering service providers with the highest consolidated scores based on the evaluation
  • ES Top 5 Challengers: The next five top engineering services providers who are credible partners for enterprises and are positioning themselves as rivals to leading players

See the 2022 ES Top 15 and Top 5 Challengers

Has the Engineering Services Market Bottomed Out? | Blog

The COVID-19 pandemic resulted in a severe economic downturn in 2020, and engineering service providers certainly suffered the effects of the slowdown. The following chart presents the performance of select engineering service providers – Alten, Cyient, HCL Technologies’ Engineering and R&D Services, KPIT Technologies, and L&T Technology Services – during this period as an indicator of the overall market.

Phase 1: Pre-COVID-19 sluggish growth phase – While the pandemic began taking its roots in Q1 2020, many engineering services vendors were growing at a slower pace from the second half of 2019. This can be traced back to a slowdown in key engineering verticals such as automotive, aerospace, and telecoms.

Phase 2: COVID19-led downturn – Growth began declining severely in the first quarter of 2020, and the dip in the chart shows that Q2 was when the pandemic’s effect became most pronounced. Interestingly, a deeper analysis of these companies’ portfolios reveals that service providers with greater exposure to the automotive, aerospace, and industrial verticals suffered a greater dip in their revenues. This is because these assets and hardware-heavy verticals are the ones where enterprises have reduced their R&D budgets the most. Consequently, these were also the vendors who suffered a greater dip in Q3.

Phase 3: Signs of recovery – The results the vendors reported for Q4, however, indicate that after multiple quarters of declining growth, the engineering services market has finally bottomed out and is headed upwards from here on. While the vendors have continued to report negative YOY growth numbers, revenues and growth figures have, without exception, improved in comparison to Q3.

ER&D services Y-o-Y growth for select service providers (Q1 2019 – Q4 2020)

Picture1 1

There are several reasons for this improved performance.

Broader macroeconomic recovery – The rollout of vaccines towards the end of 2020 increased hopes of a return to some semblance of normalcy, leading economic bodies to project a strong recovery to the global economy in 2021. Enterprises across most verticals have started reinvesting in R&D projects, and service providers have acted quickly to capture some share of this growing market.

Digital product engineering – Enterprises in verticals such as healthcare, communications, media and entertainment, and even automotive have increased spending on cloudified, connected, and personalized products. Due to their expertise in software and digital themes, engineering service providers have benefited. Moreover, the data-driven nature of these products brings about a continuous revenue source for these vendors.

Industry 4.0 – Early adopters of Industry 4.0 were able to recover and restart operations faster after the lockdowns as a result of their investments in robotics, augmented reality systems, digital twins, and so on. The success and resilience of these early adopters encouraged other enterprises to also invest in Industry 4.0 themes as a means to reduce costs and improve efficiencies in the long run. Thus, multiple service providers were able to win Industry 4.0 deals in Q4 as enterprises looked beyond mere proofs-of-concept and towards large-scale implementation and rollouts of those initiatives.

Cost-takeout initiatives at enterprises – The pandemic forced enterprises to adopt aggressive cost-cutting initiatives within their engineering organizations. While this resulted in the temporary cancellation of R&D projects and budgetary cutbacks, the enterprises also began examining some of the work being carried out at offshore captive centers more closely. This benefited service providers, who were proactive in making a pitch to take over these captive centers. The recent Infosys-Rolls Royce deal in which Infosys is taking over Rolls Royce’s aerospace engineering facility in Bangalore, India, is one such example. Enterprises have also taken the vendor consolidation route to cost cutting, concentrating their engineering spend among fewer vendors, resulting in larger deal sizes for the remaining players.

What does the future hold?

The robust recovery across the board in engineering services encourages us to believe that this momentum will be carried forward in 2021. In addition, enterprises have now begun to look at service providers as long-term, strategic partners. This has resulted in several large, multi-year deals being signed in the engineering services market towards the latter part of 2020. The effects of these factors noted above, particularly vaccine rollouts, cost-takeout initiatives, and large deals, will truly be felt only in 2021, leading us to conclude that the worst is behind us and that the engineering services market is poised to register better than expected growth this year.

To learn more, please reach out to us at [email protected] and [email protected].

 

 

 

 

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