Dusseldorf The digital transformation has long created robust demand for many IT service providers – but this booming industry is also suffering from the corona crisis: The management consultancy Lünendonk expects significantly less business in the current year.
Partner Mario Zillmann said on Thursday in Munich whether the market would still grow or shrink slightly given the current economic uncertainty.
“Many IT service providers will get through the crisis comparatively well,” emphasized Zillmann. On the one hand, they benefit from recurring sales through IT outsourcing and the operation of systems for customers, called managed services. Customers cannot simply switch them off.
On the other hand, in sectors such as banking, insurance, retail and the public sector, demand is “largely stable”: digitization continues to drive it.
IT service providers see the modernization of IT and the introduction of cloud services as the strongest growth driver. When asked what they would like to prioritize this year and next, 89 percent of providers called the cloud transformation.
The corona crisis is likely to contribute to this: the initial restrictions show the advantages of IT from the network, which employees can access from anywhere. Virtual conferences replace real meetings.
Special business cycle through SAP
Added to this is the payment for used capacities, called “pay as you go”. “The cloud is gaining momentum,” said Zillmann. Priority was also given to adapting the architecture to new technologies and analyzing large amounts of data.
In addition, many companies are involved in the development and introduction of their own IT platforms, such as those built by the car manufacturer Volkswagen for networking factories. “More and more business models are based on software,” says Zillmann – this is an opportunity for service providers who help with capacities and know-how. However, if the customer builds up their own expertise, the consulting business will be demanding, said Heiko Packwitz, Head of Marketing at Lufthansa Industry Solutions.
SAP is causing a special boom: Since last year, numerous large medium-sized companies and corporations have been dealing with the S / 4 Hana business management system – the standard maintenance for the previous version ends in 2027, so it is time for extensive implementation, despite the crisis.
But it is not just about meeting the deadline, emphasized Holger von Daniels, head of Valantic. The management understood the value of the system for digitization.
Trade conflict weakened business in 2019
Business already developed worse than expected in the past year: the slowdown in the economy was just as noticeable as the international trade conflict. According to the Lünendonk study, sales of IT service providers grew by 7.8 percent and thus less than expected, whereby the 25 largest companies performed significantly better with an increase of 10.6 percent. As a general contractor, Zillmann reported that they had completed a number of major projects.
IT service providers who, for example, operate data centers, maintain computers or offer outsourcing services on behalf of customers grew by only two percent. Zillmann said that cloud computing resulted in “tectonic shifts” in the market: IT from the cloud, for example, largely makes own hardware superfluous, which puts some business models under pressure.
Lünendonk regularly examines the market for IT consulting and system integration. As in previous years, the list tops Accenture, which increased sales in Germany by around seven percent to 2.4 billion euros. This is followed by T-Systems with 1.6 billion, IBM with 1.45 billion and Capgemini with 1.16 billion euros.
With 450 million euros, Adesso is number one among medium-sized providers, which traditionally play an important role in Germany, followed by GFT Technologies, ESG and Materna.
Lünendonk considered 76 IT service providers, which represent a good two thirds of the German market with a turnover of 28.1 billion euros. The study is considered an important barometer for the market.
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