Few Enterprises Looking at Agile and DevOps as Part of Application Services Deals: New Everest Group Report

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Less Than 10 Percent of Application Services Agreements in 2014 Required DevOps-Based Delivery

DevOps: Brave New World

DevOps: Brave New World

The onus is on service providers to ensure the trust deficit is bridged and they are aligned to this overarching trend of DevOps disrupting the application services market.

Fewer than 10 percent of application services agreements in 2014 required DevOps-based delivery, suggesting that enterprises do not yet believe that service providers can play a meaningful role in their Agile to DevOps journey.

Everest Group research suggests that moving from an Agile model to DevOps is the single most important trend in application services. Though even today enterprises may only be experimenting with Agile, this is not stopping them from exploring the DevOps model for faster application delivery. However, most enterprises are focusing on adopting the DevOps model using internal resources rather than leveraging service providers.

“The onus is on service providers to ensure the trust deficit is bridged and they are aligned to this overarching trend of DevOps disrupting the application services market,” said Yugal Joshi, practice director at Everest Group. “Enterprises and service providers need to collaborate together and undergo an internal reorganization if they aspire to leverage the concepts of the DevOps model.”

Technology disruption is driving demand for application services consulting, as evidenced by the fact that two out of three application services deals inked in 2014 included consulting services. The market for applications services grew by 4 percent in 2014, outpacing the 3.4 percent overall growth of the IT services market.

These results and other findings are explored in a recently published Everest Group report: Application Services—Annual Report 2015: “Agile to DevOps? Not So Fast.”

Other key findings:

  • Stand-alone application services deals dominated the market with 59 percent share in new signings. Bundling of IT towers with Business Process Services remained muted with only 4 percent of deals witnessing it.
  • Enterprises focused on output and business outcomes from application services, with 58 percent of engagements based on the “non-labor” model.
  • The Banking, Financial Services and Insurance (BFSI) industry led the application services deal activity (30 percent share).
  • North America continued to witness a decline in average deal size; European clients signed contracts of larger value than global peers; and clients across the Asia Pacific (APAC) region witnessed significant demand contraction, with contract sizes approximately 35 percent lower than the global average.

***Download Complimentary 12-page Preview Report Here*** (Registration required.) This preview summarizes the report methodology, contents and key findings and offers additional resources for further study.

The full report analyzes the application services market, focusing on:

  • Major trends in application services adoption
  • Key factors shaping the market, including buyer expectations
  • The outlook for 2015-2016
  • Market share of 30 leading service providers, including large multi-national providers with headquarters in Europe, North America, India, Asia Pacific, and other regions.

*** Download Publication-Quality Graphics ***
High-resolution graphics illustrating key takeaways from this report can be included in news coverage, with attribution to Everest Group. Graphics include:

  • Help wanted: Technology disruption drives increased demand for consulting support in application services
  • DevOps: Brave New World
  • Saying no to bundling: Despite a meaningful push from service providers, enterprises remain reluctant to leverage the bundled services model

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, and sourcing. We are trusted advisors to senior executives of leading enterprises, providers, and investors. Our firm helps clients improve operational and financial performance through a hands-on process that supports them in making well-informed decisions that deliver high-impact results and achieve sustained value. Our insight and guidance empowers clients to improve organizational efficiency, effectiveness, agility and responsiveness. What sets Everest Group apart is the integration of deep sourcing knowledge, problem-solving skills and original research. Details and in-depth content are available at research.everestgrp.com.

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Andrea M. Riffle

Robert Cathey
Cathey Communications
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