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SAP conference confirms an intact backdrop for IT services
SAP conference confirms healthy demand backdrop for IT services
At SAP’s annual Sapphire conference, we met with Accenture, Atos Origin,
Cognizant Technology Solutions, HCL Technologies, Infosys, TCS, and
Wipro to discuss their specific efforts around SAP and enterprise
applications. Consistent with the latest GS IT Spending Survey and
recently reported results, our conversations as well as record attendance at
the conference confirmed healthy demand for applications and ERP
services, and support our positive view on the consulting models including
Accenture, CGI Group, Cognizant, and Sapient.
Enterprise applications remain a significant growth driver
We believe enterprise applications remain a significant growth driver for IT
services. All of the vendors indicated that their SAP practices have grown
faster than company averages, both in revenue and headcount; these
practices are expected to sustain 20%-30% annual growth over the next
few years. A couple of integrators noted that the initial wave of “pent-up”
demand drove growth in 2H10, with a more gradual but sustainable phase
of growth expected going forward. The drivers for ERP activities include a
combination of upgrades, platform consolidation, new sales in emerging
countries, and global deployments for large multi-national corporations.
Intact discretionary IT spend supported by growth investments
Our conversations suggest that the backdrop for discretionary IT spending
remains intact, driven by increased growth investments, particularly in the
areas of Cloud, analytics, and mobility. This is consistent with our view that
new technology spending initiatives driven by both cyclical and secular
factors will drive sustained growth in IT spending in 2011 and beyond. For
perspective, SAP currently expects that its offerings in these new areas will
grow to €5 bn in revenue, or about 25% of its business by 2015.
Strong momentum in N.A. and emerging markets; Europe sluggish
Virtually all integrators pointed to solid business momentum in North
America and emerging markets. However, demand remains sluggish in
Europe due to a weaker macro backdrop and a more gradual loosening of
discretionary spending budgets. From an industry perspective, verticals
showing strength include retail and consumer packaged goods, health
care, utilities and financial services, while telecom and public sector lag;
consistent with recently reported earnings results.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
SAP conference confirms an intact backdrop for IT services
SAP conference confirms healthy demand backdrop for IT services
At SAP’s annual Sapphire conference, we met with Accenture, Atos Origin,
Cognizant Technology Solutions, HCL Technologies, Infosys, TCS, and
Wipro to discuss their specific efforts around SAP and enterprise
applications. Consistent with the latest GS IT Spending Survey and
recently reported results, our conversations as well as record attendance at
the conference confirmed healthy demand for applications and ERP
services, and support our positive view on the consulting models including
Accenture, CGI Group, Cognizant, and Sapient.
Enterprise applications remain a significant growth driver
We believe enterprise applications remain a significant growth driver for IT
services. All of the vendors indicated that their SAP practices have grown
faster than company averages, both in revenue and headcount; these
practices are expected to sustain 20%-30% annual growth over the next
few years. A couple of integrators noted that the initial wave of “pent-up”
demand drove growth in 2H10, with a more gradual but sustainable phase
of growth expected going forward. The drivers for ERP activities include a
combination of upgrades, platform consolidation, new sales in emerging
countries, and global deployments for large multi-national corporations.
Intact discretionary IT spend supported by growth investments
Our conversations suggest that the backdrop for discretionary IT spending
remains intact, driven by increased growth investments, particularly in the
areas of Cloud, analytics, and mobility. This is consistent with our view that
new technology spending initiatives driven by both cyclical and secular
factors will drive sustained growth in IT spending in 2011 and beyond. For
perspective, SAP currently expects that its offerings in these new areas will
grow to €5 bn in revenue, or about 25% of its business by 2015.
Strong momentum in N.A. and emerging markets; Europe sluggish
Virtually all integrators pointed to solid business momentum in North
America and emerging markets. However, demand remains sluggish in
Europe due to a weaker macro backdrop and a more gradual loosening of
discretionary spending budgets. From an industry perspective, verticals
showing strength include retail and consumer packaged goods, health
care, utilities and financial services, while telecom and public sector lag;
consistent with recently reported earnings results.
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