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Professional IT Services Market Share<br />
(Source: Gartner Dataquest IT Services Market Metrics Worldwide Final Market Share, August 2006)<br />
(in millions of U.S. dollars)<br />
Vendor<br />
2005 Revenue<br />
% Market Share<br />
2005<br />
IBM 40,607 8.2%<br />
EDS 19,415 3.9%<br />
Accenture 15,705 3.2%<br />
Fujitsu 14,844 3.0%<br />
Computer Sciences Corporation (CSC) 14,520 2.9%<br />
<strong>Capgemini</strong> 8,637 1.8%<br />
Automatic Data Processing, Inc 8,187 1.7%<br />
Lockheed Martins 7,738 1.6%<br />
NTT Data 7,469 1.5%<br />
SAIC 7,310 1.5%<br />
2) Focus on the european market<br />
According to the study by Pierre Audoin Consultants, dated<br />
December 2006 and issued by Christophe Châlons Managing<br />
Director, the competitive environment Europe in the IT services<br />
sector is characterized by a market that has recovered solid<br />
growth trends.<br />
The companies, borne by a generally more favorable economic<br />
climate, have regained a solid appetite for innovation. They are<br />
now investing sustainably in large projects such as the renovation<br />
of their IT systems and the development of new applications in<br />
order to support their corporate strategies while continuing to<br />
implement cost reductions. The merger & acquisition trends in<br />
the banking and service industries are also encouraging senior<br />
management to call upon external service-providers in the field<br />
of consulting, a market that should grow in France alone by 5<br />
to 6% per year, according to the research firm Pierre Audoin<br />
Consultants (PAC). And this growth draws new players: Indian IT<br />
services companies are offering IT consulting, audit and law firms<br />
are entering the strategic consulting market and certain insurance<br />
companies are entering the foray via risk analysis.<br />
However, the new growth dynamics in the European IT market<br />
do not seem to benefit all of the major service-providers in the<br />
same way, observes PAC. Five American companies (IBM, HP,<br />
EDS, Accenture, CSC), five European companies (<strong>Capgemini</strong>, Atos<br />
Origin, T-Systems, SBS, LogicaCMG) and one Japanese company<br />
(Fujitsu Services) dominate the European market.<br />
LogicaCMG, <strong>Capgemini</strong> and Accenture formed the leading pack<br />
in growth terms in 2006 followed by EDS, IBM et T-Systems. HP<br />
and Atos Origin, which posted weak growth, whereas CSC and<br />
SBS were on a downward trend.<br />
Faced with the globalization of their clients’ business, new purchasing<br />
strategy (multi-sourcing of outsourcing contracts, listing<br />
policies, etc.) and competition from the Indian pure players, the<br />
traditional, large IT services players have to adapt their business<br />
models, standardize their offerings, globalize their consultant<br />
teams and their production, whether for outsourcing or for projects.<br />
By failing to include a credible offshore component in their commercial<br />
offers or by being too focused on the large or the very<br />
large outsourcing projects, heavy consequences in terms of profit<br />
margin and revenue may ensue. Flexibility, transformation, industrialization<br />
and globalization are the indispensable ingredients for<br />
a major service provider.<br />
Any player that lacks any of these ingredients may find that its<br />
growth is curbed and become the target of takeover bids, either<br />
from competitors or – and this is a relatively recent phenomenon<br />
in the IT services and telecommunications industries – from<br />
players with a purely financial logic, with considerable resources<br />
at hand.<br />
ANNUAL REPORT 2006 <strong>Capgemini</strong><br />
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