Infosys : Accenture and Infosys to surpass IBM and DXC Technology in the second half of 2021
October 19, 2021 at 10:02 am EDT
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Consulting companies such as Accenture and Infosys are likely to gain more growth in the second half of 2021 than IBM and DXC. This is due primarily to a noticeable increase in corporate spending on new technologies. IBM and companies of this kind are losing out in this situation because of their high dependence on outsourcing revenues. More than 10% growth in the industry compared to the second half of 2020 is quite possible (after a significant reduction in discretionary spending during the past year).
The consulting industry is expected to sharply return to a strong performance
According to the analysts' forecasts, in the second half of 2021, the consulting industry may regain some of its previous sales achievements due to an increase of clients' expenses budgets, and first of all financial-services clients', whose valuations in the first half of the year showed excellent growth. In 2020, such companies conducted a conservative policy in discretionary spending and purchase of new software and updating the old one. This type of policy was caused, of course, by the pandemic and general market uncertainty. Data from Amazon Web Services and Microsoft, as well as indicators such as PMI, provide a clear picture of the recent increase in companies' spending on IT services. Accordingly, we can state with a high degree of confidence the future growth of the industry.
Accenture and EPAM among the leaders
Experience, reputation, and market position play an important role. Therefore, players like Deloitte, Accenture, and EPAM Systems have the best chances of a quick and high-quality recovery of their previous figures. In their portfolios of services, a large share falls on such perspective directions as cloud services, security, analytics. According to the general opinion of the majority of experts, these areas will be the drivers of growth in the near future. Just think about it: Accenture generates more than 2/3 of its revenue from this type of service. If we also add to the general picture the lack of qualified specialists in the industry, then the rise in prices for services of such kind in the second half of 2021 is quite expected.
IBM among the outsiders?
But what awaits companies like IBM and DXC Technology, for example? The overall recovery trend will affect them to a lesser extent, and the reason for this is the nature of their service portfolios. These companies have a somewhat "outdated approach" to doing business, they pay less attention to new directions and are largely focused on infrastructure outsourcing, which will not allow them to follow the industry's growth leaders. To illustrate the picture: DXC Technology shows less than a quarter of the consulting component in the total sales volume, while for IBM such share is even less - just a bit over 10%.
Infosys Limited is an information services company, their end-to-end business solutions include:
- consulting and systems integration comprising consulting, enterprise solutions, systems integration and advanced technologies;
- business IT services comprising application development and maintenance, independent validation services, infrastructure management, engineering services comprising product engineering and life cycle solutions and business process management;
- products, business platforms and solutions to accelerate intellectual property led innovation, including Finacle TM, our banking product, which offers solutions to address core banking, mobile banking and e-banking needs of retail, corporate and universal banks worldwide;
- newer areas such as cloud computing, enterprise mobility and sustainability.
Net sales break down by market between finance (29.8%), retail and logistics (14.5), telecommunications services (12.3%), manufacturing industry (12.9%), energy and utilities (12.6%), technology (8.1%), life sciences, health care and insurance (6.9%) and other (2.9%).
Net sales are distributed geographically as follows: India (2.6%), North America (61.8%), Europe (25.6%) and other (10%).