The IT applications services landscape is undergoing a rapid transformation, fueled by AI, emerging technologies, and evolving deal constructs. As enterprises shift from pure play cost-savings to value-driven engagements, traditional pricing models are being reshaped to demand greater efficiency, flexibility, and innovation from service providers. Watch Everest Group experts Achint Arora, Partner, Prateek Gupta, Vice President, and Amanpreet Manchanda, Vice President, as they explored the NOW and NEXT of IT applications services pricing, covering the evolution of commercial models, the role of AI in redefining cost structures, and the key differentiators that maximize value in outsourcing deals. Attendees came away with actionable insights to help buyers and providers navigate shifting market dynamics and stay ahead in the competitive IT services ecosystem. What questions did the webinar answer for the participants? How are current macroeconomic trends impacting the IT applications services pricing and commercial construct? How are deal constructs evolving and may further change evolve due to gen AI, emerging technologies, and macroeconomic trends? What actions should be taken to successfully navigate the current market?

The economic environment is currently uncertain due to concerns around inflation and geopolitical instability in parts of the world. As a result, enterprises are pushing service providers to deliver more while keeping costs static or even lowering them. Providers can differentiate themselves through a mix of efficient solution sizing, which involves the best use of granular market insights, continuous service improvement levers (including generative AI impact), balanced risk-taking to do more with less, and competitive underlying rates. In this webinar, Everest Group’s pricing experts discussed some of the true differentiators observed on recent deals and the outlook for these approaches. What questions did the webinar answer for the participants? What selection criteria have enterprise clients prioritized in recent IT outsourcing deals? What are the price and solution sizing themes that land well in terms of win rates? What are the pitfalls that enterprises and service providers should be mindful of?

While the professional services market experienced a slowdown last year, engineering services emerged as a standout performer among other segments. In this webinar, our analysts examined the past performance and future prospects of the engineering services sector. Participants gained valuable insights into the pricing outlook, commercial dynamics, market attractiveness, and evolving buyer expectations for engineering services. Finally, we explored emerging trends and future projections. What questions did the webinar answer for the participants? How did the engineering services market perform in 2023? What are the latest enterprise objectives and recent commercial trends in this space? How will the engineering services market shape out in 2024, and what can service providers do to improve win rates in deals?

In the current market, prices are reaching a plateau, and providers are facing the pressing need to re-evaluate their solutions to gain a competitive edge in outsourcing deals. Additionally, today’s buyers are increasingly more aware that there is no “one-size-fits-all” approach, and they aren’t confined to rate cards. Crafting the winning solution will be the key differentiator in outsourcing deals. Watch this webinar as our pricing experts explore how the success of a pricing bid, and what directly influences the pricing of a deal, ultimately lies in crafting a successful solution sizing model. The speakers also discussed the need to understand the key considerations and prerequisites that underpin a successful solution sizing model and how outside forces, such as an uncertain economy and digital and transformation trends in the marketplace, can impact solution sizing deals. What questions has the webinar answered for the participants? Why is solution sizing important in today’s competitive deal environment? What are the key elements of winning solutions across service areas? What needs to be in place for impactful and sharp solution sizing?

In 2022, the outsourcing industry experienced significant attrition and wage hikes. However, those metrics stabilized in the first few months of 2023, and due to today’s economic environment, the focus has turned to cost control. To make the best decisions going forward and fulfill their cost-cutting mandates, business leaders must stay on top of these shifts. In this webinar, our experts discussed the six key pricing and commercial themes observed in the first half of the year and how enterprises can incorporate them into their planning whether entering new outsourcing relationships, renegotiating, or consolidating. Our speakers discussed: Which key outsourcing pricing and commercial themes were observed in the first part of 2023 How these six themes are expected to play out for the remainder of the year How enterprises can use these themes to plan and execute on their cost-cutting directives

2022 was an unusual year for IT procurement category managers, specifically those managing software and cloud investments. We witnessed price hikes across the board from software and cloud providers, accompanied by enterprise budget cuts in anticipation of a recession. In this webinar, Everest Group’s software pricing expert discussed recent pricing trends, key tactics enterprises use to keep their software spend in check, and the outlook for software and cloud pricing in 2023. Our speakers discussed: Why do enterprises find software licensing negotiations to be challenging? What are the most commonly negotiated clauses in recent deals What are the best practices to keep software spend in check? What is the future outlook for software pricing?

There is clear intentionality as IT applications and infrastructure move to managed services, a shift that the global challenge to find talent across industries accelerated. Pricing model asks are now moving from simple day rates to more complex pricing constructs, such as pricing for agile pods, weekly pricing, fixed fee, and output and outcome-based pricing. In such scenarios, getting the solution sizing right is often the difference between wins and losses in competitive deal scenarios. Within a managed services model, providers will also need to correctly translate these underlying solution considerations and the value they bring to the client to ensure that the solution is evaluated for its true merit. What questions did the webinar answer for the participants? Why is razor-sharp solution sizing so critical? What are the important parameters to keep in mind? What are the common pitfalls to avoid to ensure a competitive fee profile?

On April 12, Everest Group hosted a webinar titled, "Outsourcing Pricing: 3 Pitfalls and 2 Unknowns Enterprises Need to Know in 2022." The market for outsourced services has changed drastically in the past twelve months. With the talent shortage shaping up to be a long-term dilemma that will likely last years, compounded with industry uncertainty brought on by the Ukraine war, enterprises are navigating uncharted territory. This expert panel discussed three critical outsourcing pricing pitfalls that enterprises should watch for now and two unknowns to be aware of throughout 2022. Our experts addressed the following questions: What key elements will ensure that pricing-related uncertainties can be managed correctly in 2022? What unknowns should enterprise buyers keep in mind for 2022? What are the pricing pitfalls that enterprises should avoid?

On August 17, Everest Group hosted a webinar titled, "Application Services in 2021: Rate Hikes, Productized DevOps, and More?" Are your IT application services deals aligned with the current market dynamic? As rates rise, buyers and providers should be in preparation mode. IT application services is one of the most mature yet dynamic functions within the outsourcing industry. Current trends like rapid changes in operating models, the advent of new technologies such as digital, buyer preferences, and provider capabilities have caused outsourcing deals in IT applications to undergo significant changes. Drawing from live deals assessed and benchmarked by Everest Group, this webinar detailed buyers and providers insights on pricing trends in IT application deals, current solution practices, the impact of automation, and quality and satisfaction-related tenets. What questions does the webinar answer? How have operating models and solutions evolved in IT applications deals? How real is the talk around moving from SLAs to XLAs? What are recent pricing trends and the future pricing outlook?

On October 17, Everest Group hosted a webinar titled, "Output-Based Pricing in Application Services: Adoption in the As-a-Service Economy." Despite decades of outsourcing experience, pricing models continue to be input-based, leaving little to no incentive for the sourcing teams to change or for service providers to propose new options. As the inexorable march toward the as-a-service economy continues, the input-based model is increasingly less effective in some areas. An output-based services consumption model is better suited to the overall cloudification of the IT estate. In this session, Everest Group’s Pricing Assurance team leaders explore adoption of output-based models and offer insights on pitfalls to avoid if you’re considering this approach. We also introduce the different output-based benchmarks we see being contracted in IT application services. Specifically, we answer these questions: What are the distinct advantages of output-based pricing? What key metrics are being tracked across application services engagements? Where do we see early adoption of output-based pricing, and how should we drive behavior toward more widespread adoption? What are the typical guardrails enterprises should have in place?