AI’s impact on physical product engineering has been transformative, driving an evolution from traditionally manual processes to AI-driven automated workflows. Enterprises are adopting AI across the product life cycle to realize productivity gains, reduce overheads, and accelerate time to market. Additionally, AI is helping enhance physical products’ functionalities through features such as voice recognition, predictive analytics, and personalized user experiences.   Physical AI is emerging as a new interest area where physical products are getting closer to autonomously perceiving, understanding, and dynamically interacting with the world. With that, technology giants such as Meta and Amazon are foraying into robotics and autonomous systems. Furthermore, fostering expertise across areas such as AI hardware, edge computing, sensor technologies, and advanced simulation platforms is becoming essential across the wider set of industries. In this Viewpoint, we explore strategic imperatives such as infrastructure investments, talent upskilling, and ecosystem partnerships that enterprises should adopt to thrive in such an environment. Finally, it explores providers' roles in enabling enterprises to seamlessly adopt AI as a core competency and realize substantial benefits in the current environment. Scope All industries and geographies Contents In this report, we examine: AI’s impact on the physical product engineering value chain AI-driven enhancement of product capabilities Physical AI’s evolution to autonomously create products Engineering service providers’ role to support enterprises in this evolution

In 2024, enterprises faced economic headwinds from recessionary pressures, inflation, high interest rates, and geopolitical tensions impacting supply chains. Despite these challenges, organizations showed resilience by focusing on cost control, value realization, and technology adoption to enhance productivity. Key Engineering and R&D (ER&D) growth drivers included IoT, connected ecosystems, AI augmentation, and the demand for intelligent manufacturing and software-defined solutions. There were indications of a market recovery toward the end of 2024 due to the reduction in interest rates and the AI boom. The surge in Global Capability Centers (GCCs) and their shift from backend offices to R&D hubs also contributed to the ER&D growth momentum. In this report, we examine key ER&D verticals and horizontal themes, such as the rise of GCCs, AI, and manufacturing, that will influence enterprise investment priorities in 2025. Scope Industry: ER&D Geography: global Contents This research presents Everest Group’s view on key macroeconomic and technology trends shaping spending and outsourcing in the ER&D industry in 2025. Membership(s) Engineering Research and Development Sourcing and Vendor Management

The report explores the transformation of enterprises and providers in the construction sector, focusing on aligning with emerging technologies and addressing dynamic industry challenges. It segments the industry into three primary areas: residential and commercial development, civil construction for public infrastructure, and digital engineering services. Each segment has distinct priorities that cascade into engineering and technology investments. It outlines actionable use cases for each segment, providing insights into the construction industry’s resilience. It highlights the top enterprise spenders, their strategic focus areas, and investment priorities across green technology, digital transformation, and automation. Dedicated sections cover emerging use cases in generative AI, cybersecurity, and niche engineering, ensuring ongoing projects’ comprehensive coverage while identifying new opportunities. The report also provides a detailed view of the outsourcing market, including market size, key delivery locations, outsourced services, and strategic partnerships driving the digital value chain. Scope Geography: global Industry: construction Service: construction services Contents The study is divided into the following three sections: Market overview: market size and growth across key segments and geographies Construction engineering trends: emerging use cases, including those across generative AI, cybersecurity, and niche engineering, to uncover new growth opportunities Outsourcing landscape: view of the outsourced market across service offerings and partnerships leveraged across the entire value chain Membership(s) Engineering Research and Development Sourcing and Vendor Management

The automotive industry is significantly transitioning due to shifting consumer expectations. Vehicles are evolving from being mere utilities to offering connected features, advanced safety, and personalized experiences. This shift has driven OEMs to rethink their approach to vehicle engineering and revenue channels and led to the emergence of Software-defined Vehicles (SDVs), where software acts as the vehicle's central control unit, controlling functionalities, analyzing data, and providing an enriched user experience. While OEMs are making strong inroads in capitalizing on the demand drivers and introducing SDV features, developing SDVs is a daunting task faced with challenges such as software development complexity, dynamic regulatory environment, and research and development ramp-up and monetization. All these challenges can lead OEMs to stray away from their course of action, incur cost overruns, and improperly prioritize applications from a monetization standpoint. In this viewpoint, we provide an overview of the North American SDV market and propose a framework that OEMs can utilize to assess their success in navigating these challenges, building SDV competencies, and monetizing their offerings. The framework will help them understand their current state of maturity and identify areas that they need to actively focus on. Scope Industry: automotive Geography: North America Contents In this viewpoint, we: Define SDVs and how they differ from traditional vehicles Give an overview of the North American SDV market dynamics Explain the challenges faced by OEMs in developing SDVs Provide a framework on how OEMs can assess their maturity in developing SDVs and driving market success Role of providers in supporting OEMs in their SDV journey Memberships Engineering Research and Development Sourcing and Vendor Management

In the product engineering domain, software remains the largest expenditure, continuing its upward momentum in the face of recessionary pressures, geopolitical conflicts, talent shortages, and delayed enterprise decision-making. Despite these macroeconomic challenges, several key factors are driving software R&D’s evolution. These include a shift toward platform-based business models, AI- / gen AI-augmented secure products’ increased adoption, a strong focus on sustainability, and a heightened emphasis on customer and developer experiences. As enterprises navigate these transformative trends amid economic uncertainty, their expectations from providers are evolving. They now seek strategic partners that can offer not just engineering talent, but also cost savings, speed, and innovation. This report, the fifth edition of Everest Group’s Software Product Engineering Services PEAK Matrix® Assessment, evaluates 37 engineering service providers, positioning them on the PEAK Matrix&® framework and offering enterprise sourcing considerations. Scope Industry: Software Product Engineering Services (SPES) Geography: global The study is based on RFI responses from providers, interactions with their SPES leadership, client reference checks, and an ongoing analysis of the SPES market Contents In this report, we examine: Everest Group’s PEAK Matrix® evaluation of SPES providers The characteristics of Leaders, Major Contenders, and Aspirants Providers’ key strengths and limitations, market impact, and vision and capabilities Membership(s) Software Product Engineering Services Sourcing and Vendor Management

Manufacturers have long prioritized refining their processes to enhance efficiency, elevate product quality, and manage costs. However, the rise of digital manufacturing has transformed this landscape, integrating technologies such as AI, IoT, AR/VR, and digital twins into manufacturing processes for optimization. This evolution enables better response to dynamic business environments, regulatory requirements, and the imperative for sustainability amid escalating resource depletion and environmental concerns. Sustainability has become increasingly vital, particularly for sectors such as manufacturing, energy, and mining, focusing on resource optimization and emissions tracking. While implementing digital transformations in new factories is straightforward, retrofitting existing facilities, known as brownfield factories, poses challenges such as integrating modern technologies with legacy systems, the risk of destabilizing current processes, longer time frames for realizing value, and resistance to change. However, thorough assessments and strategic investments can yield substantial gains and align performance with sustainability across brownfield operations. In this viewpoint, we explore the current state of digital manufacturing adoption in brownfield factories, examining technology enablers, key use cases, and challenges that enterprises face in modernizing their factories. The report provides a business case for digital manufacturing in brownfield factories to enhance efficiency and sustainability. Scope Industry: manufacturing, automotive, mining and extraction, oil and gas, energy and utilities, aerospace and defense, consumer goods, and industrial products   Geography: global Contents In this viewpoint, we: Explore the current state of digital manufacturing adoption in brownfield factories Examine the technology enablers driving digital transformation Discuss key use cases illustrating the benefits of digital manufacturing Consider the challenges that enterprises face in modernizing their factories Propose a business case for digital manufacturing in brownfield factories Membership (s) Engineering Research and Development Outsourcing Excellence

In recent years, investments in 5G engineering had skyrocketed, driven by 5G’s high reliability, low latency, high bandwidth, easy customizability, and strong support for a plethora of use cases. Telecommunication Service Providers (TSPs) and Telecommunication Equipment Providers (TEPs) invested significantly to expand 5G networks worldwide and devise new offerings to attract customers. Simultaneously, enterprises actively explored the transformative potential of private 5G for their businesses. However, a shift occurred in the latter half of 2022. While TSPs accelerated network expansion, consumer migration to 5G was slow. Enterprises, despite actively exploring the possibilities of private 5G, hesitated to adopt it on a larger scale due to high capital costs and a limited number of credible success stories. These challenges, coupled with fewer monetization opportunities and recessionary macroeconomic environments, led TSPs and TEPs to contemplate strategies for generating returns on substantial investments. Nevertheless, certain subthemes such as network slicing, AI adoption, and standalone 5G networks, along with emerging themes such as Open Gateway, RedCap, and 5G-NTN, remained resilient and continued to attract investments. In this report, we assess the 5G engineering market, identify key trends shaping the R&D space, and study the challenges and opportunities that lie ahead for 5G. The report also examines how providers align with the 5G engineering requirements of their customers and enhance their capabilities to become partners of choice. Scope Industries: telecommunication, ISV, consumer electronics, and connected device ecosystems and private networks Geography: global Contents In this report, we examine: Enterprise Research and Development (ER&D) spending on 5G engineering and its distribution across geographies and market segments Key trends and investment themes influencing spending, such as the expansion of 5G networks, the adoption of private 5G, and the increasing significance of technologies and initiatives such as Open Gateway, 5G-NTN, open RAN, network slices, RedCap technologies, and AI The outsourcing landscape, assessing the growth of 5G engineering services and how providers are aligning themselves to meet market demands Membership (s) Engineering Research and Development Outsourcing Excellence

Recessionary concerns exerted a significant influence on enterprise decision-making in 2023, driven by factors such as depleting pandemic savings, high-interest rates, global demand slowdown, rising oil prices, and ongoing geopolitical uncertainties. Despite these challenges, enterprises displayed adaptability and strategic responsiveness to emerging trends while actively pursuing profitability and optimizing costs. As a result, global Engineering Research and Development (ER&D) spending continued its upward trajectory. At the same time, as enterprises prioritized profitability and streamlined discretionary spending, ER&D services outsourcing grew at a slower-than-expected pace. In this research, we examine the key macroeconomic and technology trends that will shape ER&D spending and outsourcing in 2024. Scope Industry: ER&D Geography: global Contents This research presents Everest Group’s view on the key macroeconomic and technology trends that will shape ER&D spending and outsourcing in 2024. Membership(s) Engineering Research and Development Software Product Engineering Services Sourcing and Vendor Management  

5G’s lower latency and higher bandwidth are unlocking newer uses for enterprises to explore. Additionally, 5G adoption is enabling the rapid scalability of network infrastructure, driving higher levels of customization, and reducing operating costs. Enterprises are exploring various initiatives, including the decoupling of hardware and software through network function virtualization, automating network operations, adopting open-source components (hardware and software), and exploring monetization opportunities. However, the market’s nascency is creating uncertainty and increasing complexities for enterprises. Therefore, they are looking to partner with providers to share development risks, reduce operational costs, implement system integration measures, access a larger talent pool, and leverage the expertise of their partner ecosystem to engineer solutions faster. This compendium provides comprehensive and fact-based snapshots of 20 5G engineering services providers featured in the second edition of Everest Group’s 5G Engineering PEAK Matrix® Assessment. Each profile provides a comprehensive picture of the provider’s 5G engineering services, key solutions offered, strategic partnerships and investments in 5G engineering, performance in the market, and customer case studies. The report also presents our insights on enterprise sourcing considerations for each provider. Scope All industries and geographies Services: 5G engineering services The study is based on RFI responses from providers, interactions with their 5G engineering leadership, client reference checks, and an ongoing analysis of the engineering services market Contents In this report, we present detailed profiles of 20 5G engineering providers, and include: An overview of the 5G engineering services business, encompassing vision and strategy, 5G engineering services revenue, year-on-year growth, and revenue composition across geographies, industry segments, value chain functions, and buyer sizes A curation of providers’ case studies, proprietary solutions, partnerships, and investments Providers’ key strengths and limitations Membership(s) Engineering Research and Development Sourcing and Vendor Management

5G’s lower latency and higher bandwidth have unlocked newer uses for enterprises to explore. Additionally, 5G adoption is allowing the transformation of network infrastructure to make it quickly scalable, driving higher levels of customization and lower operating costs. Enterprises are exploring the decoupling of hardware and software in the form of network function virtualization, automation of network operations, adoption of open-source components (hardware and software), and monetization opportunities. However, the market’s nascency is creating uncertainty and increasing complexities for enterprises. Therefore, they are looking to partner with providers to share development risks, reduce operational costs, implement system integration measures, bring in a larger talent pool, and leverage the expertise of their partner ecosystem to engineer solutions faster. This research, the second edition of Everest Group’s 5G Engineering PEAK Matrix® Assessment, evaluates 20 engineering service providers, features them on the PEAK Matrix® framework, and provides sourcing considerations for enterprises. Scope Providers assessed: Accenture, BICS, Brillio, Capgemini, Cyient, DXC Luxoft, GS Lab I GAVS, HARMAN DTS, HCLTech, IBM, Infosys, LTTS, NTT DATA, Sasken, Tata Elxsi, TCS, Tech Mahindra, Tietoevry, VVDN Technologies, and Wipro Services: 5G engineering services Geography: global The study is based on RFI responses from providers, interactions with their 5G engineering leadership, client reference checks, and an ongoing analysis of the engineering services market. Contents In this report, we examine: Everest Group’s 5G Engineering Services PEAK Matrix® 2023 Key characteristics of Leaders, Major Contenders, and Aspirants A summary dashboard assessing each provider’s vision & capability and market impact Providers’ strengths and limitations vis-à-vis enterprise sourcing considerations Membership(s) Engineering Services Sourcing and Vendor Management