In 2024, software and internet companies faced a volatile landscape marked by persistent economic uncertainty, inflationary pressures, and an increasingly complex regulatory environment. Yet, amid these headwinds, firms remained committed to future-focused investments, particularly in generative AI, real-time data systems, cloud-native infrastructures, and secure platform engineering. The rise of multimodal AI, zero-trust architectures, and sustainable computing reflects the industry’s enduring emphasis on innovation and resilience. This report provides an in-depth analysis of Engineering Research and Development (ER&D) spending and outsourcing strategies among the top 100 global software and internet firms. It offers insights into how companies are allocating budgets, scaling innovation, and leveraging external partnerships to advance product and platform development. By examining trends across company size, geography, and key verticals, this research identifies strategic patterns in spend intensity, outsourcing behaviors, and modernization priorities. Additionally, it offers insights into future growth trajectories, emerging trends, and their strategic implications for providers, enabling them to navigate the shifting market landscape and seize new opportunities.

Software product management is evolving rapidly as organizations push for faster innovation, sharper customer focus, and measurable business outcomes. Product managers are no longer just roadmap custodians; they now orchestrate complex workflows, integrate fragmented toolchains, and lead in navigating rising delivery expectations. Their role now demands doing more with less, across an increasingly interconnected and high-pressure environment. Systems of Execution (SoE) represent a new operating paradigm that combines AI, automation, and orchestration to streamline execution across the product lifecycle. By linking insights to decisions and decisions to actions, SoE empower product teams to act with real-time intelligence and remain closely aligned with strategic goals. In this Viewpoint, we examine product managers’ evolving responsibilities, the systemic challenges constraining modern product organizations, SoE’s transformative potential, and how leading enterprises are adopting SoE to improve delivery speed, cross-functional alignment, and business impact. Scope Industry: all Geography: global Contents In this viewpoint, we examine: The product management industry’s evolution and its key challenges SoE as a paradigm that unifies AI, automation, and orchestration for smarter execution How product organizations can implement SoE to streamline workflows, enhance speed, and stay aligned with business goals

As enterprises strive for greater adaptability, autonomous execution, and continuous optimization, they are reimagining application development. Traditional approaches – focused on static requirements, linear workflows, and manual oversight – can no longer keep pace with real-time business demands. Development teams must now build systems that not only deliver features but also respond intelligently to change, act independently, and learn from every outcome. Systems of Execution (SoE) offer a new blueprint for application design – one that integrates AI, automation, event-driven architecture, and adaptive workflows to create intelligent, self-optimizing applications. By enabling real-time sensing, autonomous decision-making, and dynamic orchestration, SoE-ready applications fundamentally redefine enterprise responsiveness and resilience. This Viewpoint examines application development’s evolution in the context of SoE. It explores the architectural principles behind SoE-ready systems, the foundational investments enterprises must make, and real-world case studies demonstrating how leading organizations are unlocking value through agentic, context-aware applications. Scope Industry: agnostic Geography: global Contents In this viewpoint, we examine: SoE-ready application development The required technology investments A pragmatic roadmap for enterprise leaders to execute an SoE strategy How SoE enable future-proof, resilient, and intelligent enterprises

In the product engineering domain, software remains the largest expenditure, growing despite economic slowdowns, geopolitical tensions, and talent shortages. Key drivers include a shift toward platform-based business models, increased adoption of AI- / gen AI-augmented secure products, a focus on sustainability, and improved customer and developer experiences. Enterprises now seek strategic partners that can offer not just engineering talent, but also cost savings, speed, and innovation. In this report, we delve into the Software Product Engineering Services (SPES) market, analyzing its size, growth dynamics, and outsourcing trends across key verticals. The report sheds light on SPES spending patterns, growth rates, and the tailwinds and headwinds shaping its trajectory. Additionally, it provides insights into the future growth outlook, emerging themes, and their implications for providers, helping them navigate the evolving landscape and capitalize on new opportunities. Scope Industry: SPES Geography: global Contents In this report, we examine: SPES market size, growth, spending, and growth rate across verticals Tailwinds and headwinds to future growth SPES outsourcing market size, growth, and trends across verticals Growth outlook for SPES and prominent themes Implications for providers Membership(s) Software Product Engineering Services 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

Enterprises are increasingly depending on providers with rapid innovation in software product engineering. Consequently, providers are developing offerings that can help them play a critical role across the software product engineering value chain by filling capability gaps, augmenting staff, reducing time-to-market, and bringing in new technologies. Given the vital role that providers are playing in software product engineering, it is important to understand how satisfied enterprises in the domain are with the providers they engage with. Everest Group’s Software Product Engineering Services Enterprise Pulse study analyzes enterprises’ expectations and satisfaction levels with their providers. The findings in this report are based on insights from 234 unique interviews with enterprises nominated as references by more than 40 global software product engineering providers assessed in this report. The study summarizes the enterprises’ views on their providers’ capabilities across the software product engineering services value chain. The report also outlines enterprises’ expectations from engineering providers and captures quantitative and qualitative insights across multiple assessment parameters. Scope Software product engineering services All industries and geographies Contents This report studies Enterprises’ satisfaction levels with their providers across geographies, key engineering domains, and key engagement parameters Enterprises’ expectations from and perspectives on individual providers Membership(s) Software Product Engineering Services Sourcing and Vendor Management

In the product engineering space, software remains the largest expense, although its growth has slowed recently. This deceleration is largely due to economic headwinds, such as decreased consumer confidence and tighter budgets, which have made enterprises and providers more cautious about investing in new technologies. Additionally, geopolitical conflicts, talent shortages, and delayed decision-making within enterprises have further contributed to this trend. Despite these challenges, the software R&D landscape continues to evolve, driven by several key trends. The increasing adoption of AI and generative AI is transforming product development, while a growing emphasis on sustainability is shaping both product design and delivery. Additionally, providers are focusing on enhancing the customer and developer experience to drive adoption and loyalty. To navigate this evolving landscape, businesses are also exploring platform-based business models to create scalable and flexible solutions. This compendium provides comprehensive and fact-based snapshots of 43 software product engineering service providers. Each profile offers a detailed overview of the provider’s software product engineering services, solutions offered, strategic partnerships and investments, market performance, and customer case studies. Scope Industry: software product engineering Geography: global This study is based on RFI responses from providers, interactions with their software product engineering services leadership, client reference checks, and Everest Group’s ongoing analysis of the software product engineering services market Contents In this report, we examine: The software product engineering services business, including vision and strategy, revenue and YoY growth, and revenue composition across geographies, industry segments, value chain functions, and buyer sizes Providers’ case studies and proprietary solutions Provider’s partnerships and investments in the software product engineering domain Software Product Engineering Services Outsourcing Excellence

Gen AI’s emergence marks a significant milestone in technology, enabling machine capabilities to emulate human intelligence and creativity. Its transformative potential and close relationship with Large Language Models (LLMs) are encouraging individuals and enterprises to reimagine decision-making processes and content creation strategies. Gen AI also offers promising opportunities for enterprises seeking to expand their operations beyond traditional AI and Robotic Process Automation (RPA). Hence, technology providers are introducing an array of related tools and LLMs. However, amid this excitement, enterprises may rush to adopt gen AI without carefully considering its benefits and the necessary investments. Previous technology waves indicate that such initiatives often conclude unfavorably, failing to deliver tangible business value. To navigate this landscape effectively, enterprises should compare the advantages of gen AI against alternative solutions, carefully select LLMs, optimize them for maximum business impact, and choose appropriate deployment models. By doing so, they can unlock the full potential of gen AI while mitigating risks and maximizing returns. Through strategic planning and thoughtful execution, enterprises can seize new opportunities and drive innovation in this era of gen AI. In this report, we offer practical advice to businesses, highlighting key areas where gen AI can outperform traditional AI and RPA. The report also advises on selecting the appropriate LLMs tailored to specific requirements and provides strategies for enhancing LLM performance to achieve tangible business benefits. Additionally, it discusses considerations for determining the optimal deployment model for LLMs, aiding enterprises in maximizing the value derived from their gen AI initiatives. Scope All industries and geographies Contents In this viewpoint, we examine: Gen AI’s significant benefits over AI and RPA Key factors to consider when selecting an LLM Strategies for optimizing and fine-tuning LLMs to realize business value Considerations for choosing the most suitable deployment model for LLMs Membership(s) Engineering Research and Development Software Product Engineering Services Sourcing and Vendor Management  

In the product engineering space, software remains the largest area of expenditure, maintaining its upward trajectory despite a slower pace. This deceleration is primarily due to recessionary headwinds, geopolitical conflicts, talent shortages, and delayed decision-making within enterprises. Amid this macroeconomic turbulence, several themes continue to drive software R&D forward. These include transitioning to platform-based business models, increasing the adoption of AI- and gen AI-augmented secure products, prioritizing sustainability, and enhancing customer and developer experiences. The shift toward these transformative themes, coupled with the current economic climate, is significantly altering enterprises’ expectations from their providers. Rather than solely seeking providers focused on offering engineering talent, enterprises now aspire to engage with strategic partners capable of delivering savings, speed, and innovation simultaneously. This report, the fifth edition of Everest Group’s Software Product Engineering Services PEAK Matrix® Assessment, evaluates 43 engineering service providers, positioning them on the PEAK Matrix® framework and offering insights into enterprise sourcing considerations. Scope Industry: software product engineering Geography: global The study is based on RFI responses from providers, interactions with their software product engineering services leadership, client reference checks, and an ongoing analysis of the software product engineering services market Contents In this report, we examine: Everest Group’s services PEAK Matrix® evaluation of engineering service providers associated with software product engineering services The characteristics of Leaders, Major Contenders, and Aspirants Providers’ market impact and vision and capabilities Providers’ key strengths and limitations Membership(s) Software Product Engineering Services Outsourcing Excellence

As we step into 2024, global macroeconomic stability is shrouded in great uncertainty. Ongoing macroeconomic events, trade wars, and an economic slowdown are impacting businesses worldwide, compelling them to approach business growth in the upcoming year with caution. Most organizations are striving to minimize cost/price pressures in response to growing inflationary trends. While the demand and supply gap for conventional engineering skills has eased, new advances in AI have once again resulted in a scarcity of skilled talent. More importantly, there is a shift caused by multiple industries looking to explore and implement generative AI across their value chain, signaling a substantial change in traditional talent requirements. Today, the challenge lies in navigating these uncertain times while addressing the talent gap. This report offers insights into how leading global enterprises have been impacted in 2023 and outlines their strategies for fostering innovation with resilience in these uncertain times. Scope All industries and geographies Services: engineering Contents In this report, we examine: Identify top business challenges and vital business model changes in 2024 Study the outlook and priorities for 2024 Explore key themes that define the enterprise software industry Examine changes to provider portfolios and key provider-related challenges and priorities Membership(s) Engineering Research and Development Software Product Engineering Services Outsourcing Excellence