Application Outsourcing – Annual Report 2014: “Rationalization Goes Hyper”

27 May 2014
by Ashwin Venkatesan, Chirajeet Sengupta, Jimit Arora, Yugal Joshi



Buyers are having a harder look at their applications portfolios than ever before, as they aspire for greater business agility and reduced management costs. Adoption of next-generation technologies and automation is enabling enterprises to achieve effective application rationalization, cutting across the entire IT function. Enterprises are thereby able to free up a significant chunk of the IT budget, a majority of which is currently dedicated to core operations, maintenance, and support.

Everest Group’s annual research on application services provides fact-based perspectives on buyer adoption by geography, industry, and revenue size. It analyzes major trends that are shaping the applications market and the outlook for the next year. It also sizes the IT services market in terms of application outsourcing and consulting services.

Buyer Adoption Trends


  • IT service market size (split across applications, consulting, infrastructure service, geography, and industry verticals)
  • Market share of leading IT service providers in applications, consulting, and infrastructure service
  • AO buyer adoption trends across geography, industry verticals, and revenue size
  • Key trends shaping the AO market (hyper-rationalization, and declining AO pricing)
  • Outlook for 2015

AO Pricing Engagements


This annual research deep dives into the application outsourcing landscape. It provides data-driven facts and perspectives on the overall market. The research covers AO adoption trends, demand drivers, and buyer expectations. The research analyzes buyer challenges, trends shaping the market, and also provides an outlook for 2015 for the broader IT as well as AO market.

For example, the section on “AO Overview” analyzes the following:

  • Deal trends (new vs. renewals)
  • Deal size and duration
  • Scope of services (e.g., application development, maintenance, and consulting)
  • Pricing trends
  • Delivery location

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