Narrowing Choices in Traditional Application Services Deals
Challenges Being Faced by Service Providers in Application Management Contracts

3 May 2019
by Achint Arora, Prateek Gupta

In this viewpoint, we explore shifting demand in the Application Management (AM) space. Despite its importance as a major enterprise spend area, AM is considered a commoditized service – in most cases, enterprises view it as reactive, focused largely on “keeping the lights on.” As a result, many enterprises see AM as a non-value added expenditure and expect perpetual year-over-year cost reductions from service providers.


However, things are changing. In this report, we explain the major trends that are reshaping traditional application services, including key challenges service providers face today in responding to complex enterprise demands. Specifically, the report addresses:

  • An assessment of the major factors impacting traditional application services proposals as well as delivery:
    • AM deal pricing mechanism changes 
    • The revenue shift to cloud providers
    • Customer expectations from AM
    • Other factors that have impacted AM
  • Measures that AM service providers should take to adapt to the changing requirements

Page Count: 7