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

The viewpoint talks about the shifting demand in the Application Management (AM) space. Despite its importance, being a major enterprise spend, AM is considered a commoditized service. In most cases, it is considered as reactive and restricted to keeping the “Lights-On”. Thus, many enterprises see it as a non-value expenditure, and expect unabated year-on-year cost reductions from the service providers.


In this report, Everest Group has outlined the major trends that are reshaping in traditional application services, including some of the key challenges that the service providers are facing today in responding to complex enterprise demands. The report includes the following:

  • Assessment of some of the major factors that have impacted the traditional application services proposals as well as delivery:
    • Changes in pricing mechanism in AM deals
    • The revenue shift to cloud providers
    • Customer expectations from AM
    • Other factors that have impacted AM
  • Measures that the AM service providers should take to adapt to the changing requirements

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