The 25 largest IT consulting firms in Germany have performed well last year, growing their combined revenues by 3.2% to a total of €9.8 billion. IBM GBS, Accenture and T-Systems are with a distance the market leaders in the technology consultancy domain, holding a 40% share of the top 25.
Every year Lünendonk, a German-origin analyst firm, assesses the state of the IT consulting sector in the country, with a particular focus on the top of the market. The analysts look at amongst others the revenue, profit, and workforce of the 25 most important players*.
An analysis on Lünendonk’s data reveals that last year the top 25 IT consultancies and systems integrators jointly reaped revenues of €9.8 billion, which accounts for about a quarter of the German IT advisory and services market. The total number of professionals employed by the market leaders stands at just over 52,000 – roughly 1,700 more than the previous year – with IBM Global Business Services (6,800) and Accenture (5,850) the largest employers. Overall the combined revenue of the top 25 firms grew by 3.2%, while the average firm growth amounted to 7.2%.
In the top of the market there have some been shifts of power. 2013’s market leader T-Systems slipped to third spot following a 13% decline in sales as part of a company-wide realignment. IBM GBS is hence the new number #1, while Accenture climbs to second place on the back of a 10% growth in income. French-origin IT powerhouses Atos and Capgemini conclude the top five, although they have switched positions.
The remaining spots in the top 10 have remained relatively stable, with msg systems, CSC, Hewlett-Packard and Allgeier maintaining their top 10 position. Arvato Systems jumps into the top 10, holding 9th spot, thrusted by an 18% growth rate, taking its revenue to €337 million, however, still less than a quarter of IBM GBS’s income.
The positions 11 to 20 include several large global firms, including Indian companies Infosys and Tata Consultancy Services, Canadian-origin CGI (building on the acquisition of Logica in Germany) and US-headquartered NTT Data. Itelligence, a Bielefeld-based IT consultancy, can call itself the fastest grower of the top 25, bringing it to the 15th spot in this year’s edition. Reply Group, number 24 on the list, is the only newcomer in the ranking (after two years of absence), displacing Cologne-headquartered Seven Principles.
Overall, 18 of the top 25 IT consulting firms managed to increase their sales, of which 10 companies even managed to book a growth of 10% or more. One firm kept its revenue on par (SQS), while six IT advisories had to face declining sales. The positive development of the top 25 players is according to the authors closely related to the improving economic climate and the growing demand for IT transformations. “Most client organisations are currently investing in technology and expanding their digital strategy elements such as Mobile, Big Data and Cloud,” write the researchers.
Going forward the German IT consulting market is forecasted to continue its growth trajectory, with the top 25 players well positioned to capitalise on the potential. "Well-established IT consultancy firms will in the long run benefit from a stronger pipeline of orders, which will reflect in the sales figures of companies,” state the authors, although no clear-cut growth forecast has been released for 2015 and beyond.
Audit, tax and financial advisory
Earlier this month, Consultancy.uk featured a similar analysis on the audit, tax and financial advisory landscape in Germany, a market that is worth nearly €6.4 billion.