- The market addressed by ER&D Service Providers stands at ~USD 80 Billion, at 8% Y-o-Y growth
- Digital Engineering Spend in 2019 is estimated to be USD 404 Billion, accounting for ~30% of the overall ER&D Spend and is expected to grow at a CAGR of 19% to reach USD 1.1 Trillion by 2025
- Services-led verticals will contribute 1/5th of the global Digital Engineering Spend by 2025
/PRNewswire/ — Zinnov, a leading global management and strategy consulting firm, released its annual ratings for ‘Zinnov Zones for ER&D Services – 2019’today. This pre-eminent rating is aimed at enabling business leaders across industries to make informed decisions in their partner selection across geographies for their Engineering and R&D-led product and service initiatives. The study analyzed the global Engineering R&D (ER&D) space and estimated that the Global ER&D spend by organizations worldwide stands at USD 1.4 Trillion in 2019, and is expected to grow at a CAGR of 7% to cross USD 2.2 Trillion by 2025.
The study titled, ‘Zinnov Zones for ER&D Services – 2019,’ highlighted that though the global ER&D spend is growing at a modest 7%, Z1000 Enterprises in North America and Western Europe are the dominant spenders at 45% and 28%, respectively. Also, the study highlighted that Software & Internet vertical is the largest contributor to ER&D Spend, with USD 196 Billion and also contributes ~40% to the overall Digital Engineering spend, driven by investments in Digital Engineering Stack and new-age technologies such as AI/ML, AR/VR, Big Data Analytics, and Blockchain.
Zinnov, for the first time, has done a comprehensive assessment of 22 Global Engineering Service Providers with overall ER&D Services revenue below USD 150 Million to evaluate their ER&D capabilities across 30+ parameters and sub-parameters and released “ER&D Zones – Small and Medium Service Providers.”
The study noted that the growth in Digital Engineering is accelerating across industries and is led by Software & Internet, which accounts for USD 160 Billion and is expected to grow at a 22% CAGR to reach USD 527 Billion by 2025. Enterprises are making significant investments in Digital Engineering initiatives to continue to stay relevant. Services-led verticals such as BFSI, Media & Technology, Retail, Healthcare Payers & Providers, and Travel & Hospitality are rushing to build new products and services to drive differentiation, thereby creating ER&D opportunities for providers. With ER&D Services consistently outpacing IT Services, Large IT Service Providers are betting on their ER&D capabilities to drive growth.
Speaking about the report, Pari Natarajan, CEO, Zinnov, said, “Global ER&D Spend is resilient and has witnessed growth despite slowdown and geo-political factors. Future spend will be fuelled by an increase in Digital Engineering spend across verticals. Nearly half of the global ER&D spend will be from Digital Engineering initiatives in the next 5 years. The integration of Engineering as a core function in services-led verticals has resulted in newer opportunities for Service Providers.”
“With Engineering Services viewed as the key lever to drive growth, large IT Service Providers are increasingly acquiring Engineering Service Providers and placing their bets on ER&D services. In order to succeed and garner a greater wallet share, Service Providers need to diversify and pivot their offerings around Digital Engineering services,” he added.
For this study, 50 Global ER&D Service Providers were assessed on their ER&D Services prowess and capabilities, across the following areas:
• Overall ER&D Zones 2019
• ER&D Zones – Small and Medium Service Providers 2019
• Design & Simulation Engineering
• User Experience Engineering
• Platform Engineering
• Quality Assurance Engineering
Verticals: Automotive, Aerospace, Construction & Heavy Machinery, Consumer Electronics, Consumer Software, Enterprise Software, Energy & Utilities, Industrial Automation, Medical Devices, Semiconductor, Telecommunication, and Transport
Service Providers assessed:
Accenture, AF, Akka Technologies, Alten, Altran, Aspire Systems, Bertrandt, Bristlecone, Capgemini, Caresoft Global, Cerium Systems, Cigniti, Cognizant, Cyient, Daffodil Software, Dextra Technologies, EDAG, eInfochips, Embitel, EPAM, e-Zest, GlobalLogic, Happiest Minds, Harman Connected Services, HCL, IAV, Infogain, Infosys, Itransition, KPIT Technologies, LTTS, Mindteck, Mphasis, Musala Soft, Net Solutions, PathPartner, Persistent Systems, Quest Global, R Systems, Sasken Technologies, Softdel, Sonata Software, Tata Elxsi, Tata Technologies, TCS, Tech Mahindra, Tieto, To The New, UST Global, VVDN Technologies, Wipro.
About Zinnov Zones:
Zinnov Zones is an annual rating published by Zinnov which rates Global Service Providers based on their competencies, capabilities, and market success. Since 2009, Zinnov Zones (previously known as GSPR – Global Service Provider Ratings) has become one of the most trusted reports globally, for both enterprises and Service Providers to better understand the vendor ecosystem across multiple domains such as Digital Transformation, ER&D Services, IoT, RPA, and Media and Entertainment.
This is the eleventh consecutive year that Zinnov has assessed Service Providers for their ER&D capabilities. The detailed ratings and contact information of service providers are available on https://zinnovzones.com/
Founded in 2002, Zinnov is a global management and strategy consulting firm, with presence in Santa Clara, Houston, Bangalore, and Gurgaon. Over the past 17 years, Zinnov has successfully consulted with over 250+ Fortune 500 customers to develop actionable insights that help them in their transformation journeys. With core expertise in Product Engineering and Digital Transformation, Zinnov assists clients by:
• Providing research and strategy consulting for Technology Service Providers in the areas of Product Engineering and Digital Transformation;
• Enabling companies to develop and optimize a global engineering partner strategy to achieve higher throughput, innovation, productivity, and cost savings;
• Growing revenue for companies’ products and services in India and other emerging markets;
• Helping MNCs expand and/or consolidate their globalization footprint.
With their team of experienced professionals and research teams, Zinnov serves clients from across software, semiconductor, consumer electronics, travel and hospitality, automotive, storage, telecom & networking, healthcare, banking, financial services, and retail verticals in US, Europe, Japan, and India.