PAC Analyst Hot Takes 2024 – Cloudification of Business Applications

Our Head of Business Applications Practice,  Joachim Hackmann, discusses the Cloudification of Business Applications in this week’s episode of the “PAC Analyst Hot Takes” series.

The video will give you insights into public cloud deployments, including SaaS native applications in critical business areas like ERP. 

If you are interested in understanding this topic better, you can schedule a meeting with Joachim Hackmann.

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PAC Analyst Hot Takes 2024 – Key revenue drivers: Cloud and GenAI

Don’t miss out on the latest insights in our “PAC Analyst Hot Takes” series.💡 Join our Principal Analyst, Frank Naujoks, as he delves into the key revenue drivers shaping today and tomorrow: Cloud and GenAI.

Ready to dive deeper into these topics? Schedule a meeting with Frank Naujoks now.

PAC compares services providers in its latest RADAR on SAP services in Europe and Germany

Munich, February 7, 2024 – The demand for SAP services remains very high. For most companies, the migration to SAP S/4HANA is still outstanding while the end of standard maintenance for SAP ECC, scheduled for 2027, is approaching. At the same time, companies have to decide on their future direction with regard to issues such as their deployment model (private cloud, public cloud) or process modernization. Against this background, the PAC RADAR “SAP Services in Europe and Germany 2024” helps companies choose the right provider.

For this year’s PAC RADAR “SAP Services in Europe and Germany 2024”, PAC did an in-depth analysis of 24 leading services providers, evaluating them in 16 different RADAR segments according to about 100 individual criteria. The results are presented in RADAR graphs (see sample graph for SAP S/4HANA-related services) that provide a quick overview of the relevant players. The IT services providers evaluated in the PAC RADAR series on SAP services in Europe and Germany 2024 include, for example, BTC, DXC, Eviden, Reply and T-Systems.

Services providers have increased the number of their consultants

The services providers assessed in this PAC RADAR series account for nearly 50% of SAP services market volume in the EMEA region. They are part of a very heterogeneous vendor landscape ranging from well-established international services providers with tens of thousands of certified SAP consultants worldwide and substantial offshore and nearshore capabilities to Germany-focused providers with a few hundred, mainly domestic, SAP experts. Almost all providers in this year’s analysis consider themselves to be full-service providers. However, the RADAR analysis shows that there are some vendors with a focus on infrastructure services (e.g., hosting) or on SMB clients.

“The services providers have substantially increased their SAP-related resources over the past few years. The analysis of the RADAR data shows that the number of trained SAP experts grew by an average of more than 25% globally between 2021 and 2023,” says Joachim Hackmann, Principal Analyst and Head of the BAS Practice at PAC. “Resources in Europe and Germany expanded to a slightly lesser extent, which suggests that providers invested more heavily in the expansion of nearshore and offshore resources”.

A changing vendor landscape for hosting services

The fact that SAP, with programs such as RISE with SAP, is pushing its customers to switch to cloud-based deployment models is giving a boost to those hosting services that are based on the major hyperscale public clouds (AWS, Microsoft Azure, and Google Cloud). “The strong demand for public cloud migrations has had a massive impact on the competitive landscape in the SAP hosting space. Established hosting providers as well as systems integrators, which used to be positioned in the C&SI and AM services markets in the past, offer end-to-end SAP operations, i.e., a combination of cloud management and SAP operations”, points out Karsten Leclerque, Principal Analyst and Head of the Infrastructure & Cloud Services Practice at PAC. “Still, not all SAP systems by far will be migrated to public cloud platforms. Private, or at least hybrid, architectures will remain highly relevant”.

The new PAC RADAR series

The PAC RADAR is an effective tool for the holistic evaluation and visual positioning of software vendors and IT services providers on local markets. With the help of predefined criteria, PAC evaluates and compares providers’ strategies, development, and market position, in addition to their performance and competencies within specific market segments. Each PAC RADAR focuses on a specific IT market segment, such as SAP Consulting & Systems Integration, SAP Application Management, SAP Hosting, and SAP S/4HANA-related Services. 

The PAC RADAR is supplemented by a dynamic tool that allows user companies to weight all evaluated criteria in line with their specific preferences. For instance, the provider long list this tool compiles for a midsize company looking for a services partner for SAP S/4HANA migration may differ greatly from the list generated for a global corporation looking for a services provider to migrate and operate a complex SAP environment. 

Webinar – Combining generative AI and automation to boost service desk efficiency

Tue, Feb 27 | 11:00 AM – 11:45 AM | live event in french

Following on from its regular publications on the subject of the adoption of AI and Generative AI, PAC will have the pleasure and honour of sharing its independent vision of the AI GenAI market in France and an internal RETEX for its own activities. This webinar will also be a unique opportunity to hear from experts at Konverso and COLAS about real-life examples of how AI can be used in service activities, and to benefit from their best practice and advice on how to approach this type of project.

Who will be there:

PAC Analyst Hot Takes 2024 – migration to SAP S/4HANA

The topic of migrating to SAP S/4HANA is currently gaining popularity in the software and IT services market. In this week’s episode of the “PAC Analyst Hot Takes” series, our Senior Analyst, Sidney Siegertsz, discusses the challenges businesses face during this process and reveals lesser-known solutions to make the migration easier.

To gain a better understanding of the insights into SAP S/4HANA migration drivers, check out our latest Market Figures & Forecast for SAP-related services .

PAC Analyst Hot Takes 2024 – AI Usage in Cybersecurity

Our Head of Cybersecurity Practice, Wolfgang Schwab, talks about the use of AI in cybersecurity in the latest episode of PAC Analyst Hot Takes. 

In the video below, you can discover more about the shift from individual hotspot solutions to security mesh. 

If you want to explore this topic in greater depth, you can arrange a meeting with Wolfgang Schwab.

PAC evaluates 15 sustainability platforms for the manufacturing industry

Sustainability Platforms Benchmark 2023: 
Who are the “best in class” platform providers in Europe?

  • Manufacturers Are Urged to Embrace Sustainability: PAC highlights the imperative for manufacturers to integrate sustainability across all divisions in response to EU directives.
  • A Diverse Vendor Landscape: Vendors from different backgrounds and with varied specialities are competing for shares in the evolving market for environmental sustainability solutions.
  • Rapid Growth of the Sustainability Software Market: Despite its current size, PAC believes that software and IT services related to environmental sustainability will grow fast in the coming years. Projected growth for Germany, for instance, is 37.7% in 2024, which reflects strategic investments and potential market shifts.

Munich, January 10, 2023 | The European analyst firm PAC (Pierre Audoin Consultants) has again looked at the providers of open digital platforms for the manufacturing industry. This time, 94 platform vendors active in the European market were reviewed across 9 topics. The focus of the INNOVATION RADAR has always been to differentiate between different platform concepts and evaluate newly emerging topics, one of them being sustainability.

The necessity to become more sustainable

Environmental sustainability is not a new topic. For decades, politicians and scientists have been discussing this subject, and international treaties such as the Kyoto Protocol of 1992 have certainly helped reduce greenhouse gas (GHG) emissions and slow global warming. However, the 2000s have shown that these initiatives were not enough. As consumers (especially the younger generations) are demanding more efforts to stop man-made climate change, the European Union has been adopting policies that support more sustainable business and consumption models. A year ago, the Corporate Sustainability Reporting Directive (CSRD) came into effect, and in late 2023, the European Parliament also approved the Corporate Sustainability Due Diligence Directive (CSDDD). Both are setting new standards that business leaders from all industries, including the manufacturing sector, must adopt.

To do so, manufacturers need the right tools to collect and analyse data on their environmental impact across all units. Companies do understand that sustainability cannot just be dealt with by a single department; instead, it is a principle that must be adopted and integrated across all divisions. This is also true for senior management, where PAC observes companies just hiring candidates with the necessary expertise and appointing Chief Sustainability Officers (CSO) instead of assigning sustainability to another C-level executive, like the CFO or CMO. 

“Manufacturers cannot ignore sustainability any longer. With the (upcoming) EU regulations, they not only have a regulatory obligation; it will also be easier to draw comparisons with competitors, i.e., their image, reputation, and competitive advantage may increasingly be at risk.”

The provider landscape

In the INNOVATION RADAR, PAC looked at companies with activities in Europe, including them in the evaluation if their platforms helped manufacturers with at least one of the following topics: carbon accounting, sustainability reporting, or applying principles of the circular economy. A total of 15 companies were analysed according to more than 30 criteria related to market strength and competence. 

IBM, Salesforce, and SAP achieved the highest scores in the INNOVATION RADAR. They all come from different backgrounds. Overall, PAC classified the considered providers in five categories. Salesforce and SAP belong to the typical business application providers, along with vendors like Microsoft, Oracle, and ServiceNow. These players are known for their solutions covering ERP, CRM, and other processes; they have made significant investments to improve their capabilities in sustainability. Then there are the sustainability specialists, such as Plan A, SmartHead, and WatchWire. These companies have always focused on sustainability (or even ESG) and have acquired deep expertise but have less market power than Salesforce and SAP. The next category is vendors like OneTrust and IntegrityNext, which are experts in governance, risk, and compliance and consider environmental sustainability as adjacent to these topics. Next, there are the CAD and PLM specialists, like Siemens. They have strong industry expertise and often focus on product carbon footprints (PCF), thereby also dealing with product design. The last group includes players such as IBM, Wolters Kluwer, and Visma who prefer to grow their sustainability business units by acquiring specialists (Envizi, Enablon, and SmartTrackers, respectively) and integrating and improving their sustainability offerings with the acquired capabilities. 

A market on the move

The landscape of platform providers for environmental sustainability as a whole is highly dynamic. According to PAC’s analysis, the market is still small, worth only about €590 million in Germany (vs. €42 billion for the entire German software & cloud platforms market). Nonetheless, the software & cloud platforms segment for environmental sustainability has the highest growth rate. PAC estimates that in 2024, the market will grow by 37.7% in Germany and will continue its strong expansion in the years to come. 

Given such impressive potential, it is not surprising that platform vendors have been quick to make investments to grab a piece of the cake and secure a leadership position for themselves in the market. As mentioned before, some software vendors have organically grown their sustainability know-how, while others have acquired some specialists, merging deep expertise with substantial market power. 

What about the other sustainability specialists? The assessment is mixed. Some companies seem well on their way to establishing themselves as benchmark players. Plan A is a very good example: specializing in carbon accounting software for all 3 scopes, the company has been able to raise $40 million in funding since its creation in 2017 and has prominent clients such as BMW, Flixbus, Société Générale, and the European Union. Some sustainability experts join forces to increase their market footprint; VERSO, sustainably, and Silvester Group, for instance, merged into one company under the name of VERSO. Other companies with interesting capabilities in environmental sustainability are acquired by more established vendors. Zeigo, for instance, the British provider of a supply chain decarbonization platform, was acquired by Schneider Electric. 

“Some of the biggest challenges for manufacturers are to sustainably manage the supply chain and scope 3 emissions as well as implement circularity. The former topic is addressed by many software vendors, while the latter topic is currently less of a priority.”

All in all, IT user companies still consider sustainability as a concept that they integrate because they have to. Meeting the requirements of regulators, consumers, and employees is what makes this topic so relevant for the software & IT services industry. The PAC INNOVATION RADAR on Open Digital Platforms has identified many of the market drivers dominating the topic in 2023, especially in the manufacturing industry. The considerable dynamic and fragmentation of the market lead PAC to believe that the picture will change over the coming months.

Genesys to Acquire Radarr Technologies

On January 22th, Genesys, the customer experience (CX) and contact center software company, announced the acquisition of Radarr Technologies, an AI-based social and digital listening company from Singapore. To manage their social media presence, many organizations today rely on solutions that are often disconnected from other customer engagement. By integrating the capabilities of Radarr Technologies into the Genesys Cloud platform, Genesys strives to help these organizations to engage with customers on social channels. Finally, according to Genesys, the Multilingual Sentiment Models within the Radarr Technologies solution will further strengthen the natural language processing (NLP) of the Genesys Cloud platform. The acquisition is expected to be closed in Q1 of FY 2025, which goes from Feb. 2024 to Apr. 2024.

Author:

Photo of Aida Oganesov, our IT Market Analyst
Aida Oganesov

Meet us @ ZohoDay 2024

February 6-9, 2024, McAllen, Texas

Zoho, a software company offering a suite of business applications, often hosts events and summits to showcase its latest products, share industry insights, and engage with its user community. ZohoDay is an event dedicated to celebrating Zoho’s achievements, providing updates on their software solutions, and fostering connections among users and experts.

Who will be there:

Photo of Franck Naujoks, our Senior Analyst
Frank Naujoks

China will flood the world with cars

Here are the proof points:

Fact 1: China installed more new industrial robots in 2022 than the rest of the world combined. We saw the same picture already in 2021. 

Fact 2: As you can see below many of these industrial robots have been installed in the automotive industry.

Conclusion: China is building huge production capacities in automotive. Large export volumes are the logical consequence.

Author:

Arnold Vogt

PAC Analyst Hot Takes 2024 – The sensitive GenAI trends for buyers and sellers

In this week’s “PAC Analyst Hot Takes” series, our exceptional Analyst, Iulia Sandut, sheds light on the more sensitive GenAi trends that buyers and sellers in the Software & IT services industry should be aware of. 

In the video, she discusses the risks and gains in the labour market associated with these trends. 

If you want to learn more about this topic, you can schedule a meeting with Iulia Sandut.

What remains after the WEF?

The WEF circus has moved on – the short-term corporate venues are disappearing from the Promenade again and things will soon be a little less busy again in Europe’s highest city.

Once again, two things were noticeable. With the exception of SAP, it was difficult to find any European heavyweights with their own venues. A reflection of the no longer so new New Economy. Asian and American players dominate the growth sectors – and also the week-long cityscape in Davos. The Arab presence is growing strongly – the petrodollars are being invested intelligently – also and especially in the education of their own citizens. For example, the United Arab Emirates has had a Minister for Artificial Intelligence, Digital Economy and Remote Work, Omar Sultan Al Olama, since 2017.

The hope remains that we will also see a few European hopefuls next year; artificial intelligence will also be dominant in 2025, and there are also a few exciting hopefuls from Germany. Aleph Alpha was at least able to score points in the media, and in the future will also be able to do so commercially; exciting start-ups such as Parloa may also be paving the way for a European comeback – the rest of the world is not asleep. That is definitely a lesson to be learned from this year’s WEF.

Author:

Photo of Franck Naujoks, our Senior Analyst
Frank Naujoks

THE CLOUD IN 2023: WHAT CIO HAVE TO SAY? [WHITE PAPER]

The cloud, whether for infrastructure (IaaS), platforms (PaaS) or software (SaaS), is now at the top of the agendas of Information Systems and Digital Departments and at the heart of the strategies of major French companies and public institutions.


To download the white paper “THE CLOUD IN 2023: WHAT CIO HAVE TO SAY?” click here [free access, in french]

This white paper was produced in partnership with HPE | Intel

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