German IT services competitive landscape

The German IT services market has been a vibrant space during 2007, particularly in the outsourcing segment. In view of the mounting pressure on prices and margins, vendors are rethinking their strategy along the lines of productising services, outsourcing and global sourcing. We interviewed leading IT services players to examine their unique challenges in the German market and to determine how their strategy for the German market might vary from their overall global strategy.

In most cases, the vendors' local strategies are actually congruent with their worldwide approach. However, due to the unparalleled importance of mid-sized companies in Germany, some vendors use this market as a test bed for new approaches to make inroads into this market segment, which they then aim to export to other geographies. The current good economic climate has fostered accelerated spending on larger IT projects, which have often involved preparatory consulting assignments. Therefore, vendors have benefited from a rising demand for consulting needs.