Gartner Survey Shows IT Services Providers in Fierce Battle with Top-Tier Technology Vendors for Brand Recognition in Services Industry
STAMFORD, CONN., October 6, 2003 — The IT services marketplace is a highly competitive and fragmented market with IT service providers competing with top-tier technology vendors for market share and mind share. In this type of environment, a strong brand can play an important role in differentiating a company from the rest of the pack, according to Gartner Inc. (NYSE: IT and ITB).
In April and May of 2003, Gartner surveyed 197 buyers and influencers of IT services to determine which brands were most closely associated with specific categories of IT professional services — business and IT consulting; systems development and integration; IT outsourcing; and business process outsourcing.
The survey showed that IBM, Hewlett-Packard and Microsoft ranked in the top 10 in terms of first to mind and total unaided responses in the business and IT consulting category, even though none of the three had a strong footprint in business consulting. IBM was the dominant brand (in terms of both first to mind and total unaided awareness) in three of the four categories (see Table 1).
Consistent with the uniquely fragmented nature of the IT professional services market, however, more than 188 different IT product and service providers were top of mind with survey participants in the systems development category. A total of 159 different providers were top of mind in business and IT consulting. Even so, "don't know" was among the top five in every category. Gartner analysts believe this is a good news/bad news situation for IT professional services providers.
"For providers entering the market, or established and/or boutique players who have historically foregone brand building, there is still plenty of mind share to be had. Outside of IBM, no one provider overwhelmingly dominated any categories tested," said Christine Adams, principal analyst for Gartner. "However, the days of the IT professional services stealth brand are ending. As major technology brands extend their reach into professional services, the niche consultancies that have always had a home in IT services are elbowed aside in terms of market perception. Stealth brands only thrive when everyone else is playing by the same rules."
Table 1
First to Mind Vendors by Category (Total Unaided Awareness)
Rank
Business and IT Consulting
Systems Development and Integration
IT Outsourcing
BPO
1
IBM (117)
IBM (97)
IBM (106)
Don't Know (120)
2
EDS (32)
Don't Know (53)
EDS (70)
ADP (53)
3
Don't Know (26)
EDS (24)
Don't Know (60)
IBM (37)
4
Accenture (25)
CGE&Y (17)
None (28)
None (32)
5
Deloitte (24)
Accenture and Microsoft (15)
Hewlett-Packard (25)
EDS (15)
Note: Number of respondents equals 197. Multiple responses permitted. Based on total unaided responses.
Source: Gartner Dataquest (July 2003)
The survey also found that leading Indian offshore providers commanded a large degree of unaided awareness. Survey participants mentioned five Indian-based companies — Infosys Technologies, Patni Computer Systems, Satyam Computer Services, Tata Consultancy Services, and Wipro Technologies — across the four services categories presented in the study. By category, the offshore providers did best in systems development and integration, receiving 10 unaided mentions, meaning that five percent of participants named an offshore provider in association with this category.
"Failure to invest in a services brand does more than limit awareness — it robs a provider a critical vehicle through which service expectations might be conveyed, purchase risk minimized, and confidence in service quality and satisfaction reinforced," Adams said.
A strong brand and the customer pull it creates are key determiners of an IT service provider's ability to form crucial strategic alliances with other technology players. Gartner analysts said that top-line growth is the main driver of partnering in IT. Market leaders with strong brands and customer credibility are better positioned to deliver this result than lesser-known rivals.
Additional information is available in the Gartner Focus Report Brand Awareness and Strength in IT Professional Services, Part I. This report examines IT services buyers' unaided brand awareness and the degree to which certain brands are associated with specific categories of IT professional services. This research can be purchased on Gartner's Web site.
Gartner analysts will provide additional analysis on the IT services market at Gartner Symposium/ITxpo 2003, to be held October 19-24 in Orlando, Florida. Gartner Symposium/ITxpo is the IT industry's largest and most strategic conference, providing business leaders with a look at the future of IT. For more details or to register for Gartner Symposium/ITxpo 2003, visit www.gartner.com/us/symposium/us or call 1-800-778-1997. Members of the media can register for the event by contacting Maria DiMasi at 212-699-2734 or e-mailing GartnerEvents@middleberg.com.
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