Summary of our market study

In France, the outsourcing market is estimated at 1.3 billion euros

The global IT outsourcing market has experienced an upward trend, particularly characterized by the growth of the "as-a-service" model, which gained momentum during thethe "as-a-service" model, which gained momentum during the COVID-19 pandemic due to the increased need for cloud-based solutions that support remote working and e-commerce.

By 2020, over 67% of businesses have opted for outsourcing, with a notable shift from traditional managed services to cloud-based services, which offer resilience, adaptability and flexible contracts.

In France, annual contract value (ACV) rose by 15% to €1.3 billion, but the managed services segment declined. Despite the decline in managed services, spending on as-a-service arrangements increased.

worldwide, ACV reached $55.7 billion. The move towards cloud-based models and the need to comply with data protection regulations are driving this expansion.

Trends in demand for outsourcing services in France

The outsourcing market in France is demonstrating steady growth and structural changes driven by the digital transformation of businesses.

Digitization and digital transformation are the main forces driving demand for outsourcing, as they result in a growing need for high-performance IT systems, modernization of existing systems and enhanced security measures.

Companies are increasingly opting for outsourcing to achieve these improvements. A study by research institute Whitelane revealed a growing interest in outsourcing, with almost 60% of companies surveyed planning to maintain or increase their outsourcing activities.

Cost reduction remains a key motivation for outsourcing, with studies estimating cost savings of around 31% over one year to 33% over three years as a result of outsourcing.

The profile of outsourcing customers is expanding beyond large corporations to include small and medium-sized enterprises (SMEs). Analyst firm Canalys has observed a 25% annual increase in spending by SMEs on managed services in France.

The financial sector, as well as the utilities and professional services sectors, have been important areas of growth in the outsourcing market. Sectors such as telecommunications, media, healthcare and pharmaceuticals are also actively embracing outsourcing, and offer high growth potential.

The trend towards "as-a-service" models, mainly in cloud computing, is becoming more important, while managed services are in decline.

The coronavirus crisis has accentuated this shift towards "as-a-service" offerings, driven by the need for cloud-based solutions to support remote working and adapt to market uncertainties.

Prices for outsourcing services vary, with monthly maintenance costs starting at 20 euros per workstation and 50 euros per server.

The main market players shaping the IT outsourcing landscape

Multinationals

  • Capgemini: Originally from France, Capgemini has become a global powerhouse in the IT services sector. n.
  • Orange Business Services: B2B division of the Orange Group
  • Atos: global player

European heavyweights :

  • Sopra Steria: European leader in consulting, digital services and software development

Dynamic French competitors :

  • GFI Informatique
  • Resadia
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Summary and extracts

1 Market overview

1.1 Definition and scope of the study

Outsourcing refers to the outsourcing of information systems management. It involves entrusting an external service provider with the management, operation, security and maintenance of your IT assets.

The IT sector covers three branches: software publishing, technology consulting and IT services.

The IT services branch itself comprises three categories: consulting services (outside expertise relating to the improvement of information systems), systemsengineering and integragration (design and development of information systems) andoutsourcing (management of information systems).

Outsourcing covers a wide range of services , the nature and scope of which can vary from one service provider to another.

However, it is possible to identify the main types of outsourcing:

  • Application
  • Operational
  • Global
  • Partial

In addition, outsourcing is often equated with managed services, whereas historically, outsourcing has been based on a reactive, curative approach.reactive approach (the outsourcer does not anticipate problems, but manages those already present), while managed servicesmanaged services, on the other hand, take a proactive approach (the managed services provider identifies anomalies before they create problems, and supports the customer in developing its IT system).

In this study, we will consider outsourcing as IT outsourcing in the broadest sense, comprising two segments: managed services and as-a-service.

In 2022, in France, the annual value of digital service companies (outsourcing, cloud, IT, etc.) increased by 15.5% compared to 2021. While the outsourcing market has been growing strongly for several years, and can therefore be described as structural, it is changing both nationally and globally. Indeed, managed services are experiencing a negative dynamic, in favor of services-as-a-service, whose growth is likely to be further reinforced as a result of the coronavirus crisis.

In 2008, the emergence of new technologies, in particular remote servers (Cloud), initiated a transformation of the outsourcing market. In addition to the option of using a service provider to manage information systems (managed services), there is now the possibility of using a service provider who remotely manages information systems and delivers them to the customer via an Internet connection (as-a-service).

Managed services providers can carry out the tasks entrusted to them either on their own premises, if the customer's system is hosted there, or via a link enabling remote intervention, or on the customer's premises.

Originally, outsourcing was motivated by a desire to reduce costs. Nowadays, the aim is to improve IT systems to optimize performance and focus on core business.

By 2020, over 67% of companies had opted for outsourcing to simplify their network and IT management. This trend was confirmed in 2021, with 70% of companies announcing that they wished to make greater use of outsourcing services[Infologo, ITStack]

1.2 A fast-growing global market

The global outsourcing market can be measured by ACV (***), which refers to the value of outsourcing contracts for the management of information systems. In ****, all outsourcing contracts worldwide were worth ***.* billion US dollars, and the market was estimated at *** million US dollars in ****.

Indeed, the global outsourcing market is characterized by ...

1.3 A French market in line with global growth

The outsourcing market is in very good health. All software management, cloud, digital consulting engineering and digital services industries will see their sales grow in ****. The market is estimated to have reached record sales of **.* million euros in ****. The sector enjoyed growth of *.*% in ****, which should continue in **** with an estimated ...

2 Demand analysis

2.1 Demand trends and drivers

The primary factor driving demand for outsourcing is digitalization and digital transformation. IBM shows the effects of digital transformation according to IT decision-makers from a panel of *** companies. Digital transformation is leading to a growing need for high-performance IT systems, modernization of existing systems and enhanced security, all of which are ...

2.2 Customer profile

For a long time, the clientele of outsourcing providers consisted mainly of large companies. Today, however, the benefits of outsourcing are considered to apply to small, medium-sized and even very small businesses. Indeed, outsourcing is well suited to smaller companies, as technological advances now make it possible to improve their information ...

2.3 The effect of the Covid-19 crisis

The coronavirus epidemic has accelerated an already existing trend, namely the development of the service-as-a-service model to the detriment of managed services. The restrictive measures and confinement in France have in fact reinforced the decline of managed services in favor of service-as-a-service, whose growth has particularly accelerated.

The epidemic has slowed ...

3 Market structure

3.1 Market organization

The definition of outsourcing has evolved in step with innovation and the emergence of new technologies. Indeed, multiple concepts have emerged, and the vocabulary has become increasingly complex. However, it is possible to identify two forms of outsourcing. Managed services, as the outsourcing of information services management, can be broken down ...

3.2 ESN, the giants of the sector

The traditional ESN model

ESNs (***), are the main players in the outsourcing market, and generally offer IT services that go beyond outsourcing alone.

In ****, ESNs in France reported *% growth in sales, compared with ****. The year **** also saw growth of *.*% compared to ****, so the sector seems to be enjoying solid growth since ...

3.3 The rise of the service model

ESNs are particularly likely to offer an "As a service" model. The "As a service" model offers services in return for subscriptions, rather than buying the product directly. The advantages for the customer are numerous: constant product performance, the possibility of unsubscribing at any time... For the company, this system offers ...

4 Offer analysis

4.1 Types of outsourcing services

Global outsourcing

Global outsourcing involves outsourcing management of the entire information system.

Partial outsourcing

Partial outsourcing involves outsourcing the management of a part of the information system. There are several categories of partial outsourcing.

Application Management (***): concerns the development, maintenance, operation and upgradability of a company's software assets. Operations outsourcing: covers ...

4.2 Prices

Prices for outsourcing services can vary according to a number of criteria, the main ones being: the scope of intervention (***).

However, it is possible to give a rough idea of prices.

Outsourcing companies offer monthly, hourly or flat-rate prices. Monthly fees start at €** per workstation, and €** per server for simple maintenance. ...

4.3 Innovation: a major challenge for our offering

NSEs rely on innovation to enhance and differentiate their offering. There has been a significant increase in the use of innovation in the marketplace to enhance a company's value. As the NSE market is under construction, it is particularly conducive to innovation.

Young ESN and outsourcing companies and start-ups with innovative ...

4.4 A trend from outsourcing to CSR

As in many other sectors, ESN and outsourcing are faced with the issue of technology pollution. While the metaphor of the cloud is often used to mean that these technologies do not require physical supports for the user, in practice they do require physical supports for the vendor, and greedy servers ...

5 Regulations

5.1 Regulations

The outsourcing contract The outsourcing contract is an SLA (***) between the outsourcer and the customer, defining the quality of service to be provided by the service provider. The contract includes both basic and specific clauses. The standard clauses include Identity of service provider and customer Conditions of duration, renewal and termination Insurance Terms ...

6 Positioning the players

6.1 Positioning the players

Source: ****

  • Sopra Steria
  • Orange Business Services
  • XEFI
  • DRI
  • Atos Eviden
  • Koesio Groupe

List of charts presented in this market study

  • Annual value of outsourcing contracts (LCA)
  • Growth in the various outsourcing sectors
  • Over the next two years, what is your strategy for outsourcing your information systems?
  • Reasons why companies outsource their information systems, according to customers
  • What impact will digital transformation have on your company's IT over the next 24 months?
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Latest news

Thales ready to invest in defense information systems and eavesdropping for Atos - 03/05/2024
  • - Value of recent Imperva acquisition by Thales: €3.6 billion.
  • - Thales' position in the world cyber rankings following the Imperva acquisition: Top 5.
  • - Estimated annual revenues for MCS (Mission Critical Systems): €200-300 million.
  • - Estimated total portfolio of Atos' BDS (Defense and Security) division: 1.5 billion euros.
Lyon-based Xefi boosts its digital growth - 02/02/2024
  • - The company is investing 60 million euros in a new site in Rillieux-la-Pape, near Lyon.
  • - The company currently has 2,000 employees, but plans to increase this to 700 at the new site within 18 months.
  • - The future 17,500 m2 site will comprise four buildings, including offices for the 500 head office employees, a sixth 80-bay data center, a brasserie and a training center.
  • - The company has five data centers, two of which are HDS-certified (for healthcare data hosting).
  • - The company has sales of 355 million euros, with growth of 16% by 2023 and 100% by 2020.
  • - It has around 180 branches, including 160 in France, and serves 100,000 customers.
  • - Xefi is expanding in Europe, with branches in Belgium, Switzerland and Spain.
  • - The company plans to have 250 branches in France by 2026 and 400 in Europe, expanding into Italy, Germany and the Netherlands.
  • - One of the company's development processes is franchising, enabling proximity to customers.
  • - In December 2021, Xefi took over Novatim, a company based in Courbevoie, France
AI training, diversification: the cultural revolution continues at Orange Business - 13/11/2023
  • Orange Business annual sales: 8 billion euros.
  • Number of employees concerned by the new training process: 5,000.
  • Annual growth rate of AI projects: 35%.
  • Proportion of sales generated by digital services: 44%.
Atos: an explosive case - 30/08/2023
  • Atos has entered into exclusive negotiations with EP Equity Investment to sell Tech Foundations, its indebted historical division.
  • The Atos group has 110,000 employees.
  • The proposed plan involves Atos becoming "Eviden" and remaining listed on the Paris Stock Exchange, while the "Atos" name and outsourcing activities will be sold to Kretinsky and delisted.
  • A capital increase of 720 million euros is planned, as well as the acquisition of a 7.5% stake in Eviden by Kretinsky
Atos hopes to turn the page on the crisis thanks to Kretinsky - 02/08/2023
  • Daniel Kretinsky has announced plans to buy Atos' outsourcing business.
  • He has spent just over 200 million euros to become the largest minority shareholder in Atos' Eviden division, with activities in cybersecurity.
  • Atos has divested itself of a business that accounts for more than half of its sales, but is in decline and loss-making.
  • In June 2022, Atos implemented a radical restructuring plan with 7,500 job cuts and a bill of 1.1 billion euros.
  • The outsourcing activities of Atos (taken over by Daniel Kretinsky) were placed in an entity called Tech Foundations.
  • The acquisition by Kretinsky concerns all Atos outsourcing activities, which generated sales of over 6 billion euros in 2022, and has 52,000 employees.
  • The acquisition cost is symbolic, but includes the assumption of all liabilities (nearly 10 billion euros) of the branch.
  • Atos will be renamed Eviden and will remain listed on the stock exchange.
Sale of historical activities to Daniel Kretinsky - 01/08/2023
  • The group finalizes the demerger of its ailing historical outsourcing business (Tech Foundations) from its much more dynamic cybersecurity business (Eviden).
  • The French IT group confirms its plan to sell its historic outsourcing activities to Czech billionaire Daniel Kretinsky, valued at 2 billion euros, and to restructure around the activities of its subsidiary Eviden, which it will rename.
  • Valuation of Atos' historical outsourcing activities: 2 billion euros.
  • Number of IT infrastructure employees (Tech Foundations): 52,000
  • Total group size: 110,000 employees.
  • Eviden's average annual growth target: 7% of sales over the period 2022-2026.

Companies quoted in this study

This study contains a complete overview of the companies in the market, with the latest figures and news for each company. :

Sopra Steria
Orange Business Services
XEFI
DRI
Atos Eviden
Koesio Groupe

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