In this quarterly report, Avasant provides key information on IT services solution and pricing trends. The report covers market (buyer) perspective, macro trends from the service provider community, and finally, the pricing, solution, and staffing trends in the space. The report examines trends across services including infrastructure and cloud services, application services, and digital services. The geographic coverage is global, with a large share of data points from North America. The report builds on insights gathered through our enterprise interactions, ongoing market research, and data collection, as well as the AvaMark Price Benchmarking database.

In addition to pricing commentary, Avasant incorporates market data from providers through a number of sources, including public disclosures, market interactions, and deal data. This report also highlights the key trends in the market and Avasant’s viewpoint on the future direction of the industry.

Key buyer trends shaping the market:

• • IT operational spending growth by clients is strongest in a decade
  • The spend is focused on growth and transformation initiatives
  • Cloud, data, and digital are leading the IT spend
  • Security and apps spend is rising and data center spend is declining

Key service provider trends:

• • Revenue continues to increase for providers
  • Operating margins are under pressure
  • Price increase is a key conversation with clients, but clients expect net neutral impact
  • Providers are planning to offset high operating costs

Managed services pricing and solution trends:

• • Niche skills and digital talent charged at a premium
  • Price increments in FTE rate cards
  • Managed services deals continue to be competitively priced
  • Increased focus on automation, productivity improvements, and pyramid levers