Leading IT service providers in Germany

As expected, demand for IT services did not collapse in the corona year 2020, but is still below the level of the previous year. The 83 IT service providers analyzed increased their sales in Germany by 2.7 percent in 2020 to a total volume of EUR 25 billion (2019: EUR 24.3 billion). In 2019, growth still amounted to 3.3 percent.

On average, the IT service providers surveyed recorded growth of 4.9 percent, and 65 percent of IT service providers were able to increase their revenue in 2020, which was still achieved by 82 percent of IT service providers in 2019. While demand for IT services from the two most important sectors, industry and financial services, remained almost constant compared to 2019, the IT service providers surveyed significantly expanded their business with the retail sector and the public sector.

The surge in digitization that began at the start of the corona pandemic ensured full order books for many IT service providers, particularly from the third quarter onwards: across all sectors, topics relating to the development and implementation of digital and data-based business models, IT modernization, and the migration of IT applications to the cloud dominated. Above all, however, companies invested heavily in the development of online sales channels to compensate for the loss of physical sales channels, from which some IT service providers benefited particularly strongly.

During a virtual press briefing, Sebastian Hauptmann, CSO of Valantic, commented: "Customer experience and e-commerce are booming. Partly born out of necessity, but this trend will continue. Corona has given a boost to digitalization in all areas. By now, I think every board has understood that the topic of digital transformation is business-critical."

IT consulting and system integration

This can also be seen in the Lünendonk list of "Leading IT consulting and systems integration companies in Germany". The ranking included companies that generated more than 60 percent of sales with management and IT consulting, systems integration, software development and implementation.

The market leader continues to be Accenture, with estimated German revenue of EUR 2.2 billion for 2020. IBM follows in second place, also with estimated revenue for the IT consulting and systems integration business of EUR 1.5 billion. Capgemini has moved up into the top 3 of the current Lünendonk list.

The French-based consulting and IT service provider increased its revenue in Germany by an estimated 25 percent to EUR 1.45 billion. T-Systems, which came second in last year's Lünendonk list, finds itself in fourth place in the current ranking; mainly caused by the spin-off of the two units TC Services and Classified ICT from T-Systems to Telekom Deutschland. NTT Data completes the top 5.

Within the top 10, in addition to Capgemini, the two IT service providers Tata Consultancy Services (TCS) and Infosys made disproportionate gains in Germany. There was a major change at Allgeier in 2020: The listed company spun off Nagarro, which it acquired in 2011, and floated it on the stock market. Nagarro ES primarily bundles the software development business.

New to the Lünendonk list is Conet. With a 16.6 percent increase in sales, partly due to the acquisition of Procon IT, the Hennef-based company made a direct entry at No. 24. This list thus saw more rough changes than the second list published, which looks at the leading IT service companies.

IT Service

The ranking of leading IT service companies includes IT service providers that generate more than 50 percent of their revenue from IT outsourcing and managed services on the external market. The top spot is held by T-Systems with estimated revenues of 2.2 billion euros.

Atos, IBM and DXC remained unchanged in second, third and fourth place. Datagroup climbed into the top 5 with a leap in sales from 306.8 million euros to 358.2 million euros; it achieved the highest growth within the top 10.

Datagroup thus swaps places with the Indian IT service provider HCL, which achieved estimated German sales of 342 million euros in 2020. The top 10 ranking is completed by q.beyond with sales in Germany of 138.3 million euros. At 13.4 percent, the Cologne-based IT service provider achieved the second strongest revenue growth within the top 10.

New this year was the market sample of the ten leading in-house IT
service providers in Germany. These are internal service providers of large companies. The top 5 are occupied by Allianz Technology, Finanz Informatik, Fiducia & GAD IT, DB Systel and BWI. BWI is the IT service provider for the German armed forces.

Frank Leidenberger, BWI's Chief Digital Officer, describes the company's need: "Historically, there was a partnership with IBM and Siemens, but in 2016 the Bundeswehr had to decide how to proceed after the modernization of the IT landscape. That's when BWI was founded. We can provide the digital skills that are needed here. BWI is an essential component for the Bundeswehr."

In summary, the corona pandemic had a not insignificant impact on the IT services market, but more positive than negative. The increasing pressure of digitization forced more and more companies to deal with topics such as cloud, AI or modernized processes.

Almost no company wanted to embark on this journey alone - a great starting position for service providers. And these transformation processes are far from over. IT service providers will probably continue to do good business in the coming years.

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