What does Latin America, Eastern Europe and an IT service company called Endava have in common? The answer: everything.
In our most recently published research called “Latam vs. Eastern Europe: Endava IPO & the Global Shift in IT Services” we explore the macro trends in IT Services. Behind the macro trends, the report presents a breakdown as to why these regions excel in IT service delivery as well as where their strengths lie in terms of end-markets and on the IT Service Matrix.
Quoted Synopsis from the Report:
“Today’s landscape of IT service offerings — everything from Cloud, Big Data, Business Intelligence, Artificial Intelligence, Digitalization, Blockchain, Cybersecurity, and more — is a hot topic of conversation for enterprises across the globe. This group of highly technical enterprise technology products and services require an enormous amount of maintenance and innovation, therefore providing opportunities for the IT Service sector; consisting of professionals that specialize in information technology.
“Maintaining and constantly innovating IT systems and offerings is incredibly time intensive — explaining why most organizations — 73% of organizations according to a 2016 Deloitte survey [1] — look to outsource and obtain IT services from regions such as Asia, India, and more recently Eastern Europe and Latin America. Countries like India are known for their low costs, strong work ethic, large human capital supply, IT expertise and English fluency — making them a very advantageous option for IT Services. With the emergence of Digital Transformation, Eastern Europe and Latin America are also showing they can offer areas of opportunity in IT services, with unique strengths differentiating their offerings from other providers. In fact, IT Services in the East (Eastern Europe) and West (Latin America), with endpoint delivery still focused on the US and Europe, are hot service providers posing a serious threat to Indian providers — more specifically Indian providers less experienced in both digital technology and agile delivery methods. The firms in the East and West who succeed are highly rewarded — i.e. Endava IPO.
“This article discusses why the “East” and “West” are threats to areas of the Indian IT Service market, what these “East” and “West” regions have to offer, what makes them different, and which markets they cater to most.”
What this Means for You
Not only is there simply a rise in service delivery coming from the Latin American and Eastern European providers, but I hope that you can take away the extraordinary opportunities facing service providers by the Endava IPO. As a provider, no matter what region you currently operate in, these two markets are HOT for all of the reasons listed in our research and I imagine that will continue for the near future. I also predict that, sooner rather than later, we may see a wave of firms trying to replicate what Endava just demonstrated as a possibility. If you’re interested in exploring one of these regions, I suggest doing so before the market is saturated with firms that offer both Latin American and Eastern European delivery — successfully tapping into the strengths of these two regions. As businesses only get more globally focused, this wave of market saturation looking to join the strengths from these two regions is only a matter of time.
Whether firms seek M&A as a means to an end — joining forces between these two regions — or firms attempt to grow their capabilities in these regions organically, I’m not certain. However, the former seems more likely than the latter, considering rapidly and strategically growing in two markets can be difficult and twice the amount of effort when compared to the acquisition of an already experienced and stable platform. For example, the case in point: Endava’s (Eastern European-based provider) acquisition of Velocity Partners (Latin American-based provider) in Jan-18, propelling their record setting-growth and IPO just about six months later.
View Full Report Here
Author: Garth Martin, Associate at 7 Mile Advisors
About 7 Mile Advisors
7 Mile Advisors provides Investment Banking & Advisory Services to the Business Services & Technology Industries globally. 7 Mile Advisors advises on M&A and private capital transactions, and provides market assessments and benchmarking. As a close-knit team with a long history together and a laser focus on our target markets, 7 Mile Advisors helps its clients sell companies, raise capital, grow through acquisitions, and evaluate new markets. For more information, including research on the M&A markets, visit www.7mileadvisors.com.
All securities transactions are executed by 7M Securities, LLC, member SIPC/FINRA.
Sources:
A Shifting Landscape in IT Services was originally published in 7 Mile Advisors on Medium, where people are continuing the conversation by highlighting and responding to this story.
