Engineering Services companies are set to play an integral role in global product development ecosystem. The larger and more mature set of companies are no longer just a “vendor” but are acting as extended arms of the RD&E (Research, Development and Engineering) units of their customers.  The corporate R&D spending from corporates in the core technology sectors is estimated to be $500 Billion.  Approximately $35Billion, out of the $500B pie, is being outsourced to third party engineering service providers (ESP’s).  We believe that the engineering services market is set to grow significantly in the long run.  There are multiple technologies converging and leading to the tipping point of large scale adoption (IOT, Big data, AI, Robotics etc. ). ESP’s will play a major role not only in the development but also the proliferation and adoption of newer technologies by innovating on the products / services and business models.

rVantage brings to you an introductory report on the ESP market, benchmarking the financial performance of the market leaders of this space:  The Global top 1o ESP’s.   Going forward we will continue to share much more insights and data on this interesting market space.

Global_Top10_ESPs_2016

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EXECUTIVE SUMMARY 

  • Engineering Services Providers (ESP’s) are companies that provide functional or technological expertise to their customers in the product development lifecycle.  For example: Product Testing as a function could be outsourced to an ESP.  Cloud or Android development is technological outsourcing.
  • From a pure cost arbitrage value by facilitating product engineering in low cost locations,  some of the larger ESP’s have evolved more strategic engagement models like profit/risk sharing and outcome based models.
  • At $35 Billion, the global third party engineering service provider share is only around 7% of the total global research and development spend.
  • Aerospace ,Automotive and Healthcare seem to be the most favoured sectors targeted by ESP’s.  Industrial Manufacturing,  Semiconductors and Process Industries have relatively fewer players.
  • The report compares the performance of these companies (except AVL, since it’s a privately held company) on Revenues, Growth, Profitability,  Productivity (Revenue Per Employee) and Efficiency (Days Sales Outstanding)
  • Click on the links in the table to know more about these companies.
  • TOP GLOBAL ENGINEERING SERVICE PROVIDERS
    Company  Engineering Services Revenues in USD Million
    ALTRAN     $ 2138.9
    ALTEN     $ 1644.5
    AVL  (Privately Held)     $ 1355.4 
    HCL (ERS)     $ 1075.7
    AKKA TECHNOLOGIES     $ 1069.4
    BERTRANDT     $ 997.9
    EDAG      $ 791.9
    ACCENTURE     $ 758.9
    TCS(EIS)     $ 735.0
    AF     $ 641.1
    WIPRO (PES)     $610.9