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Magic Quadrant for Oracle Application Services, Worldwide

Published: 28 February 2018 ID: G00340232

Analyst(s):

Summary

This Magic Quadrant evaluates 19 service providers' capabilities to deliver Oracle application implementation and management services. Sourcing and vendor management leaders should use this research to help identify, evaluate and select potential Oracle application service providers.

Market Definition/Description

This Magic Quadrant is focused on the full life cycle of Oracle application services, spanning project-based implementation and multiyear application management services (AMS). Analysts evaluate service providers for their ability to deliver a comprehensive set of implementation and management services across the Oracle portfolio of products for clients worldwide.

Comprehensive is defined as follows:

  • A distinct offering, consistent with common market service offerings as defined by the following: scope of service, delivery structure, intellectual property (IP), roles and responsibilities, service metrics and levels, terms and conditions, and pricing model. The delivery structure is analyzed across all industries for general services, and is specific per industry where applicable. The delivery structure is also analyzed with regard to consistent internal delivery across all countries where such services are provided (through methodologies, best-practice processes, tools, technology and people).

  • A consolidated set of distinct offerings to address industry-specific demand or cross-industry demand, where the offering is recognized by clients or analysts as an integrated offering.

Oracle application implementation services are:

  • All project-based implementations of Oracle applications without ongoing management responsibilities. They include all products, applications, databases, analytics, middleware, mobile and other technologies (on-premises and cloud-based). This category includes:

    • Consulting services, which are advisory services designed to help companies analyze and improve the effectiveness of business operations and technology strategies. Gartner divides consulting services into two subsegments: business consulting services and IT consulting services. Consulting services go beyond technical blueprinting to include such activities as operating-model changes, business process improvement, and standardization and harmonization of processes when they are part of an Oracle program. They also include program management, organizational change management and governance.

    • Development and integration services, which include application development, implementation and integration services for first-time implementations, upgrades, rollouts, consolidations, optimization or any combination thereof for any version. They also include configuration, customization and enhancement of existing Oracle functionalities, reports, interfaces, conversions, extensions, forms, data loading, rollout, integration, testing and training.

Oracle AMS is:

  • All ongoing services focused on Oracle applications that are provided as part of a multiyear-based agreement and managed against defined quality metrics. This category includes:

    • All ongoing activities related to application development, implementation, integration, testing, maintenance and support (functional and/or technical), and help desk services delivered within the scope of a multiyear application service agreement

    • All ongoing activities required to perform application monitoring and operational service activities as formalized in run books, inclusive of job scheduling and execution, and backup and restoration of the in-scope applications

    • All ongoing activities required for providing, maintaining, securing, scheduling, backing up, recovering and supporting inbound and outbound application interfaces (electronic data extraction and translation and loading), web services, and databases

This Magic Quadrant does not cover other Oracle services, for example:

  • All activities relating to business process outsourcing

  • All ongoing infrastructure and hosting-only services

  • Any physical — on-premises and cloud — compute assets' associated revenue

  • Product-only activities, such as from the resale of Oracle licenses or the service provider's third-party products

The lists of industries included in this research can be found in Note 1.

A more detailed analysis of the service providers' capabilities, with scoring based on use cases (AMS or implementation), is available in "Critical Capabilities for Oracle Application Services, Worldwide."

Magic Quadrant

Figure 1. Magic Quadrant for Oracle Application Services, Worldwide
Research image courtesy of Gartner, Inc.

Source: Gartner (February 2018)

Vendor Strengths and Cautions

Accenture

Accenture is in the Leaders quadrant.

The following numbers are Gartner estimates:

  • Accenture has 53,870 Oracle application service full-time equivalents (FTEs) worldwide; the geographic breakdown of its FTEs is North America, 25%; Latin America, 7%; EMEA, 27%; and Asia/Pacific (APAC), 41%.

  • Its Oracle application service geographic breakdown by revenue is North America, 49%; Latin America, 3%; EMEA, 30%; and APAC, 18%.

  • The revenue breakdown of its worldwide Oracle services is as follows:

    • 53% from implementation services

    • 47% from AMS

  • The top five industries from which Accenture derives its Oracle application service revenue are telecommunications, public sector, banking, utilities and energy, and healthcare.

Strengths
  • Scale and experience. Accenture's Oracle application service practice is by far the largest of those considered in this Magic Quadrant. It has good geographic spread of resources supporting its global delivery, and a very wide coverage of industries. The current focus is cloud, but given its scale, there is also wide and deep coverage of all products in Oracle's portfolio. It also has balance across both implementation and AMS. It is a good fit for global enterprises embarking on multinational transformations.

  • Alliance relationships. Accenture continues to leverage its relationship with Oracle through the Accenture Oracle Business Group (AOBG) that was formed in April 2015. Through this group, the two companies develop, sell and deliver a suite of preintegrated industry-based cloud solutions, accelerators, assets and tools built on Oracle's software as a service (SaaS), platform as a service (PaaS) and infrastructure as a service (IaaS) offerings to simplify migration to the cloud and speed up time to market.

  • Innovation and vision. Accenture reference clients scored them in the top 3 for overall satisfaction and above the peer average in 12 of the 20 capabilities scored. Their highest scores were for innovation proposed, innovation realized, proactiveness, and vision and thought leadership. Some clients cited how they appreciated Accenture as a collaborative and strategic partner.

Cautions
  • Lack of interest in small and midsize business (SMB) market. Accenture's strategy continues to be focused on the global enterprises, rather than SMBs. Although Accenture demonstrates a desire to deliver to a broader range of clients with the move to cloud, its formal strategy continues to be focused on global enterprises and not SMBs.

  • Product independence concerns. Accenture has had a very extensive and deep alliance with Oracle for several years, which has led to its Accenture Oracle Business Group (AOBG) relationship with Oracle. The sheer magnitude of the relationship is so large that, at times, it can be interpreted as reaching an uncomfortable level where product independence can be questioned. Although Accenture applies a technology-agnostic approach to application services, at times, this partnership (AOBG) has had a downside for Accenture, giving it a perceived lack of neutrality. Deep alliances can become a concern for some clients that are seeking service providers that demonstrate a product-agnostic source of expertise.

  • Staffing and contracting difficulties. Accenture reference clients scored the company below the group average in eight of 20 capabilities, with contracting practices and continuity of staff scoring the lowest. Some reference clients highlighted that they were seeing more use of subcontractors and noted difficulties in finding U.S. citizen resources.

Capgemini

Capgemini is in the Challengers quadrant.

The following numbers are Gartner estimates:

  • Capgemini has 15,240 Oracle application service FTEs worldwide; the geographic breakdown of its FTEs is North America, 29%; Latin America, 4%; EMEA, 33%; and APAC, 34%.

  • Its Oracle application service geographic breakdown by revenue is North America, 31%; Latin America, 5%; EMEA, 60%; and APAC, 4%.

  • The revenue breakdown of its worldwide Oracle services is as follows:

    • 46% from implementation services

    • 54% from AMS

  • The top five industries from which Capgemini derives its Oracle application service revenue are consumer products, telecommunications, public sector, utilities and energy, and travel and transportation.

Strengths
  • End-to-end capability in Europe and North America. Capgemini's Oracle application service practice covers the full spectrum, from consulting to outsourcing, and from the functional to the technical. It is focused on growing its cloud business and is leveraging its ability to do cloud readiness assessments as a starting point to help clients on their journey to cloud. Implementation services and AMS are balanced and strong in Europe, where Capgemini has more than 1,400 Oracle resources in France, almost 1,200 in Benelux and more than 500 in the Nordic countries. Although it is smaller, Capgemini has significantly grown Oracle application service revenue in North America over the past years, especially since the acquisition of IGATE in 2015.

  • Wide technical capability including NetSuite. Capgemini has a wide coverage of all the Oracle portfolio of products with revenue in 20 of the 22 technology areas tracked. The NetSuite capability is relatively strong, with implementations completed in more than 35 countries.

  • Flexible deals. Capgemini scored high with reference clients for contracting practices and fee at risk. Through its cloud Managed Service Provider (MSP) offerings, it is providing new commercial ways to move workloads to cloud. Reference clients noted that Capgemini understood their problem statement and were always forthcoming with a viable solution.

Cautions
  • European heritage that impacts North American growth. With its major presence in Europe, Capgemini still derives 60% of its Oracle application service revenue from its traditional markets. Even with active investments in North America, it still needs to convince North American-headquartered enterprises to be shortlisted for large complex multinational deals.

  • Need for better communication on investment in automation tools. Capgemini needs to better communicate to existing clients and market its investment in tools and automation to potential new clients. Clients report that they would like to see Capgemini apply lessons learned and improve its tools, invest more in automation, and provide and apply better tools for managing projects.

  • Clients seeking more innovation in delivery. Capgemini scored clearly below the peer average for overall satisfaction. Its reference clients scored Capgemini below the group average in 17 of 20 capabilities, with the lowest scores for relationship management, ability to deliver against expectations, innovation proposed and innovation delivered. Capgemini's reference clients specifically cited that Capgemini should use the lessons learned to improve its competitive edge.

CGI

CGI is in the Niche Players quadrant.

The following numbers are Gartner estimates:

  • CGI has 5,330 Oracle application service FTEs worldwide; the geographic breakdown of its FTEs is North America, 42%; Latin America, 0%; EMEA, 42%; and APAC, 16%.

  • Its Oracle application service geographic breakdown by revenue is North America, 44%; Latin America, 0%; EMEA, 42%; and APAC, 14%.

  • The revenue breakdown of its worldwide Oracle services is as follows:

    • 50% from implementation services

    • 50% from AMS

  • The top five industries from which CGI derives its Oracle application service revenue are public sector; retail; telecommunications; aerospace and defense; and engineering, construction and operations.

Strengths
  • Local delivery capabilities. CGI has Oracle practices in more than 15 countries and leverages the CGI global proximity model of more than 400 offices to deliver strong local support to implementation and AMS engagements. With more than 700 Oracle professionals in France and more than 600 in Nordics, combined with more than 2,000 in North America, CGI is well-placed to provide local delivery in Europe and North America.

  • Balanced implementation and support portfolio. CGI's Oracle application service practice is balanced across implementation and AMS. Similarly, the products supported are fairly wide with qualified resources spread globally for the majority of the Oracle products (except JD Edwards).

  • High-quality resources. CGI reference clients gave the company high scores for regional/local capability and overall satisfaction. In addition, CGI was above the group average in quality of functional expertise, quality of technical skills for core functionality, quality and professionalism of staff, knowledge management, and continuity of staff. Multiple references called out the skills and quality of the resources provided.

Cautions
  • Limited offshore delivery. CGI's Oracle application service capability is sometimes constrained by its proximity model using an onshore resourcing structure. For larger clients and to provide a lower cost base, CGI does need offshore delivery centers, and these are relatively smaller than its competitors operations. This has led to client feedback indicating delays in resourcing engagements when using global delivery.

  • Limited investment in automation and operational efficiency improvements. CGI needs to further grow its investment in accelerators and (intelligent) automation to improve its delivery effectiveness and efficiency. This is supported by CGI's reference clients indicating that they expected more reuse of accelerators, and to see more benefits from automation in the proposed processes.

  • Lack of vision and innovation. Although reference clients gave CGI high scores overall, it was below the group average in 13 of 20 specific capabilities scored, with the lowest scores for vision and thought leadership, innovation proposed, quality of industry expertise, and contracting practices. This is supported by CGI reference clients that specifically stated that CGI needs to be more proactive and innovative.

Cognizant

Cognizant is in the Challengers quadrant.

The following numbers are Gartner estimates:

  • Cognizant has 15,193 Oracle application service FTEs worldwide; the geographic breakdown of its FTEs is North America, 24%; Latin America, 0%; EMEA, 3%; and APAC, 73%.

  • Its Oracle application service geographic breakdown by revenue is North America, 86%; Latin America, 0%; EMEA, 11%; and APAC, 3%.

  • The revenue breakdown of its worldwide Oracle services is as follows:

    • 43% from implementation services

    • 57% from AMS

  • The top five industries from which Cognizant derives its Oracle application service revenue are banking, retail, insurance, life sciences and healthcare.

Strengths
  • Digital and cloud focus. Cognizant's Oracle application service practice has embraced the overall strategic mantra: doing digital to being digital. It has strengthened its overall position in Oracle Cloud by starting with business digital transformation, and then using cloud as an enabler, if appropriate. It has dedicated offerings, such as Cloud Lift, Cloud Shift, Cloud Map and ScanIT, which are tools for the journey to cloud. It has also invested in an Octane Solution Center that certifies consultants on Oracle Cloud and digital transformation technologies.

  • Innovation embedded in service delivery. Cognizant has a strong focus to bring value beyond traditional application services. It engages with customers to estimate and approve the hard and soft dollar savings from engagements, claiming $56 million in Oracle application service associated savings for clients in 2016. For Oracle implementations, Cognizant has more than 100 proprietary tools and accelerators. Tools like EAZAuto (the Cognizant Intelligent Automation platform), Fusion Integration Migration Framework (which automates migration from Java CAPS and TIBCO to the Oracle Fusion platform), and OneTap (which integrates business functions with Oracle Retail) are Oracle-specific enablers for automation and improved delivery.

  • Staff continuity and proactiveness. Cognizant scored clearly above peer average for overall satisfaction and highest across all vendors for willingness to rehire for similar services. Its reference clients scored Cognizant above the group average in 19 out of 20 capabilities, from which it was highest in continuity of staff, innovation realized, proactiveness, service integration management and contracting practices.

Cautions
  • Revenue mainly from North America. Although Europe is experiencing strong growth, Cognizant still realizes 86% of its Oracle application service revenue from North America.

  • High dependency on offshore delivery. Cognizant delivers Oracle application services with 11,000 of its 15,000 Oracle application service staff based in India. This may be a challenge for continental European clients in need of European-based local resources or non-English capabilities.

  • Clients wanting more local leadership empowerment. Reference clients indicated that Cognizant project leadership needs to push back more on requests to change standard functionality if leaders believe it is not in the client's best interest. Clients further believed this could be related to the lack of local project leadership being empowered to make decisions locally.

  • Risk balance on contracts. Almost one-third of Oracle application service revenue is realized through time and materials deals, with little to no outcome-based risk with Cognizant. It is recognized by its reference clients that scored Cognizant below the group average for delivery against expectations and percentage fee at risk.

Deloitte

Deloitte is in the Leaders quadrant.

The following numbers are Gartner estimates:

  • Deloitte has 22,323 Oracle application service FTEs worldwide; the geographic breakdown of its FTEs is North America, 24%; Latin America, 11%; EMEA, 16%; and APAC, 49%.

  • Its Oracle application service geographic breakdown by revenue is North America, 57%; Latin America, 10%; EMEA, 23%; and APAC, 10%.

  • The revenue breakdown of its worldwide Oracle services is as follows:

    • 87% from implementation services

    • 13% from AMS

  • The top five industries from which Deloitte derives its Oracle application service revenue are industrial machinery and components, public sector, banking, life sciences, and high tech.

Strengths
  • Complex global digital transformation. Deloitte has a good global spread of resources with relevant industry expertise. Through integrating local business and industry consultants with global and regional Oracle application service support teams, Deloitte is able to support both purely local as well as regional or global cloud and digital transformation journeys.

  • Commitment to cloud. Deloitte has made significant investments in Oracle Cloud on both the resource and technology fronts. Approximately 75% of its resources have received training in cloud technologies. The organization has invested in new cloud methods (e.g., the Hybrid Agile Momentum Cloud methodology), tools (e.g., the DigitalMIX integration platform), accelerators (e.g., preconfigured industry SolutionPrints) and delivery centers (e.g., the Oracle Cloud delivery center in Florida). Additionally, with the acquisition of Day1 Solutions, a cloud consulting firm, Deloitte acquired an advanced set of analytic, cloud-native capabilities that further expanded its Oracle Cloud capabilities.

  • Knowledgeable people. Deloitte scored clearly above the peer average for overall satisfaction. Deloitte reference clients scored the organization above average in all 20 capabilities and particularly high for vision and thought leadership, quality of industry expertise, quality of functional expertize, and proactiveness. Some of Deloitte's clients praised its resources for professionalism and product knowledge.

Cautions
  • Less business in Oracle application management. Although Deloitte has shown 32% year-over-year growth in Oracle AMS, with only 13% of its Oracle application service revenue, the Deloitte AMS offering is relatively much smaller than its implementation business.

  • Some resourcing issues. With Deloitte's rapid growth of Oracle Cloud-based services, it experiences growing pains to hire and integrate new resources, and roll out new methods and tools. This can result in inconsistent client delivery experiences. Some reference clients specifically cited resource churn and turnover in the allocated team as the main challenge.

  • Relatively more expensive services. Deloitte client references scored the company relatively low on value for money, and the score for total cost of contracted services was not as strong as other attributes.

DXC Technology

DXC Technology (DXC) is in the Challengers quadrant.

The following numbers are Gartner estimates:

  • DXC has 9,082 Oracle application service FTEs worldwide; the geographic breakdown of its FTEs is North America, 20%; Latin America, 4%; EMEA, 18%; and APAC, 58%.

  • Its Oracle application service geographic breakdown by revenue is North America, 47%; Latin America, 5%; EMEA, 45%; and APAC, 3%.

  • The revenue breakdown of its worldwide Oracle services is as follows:

    • 32% from implementation services

    • 68% from AMS

  • The top five industries from which DXC derives its Oracle application service revenue are public sector, healthcare, insurance, aerospace and defense, and industrial machinery and components.

Note: On 1 April 2017, the merger, that CSC and HPE announced on 24 May 2016, for HPE to spin off its Enterprise Services group and merge it with CSC, was completed. The new brand for the merged operation is DXC Technology. This analysis is based on the merged Oracle service operation, which was aggregated and presented as DXC Oracle application services.

Strengths
  • Opportunities for new brand and organization. DXC has a good geographic spread of Oracle application service revenue and FTEs to build upon. DXC explicitly can benefit from the existing industry solutions that both HPE and CSC had invested in, and the complementary cloud and Oracle application services supporting hybrid infrastructure management and orchestration capabilities.

  • Acquisitions bringing fresh approaches. DXC has acquired Red Rock, Xchanging and Tribridge in the past 12 months. Each acquisition offers DXC new Oracle application service capabilities that have helped it present some fresh options around accelerators for NetSuite, Oracle Transportation Management, and Oracle Internet of Things integration and management. The new implementation projects won in the past 12 months have included a high proportion from the new acquisitions.

  • Reference clients considering rehire. DXC reference clients scored the company above the group average in 17 of 20 capabilities, with higher scores for innovation proposed, innovation realized, and vision and thought leadership. DXC was also given a high score for rehire, with clients highlighting long partnerships and close integration with the former CSC and HPE teams.

Cautions
  • Complacency and predominance of AMS. DXC's Oracle application service practice is predominantly AMS (68%) and has a large number of established deals with long-term clients (especially public sector) that have been renewed. These clients report that DXC is not aggressive and zealous with regard to seeking out opportunities for higher efficacy, additional efficiency or fresh new ideas to reinvigorate the long-standing status quo.

  • Scalability of innovation. The acquisitions in the Oracle space have definitely brought new ideas and capabilities, but they are currently restricted in geography — mostly North America (apart from Red Rock solutions) — and scale — mostly SMBs. DXC must continue to invest in scaling up the acquired assets to really benefit from its acquisitions over the longer term.

  • Value for money. DXC reference clients scored the company below the group average for quality of technical skills for core functionality, desire to go the extra mile and total cost of contracted services. Additionally, DXC scored relatively lower for value for money.

Fujitsu

Fujitsu is in the Niche Players quadrant.

The following numbers are Gartner estimates:

  • Fujitsu has 1,243 Oracle application service FTEs worldwide; the geographic breakdown of its FTEs is North America, 49%; Latin America, 0%; EMEA, 35%; and APAC, 16%.

  • Its Oracle application service geographic breakdown by revenue is North America, 36%; Latin America, 0%; EMEA, 44%; and APAC, 20%.

  • The revenue breakdown of its worldwide Oracle services is as follows:

    • 58% from implementation services

    • 42% from AMS

  • The top five industries from which Fujitsu derives its Oracle application service revenue are public sector, automotive, consumer products, high tech, and travel and transportation.

Strengths
  • Enabling Oracle hybrid cloud. The Fujitsu Oracle practice is relatively small (approximately 1,200 FTE), but benefits from access to the infrastructure technologies of the larger company and has more than 2,000 additional staff supporting Oracle hardware products. Fujitsu sees an opportunity to bundle Oracle application services with its infrastructure services to provide PaaS and hybrid IT for Oracle. Fujitsu is investing in a global hybrid IT offering for Oracle that leverages their MetaArc and K5 Cloud Services.

  • North America manufacturing and U.K. and Ireland public sector. Fujitsu continues to have deep relationships with Oracle application service customers in the North America automotive and consumer goods sectors, along with public-sector clients in the U.K. and Ireland. In the past 12 months, it has had wins in transport, healthcare, retail and logistics as a result of its hybrid IT offering, and it is experiencing strong overall growth in the Oracle application service practice.

  • Long-term customer relationships. Fujitsu has a focus on building long-term customer relationships. Many of the client references that Fujitsu provided have been Fujitsu clients for more than five years. Its reference clients scored Fujitsu above the group average on quality of industry expertise, quality and professionalism of staff, continuity of staff, proactiveness and quality of technical skills, with clients stating that the long-term relationship was a key success factor.

Cautions
  • Small scale. The Oracle practice at Fujitsu is one of the smallest considered within this Magic Quadrant. It has 20% of its Oracle application service business within Japan and has the smallest overall resource footprint and limited global delivery from low-cost delivery centers currently. This small scale also restricts major investment in innovation specifically for Oracle application services, although it is able to use the wider technology innovations driven by the larger company.

  • Low market visibility. Fujitsu is well-known in Japan, but has been challenged to grow its business in other regions and is currently working to expand and promote its regional capabilities. However, the overall Oracle application service practice still lacks scale, and new clients that do not already know Fujitsu through its other offerings don't often consider it as a candidate.

  • Overall operation and contracting needing improvement. Fujitsu reference clients commented that staff members are strong and dependable and follow good processes. However, reference clients scored the company below the group average in 15 of 20 capabilities, and gave relatively poor scores for total cost of contracted services, contracting practices, regional/local capability, and desire to go the extra mile.

HCL Technologies

HCL Technologies (HCL) is in the Niche Players quadrant.

The following numbers are Gartner estimates:

  • HCL has 4,968 Oracle application service FTEs worldwide; the geographic breakdown of its FTEs is North America, 13%; Latin America, 1%; EMEA, 3%; and APAC, 83%.

  • Its Oracle application service geographic breakdown by revenue is North America, 67%; Latin America, 2%; EMEA, 11%; and APAC, 20%.

  • The revenue breakdown of its worldwide Oracle services is as follows:

    • 34% from implementation services

    • 66% from AMS

  • The top five industries from which HCL derives its Oracle application service revenue are high tech, banking, life sciences, consumer products and retail.

Strengths
  • Expertise in the traditional Oracle suites. HCL derives more than 50% of its Oracle application service practice revenue from implementation and support of E-Business Suite (EBS) and PeopleSoft. The organization is investing and building capability in a global cloud center of expertise to transform its clients' application platforms to cloud and digital using custom-built accelerators (e.g., specialist tools for R12 assessment and R12 upgrade using the HCL COMIT and iLoad solutions). Beside the wider Oracle Cloud application portfolio, HCL has specifically invested in EBS and PeopleSoft cloud transformation accelerators.

  • Investments in automation. HCL continues to invest in its DRYiCE platform, which is powered by IBM's Watson AI, integrated with HCL's own modular technology and industry-specific standard operation procedures (SOPs), and applied to Oracle product and cloud components. HCL builds a client-specific DRYiCE platform based on the future environment and associated service levels. Such DRYiCE solutions include virtual operations management without human intervention and intelligent development for accelerated software build, test and release in DevOps.

  • High-quality staff. HCL received a high score for rehire. Reference clients scored HCL above the group average in quality of industry expertise, quality of technical skills, desire to go the extra mile, continuity of staff and knowledge management, with clients noting that staff will go beyond the contract.

Cautions
  • Limited coverage outside North America. HCL's business is very regionally focused — 67% of its revenue is derived from North American customers, predominantly in the United States. With relatively few resources in Latin America, EMEA and Japan, HCL may struggle to effectively support multinational companies requiring local, on-site presence.

  • Digital vision as a work in progress. HCL's recent investment focus has been predominantly on automation capabilities in its existing implementation and AMS business, and on accelerators to move their clients to the cloud. New technology investments have been on a per-case and opportunistic basis more than a strategic decision.

  • Clients seeking more innovation. HCL reference clients scored the company below the group average in 12 of 20 capabilities. HCL scored relatively lower on vision and thought leadership, innovation proposed, innovation realized, local/regional capabilities, and delivery against expectations. Some reference clients specifically mentioned that they were looking for HCL to generate a higher volume of innovative ideas to transform their business.

IBM

IBM is in the Challengers quadrant.

The following numbers are Gartner estimates:

  • IBM has 15,800 Oracle application service FTEs worldwide; the geographic breakdown of its FTEs is North America, 12%; Latin America, 1%; EMEA, 16%; and APAC, 71%.

  • Its Oracle application service geographic breakdown by revenue is North America, 49%; Latin America, 2%; EMEA, 30%; and APAC, 19%.

  • The revenue breakdown of its worldwide Oracle services is as follows:

    • 55% from implementation services

    • 45% from AMS

  • The top five industries from which IBM derives its Oracle application service revenue are public sector, consumer products, banking, telecommunications and retail.

Strengths
  • Strong global delivery model and product offering. IBM's Oracle application service practice is balanced across implementation and AMS. With almost 16,000 geographically well-spread Oracle application service staff members, including more than 6,500 in India and almost 1,500 in China, IBM has a strong global delivery model, combining local capability with lower-cost offshore delivery. This, combined with the wide product offering, makes IBM a good choice for large, global, multidimensional and transformative projects for implementation, combined with infrastructure offerings and then transition to support.

  • AI differentiation. IBM as a whole is investing in automation and robotics, and marketing heavily its AI capability through its Watson brand. Although it is early in the cognitive life cycle and implemented examples are rare, IBM has introduced more than 70 Watson use cases that can be leveraged for Oracle application service clients. This is currently a differentiator for IBM, for those looking to involve AI solutions over and above the automation that many competitors are promoting.

  • Client satisfaction. IBM scored above the group average on overall satisfaction. Its reference clients scored IBM above the group average for 16 of 20 capabilities. Reference clients also gave relatively high scores for quality of industry expertise, proactiveness, relationship management, multisourcing service integrator (MSI) management and knowledge management with clients, noting that they were completely satisfied with the quality of service provided.

Cautions
  • Siloed delivery. Many clients seek IBM to source both application and infrastructure services, with the expectation that it will derive benefits across the integrated stack. However, clients report that the IBM teams operate in silos and are disconnected.

  • Behind on new technology implementations. Although IBM, from a service perspective, is technology-agnostic, it is still in investment mode to build up Oracle technology skills and expertise in the domains IBM software and cloud business was actively competing with Oracle. Potential clients should verify IBM's Oracle Cloud stack infrastructure expertise in more detail as part of the due diligence process, to ensure the right skills and technology are allocated or applied. This is supported by its reference clients that score IBM below group average in quality of technical skills for core functionality and quality of technical skills for emerging Oracle products.

  • Ineffective escalation on projects. IBM reference clients also scored the company below the group average in total cost of contracted services and regional capability. Some reference clients specifically mentioned a higher-than-expected staff turnover. Some other reference clients indicated that IBM should more timely escalate delivery issues to ensure client attention and drive joint resolution.

Infosys

Infosys is in the Leaders quadrant.

The following numbers are Gartner estimates:

  • Infosys has 14,686 Oracle application service FTEs worldwide; the geographic breakdown of its FTEs is North America, 23%; Latin America, 0%; EMEA, 4%; and APAC, 73%.

  • Its Oracle application service geographic breakdown by revenue is North America, 69%; Latin America, 1%; EMEA, 19%; and APAC, 11%.

  • The revenue breakdown of its worldwide Oracle services is as follows:

    • 66% from implementation services

    • 34% from AMS

  • The top five industries from which Infosys derives its Oracle application service revenue are high tech, industrial machinery and components, banking, retail, and automotive.

Strengths
  • Innovative approach. Zero Distance is an organizationwide, grass-root-level innovation movement at Infosys where employees proactively observe, learn from the client user pain points and come up with innovative ideas. Infosys is instilling a culture of innovation and proactive thinking. Through investments in IP (e.g., vertical solutions), co-innovation with partners (e.g., Telstra open UI solution), acquisitions (e.g., Brilliant Basics) and automation (e.g., Nia and Panaya), Infosys is turning those ideas into benefits for clients. It is quoting workforce optimization of 20% in implementations, 30% in AMS and 40% in upgrades.

  • Innovative pricing models. Infosys is being very creative in the pricing models it can use. It is combining its own IP, third-party software, third-party services and in-house services to create bundles that match the client needs and allow balancing between capex and opex. Real examples of bundled license plus services pricing, business platform based, instance/interface/server based, ticket based, outcome based, IP based, sprint based, catalog based and wave based were provided along with fixed price and time and materials. All the 2017 wins that were reviewed were fixed price and 60% included IP.

  • Effort to provide value. Infosys reference clients scored the company above the group average in 16 of 20 capabilities. They also gave relatively high scores for desire to go the extra mile, quality and professionalism of staff, continuity of staff, quality of technical skills for core functionality, and total cost of contract services. Infosys was also given a high score on value for money and percentage of fee at risk, with reference clients noting that Infosys was consistently exceeding expectations and was easy to work with.

Cautions
  • Changing leadership. Dr. Vishal Sikka resigned as CEO of Infosys in August 2017. He had been focused on the transformation of Infosys and was leading the innovative direction being pursued. In December 2017, Infosys appointed Salil S. Parekh as CEO. The company stated that the new CEO would continue to execute on the strategy started by Dr. Sikka, and the transition is running smoothly.

  • Geographic balance. Infosys has the majority of its engagements in North America. Although there is business in EMEA, it is not growing any faster than North America, and in the APAC region, the growth is slower on a small base. Infosys heavily leverages its global delivery capabilities with almost 10,000 of its 15,000 Oracle resources based in India. Therefore, it might not be able to service all geographies unless sufficient local resource and marketing exist.

  • Lack of local capabilities. Infosys is recruiting many more local resources but does heavily leverage global delivery, and feedback from clients suggests this may be too much. Comments from references had a consistent theme to improve the local ratio and to improve collaboration between Infosys teams. Infosys reference clients scored the company below the group average for quality of technical skills in emerging technologies, proactiveness, innovation proposed and innovation realized.

KPIT

KPIT is in the Niche Players quadrant.

The following numbers are Gartner estimates:

  • KPIT has 2,278 Oracle application service FTEs worldwide; the geographic breakdown of its FTEs is North America, 14%; Latin America, 4%; EMEA, 6%; and APAC, 76%.

  • Its Oracle application service geographic breakdown by revenue is North America, 59%; Latin America, 4%; EMEA, 21%; and APAC, 16%.

  • The revenue breakdown of its worldwide Oracle services is as follows:

    • 33% from implementation services

    • 67% from AMS

  • The top five industries from which KPIT derives its Oracle application service revenue are industrial machinery and components, automotive, life sciences, oil and gas, and aerospace and defense.

Strengths
  • Technology focus. KPIT's Oracle application service practice is mainly AMS, complemented by targeted implementation services. Almost 50% of its revenue is from JD Edwards engagements, and it has more than 80 JD Edwards clients in production.

  • Industry focus. Ninety percent of KPIT's revenue is from six subverticals, and it purposely keeps a tight engineering/manufacturing focus to stay within its chosen verticals: automotive and transportation, energy and resources, consumer and industrial products, high tech, life sciences, and utilities. Investments are limited by the scale of the organization and are focused on high-value return for the businesses covered (e.g., ViziTrans integrated logistics solution).

  • Value within focus areas. KPIT reference clients scored the company above the group average in 16 of the 20 criteria, and gave relatively high scores in total cost of contracting services, contracting practices and delivery to expectations. References commented that it was very cost competitive and was a committed partner. The Oracle practice is a large proportion (21%) of the overall KPIT organization, and any enterprise using KPIT for Oracle services will get attention from the KPIT leadership team.

Cautions
  • Size and scale. KPIT gets good results from its small scale by being very focused. However, with only 2,300 Oracle specialists worldwide and 1,600 in India, clients seeking to source large, multiregional deals may not find KPIT a good fit.

  • Need to widen the focus. Although KPIT has a good reputation for managed services and JD Edwards, it needs to widen its focus if it wants to grow in the Oracle service space. Cloud is pushing clients toward smaller deal sizes, which will allow KPIT to compete, but it will need to show increased cloud competency and invest in training, additional accelerators, tools and automation to compete in new technology areas.

  • Resourcing issues. KPIT reference clients commented on employee churn, turnover at offshore and the use of subcontractors. They scored the company below the group average for quality and professionalism of assigned staff, quality of functional expertise, proactiveness, and innovation proposed.

LTI

LTI is in the Niche Players quadrant.

The following numbers are Gartner estimates:

  • LTI has 3,598 Oracle application service FTEs worldwide; the geographic breakdown of its FTEs is North America, 8%; Latin America, 1%; EMEA, 8%; and APAC, 83%.

  • Its Oracle application service geographic breakdown by revenue is North America, 48%; Latin America, 5%; EMEA, 37%; and APAC, 10%.

  • The revenue breakdown of its worldwide Oracle services is as follows:

    • 31% from implementation services

    • 69% from AMS

  • The top five industries from which LTI derives its Oracle application service revenue are industrial machinery and components; engineering, construction and operations; oil and gas; insurance; and life sciences.

Note: Larsen & Toubro Infotech was formally rebranded as LTI on 4 May 2017.

Strengths
  • Experience in asset-intensive industries. LTI's experience and capabilities in asset-intensive industries continue to be the backbone of its service offering. The organization derives 67% of its revenue in the legacy Oracle suites (E-Business, JD Edwards and PeopleSoft). It continues to be ranked in the top third of revenue deals for JD Edwards among the vendors assessed for this report.

  • Focus on growing the Oracle practice. LTI continues to invest in its future with the rebranding of the organization and the launch of LTI 2.0, focusing on digital innovation (e.g., more than 10 digital solutions for industry verticals), service leadership (e.g., Mosaic automation for its NextGen AMS launch) and investment in its people (e.g., 20% of staff cross-trained on PaaS and SaaS technologies). These investments have resulted in increasing wins and delivery in the digital space.

  • Flexible pricing models. LTI offers a range of pricing models ranging from traditional consumption-based to outcome-based at-risk fees. Reference clients scored the company above average in contracting practices, regional capabilities, quality of technical skills and willingness to "go the extra mile," with clients noting that LTI has been timely and provided consistent value.

Cautions
  • Limited industry coverage. LTI's heritage and historic focus on certain industries present a challenge for the company in showcasing its experience outside of the industries it chooses to support. Coupled with a relatively limited depth in change management, this will pose a risk for projects requiring significant business process change in one of LTI's noncore industries.

  • Resourcing issues. Clients reported issues with resource continuity. Given the size and location of LTI's resource pool (2,900 of 3,600 in India), this could be an issue for clients.

  • Need for more proactiveness. LTI reference clients scored the company below the group average in 15 of 20 capabilities, and gave it a relatively low score for continuity of staff, quality of technical expertise, innovation proposed and realized, and proactiveness. Reference clients noted that they would like LTI to identify risk areas more proactively and be more proactive in suggesting improvements and evolutions for AMS.

NTT DATA

NTT DATA is in the Niche Players quadrant.

The following numbers are Gartner estimates:

  • NTT DATA has 3,010 Oracle application service FTEs worldwide; the geographic breakdown of its FTEs is North America, 17%; Latin America, 4%; EMEA, 29%; and APAC, 50%.

  • Its Oracle application service geographic breakdown by revenue is North America, 44%; Latin America, 4%; EMEA, 24%; and APAC, 28%.

  • The revenue breakdown of its worldwide Oracle services is as follows:

    • 56% from implementation services

    • 44% from AMS

  • The top five industries from which NTT DATA derives its Oracle application service revenue are telecommunications, high tech, life sciences, automotive and banking.

Strengths
  • Balance and full service. NTT DATA's Oracle application service practice is balanced across implementation and AMS, and has a balanced geographic spread, including 4% in Latin America. The company overall has grown through acquisitions (Dell Services, everis, Keane) to 109,000 IT professionals, and now offers one-stop, full life cycle services from consulting and development, to outsourcing in 15 languages.

  • Support and investment from NTT Group. There is commitment across the NTT Group for continued investments into NTT DATA to strengthen the global application service business. NTT Group already has high-quality and large-scale data center and network assets, which can support bundling and cloud solutions for the Oracle practice.

  • Proactiveness and commitment. NTT DATA reference clients expressed satisfaction with the way that NTT DATA proactively took ownership of delivery and its general commitment to projects. It scored the company above the group average in proactiveness and regional capability.

Cautions
  • Integration of acquisitions and practices. NTT DATA has grown rapidly through acquisition over the past 10 years, including Dell Services in 2016. This recent acquisition brought in additional Oracle resources and capabilities to add to those that came in previously with everis and Keane. Each acquisition has brought a different set of skills, capabilities and methodologies, along with regional differences in operating models. NTT DATA is just now assimilating assets and approaches across geographic boundaries.

  • Traditional delivery and limited use of automation. NTT DATA has strong process and experience in traditional application implementation and management functions, but has yet to leverage fully the tools and assets it has been acquiring and developing for the past few years. It continues to rely on labor-based application service delivery, and the levels of automation lag behind the major competitors in this space.

  • Lack of experience with new technologies. NTT DATA reference clients scored the company below the group average in 18 out of 20 categories. Overall satisfaction was similarly relatively low compared to the other organizations reviewed in this Magic Quadrant, with some reference clients specifically noting that NTT DATA was lacking in expertise in some newer technologies.

Oracle

Oracle is in the Niche Players quadrant.

Oracle did not submit supplemental information. The following analysis and numbers are Gartner estimates based on the analysis from last year, client and prospect dialogue in the last year, and publicly available information:

  • Oracle has approximately 24,000 Oracle services FTEs worldwide; the overall geographic breakdown of its FTEs is reported as 37% within North America.

  • Its Oracle service geographic breakdown by revenue is reported as North America and Latin America, 51%; EMEA, 30%; and APAC, 19%.

  • The revenue breakdown of its worldwide Oracle services is estimated as follows:

    • 80% from implementation services

    • 20% from AMS

  • There is no data available as to the top five industries from which Oracle derives its Oracle application service revenue.

Strengths
  • Wide portfolio of Oracle service offerings. Oracle provides services from multiple teams and, in 2017, consolidated its organization to deliver Oracle Support and Oracle Consulting. Oracle Consulting has more than 13,000 experts in 145 countries focused exclusively on implementing Oracle solutions for clients. Oracle Advanced Customer Services (ACS) provides technical support for the entire Oracle stack and has more than 4,000 engineers in 127 countries. Oracle Managed Cloud Services (OMCS) is a service that replaces the usual AMS offering with Oracle hosting client's Oracle software and client-specific operation supported remotely. However, it does also have a capability to do on-premises support. OMCS and ACS are now merged.

  • Understanding of the technology. Oracle is a product-led company with extensive service capacity for providing highly technical resources. Oracle's service business provides consultancy on application architecture and development, as well as technical services such as integration, regression testing and customization management.

  • Product understanding. No references or briefings were provided by Oracle for this year's analysis, and all scoring has been based on analyst opinion, research and publicly available information. The analysts scored Oracle relatively high for product understanding, cloud vision and company viability.

Cautions
  • Focus on products not services. For implementation projects, Oracle often chooses to partner with other service providers, rather than taking the lead system integrator role. Oracle does not usually promote OCS services for large complex engagements, and concentrates on overall customer success through combining a mix of implementation capabilities with strong product expertise.

  • Need for resource continuity on projects. Inquiry clients tell us that they experience resource continuity issues on projects, which makes it difficult to resolve technical issues in a timely way and for Oracle staff members to gain an understanding of their environments. They indicate that there is a consistent need to request that dedicated (named) resources are assigned in order to have a sense of assurance in the quality and consistency of service.

  • Less flexible contracting. No references or briefings were provided by Oracle, and all scoring has been based on analyst opinion, research and publicly available information. The analysts scored Oracle relatively low for contracting practices, relationship management, value for money and industry expertise.

PwC

PwC is in the Challengers quadrant.

The following numbers are Gartner estimates:

  • PwC has 6,010 Oracle application service FTEs worldwide; the geographic breakdown of its FTEs is North America, 38%; Latin America, 5%; EMEA, 13%; and APAC, 44%.

  • Its Oracle application service geographic breakdown by revenue is North America, 75%; Latin America, 4%; EMEA, 12%; and APAC, 9%.

  • The revenue breakdown of its worldwide Oracle services is as follows:

    • 94% from implementation services

    • 6% from AMS

  • The top five industries from which PwC derives its Oracle application service revenue are healthcare, utilities and energy, banking, industrial machinery and components, and high tech.

Strengths
  • Business focus and heritage. With its roots in business consultancy, PwC approaches all the engagements as a business problem with business outcomes. This is an advantage for cloud implementations where the clear message is that success will come from business transformation combined with operational change management not through pure technology changes. PwC can leverage its functional experts and change management specialists to strongly lead the Oracle-enabled transformation projects.

  • Understanding of cloud and its impact. PwC was an early mover to cloud. Sixty-four percent of its Oracle FTEs are now cloud certified, and it has completed more than 200 cloud implementations. It is experiencing triple-digit cloud growth with more than half of its opportunities being cloud-related. In addition, PwC understands how cloud will change the delivery model for support and is evolving how it can make its support offerings more modular and delivered with a reduced staff footprint. It has reduced staff in the Oracle practice year over year while increasing revenue.

  • Client and service management. PwC reference clients scored the company above the group average in vision and thought leadership, regional capability, relationship management, service integration management, and MSI management. Reference clients specifically noted that PwC delivered a consistent, reliable service, and that it saw PwC as a trusted advisor.

Cautions
  • Limited business in application support. PwC's Oracle service practice has historically focused on implementation services with very little revenue in AMS. PwC will rarely engage in AMS-only projects, but will consider providing ongoing support at the end of an implementation, especially with its newer cloud support models. As a result, the AMS part of the practice is evolving, but is behind in traditional on-premises support compared to the competitors. There will likely be a transition to an alternative supplier required at the end of the implementation project if traditional support is required.

  • Coverage in mainly North America. PwC receives 75% of its Oracle revenue from North American-based clients. EMEA, and especially APAC, is growing by double digits on a small base. With the focus on cloud and remote delivery through its widely spread workforce, PwC is actively marketing to get to a more balanced geographic portfolio and also overcome regional challenges caused by its organizational structure.

  • Some program management issues and cost. Multiple reference clients reported that there was a need for stronger program management and coordination across PwC resources on the project, and there was feedback that the services were expensive. PwC reference clients scored the company below the group average in 14 of 20 criteria, with the lowest scores in total cost of contracted services and continuity of staff.

TCS

Tata Consultancy Services (TCS) is in the Challengers quadrant.

The following numbers are Gartner estimates:

  • TCS has 18,519 Oracle application service FTEs worldwide; the geographic breakdown of its FTEs is North America, 15%; Latin America, 2%; EMEA, 10%; and APAC, 73%.

  • Its Oracle application service geographic breakdown by revenue is North America, 61%; Latin America, 2%; EMEA, 29%; and APAC, 8%.

  • The revenue breakdown of its worldwide Oracle services is as follows:

    • 56% from implementation services

    • 44% from AMS

  • The top five industries from which TCS derives its Oracle application service revenue are telecommunications, banking, high tech, retail and insurance.

Strengths
  • Balanced global delivery and full-service play. TCS's Oracle application service practice is balanced across implementation and AMS. Supported by the TCS organization as a whole, the Oracle practice has a good geographic scale and footprint, a full range of services, and a complete stack of Oracle products supported.

  • Methodologies and processes. TCS is strong in consistent delivery and creating standard methodologies and processes. In implementation, it has Oracle-specific methodologies such as Transformation Delivery Method (TDM), Express+ accelerators, CX design frameworks, CX journey mapping and business process frameworks specific to industries.

  • High-quality staff. TCS scored above the peer average for overall satisfaction. Reference clients scored the company above the group average in 15 of the 20 criteria, and gave relatively high scores for quality and professionalism of staff, desire to go the extra mile, technical skills in core functionality, and regional capability. In addition, references commented that staff members were solid, steady performers delivering to plan and willing to go the extra mile.

Cautions
  • Need to accelerate uptake on cloud business. TCS is steadily winning cloud business, but the overall numbers are still low. A small proportion of the implementation business is currently cloud or digital, and there are not many instances of support provided to cloud installations.

  • Focus on technology. TCS has a strong heritage in delivering technology, but with cloud, the key to success is the functional transformation. Some clients have provided comments that they were looking for more training and OCM from TCS, and that they wished that TCS had pushed back harder on the implementation of nonindustry standards.

  • Innovation and thought leadership. TCS reference clients scored the company below the group average in vision and thought leadership, innovation proposed, innovation realized, proactiveness, and quality of technical skills for emerging technologies. Reference clients cited that TCS should communicate and lead more.

Tech Mahindra

Tech Mahindra is in the Niche Players quadrant.

The following numbers are Gartner estimates:

  • Tech Mahindra has 8,692 Oracle application service FTEs worldwide; the geographic breakdown of its FTEs is North America, 10%; Latin America, 1%; EMEA, 7%; and APAC, 82%.

  • Its Oracle application service geographic breakdown by revenue is North America, 46%; Latin America, 1%; EMEA, 42%; and APAC, 11%.

  • The revenue breakdown of its worldwide Oracle services is as follows:

    • 49% from implementation services

    • 51% from AMS

  • The top five industries from which Tech Mahindra derives its Oracle application service revenue are telecommunications, industrial machinery and components, high tech, banking, and automotive.

Strengths
  • Focus on telecom and hi tech. Over half of Tech Mahindra's revenue comes from the telecom and high-tech sectors. It has very ambitious growth targets and is expanding its focus to look at retail, utilities, and logistics in addition to the strong telecom and high-tech sectors that it already covers.

  • Appeal to SMBs. Tech Mahindra's Oracle application service practice is balanced across implementation and AMS. It has good global balance and is larger than many other niche providers, yet not at the scale of the megasuppliers in this space. The Oracle application service practice involves almost 8% of the Tech Mahindra total staff, and any Oracle small to midsize customer for either AMS or implementations would have access to the key leaders within the Tech Mahindra organization.

  • Innovation. Tech Mahindra reference clients scored above the group average in quality of technical skills for core functionality, innovation proposed, innovation realized and regional capability. This is supported by its Oracle innovation hub and a POC/pilot-based approach leveraging industry solutions across — telecom, retail, utilities, logistics and high tech.

Cautions
  • Overreliance on global delivery model. The qualitative feedback from Tech Mahindra's clients indicated challenges in working with offshore and the extra efforts needed to make that delivery model work successfully. Seventy-eight percent of FTEs (6,800 of the 8,692) are based in India, and only 10% of FTEs are based in North America, with 7% in EMEA. Clients were asking for better coordination and more on-site resources.

  • Focus on technology. Tech Mahindra has made good investments in its own brand tools, accelerators and methodologies, such as TACTiX for automation and Test Automation Framework For Enterprise (TAFE) for testing. However, it is less focused on organizational change management and supporting clients through the initiation of their business transformation.

  • Staffing issues. Tech Mahindra clients scored the company below the group average in 15 of 20 criteria. The areas where Tech Mahindra was relatively low were quality and professionalism of assigned staff, continuity of staff, knowledge management, and contracting practices.

Wipro

Wipro is in the Leaders quadrant.

The following numbers are Gartner estimates:

  • Wipro has 12,162 Oracle application service FTEs worldwide; the geographic breakdown of its FTEs is North America, 23%; Latin America, 2%; EMEA, 7%; and APAC, 68%.

  • Its Oracle application service geographic breakdown by revenue is North America, 61%; Latin America, 5%; EMEA, 23%; and APAC, 11%.

  • The revenue breakdown of its worldwide Oracle services is as follows:

    • 56% from implementation services

    • 44% from AMS

  • The top five industries from which Wipro derives its Oracle application service revenue are high tech, retail, utilities and energy, telecommunications, and banking.

Strengths
  • Client focus in the DNA. Wipro as an organization focuses strongly on the client experience and measures and promotes exceptional client interactions. For the Oracle practice, the advocacy received from the reference scores provided in this analysis was exceptional, with Wipro scoring the highest of all the suppliers analyzed for overall customer satisfaction.

  • Value in bundles. Wipro has more than 70% of revenue from fixed-price deals and more than half of those are with revenue at risk. Wipro IP-led revenue in the deals is up 40% year over year. At the same time, all the reference clients scored Wipro the highest score on total cost of contracted services.

  • Exceptional execution capability. Reference clients scored Wipro above the group average in all the criteria and in the top three in the majority, including the highest score from all 13 references for total cost of contracted services. Client references stressed the quality of the execution.

Cautions
  • Siloed delivery. Wipro has capabilities across the entire life cycle of Oracle application services and is also able to supplement these services with integrated infrastructure services. Qualitative feedback from clients indicates that there can be insufficient internal synergy across the overall engagement, and collaboration between the Wipro resources was not as good as expected.

  • Experience in mostly large deals. Wipro is very strong in winning the mega deals and has 22% of revenue from deals more than $50 million and 67% from deals more than $10 million. With the move to cloud and a more phased approach to rolling out Oracle functionality, Wipro will need to ensure that it can compete on the smaller deals, and adjust its managed service model to deliver to a potentially larger number of customers.

  • Need to challenge clients more. Wipro received no scores below the group average and, as described in the strengths, is very client-focused. This does not mean that the customer is always right. Some clients did say that they expected more leadership and push-back in areas where Wipro is the expert.

Zensar

Zensar is in the Niche Players quadrant.

The following numbers are Gartner estimates:

  • Zensar has 3,103 Oracle application service FTEs worldwide; the geographic breakdown of its FTEs is North America, 34%; Latin America, 2%; EMEA, 7%; and APAC, 57%.

  • Its Oracle application service geographic breakdown by revenue is North America, 66%; Latin America, 5%; EMEA, 25%; and APAC, 4%.

  • The revenue breakdown of its worldwide Oracle services is as follows:

    • 61% from implementation services

    • 39% from AMS

  • The top five industries from which Zensar derives its Oracle application service revenue are high tech, retail, not-for-profit, banking and automotive.

Strengths
  • R12 capabilities. Zensar overall is seeing growth in revenue from digital technologies, but cloud service growth in the Oracle practice is slow. The bulk of revenue is from client's legacy applications and especially around R12. Zensar's application service practice is mainly focused on implementations, including upgrades, and it has established a strong practice around R12 upgrades and migrating R12 to cloud.

  • Good fit for midsize enterprises. Half of Zensar's revenue overall comes from the Oracle application service practice, and it is an area of very high focus for the company. Midsize organizations using Zensar will have access to senior-level executives and get prompt responses on escalations if needed.

  • Loyal customers. Zensar has a long-term customer base. Seventy percent of its revenue is from customers that have been with Zensar for more than 10 years, and half of the relationships involve multiple services with Zensar. The reference clients did not score the company above the group average in any criteria.

Cautions
  • Focus on Oracle only. With 50% of Zensar's business in the Oracle practice, clients will usually have already decided on Oracle as the solution before engaging Zensar. It does have a smaller SAP practice, but 60% of customers already have Oracle in-house on engagement, and in "greenfield" sites, the solution is predominantly Oracle.

  • Focus on primarily North America. Zensar's current position is primarily as a North America Oracle service provider. It does have more than 200 resources in Europe, but it does not have any multilingual capability. Although it is growing outside North America, it is not sufficient to significantly change the geographic balance.

  • Lack of local senior leadership. Zensar reference clients scored the company below the group average in all the criteria. Although the overall satisfaction was a reasonable absolute score, it was behind the competitor scores. In feedback, clients were looking for more proactive staff and more local representation by senior resources who can communicate better.

Vendors Added and Dropped

We review and adjust our inclusion criteria for Magic Quadrants as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant may change over time. A vendor's appearance in a Magic Quadrant one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. It may be a reflection of a change in the market and, therefore, changed evaluation criteria, or of a change of focus by that vendor.

Added

This is a new Magic Quadrant, so no companies were added.

Dropped

This is a new Magic Quadrant, so no companies were dropped.

Inclusion and Exclusion Criteria

The criteria for inclusion of service providers for the Magic Quadrant are based on a combination of quantitative and qualitative measures.

Quantitative Criteria

Service providers included in this Magic Quadrant must satisfy all four of the following quantitative criteria:

  • A minimum of $10 million in external revenue worldwide for implementation services

  • A minimum of $10 million in external revenue worldwide for AMS

  • A minimum of $200 million in external revenue worldwide for implementation and AMS combined

  • Geographic breakdown of worldwide revenue must adhere to a minimum level from specific regions as follows:

    • Application service revenue from three of the four regions

    • No more than 90% of the application service revenue from one region

Revenue is for the period May 2016 through April 2017. Revenue generated for internal services to a subsidiary of the vendor, or as a shared service of any legal entity of the vendor, can be included.

Qualitative Criteria

  • Overall market interest in and visibility of the service provider as determined by serious consideration for selection from enterprise clients

  • Gartner analysts' interactions with enterprise buyers, which reveal interest in specific Oracle application service providers

  • Broad capabilities and technical/package expertise in combination with domain and process knowledge of the Oracle application suite

Evaluation Criteria

Gartner evaluates service providers on their Ability to Execute and their Completeness of Vision — as per the definitions below (see Tables 1 and 2). When the two sets of criteria are evaluated together, the resulting analysis provides a view of how well the provider performs a spectrum of services compared with its peers and how well it is positioned for the future.

For more information on Gartner's Magic Quadrant research methodology, refer to our Research Methodologies on the Gartner website.

Ability to Execute

Gartner analysts evaluate vendors on the quality and efficacy of the processes, systems, methods or procedures that enable vendor performance to be competitive, efficient and effective, and to positively impact revenue, retention and reputation. Ultimately, vendors are judged on their ability in capitalizing on their vision.

Product or Service: This criterion involves core services offered by the vendor for the defined market. This includes current service offerings, as defined in the market definition and expressed by growth, capacity, market penetration, skills availability, and breadth and depth of offering.

Overall Viability: Financial viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood of the individual business unit continuing to invest in the service and continuing to offer the service. It also includes advancing the state of the art within the organization's portfolio of services, especially new emerging solutions.

Sales Execution/Pricing: This criterion assesses the vendor's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel.

Market Responsiveness/Record: This is the ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, client needs evolve, and market dynamics change. This criterion also considers the vendor's history of responsiveness and ability to quickly address changing requirements.

Customer Experience: This criterion considers:

  • Specific client feedback on the experience working with the vendor

  • Demonstrated ability to deliver on key metrics that drive the overall client experience

Operations: This is the vendor's ability to achieve its goals and meet its commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems, and other aspects that enable the organization to operate effectively and efficiently.

Table 1.   Ability to Execute Evaluation Criteria

Evaluation Criteria

Weighting

Product or Service

High

Overall Viability

Medium

Sales Execution/Pricing

Low

Market Responsiveness/Record

High

Marketing Execution

Not Rated

Customer Experience

High

Operations

High

Source: Gartner (February 2018)

Completeness of Vision

Gartner analysts evaluate vendors on their ability to convincingly articulate logical statements about current and future market direction, innovation, client needs, and competitive forces and how well they map to the Gartner position. Ultimately, vendors are evaluated on their understanding of how market forces can be exploited to create opportunity for the vendor.

Market Understanding: This is the vendor's ability to understand buyers' needs and to translate that understanding into products and services. Vendors that show the highest degree of vision listen to and understand buyers' wants and needs, and can shape or enhance those wants and needs with their added vision.

Marketing Strategy: This assesses the vendor's delivery of a clear, differentiated set of messages that are consistently communicated throughout the organization and externalized through the website, advertising, client programs and positioning statements.

Sales Strategy: This criterion assesses the strategy for selling services, which uses the appropriate network of direct and indirect sales, marketing, service, and communications affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and client base.

Offering Strategy: This is the vendor's approach to solutions offering development and delivery, with an emphasis on differentiation, functionality, methodology and features in relation to current and future requirements.

Vertical/Industry Strategy: This is the vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.

Innovation: This criterion assesses direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.

Geographic Strategy: This criterion assesses the vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography. This may be done either directly or through partners, channels and subsidiaries, as appropriate for that geography and market.

Table 2.   Completeness of Vision Evaluation Criteria

Evaluation Criteria

Weighting

Market Understanding

High

Marketing Strategy

Low

Sales Strategy

Low

Offering (Product) Strategy

High

Business Model

Not Rated

Vertical/Industry Strategy

High

Innovation

High

Geographic Strategy

Medium

Source: Gartner (February 2018)

Quadrant Descriptions

Leaders

Leaders are performing well today, gaining traction and mind share in the market; they have a clear vision of market direction and are actively building competencies to sustain their leadership position in the market.

Challengers

Challengers execute well today for the portfolio of work selected, but they have a less well-defined view of the market's direction than Leaders do. Consequently, they may be tomorrow's Leaders, or they may not be aggressive and proactive enough in preparing for the future.

Visionaries

Visionaries articulate important market trends and directions. However, they may not be in a position to fully deliver and consistently execute on that vision. They may need to improve their service delivery.

Niche Players

Niche Players focus on a particular segment of the market, such as a particular industry, size of client, functional area (such as human capital management or order management) or project complexity. Their Ability to Execute is limited to those areas of focus. Their ability to innovate may be affected by their narrow focus. Many of the providers in this segment were given higher scores for customer satisfaction, and many can be considered to be leading players within their niche market focus. Niche Players need to increase their implementation or AMS breadth and depth, as well as overall breadth and depth of capabilities, innovation, and bench strength across the spectrum of services.

Context

This Magic Quadrant addresses the worldwide Oracle application service capabilities of providers that meet our criteria for inclusion. The positioning of providers in this Magic Quadrant is based on factors determined by Gartner as being relevant to this market for Oracle application services. This Magic Quadrant is a point-in-time analysis, with all the provider profiles reflecting the status as of September 2017. Quantitative data collected was for a 12-month period ending on 31 March 2017.

When considering Oracle implementation partners for a request for information or a request for proposal, clients are advised not to simply select service providers in the Leaders quadrant. A provider may appear in a particular quadrant based on Gartner's extensive analysis across the full-service life cycle in many industries and other criteria. However, for any given deal, a client company's selection criteria will be narrower and more specific. Consequently, vendors in the Challengers, Visionaries or Niche Players quadrants may prove to be more appropriate for the engagement.

Additionally, because the inclusion criteria in the Magic Quadrant result in the analysis of the largest providers in the Oracle application services market, clients should not disqualify any potential competitors simply because it does not appear in this Magic Quadrant. Other IT services providers not evaluated in this Magic Quadrant may present better alternatives for your business requirements. A Gartner analyst can help with a shortlist of the most suitable candidates based on client requirements.

Use the Magic Quadrant as a tool to help inform your shortlist and evaluation of providers, but do not discount a provider simply because of its quadrant placement, or because it does not appear in this Magic Quadrant. For example, consider using a deal "sweet spot" analysis to ensure you have an optimum basis and evaluation criteria to down-select the most suitable vendors (see "Deal 'Sweet Spot' Analysis Accelerates Service Provider Evaluation and Selection" ).

Market Overview

Oracle had revenue of approximately $7.4 billion in enterprise applications in 2016. It is a megavendor with a considerable range of business and industry applications created through internal development as well as numerous acquisitions. Oracle has been aggressively marketing its cloud business applications for several years and purposefully transitioning its existing and new clients to the cloud. This shift represents a major disruption in the market, which, as a result of this cloud focus, is now moving much faster. Oracle has developed a large portfolio of SaaS enterprise applications as well as platform as a service (PaaS) and infrastructure as a service (IaaS) offerings. Although the direction Oracle is taking is predominantly cloud, it is also still providing support for the existing client base that is not ready to move from existing on-premises solutions.

Service providers looking to create differentiated offerings around the Oracle stack are focused on the two-pronged approach. This approach involves partly supporting its existing clients with legacy Oracle products, while also building solutions and tools for clients looking to make the move to the cloud.

Transitioning to cloud is often much more complex than a technical migration. Clients look for flexibility, speed and new functionalities, but to get these benefits, there are multiple shifts needed compared to a traditional approach. Service providers also need to shift their delivery models as well as reskill their consultants in order to make this transformation for their clients. Cloud means more frequent releases and a more agile approach, more frequent testing, and increased integration requirements, which also affects how service providers work with clients. Interoperability between IaaS, PaaS and SaaS is important. The choice of clients is often a hybrid approach, but ranging from a single Oracle application integrated into the current portfolio, to a complete approach of deploying multiple Oracle Cloud applications at the same time. Service providers are often an active part in this process of making the correct choice and creating a roadmap for the correct cloud, or on-premises strategy. This is done through various cloud readiness assessments that help assess current Oracle portfolio, priorities, and challenges in order to understand where to focus and what Oracle products and solutions can be used. Providers bring in a range of jump-start tools, accelerators and prepackaged offerings in the process of helping clients move to the cloud.

Technologies such as IoT, blockchain and mobile are being brought into the Oracle portfolio, and service providers are building up capabilities to support these areas as well as create new solutions to complement Oracle's own product portfolio.

Providers are focusing on automation and usage of cognitive and robotic technologies, AI, and robotic process automation (RPA) for various forms of operations and process automation. These technologies can eliminate repetitive tasks and predictive behaviors, and client interest in these technologies is rapidly growing.

Subscription-based pricing and outcome-based pricing based on business value are progressively adopted, with clients moving away from traditional T&M and fixed-price pricing models. This serves to further blur the lines between implementation and operational support with the shift to cloud.

The shift to cloud represents a big disruption to not only end-user clients but also service providers. Provider resources need to be trained on new technology platforms and be certified on Oracle Cloud to meet client demand. In some cases, this represents the whole workforce of providers. Providers need to be able to invest ahead, recruit and hire team members that are able to work with clients on agile projects. They also must understand the context of the client's business in order to recommend the correct solutions form a business value perspective and be proficient on the Oracle product portfolio. These resources are not easy to find, and providers are often challenged to fill positions in time. At the same time, although providers need to invest ahead of time on cloud and digital, they must also keep enough expertise to support clients still remaining on legacy Oracle applications.

Evidence

Evaluation in this Magic Quadrant is informed by:

  • Primary research — Gartner inquiries with user organization clients. Services and sourcing analysts collectively took more than 2,000 inquiries with end-user clients on service providers relating to Oracle services and products over the 12 months (October 2016 through September 2017).

  • Primary research — In the 18 months prior to July 2017, Gartner analysts took more than 900 client inquiries on topics related to cloud ERP where Oracle was a noted vendor.

  • Primary research — Feedback from 210 client references worldwide, submitted by the participating service providers, using online surveys.

  • Primary research — A 90-minute vendor briefing from each participating service provider addressing capability proof points of each evaluation criterion in the Magic Quadrant.

  • Primary research — A detailed vendor survey covering revenue, staffing, geographic capabilities, investments and other relevant information, totaling more than 1,000 data points.

  • Secondary research — Press releases and publicly available information, including company websites and financial reports.

  • Other Gartner analysts — Peer review by 12 other Gartner analysts. Their views and comments were taken into account. In addition, this document was presented and defended at the November 2017 Gartner Application Services Research Community session.

Note 1
Industries

This Magic Quadrant addresses the capabilities of the included vendors in the following 27 industries:

  • Aerospace and Defense

  • Agriculture

  • Automotive

  • Banking

  • Chemicals

  • Consumer Products

  • Defense and Security

  • Engineering, Construction and Operations

  • Healthcare (Providers)

  • High Tech

  • Higher Education and Research

  • Industrial Machinery and Components

  • Insurance

  • Life Sciences

  • Media

  • Mill Products

  • Mining

  • Not-for-Profit

  • Oil and Gas

  • Professional Services

  • Public Sector

  • Retail

  • Sports and Entertainment

  • Telecommunications

  • Travel and Transportation

  • Utilities and Energy

  • Wholesale Distribution

Evaluation Criteria Definitions

Ability to Execute

Product/Service: Core goods and services offered by the vendor for the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.

Overall Viability: Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization's portfolio of products.

Sales Execution/Pricing: The vendor's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel.

Market Responsiveness/Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional initiatives, thought leadership, word of mouth and sales activities.

Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements and so on.

Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.

Completeness of Vision

Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen to and understand buyers' wants and needs, and can shape or enhance those with their added vision.

Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.

Sales Strategy: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.

Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements.

Business Model: The soundness and logic of the vendor's underlying business proposition.

Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.

Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.

Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.