Market Share Analysis: Top 10 Consulting Providers Revenue,

Growth and Market Share, Worldwide and Regional, 2009

Gartner Dataquest Research Note G00200370, Michael von Uechtritz, 30 April 2010, V2 RA3 05072011
This report is intended as a tool for service providers conducting
a market scan of the top worldwide and regional consulting
service providers and their performance. In 2009, all providers
were challenged by shrinking consulting service markets. We
examine and analyze the top 10 consulting service providers
performance in revenue, growth and market share, both
worldwide and regionally: North America, Europe, Asia/Pacific
and Japan.
Key Findings
The consulting market declined 9%. Six of the top 10 worldwide service providers
performed better than negative 9% in 2009. Of all 280 consulting service providers
covered in IT Services Market Metrics Worldwide Market Share: Database, 138
outperformed (better than negative 9%) the global market, of which 60 providers had
positive revenue growth.
Some providers were able to capitalize from economies already recovering in late 2009
and increase their consulting service market share by selectively co-investing with buyers
for innovative and growth-focused projects, or by taking advantage of investments by
public-sector clients, representing 21%, or $15 billion, of the worldwide consulting market.
In 2009, business-outcome-focused providers of consulting services with established
business relationships were often successful in growing their market share better than
the market average. Suppliers with a broad range of advisory services were attractive
to buyers, for example, if they could provide assistance in mitigating financial risks of an
underperforming complex business operation.
Many consulting service providers faced challenging 2009 market conditions. Those with
attributes such as a pure IT focus, internal influences from other outsourcing, software or
technology businesses, an unbalanced geographical revenue split, or huge dependencies
on clients in a single vertical market often underperformed the market average revenue
growth rate. Four of the 10 largest providers (IBM, Accenture, HP and Capgemini) and
141 of all 280 providers covered in the market share database underperformed the
worldwide consulting market growth rate average of negative 9%.
2
Providers were hardest hit in 2009 by a decline of 14.9% in
Europe. Consulting service market share concentration of
the 10 largest providers in Europe increased from 35.9% in
2008 to 36.8% for 2009, or 0.9%. For 2010, in the European
region, further brand and client acquisitions are expected to
result in growing market share concentration among the top 10
providers.
Recommendations
As a business and IT consulting service business leader,
increase your 2010 market share by demonstrating to potential
buyers how the advice you sell will assist them not only in
mitigating their financial and business risks, but also in coping
with economic uncertainties. For example, commit to economic
benefits for buyers from business process improvement projects
in the supply chain.
IT consulting service providers should reduce time spent
negotiating with buyers for another (small) fixed-price project.
Instead, consider growing your market share by investing in the
development of differentiating consulting service offerings to win
clients, or add new talents to your consultant base in a global
market of $73 billion that is forecast to grow 6.2% in 2010
compared with 2009.
Constantly assess your organizations business performance,
in particular, as a local provider of consulting services. Learn
from 2009 successes and failures. Block sufficient time in 2010
with your key executives and advisors to identify what needs to
change in your consulting business strategy. For example, for
your potential and targeted client segments, assess whether
the service offering (portfolio) addresses people, process,
technology and business risk requirements, and for each
element, include a clear value promise related to the financial
business outcome.
ANALYSIS
Consulting service business leaders did not have a single month
of business as usual in 2009. And many consulting practice
leaders, partners or sales and marketing executives welcomed the
beginning of the global economic recovery during the later part of
2009 with a sigh of relief.
Many global and regional consulting service buyers delayed
or froze their investments in projects, reduced their number of
preferred suppliers and increased the pressure on consulting rate
cards. Therefore, in 2009, all suppliers faced unfavorable business
conditions. Providers key business performance indicators
such as backlog for orders and revenue, time from bid to project
delivery, client attrition, consultant utilization, forecast accuracy,
project profit and margin, project funnel and project size, sales
force efficiency were impacted. Business eroded, and many
consultancy firms were forced to take drastic measures in response
to challenging 2009 market conditions. Actions we observed
included:
Bidding for smaller projects
Cutting overhead cost
Rebalancing project tasks across a global workforce
Reducing the consultant base with voluntary or forced leaves
These actions and other steps taken by providers resulted in their
overall 2009 market share performance. The 2009 market saw
a higher market share accumulation of the 10 largest providers,
with some providers losing their 2008 position in the top 10 list
or disappearing from a regional market. Even some established
providers underperformed in their revenue growth and delivered
results below the global market average of negative 9% in 2009.
Examining and analyzing any providers performance (e.g.,
consulting service revenue, growth or market share) that is
highlighted in this document should also be read in the economical
context of 2009. The global economy declined 2.2% in 2009,
measured in real gross domestic product (GDP) growth compared
with 2008, as estimated by the World Bank in January 2010.
1.0 Consulting Market Context
Some context is important to understand the dynamics of
consulting services. In Gartners forecast and market definition,
consulting services is an offering of professional services and
includes two subsegment (business and IT consulting) forecasts.
We do not further segment the market share.
The consulting service market faced a dramatic global economic
slowing in 2009. Despite a financially challenging year, six of the
worlds largest consulting service providers that Gartner covers
in its market share analysis managed to perform better than the
market average of negative 9% in 2009. Why have some consulting
service providers been more resilient in this dramatic global
economic cycle? Gartner notes the following observations:
In difficult and uncertain times such as in 2009, buyers prefer
to work with established providers to attain advice they need.
Consulting is relatively immune from the economic effects,
even in a globally contracting market. Business advisory
service providers were somewhat more resilient if they had an
established relationship and could demonstrate their business
value-add to clients.
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expressed herein are subject to change without notice.
3
Operating complexity for organizations has increased the
demand for advice. Enterprises are confronted with myriad
and oftentimes uncertain legal, regulatory, financial, risk
management and operating conditions as a consequence of the
financial crisis in 2008 and continued economic uncertainties.
Potential buyers of consulting services often do not have
sufficient in-house expertise to address these issues completely.
It is therefore no surprise that some of the consulting service
firms that specialize in addressing complex business conditions
were asked to assist their clients in the planning of, for example,
the restructuring of a business operation, and they saw an
increase in demand for the advice they can provide.
Increase of opportunities in a rapidly recovering emerging
consulting market helped to offset uncertain or unfavorable
economic conditions for some providers in the United States
and parts of Western Europe as early as the second half of
2009. We note that providers with a global, virtual workforce
can better balance demands in terms of their capacities and
staff. These providers can deliver projects without eroding
profits, while reacting to pressures on consulting rate cards by
buyers.
2.0 Market Share Performance
Many providers took measures to survive and be sheltered from
financial distress, and overall, the consulting industry resisted
greater damages that were expected from a severe economic
downturn. BearingPoint, for example, filed for Chapter 11
bankruptcy in February 2009 for its U.S. operations. However,
of all the 280 providers covered in IT Services Market Metrics
Worldwide Market Share: Database, 60 providers experienced
positive revenue growth. This evidence of resilience for the advisory
industry is interesting, because advisory services are typically
considered by many as the first and/or worst-affected business
services when spending or capital contracts.
Thus, the leaders in this segment have evolved over time through
significant investments in methods, physical infrastructure, labor
pools, and expansion of their client base and pipelines. Organic
growth also has been supplemented with acquisitions; and when
an acquisition of scale occurs, the impact can be noteworthy. More
variability in growth and revenue performance has caused more
fluctuation in market share gains/losses. In a constantly changing
competitive landscape, we found attributes of successful providers
in the consulting market to include:
Scale Global business and IT consulting service providers
have scale in their operations to deliver their advice across
several geographical regions and domains.
Scope Advisors operating initiatives for buyers on a global
scale have the ability to offer a broad array of consulting
services addressing these initiatives; broad scope in the advice
offered is critically important.
Skills Consultancies need the right mix of skills, such as for
multicultural and multidomain change management, while at the
same time offering a deep business process understanding for
a large number of industries.
Stability A solid balance sheet and financial stability of the
business and IT consulting service provider are critical because
buying organizations must mitigate the risk of failing to complete
a project or initiative (for example, a major transformational
18-month-long global finance function project).
Strategy Consulting service providers continually evolve
their business strategy through reorganizing, reskilling of their
resources and redefining service outcome.
The top 10 lists for each region and the overall worldwide market
share did vary but not to a significant extent. Many providers
were able to hold onto their positions. However, some competitors
started to close the market share and revenue gaps through
acquisitions and organic growth, as well as by observing what
has enabled the top providers to both expand their portfolio
of consulting services and hold on to their strong places in the
market, despite the challenges all providers faced in 2009.
2010 will be critical; the return to revenue growth will be imperative
for consultancies of all sizes; those that do not keep pace with
the growth of the consulting service market, which is predicted
to rebound in 2010, will be possible targets for acquisition by the
stronger providers. Acquisitions can potentially have a material
impact on the market share rankings.
3.0 Methodology and Market Share Database
Gartners IT Services Market Metrics Worldwide Market Share:
Database provides vendor revenue, market share and end-user
market size for IT services by region and country. Consulting
services are segmented by computing and communications
platforms and by vertical market. These statistics have been
developed using secondary research and modeling to provide
timely estimates of prior-year results. Market share statistics
reflect secondary and primary research, including input from
participating vendors. See Dataquest Guide: IT Services Market
Research Methodology and Definitions for further detail on our
methodologies and definitions for IT services and which countries/
regions and verticals are covered by the database.
4.0 Worldwide: Top 10 Consulting Service
Providers Revenue, Growth and Market Share,
2009
Worldwide business conditions of 2009 have changed the
consulting market landscape because more market share was
absorbed by the 10 largest providers, reducing the combined share
of all other providers by 0.7%, or $491 million. The increase of
0.7%, from 33.4% in 2008 to 34.1% in 2009, is explained by the
fact that some smaller providers lost their revenue to some of their
larger competitors.
Six outperformers exceeded the worldwide market average of
negative 9% in 2009 and are in the top 10 list (see Table 1):
Deloitte, PricewaterhouseCoopers (PwC), Ernst & Young, KPMG
International, CSC and Fujitsu. Further, of the 280 global providers
that Gartner tracked consulting service revenue for, 138 exceeded
the negative 9% growth rate in 2009, and 60 global providers had
a positive growth rate (more than 0%) in their consulting service
revenue, despite the challenging year.
4
Acquisitions constantly change the consulting service providers
landscape and impact the growth rates inorganically. Attributes of
providers in regard to their global scale, potential for new project
scope, overall revenue size, consultant skill and talent base are an
expression of their consulting business strategy. Among the many
acquisitions in 2009, the sale of BearingPoint to CSC, Deloitte,
Keane, PwC and other providers was a major event and is reflected
in this worldwide list and the regional ones where applicable.
Smaller suppliers of advisory services were challenged in their
aim to achieve a balance in their 2009 revenue across several
geographical markets and thereby reduce the revenue impact of a
single geographical market on their global business performance.
Long existing business relationships between buyers and their
preferred consulting service provider represent a hurdle for these
smaller competitors trying to expand into new accounts or taking
market share in a previously unaddressed vertical sector.
Members of the global top 10 list traded places, but the positions
of the seven largest players did not change from 2008. In 2009,
Fujitsu climbed to the eighth position, and HP climbed to the ninth
position, while Capgemini dropped two places to the 10th
position in terms of global consulting service market share.
Overall, there was little change in the group of the top 10 provider
names listed in Table 1, which remained the same for all providers,
compared with 2008. We believe that the consistent presence
of the providers, such as KPMG, signals the stronger affinity of
IT-consulting-led projects toward financial advice required. Some
buyers have business requirements to mitigate people, process,
technology and, increasingly, financial risks and must (often)
continue to improve certain business processes to cut enterprise
costs.
The 2009 top 10 market share data shows the 10 largest global
suppliers of consulting services (see Table 1).
Six of the 10 providers outperformed the market average of
negative 9% in 2009. Attributes of the six outperformers include:
Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers
combined represent the group of the Big Four. Their
2009 market share results confirm our 2008 market share
assessment that the Big Four will increase their relevance to
buyers. Common attributes of these business consulting service
providers are as follows:
Global scale
Presence in more than 100 countries
Broad scope of the advisory services they can provide
from accounting, auditing, assurance, business and tax to
transaction advisory services
Source: Gartner (April 2010)
Table 1. Worldwide: Top 10 Consulting Service Providers Revenue, Growth and Market Share,
2008-2009 (Millions of Dollars)
Vendor
Deloitte
IBM
PricewaterhouseCoopers
Accenture
Ernst & Young
CSC
KPMG International
Fujitsu
HP
Capgemini
Other Service Vendors
Total Market
Rank
1
2
3
4
5
6
7
8
9
10
2008
4,385
4,353
3,316
3,074
2,348
1,926
1,735
1,561
1,536
1,566
51,303
77,103
2009
4,354
3,958
3,225
2,590
2,327
1,769
1,689
1,473
1,313
1,291
46,147
70,136
Growth (%)
2008-2009

0.7

9.1

2.8

15.7
0.9
8.2
2.7
5.7

14.5

17.6

10.0
9.0
Market Share (%)
2009
6.2
5.6
4.6
3.7
3.3
2.5
2.4
2.1
1.9
1.8
65.9
100.0
5
Exceeding 100,000 employees in consulting overall
Broad skill base
Size in terms of their revenue in the business and IT
consulting market and other markets.
Overall, the Big Four group coped relatively well with the
dynamics of the global consulting market. The historical
close alignment of their consulting business with the buying
organizations CFO community was attributed to these
providers auditing and accounting businesses. Since the
financial crisis in 2008, CFOs are considerably more influential
to the CIO and overall for the business and IT consulting
investments of an organization, compared with precrisis years.
Further, we observed in our dialogue with Gartner clients
through inquiries that advice of the Big Four is frequently
considered objective by their potential service buyers. This is
because these providers are, to a certain degree, not influenced
by their other businesses, such as the need to push for revenue
for IT outsourcing with a major software or large hardware
internal business unit/division, through advice they sell and
deliver.
Fujitsu, with negative 5.7%, and CSC, with negative 8.2%,
outperformed the market average of negative 9%.
Fujitsu declined less than 9% in its local and regional
government, transportation and healthcare business. Fujitsu
showed positive revenue growth for its business and IT
consulting revenue in its services, wholesale and trade, and
agriculture, mining and construction verticals.
CSCs results were positively impacted by its consulting
business in the government vertical, from which CSC derived
$866 million (of $1,769 million) in 2009 and $884 million in
2008, a 2% decline compared with 2008. CSC exploited its
consultative capabilities, creating and identifying IT outsourcing
(ITO) opportunities, as well as leveraging into and through the
transition (early life support team).
Attributes of the four underperformers, which all declined in revenue
by more than 9% in 2009, include:
These four large consulting service providers IBM,
Accenture, HP and Capgemini have a large portion of their
total IT services revenue coming from a company strategy
of positioning, often selling their outsourcing operations, in
addition to their consulting services, to buyers, as well as
bundling consulting into an application development contract.
Further, providers such as IBM and HP have other software and
hardware businesses to support/prioritize with their consulting
business.
Some providers revenue and, therefore, market share results
are geographically less balanced because the providers are
highly dependent on a single country, and we believe this
situation contributed to Capgeminis underperformance of
negative 17.6% in 2009. Capgemini collected $1,005 million,
or 77.9% of its global $1,291 million in consulting revenue,
from Western Europe. The Asia/Pacific region, a $7,187 million
market in 2009, contributed 4.5% of Capgeminis growth, or
$32 million, but at a (low) weight of 2.5% in its global consulting
service revenue.
5.0 Regional Analysis: Top 10 Consulting Service
Providers Revenue, Growth and Market Share,
2009
When reviewing provider performance in each region (worldwide,
North America, Europe, Asia/Pacific and Japan), we found
noticeable differences, and they are as follows:
Japan showed the highest concentration of market share
(68.1%) for the top 10 providers among all five regions. The
worldwide concentration of top 10 market share was 34.1% in
2009 (as shown in Table 1).
No provider in the worldwide and European top 10 lists
achieved flat (0.0%) or positive revenue growth in 2009. In
contrast, five providers operating in the Japanese market
grew their consulting service revenue, thereby outperforming
their global market peers. The market share hold by local
competitors in each region demonstrates that the ability to
deliver advisory services locally or regionally remains a key
requirement for some end users.
IBM has a unique presence: It is listed among the 10 largest
consulting service providers in all five geographical regions
covered in this report.
Other providers populate the top 10 lists in multiple regions, and
domestic providers appear on regional lists: For example, SAIC
appears in North Americas list, Logica appears in Europes list,
Samsung SDS appears in Asia/Pacifics list, and NEC appears
in Japans list. Clearly, competitive differentiation versus a group
of peers requires all providers to take into account the specific
regional or country mix of competition in these markets.
The unweighted average revenue decline (in U.S. dollars) for
the top 10 providers per region varies significantly, and it is as
low as negative 2.3% for Asia/Pacific and is as high as negative
12.4% in Europe. Asia/Pacifics lower decline in revenue for
the top 10 indicates that smaller markets recover faster from
an economic crisis, and therefore, some rapidly recovering
economies offer a 2010 revenue opportunity for providers to
eventually rebalance their total consulting service revenue split
quickly. For example, the Asia/Pacific region is forecast to grow
17.1% in 2010 in its consulting service market compared with
2009, representing an $8.5 billion market.
6
5.1 North America: Top 10 Consulting Service Providers
Revenue, Growth and Market Share, 2009
In Gartners analysis, we define North America as being composed
of Canada and the United States. North Americas business
conditions of 2009 changed the market landscape, evidenced by
0.7% more market share accumulated by the top 10, increasing
from 39.7% in 2008 to 40.4%. The increase of 0.7%, or $195
million, represents the absorption of a fictive provider holding a
27th market share position in this geographical market.
Six providers exceeded the North American market average of
negative 6.1% in 2009: Deloitte, PricewaterhouseCoopers, SAIC,
Northrop Grumman, Ernst & Young, and KPMG International
(see Table 2). Further, of the 135 providers that Gartner tracked
consulting service revenue for in North America, 69 exceeded the
negative 6.1% growth in 2009, and 28 providers operating in this
geographical market had a positive growth rate in their consulting
service revenue.
The breakup and sale of BearingPoint is reflected in this top 10 list
for North America and further underlines changes at the supply side
of the largest regional consulting market in the world worth $27.9
billion in 2009.
Positions in the top 10 list changed, but its members for the North
American region remained almost the same, compared with 2008.
In the 2009 list of the 10 largest consulting service providers in
North America, SAIC and Northrop Grumman represent two large
U.S.-focused providers. For example, in 2009, $1,245 million of
SAICs $1,250 million consulting service revenue in North America
was generated in the U.S. and $972 million of Northrop Gummans
$976 million consulting revenue in the region was generated in
the U.S. McKinsey & Co. exited the list, and KPMG International
entered the list and is now in the 10th position for its 2009 market
share.
Table 2 lists the 10 largest providers of consulting services in North
America in 2009.
Six of the 10 providers outperformed the North American
market average of negative 6.1% in 2009. Attributes of the six
outperformers include:
Consulting service providers such as Northrop Grumman,
SAIC and Deloitte that were positioned strongly (if compared
by revenue growth rates) in the 2009 North American
consulting market have historically operated in the scope of
the U.S. federal government sector. Deloittes 2009 market
share includes the acquisition of BearingPoints public-sector
practices in the U.S. These three providers performance
demonstrated a competitive advantage in their vertical business
focus and assisted these providers in achieving positive revenue
growth.
We attribute SAICs 2009 success to the providers scope, skills
and competencies it can provide to national security, energy
and environment, critical infrastructure, and health buyers of
advisory services. SAICs strategy to focus on the public sector
Source: Gartner (April 2010)
Table 2. North America: Top 10 Consulting Service Providers Revenue, Growth and Market
Share, 2008-2009 (Millions of Dollars)
Vendor
Deloitte
PricewaterhouseCoopers
IBM
SAIC
CSC
Northrop Grumman
Ernst & Young
Accenture
Oracle
KPMG International
Other Service Vendors
Total Market
Rank
1
2
3
4
5
6
7
8
9
10
2008
2,406
1,445
1,465
1,193
1,271
926
870
970
656
554
17,944
29,700
2009
2,419
1,432
1,311
1,250
1,179
976
843
797
534
528
16,616
27,886
Growth (%)
2008-2009
0.6

0.9

10.5
4.8

7.2
5.4

3.0

17.9

18.6
4.8
7.4
6.1
Market Share (%)
2009
8.7
5.1
4.7
4.5
4.2
3.5
3.0
2.9
1.9
1.9
59.6
100.0
7
for this almost-U.S.-only provider (in terms of business and IT
consulting service revenue) has paid off, as evidenced by its
better-than-market-average results. 2009 was a record year for
the provider, and its overall business exceeded $10 billion, and
it reported 27 deals valued at $100 million or greater, compared
with 17 in 2008. In 2009, SAIC acquired SM Consulting (SMC)
and Icon Systems (Icon). SMC provides services in language,
intelligence, IT, management consulting, business process
outsourcing, training, and logistics to federal, state and local
governments, and private industry.
Competitive moves (that is, acquisitions) helped PwC to expand
its consulting business and strengthen its consulting skills in
technology and transformation, including strategy, operations
and sustainability. Its acquisitions of Alaris Consulting, New
Dimension Solutions, Entology, BusinessMinds, ECS Ltd. and
Sustainable Finance, as well as portions of BearingPoint North
Americas commercial business, impacted its result.
PwC was one of two Big Four firms (Ernst & Young was the
other) to support the U.S. government in its bailout of banking
institutions under the Troubled Asset Relief Program (TARP).
Overall, PwCs business and IT consulting revenue declined
0.9% in 2009 compared with 2008.
Ernst & Young appears to be growing its technology advisory
competencies organically, although the firm acquired the
SAP-focused practice of EnteGreat in April 2009, and Capital
City Technologies, a small management and technology
consulting firm serving the government sector, in 2009. Ernst &
Young advised the Federal Reserve Bank of New York on the
dismantling of American International Group (AIG). Overall, Ernst
& Young benefited from its increased focus on the alignment of
business and IT. In terms of Ernst & Youngs consulting service
revenue (in particular, business consulting), Ernst & Young
benefited from some buyers beyond the CFO community
showing an interest in maturing solutions, such as analytics and
business intelligence, to enhance the financial transparency of
their organizations.
Oracle had the highest decline (at negative 18.6), followed by
Accenture (negative 17.9%), IBM (negative 10.5%) and CSC
(negative 7.2%) in the North American market. These four providers
in this top 10 list underperformed the market average of negative
6.1%, and their attributes include:
Oracle has not fully materialized on all consulting service
opportunities in some of the vertical sectors, such as in the
governmental sector, which is a revenue stream that some
of the other providers operating in this region have taken
benefit of. Oracle experienced a strong decline of 20.9% in its
consulting revenue for 2009 in the manufacturing (discrete and
process manufacturing) vertical sectors, which contributed to its
below-market-average performance.
With revenue of $797 million in 2009, Accenture declined
17.9% from its previous-year estimated revenue base of $970
million. Accentures project-based services include business
consulting and IT consulting, and the staffing is usually
organized to conduct a conceptual and detailed design, which
is usually executed by a business consulting team (for process
design, workflows and business case) and IT consulting
resources (for the technical architecture, detailed design and
configuration). Other advisors that Accenture competes with in
North America sell their own services, similar to those offered
by Accenture, and in 2009, competitive price pressures and
the lack of constantly reaching (new) buying centers, such as
the CEO or CFO of an organization, may have impacted its
performance.
IBM (with negative 10.5%) and CSC (with negative 7.2%) were
also challenged to cope with a difficult year and underperformed
the 2009 market average revenue decline of 6.1% in the region.
We believe that internal influences and obligations to other
businesses, such as outsourcing, software and technology,
influenced their market performance in business and IT
consulting.
5.2 Europe: Top 10 Consulting Service Providers
Revenue, Growth and Market Share, 2009
In Gartners analysis, we define Europe as being composed of
Eastern and Western Europe. A major component of the European
market is Western Europe, one of the most-mature consulting
markets. Thus, in market share, we see a combination of local,
global and Europe-based providers dominating the leadership
positions due to their position in Western Europe.
Due to a challenging European consulting service market, as
organizations slowed spending on projects, changes to the
competitive landscape were almost natural. The top 10 players
accrued an additional 0.9% of market share, growing to 36.9%,
representing a $228 million increase cumulatively or the absorption
of a fictive provider holding a 21st market share position.
Five providers within the top 10 exceeded and, thereby,
outperformed the European market average of negative 14.9% in
2009: Deloitte, PricewaterhouseCoopers, Ernst & Young, KPMG
International and Fujitsu (see Table 3). Further, of the 186 providers
that Gartner tracked consulting service revenue for in Europe, a
total of 102 exceeded the negative 14.9% average in 2009, and
18 providers operating in this geographical market had a positive
growth rate in their consulting service revenue.
Drivers for local market dynamics in the region are found in
the different economic conditions under which providers were
competing, including the many varying local legal and regulatory
requirements and differences in business culture that impacted how
consulting providers can sell and deliver their advice to European
clients.
In 2009, GDP decreased 4.1% in the euro (currency) area and
decreased 4.2% across the European Unions 27 member states,
compared with the 0.6% increase and 0.7% increase, respectively,
in 2008, according to Eurostat, the statistical office of the European
Union. The office further reported that among EU member states
for which seasonally adjusted GDP data is available, Estonia (with
2.5% growth) recorded the highest growth rate in the fourth quarter
of 2009, compared with the previous quarter, followed by Slovakia
(with 2%) and Poland (with 1.2%).
8
Currencies had an impact due to volatile exchange rates,
such as for the euro against the U.S. dollar. Currency impacts
constrained some providers operating at a country or regional
level, for example, if they had not properly hedged against
currency fluctuations. Also, some providers faced challenges from
yearly unfavorable predefined internal exchange rates in terms
of intracompany cost transfers when lending consultants for the
delivery of global projects outside their territories. We reported for
the U.K. consulting market a negative 17.2% performance in U.S.
dollars, negative 2.7% performance in British pounds and negative
12.8% performance in euros.
Positions in the European top 10 list changed in 2009, but the
providers for the region remained the same, compared with 2008.
In this 2009 list of the 10 largest consulting service providers in
Europe, Logica represents a large European-focused provider
for business and IT consulting services. That is because Logicas
$1,083 million of its $1,086 million business is derived from its
clients in Western Europe, and its revenue from the U.K. and
France combined is $452 million.
The 2009 top 10 market share data shows the 10 largest European
suppliers of consulting services (see Table 3).
Attributes of the five outperformers (Deloitte,
PricewaterhouseCoopers, Ernst & Young, KPMG International
and Fujitsu), which all exceeded the European market average of
negative 14.9% in 2009, include:
The revenue that the Big Four derived from their business
consulting services contributed to their better-than-market-
average (negative 14.9%) revenue growth performance in 2009.
The results of these four providers can be attributed to the
broad scope of projects they can address and the availability of
consultants with skills and competencies that were needed to
cope with economic challenges in 2009 by clients in a number
of verticals, such as financial services, communications, utilities
or healthcare. For example, for all four providers, revenue
growth in the financial services vertical exceeded the market
average of negative 15.6% in 2009 in the business and IT
consulting service market in Europe, which shrank from $6,542
million in 2008 to $5,521 million in 2009.
Fujitsu advisory service attributors included some competencies
to improve a buyers business operation (operational
excellence), which was a critical 2009 priority for CIOs. The
provider integrated its technology advisory competencies
organically and refocused on selling its IT consulting
competencies. In April 2009, Fujitsu acquired Siemens 50%
stake of Fujitsu Siemens Computers (FSC). As a result of
the reorganization and acquisition, Fujitsu can now reap the
benefits, and it can now broadly position its consulting services
to clients in the region.
Source: Gartner (April 2010)
Table 3. Europe: Top 10 Consulting Service Providers Revenue, Growth and Market Share,
2008-2009 (Millions of Dollars)
Vendor
Deloitte
Accenture
Logica
Capgemini
IBM
PricewaterhouseCoopers
Ernst & Young
KPMG International
Fujitsu
HP
Other Service Vendors
Total Market
Rank
1
2
3
4
5
6
7
8
9
10
2008
1,253
1,437
1,282
1,231
1,195
1,040
978
840
741
677
19,081
29,755
2009
1,182
1,145
1,086
1,012
1,005
936
924
816
656
548
16,007
25,317
Growth (%)
2008-2009
5.7

20.3

15.3

17.8

15.9

10.0
5.5
2.9

11.5

19.1

16.2

14.9
Market Share (%)
2009
4.7
4.5
4.3
4.0
4.0
3.7
3.7
3.2
2.6
2.2
63.1
100.0
9
Accenture had the greatest decline (negative 20.3%), followed by
HP (negative 19.1), Capgemini (negative 17.8), Logica (negative
17.3%) and IBM (negative 15.9%) among the 10 largest providers
in the European market. These five providers in this European top
10 list underperformed the market average of negative 14.9%, and
their attributes include:
In terms of their market share in Europe, Accenture derived
23.6% of its consulting business in 2009 from the United
Kingdom, Capgemini derived 27.8%, and HP derived 28.8%
of the regional consulting business from the United Kingdom in
2009. Further, the U.K. is Accentures and HPs primary source
country for consulting revenue in Europe. Therefore, the U.K.
had a heavy influence on these providers overall results for the
region in 2009.
Capgeminis consulting service revenue split across the regions
is somewhat unbalanced, as it collected $1,005 million, or
77.9%, of its global $1,291 million consulting service revenue
from Western Europe.
Logicas 2009 underperformance (negative 15.3%) in consulting
revenue growth versus the market average in Europe of
negative 14.9 can be attributed to its strong decline of 25.6% in
consulting service revenue in the Netherlands and a decline of
25.5% in Belgium; generally, both country markets are historic
strongholds for Logica.
IBMs decline of 15.9% in consulting service revenue in 2009
was relatively equally split across Europe.
5.3 Asia/Pacific: Top 10 Consulting Service Providers
Revenue, Growth and Market Share, 2009
The 2009 market share data shows that the top 10 providers in
Asia/Pacific in the consulting service market accounted for 48% of
the total Asia/Pacific consulting market (see Table 4), an increase of
1.1% from 46.9% in 2008, representing a business of $79 million of
the total market.
Seven outperformers exceeded the Asia/Pacific market average of
negative 5.1% in 2009: IBM, Accenture, PricewaterhouseCoopers,
KPMG International, Ernst & Young, Deloitte and CSC. Further,
of the 176 providers that Gartner tracked consulting service
revenue for in Asia/Pacific, 86 exceeded the market average of
negative 5.1% in 2009, and 53 providers operating in this diverse
geographical market had a positive growth rate in their consulting
service revenue.
In 2009, the global consulting market faced a remarkably
synchronized global downturn, but in 2010, providers started to
experience a multispeed GDP recovery. The Asia/Pacific region
clearly highlights that the recovery is proceeding at different
speeds, and it remains fragile. These conditions pose their own
challenges to consulting service providers operating in advanced
economies, such as Australia, or emerging and developing
economies, such as China and India. Further, across the region,
the business confidence index for South Korea, Malaysia and
Taiwan is up from the high levels of 2008, according to the
International Monetary Fund (IMF), signaling project opportunities
for providers.
Positions in the list did not change, and its 10 members for the
Asia/Pacific region remained the same, compared with 2008.
Samsung SDS, UXC and LG CNS represent large Asia/Pacific-
focused providers for business and IT consulting services. For
example, local IT services firm UXC, which has significant business
in the government, communications and retail sectors, is also
included in the list, and it derives $155 million of its $170 million
business in the region from clients in Australia. LG CNS and
Samsung SDS are IT services arms of their chaebol conglomerate
parent companies. Samsung SDS has $429 million of its $462
million Asia/Pacific consulting service revenue from clients in South
Korea, and LG CNS, South Korea-based, derives $141 million of its
$152 million in the region also from South Korea.
Our data for 2009 lists the 10 largest providers of consulting
services in Asia/Pacific (see Table 4).
Attributes of the seven outperformers (IBM, Accenture,
PricewaterhouseCoopers, KPMG International, Ernst & Young,
Deloitte and CSC), which exceeded the Asia/Pacific market average
of negative 5.1% in 2009, include:
The Big Fours performance in business consulting services
contributed to their better-than-market-average (negative
5.1%) revenue growth in 2009 in Asia/Pacific. Results of these
four providers can further be attributed to clients in a number
of verticals, such as financial services, communications,
government, utilities or healthcare in the region. Consistently,
all four providers have their largest share of their Asia/Pacific
consulting service revenue in Australia and in the financial
services industry (FSI). All four providers revenue growth in the
FSI exceeded the market average of negative 4.8% in 2009 for
consulting services in the Asia/Pacific region. FSI represents
$1,670 million, or 23.2%, of the regions total consulting market
of $7,187 million in 2009. The Big Four consulting firms were
among the 41 providers for whom we reported positive revenue
growth (exceeding 0%) in this regional market in 2009.
Success attributes for IBM and Accenture include country-
specific revenue growth, such as in China. IBM revenue for
consulting grew from $254 million to $297 million, or 16.6%, in
China. Accenture grew its consulting revenue in China from a
revenue base of $46 million to $60 million, or 28.7%. For CSC,
we reported revenue growth in Singapore (24.0%) and Taiwan
(22.8%).
LG CNS (negative 19.4%), Samsung SDS (negative 18.6%) and
UXC (negative 14.6) all declined in revenue in the Asia/Pacific.
These three providers in the Asia/Pacific top 10 list underperformed
the market average of negative 5.1%, and their attributes include:
Samsung SDSs and LG CNSs underperformance are due
to their continued high revenue dependency on South Korea;
92.9% of Samsung SDSs total Asia/Pacific consulting service
10
revenue was derived from South Korea, and 92.8% of LG
CNSs Asia/Pacific consulting revenue was derived from
the same country. In terms of the South Korean won, these
providers consulting revenue declined 7.3% for Samsung SDS
and declined 8.4% for LG CNS in 2009 compared with 2008.
However, the South Korean economy recovered in the second
half of 2009, according to the Bank of Korea.
UXC faced challenges in New Zealand and Australia, with
declining consulting revenue of 18.8% and 14.3%, respectively,
in 2009.
5.4 Japan: Top 10 Consulting Service Providers
Revenue, Growth and Market Share, 2009
The 2009 market share data shows that the top 10 providers in
Japan in the consulting service market accounted for 68.1% of the
market, down by 0.7% from its previous level of 68.8%; revenue of
$39 million was transferred to providers that were not part of the
top 10 list.
The average market decline in the consulting market in Japan
for all providers was 0.5%. This negative 0.5% growth rate was
outperformed by five providers in 2009 (see Table 5): Fujitsu, NEC,
NTT Data, Nomura Research and Mitsubishi Electric. Further, of the
89 providers that Gartner tracked consulting service revenue for in
Japan, 51 exceeded the market average of negative 0.5% in 2009,
and 49 providers operating in this diverse geographical market had
positive growth in their consulting service revenue.
In Japanese yen, however, the consulting market in the region
declined 9.9% in 2009 compared with 2008, and 11 providers
reported positive growth. This result highlights that the impact of
the appreciation of the Japanese yen against the U.S. dollar was
strong in 2009; for comparison purposes, we provide the list of the
top 10 also in local currency (see Table 6).
The business environment in Japan was severe for the whole of
2009, and many organizations kept tight IT services spending,
especially spending related to consulting services. Consulting
service providers operating in the Japanese market found a
somewhat positive business environment, with the GDP increasing
by 0.9% in the fourth quarter of 2009 (negative 0.1% in the
previous quarter), according to Eurostat. The office also reported
for the whole of 2009 that GDP decreased by 5.2% in Japan,
compared with it decreasing 1.2% in 2008.
Positions in the top 10 list changed, and Toshiba exited the list,
while PricewaterhouseCoopers entered the top 10 as a result of
its acquisition of BearingPoint in 2009; PwC has increased its
presence in the local market.
Some large domestic providers invested in enhancing their
consulting capabilities to effectively approach corporate executive
officers of user organizations whose budgets were strictly
controlled to win projects. Hitachi and NTT Data have been
Source: Gartner (April 2010)
Table 4. Asia/Pacific: Top 10 Consulting Service Providers Revenue, Growth and Market
Share, 2008-2009 (Millions of Dollars)
Vendor
IBM
Samsung SDS
Accenture
PricewaterhouseCoopers
KPMG International
Ernst & Young
Deloitte
CSC
UXC
LG CNS
Other Service Vendors
Total Market
Rank
1
2
3
4
5
6
7
8
9
10
2008
887
570
441
366
259
218
217
208
199
189
4,016
7,570
2009
875
462
438
409
262
253
232
200
170
152
3,725
7,187
Growth (%)
2008-2009

1.4
18.9
0.7
11.6
1.2
16.1
7.1

4.1

14.6

19.4
7.2
5.1
Market Share (%)
2009
12.2
6.4
6.1
5.7
3.6
3.5
3.2
2.8
2.4
2.1
52.0
100.0
11
acquiring consulting companies, and Fujitsu restructured its
organization and aggregated its consulting resources among the
group into a subsidiary providing new options for Japanese clients.
Such moves signal that providers have started seeing a stronger
affinity of their IT-consulting-led projects toward the financial advice
required by some of their buyers.
The 2009 top 10 market share data shows the 10 largest suppliers
of consulting services operating in Japans market (see Table 5).
Attributes of the five outperformers (Fujitsu, NEC, NTT Data,
Nomura Research and Mitsubishi Electric), which exceeded the
Japanese market average of negative 0.5% in 2009, include:
Ongoing strong relationships with companies in the
manufacturing industry, which retained IT investments to
improve the business process or expand global operations,
even under severe business circumstances. Fujitsu, NEC,
NTT Data and Nomura Research empowered their delivery
capabilities in regions such as the Americas, East Asia, Europe
and China, to strengthen their competitiveness in consulting
projects.
A consistent attribute of all these five providers (Fujitsu, NEC,
NTT Data, Nomura Research and Mitsubishi Electric) of
business and IT consulting services in Japan is that they are all
headquartered in Japan.
Focus put on the IT cost optimization related to consulting,
including the review of current systems and IT costs, spending
on software support maintenance, and outsourcing.
IBM, Hitachi, PricewaterhouseCoopers, IT Holdings and
Nihon Unisys declined in revenue in Japans business and IT
consulting market in 2009. These five providers in this top 10 list
underperformed the market average of negative 0.5%, and their
attributes include:
We observed that some providers were late in establishing
global support capabilities to gain attraction from the globally
operating Japanese manufacturers.
Relatively high dependency on the financial services sector,
which drastically cut IT budgets and froze ongoing projects in
2009.
Nomura Research and Mitsubishi Electric derive 100% of their
global consulting service revenue from clients in Japan, and
NEC derived 91.1% of its global consulting revenue from clients
in Japan.
NTT Data generated revenue of $190 million, or 34.7%, from
the FSI in 2009.
Source: Gartner (April 2010)
Table 5. Japan: Top 10 Consulting Service Providers Revenue, Growth and Market Share,
2008-2009 (Millions of Dollars)
Vendor
Fujitsu
NEC
IBM
NTT Data
Hitachi
Nomura Research
PricewaterhouseCoopers
IT Holdings
Mitsubishi Electric
Nihon Unisys
Other Service Vendors
Total Market
Rank
1
2
3
4
5
6
7
8
9
10
2008
676
540
564
526
582
195
183
170
148
125
1,683
5,392
2009
712
550
546
529
526
206
155
152
149
125
1,712
5,362
Growth (%)
2008-2009
5.3
1.9

3.2
0.5

9.6
5.9

15.2

10.7
0.9

0.6
1.8

0.5
Market Share (%)
2009
13.3
10.3
10.2
9.9
9.8
3.8
2.9
2.8
2.8
2.3
31.9
100.0
12
For comparison purposes, we provided the list of top 10 consulting
service providers in Japan in local currency (see Table 6). Of the
89 providers that Gartner tracked consulting service revenue for in
Japan, 49 exceeded the market average of negative 9.9% in 2009,
and 11 providers reported positive growth in yen.
6.0 Key Business and IT Consulting Services
This document uses Gartners terminology for consulting services,
which is an aggregate for business and IT consulting advisory
services.
Business consulting services include business operations consulting
services that typically preface, enable or influence the adoption of
IT. These business consulting services include business process
transformation, business process redesign or re-engineering,
business performance improvement, corporate compliance, finance
transformation, human capital management, risk management,
governance and sourcing advisory. Business consulting is different
from IT consulting, which is advisory services that help clients
assess different technology strategies and, in so doing, align their
technology strategies with their business or process strategies.
Examples of these types of services include transformational
change management after a merger, acquisition and divestures,
compliance issues, cost reduction, innovation initiatives in product
marketing, IT improvements, organizational design, process
improvement, productivity improvement, or functional advice for
finance management, human resources, supply chain, marketing or
customer care.
7.0 Evolution of the Worldwide and Regional
Consulting Markets
Worldwide, Gartner predicts that in the near term, revenue
pressures on consulting service providers will continue to be high.
Consultants must also update their knowledge base frequently
to keep pace with evolving business and technology needs to
defend their market share. Hype Cycle for Consulting and System
Integration, 2009 shows how dynamic the business conditions are
for business and IT consulting service providers and their potential
clients. Right now, enterprise cost takeout and business process
improvement are in the scope for many consulting projects. Apart
from price pressure on consulting day rates and frequent changes
to business conditions and technology, the global consulting
market providers face challenges from competitive technologies,
such as online advisory services, software-enabled business
models and business process simulations.
Source: Gartner (April 2010)
Table 6. Japan: Top 10 Consulting Service Providers Revenue, Growth and Market Share,
2008-2009 (Millions of Yen)
Vendor
Fujitsu
NEC
IBM
NTT Data
Hitachi
Nomura Research
PricewaterhouseCoopers
IT Holdings
Mitsubishi Electric
Nihon Unisys
Other Service Vendors
Total Market
Rank
1
2
3
4
5
6
7
8
9
10
2008
69,884
55,787
58,324
54,402
60,125
20,139
18,953
17,585
15,307
12,974
173,899
557,379
2009
66,631
51,478
51,143
49,517
49,234
19,305
14,545
14,215
13,982
11,680
160,208
501,938
Growth (%)
2008-2009
4.7
7.7

12.3
9.0

18.1
4.1

23.3

19.2
8.7

10.0
7.9
9.9
Market Share (%)
2009
13.3
10.3
10.2
9.9
9.8
3.8
2.9
2.8
2.8
2.3
31.9
100.0
13
For regional consulting service markets, we expect buyers will
continue to carefully manage their budgets, as evidenced by
intended behaviors of buyers in the U.K., which is the largest
market ($6.4 billion) in the Europe, the Middle East and Africa
(EMEA) market, and which is expected to grow 5.9% in 2010.
In 2010, the demand for advice in several regions is growing again,
and as a result, the distribution of market share will evolve; we
expect that larger providers will concentrate more market share
during the year.
Further, some providers listed in this document will strategically
acquire competitors, presenting an opportunity to grow their
global scale and revenue size in 2010, as well as to acquire new
skills needed to address an increased demand of buyers seeking
assistance regionally and globally to successfully manage
increased complexity in their business operations.