Shift towards outcome-based metrics to reflect positively on the global market for outsourced software testing

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Outsourced software testing: Key market research findings

  • The Americas dominate the market geographically
  • Embedded software testing accounts for a majority of the market’s revenue
  • Key vendors – Accenture, Amdocs, HP, and IBM

Technavio’s market research analysts predict the global outsourced software testing market to grow at a CAGR of around 11% between 2016 and 2020. The growth of this market can be accredited to the growing need for test-driven development. Test-driven development is a software development process that is gaining prominence among SMEs. The process revolves around repetitive unit testing with a short development cycle. During 2015, the Americas accounted for more than 43% of the overall market share to become the dominant shareholder in the global market for outsourced software testing. Factors such as high staffing costs, dynamic provisioning, and the need to manage quality and timelines in complex sourcing environments for application development projects will fuel the growth of the outsourced software testing market in the Americas during the forecast period.

The new market research report from Technavio presents a breakdown and analysis of the outsourced software testing segments based on the product.

“The market is currently witnessing a transition towards business outcome-based metrics. Software vendors in the market now offer outcome-based pricing models to clients that promise pricing levels benchmarked to service performance. Such models are offered to customers who have long-term relationships with the company, and where testing services have reached a stage where the outcome criteria can be defined clearly. Outcome-based services include the impact on end-customer satisfaction, revenue of clients, time-to-market, and test life cycles,” says Amit Sharma, Lead Analyst, ICT, Technavio Research.

The embedded software testing segment accounted for around 71% of the overall market’s revenue to become the primary revenue generating segment in the global market during 2015. Increased demand for embedded software in the automotive segment is the major driving force behind the growth of the embedded software testing market. Embedded software testing outsourcing is gaining a lot of traction in the market at present. A large number of SMEs and established organizations have introduced applications based on Android and Linux for the embedded system.

The major players in the market include Accenture, Amdocs, HP, and IBM. With a copious number of providers, application testing services have become an attractive business opportunity for vendors. Capgemini, TCS, Tech Mahindra, and Wipro are some other key players in the market providing software testing services. Additionally, many companies are also forging partnerships with niche players to improve their software tool packages and drive innovation. In addition to this, testing service providers are selling their testing tools as separate software instead of bundling them along with testing services.

A more detailed analysis is available in the Technavio report, Global Outsourced Software Testing Market 2016-2020.

We can customize reports by other regions and specific segments upon request.

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