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Digital Services – Q1 2017 Market Review

By Tatiana Lobanov-Rostovsky 20 Apr 2017

Welcome to the Q1 2017 edition of our Digital Services Perspective – Results International’s quarterly market update for the digital services segment. The digital services sectors we track in this market overview include (i) Data & Analytics, (ii) Strategy, UX, Design & Build, (iii) Bespoke Software & Systems Integration, (iv) eCommerce and (v) Mobile App Development. We cover the broader advertising and marketing services market in our quarterly infographics which you can find here.

The first quarter of 2017 saw a total of 95 deals completed, slightly down from 105 deals recorded in Q4 2016. By subsector, almost half of deal activity was in Bespoke Software & Systems Integration followed by Strategy & UX, Design & Build (21) and Mobile App Development (8). The public markets in IT/ Consulting Services and Marketing Communications tracked up 5.6% and 2.6% respectively this quarter, however still lagging the Nasdaq’s comparative 8.9% gain over the same period.

IT/ consulting services providers remained very active in the space with Accenture completing three acquisitions (FGE, Investtech and Solid Servision), all specialising in ServiceNow systems integration and consulting services, demonstrating Accenture’s ongoing expansion and strengthening position in the ServiceNow partner ecosystem. Capgemini also recorded three deals this quarter alone (up from 1 deal in the whole of 2016) with acquisitions spanning across the full-spectrum of digital services (Strategy, UX, Design & Build, Bespoke Software & Systems integration and eCommerce) reflecting its corporate strategy to expand its digital services portfolio in 2017.

Acquisitions from private equity houses like Stagwell Group (acquired Nielsen’s consumer & data analytics business, Harris Poll) and EOC Capital (acquired eCommerce platform design & development company, Jetshop) reflect a growing interest to the digital services sector from the private equity community as well as non-traditional buyers. We expect the buyer universe to continue to expand into Q2 and beyond as the sector continues to evolve. As a result now is a good time to be contemplating fundraising, exit or growth through acquisitions in the digital services space – if you are, please do get in touch.

We hope that you enjoy the document and look forward to discussing the data and underlying themes with you.

Click on the image below to view the report.

Digital Services

We hope that you enjoy the document and look forward to discussing the data and underlying themes with you. We have also produced our view on the previous quarter’s proceedings in a series of other market reviews on:

Enterprise Software

HealthTech

CyberSecurity

AdTech & MarTech

The Tech Report (all 5 sectors)

Tatiana Lobanov-Rostovsky

Analyst

Contact Tatiana

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