Welcome to the Q3 2018 edition of the Digital Horizon Market Review – Results International’s quarterly market update for the digital services sector. The digital services sectors we track in this market overview include (i) strategy, UX, design and build, (ii) data and analytics, (iii) bespoke software and 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.
Highlights in the quarter include:
- The Results International IT/Consulting Services Index grew to its highest level on record, gaining 20% over the last 12 months. Elsewhere in the public markets, Amazon became the second company to pass a $1trn market cap, strengthened by its market share leading AWS cloud Infrastructure-as-a-Service, in turn driving demand for complimentary service providers.
- Cloud migration and integration services for infrastructure providers (such as Amazon’s Web Services and Microsoft’s Azure) continue to attract high levels of interest as enterprises are migrating systems off premise at increasing rates. Results International acted as exclusive financial advisor to hybrid cloud and IT services consultancy OSCL on its sale to Cancom in August, highlighting this trend.
- Traditional IT services, marketing communications, and management consultancies continue to compete across traditionally out of scope territory, as Wunderman (WPP) acquired Emark, a Salesforce Marketing Cloud consultancy, and Deloitte acquired Cloudtrek, an AWS migration consultancy.
- Marketing communications firms continue to face headwinds as they grapple with building a model that’s less reliant on media budgets, while facing down the challenges posed by management consultancies and increasingly influential technology giants (Google and Facebook). The Results International Marketing Communications Index showed a loss of 5.8% in the trailing 12 months, led by WPP which shed value during a protracted period in which ex-CEO Martin Sorrell was replaced by Mark Read, who is now faced with the challenge of revitalising the juggernaut.
The digital services sectors remain active with a wide buyer universe, and the outlook is exciting. As such, now is a good time to be contemplating fundraising, exit, or growth through acquisition in the digital services space – if you are, please do get in touch.Read Less