Tech giants help drive high-tech consulting – up US$1bn in just two years

21-Jan-2020

As the US tech giants, Apple, Microsoft, and Google continue to grow aggressively and expand their range of services, they’ve ramped up their use of consultants, finds a new report today.

The report, from professional services industry experts Source Global Research, found that the high-tech industry was TMT’s fastest growing consulting market in 2018, with revenues rising 13.4% to US$4.8bn – this sub market has now grown by over US$1bn in just two years. The global TMT consulting market grew more slowly at 8.8% to US$12.9bn in 2018.

Risk & regulatory projects are also on the up in the TMT sector. The high-tech industry in particular is coming under much greater regulatory scrutiny, primarily in Europe and the US, especially in relation to data privacy, and this is proving to be a boon for consultants in the high-tech market.

Gordon Tucker, Managing Director of Protiviti, San Francisco Bay Area Market Leader, and Global TMT Industry Leader, said:
“Tech companies have been relatively unencumbered by significant regulation in the past; now the day of reckoning is here. We're helping our clients to be aware of how best to prepare for an increased regulatory environment, and helping them develop and implement an effective approach to increasing regulation.”

The Source report also found that the introduction of GDPR has been a game changer for many risk & regulatory firms serving the high-tech industry. Not only did it generate significant volumes of work before it came into effect in May 2018, but it continues to generate work as clients with European operations seek ongoing support to ensure they remain compliant with every process change or new product or service that is launched.

Ashok Patel, a writer and editor at Source Global Research, added:

“Whether it is the EU’s investigations into the business practices of the big US tech companies, the US Congressional hearings into how some of the biggest Silicon Valley companies operate, or the introduction of data privacy laws in Europe, California, Brazil, and elsewhere, companies reached out to consultants for support navigating the increasingly tricky regulatory waters and to ensure they are compliant with new laws ahead of the deadline.”


Other areas where high-tech companies are turning to consultants for support include:

  • Revamping back offices – the need for big high-tech companies to revamp their back offices also remains a key driver of work, as the rapid expansion of their operations has shone a bright light on the inadequacies of internal functions. Some consulting firms are seeing a growing demand for managed services in this space as companies appreciate the ability to offload some back-office needs and re-task tech-savvy talent to customer-facing issues and services.
  • Business Model Changes – particularly in the legacy technology market as companies explore how best to respond to disruption. With the days of selling hardware and software for a premium seemingly in the past, more and more companies are moving to new “as-a-service” models. The transition from one-off single-sale revenue structures to longer-term subscription sales models—often with lower upfront prices—is a complicated one that requires consulting firms to support through every stage of this transition.
  • Moving high-tech manufacturing out of China – as many multinational high-tech companies use China as their manufacturing hub, the breakdown of the US-China relationship, in addition to growing tensions between China and other countries, has caused widespread alarm. As a result, many US-based high-tech companies, including Apple and Google, have started to look for alternative locations for their manufacturing operations, with India and South East Asia the main beneficiaries. Consultants are benefiting from high-tech companies seeking support to shift these complex manufacturing operations, and explore how to rethink and protect their wider supply chains.


Ashok Patel from Source concluded:

“The high-tech consulting market has hit double digit growth rates for the last four years, and we don’t expect this trend to change anytime soon.

Regulation will remain a key driver as more countries continue to explore their own data privacy legislation, there is likely to be a significant growth in demand for data privacy expertise in the high-tech industry. These new laws are not just generating compliance work. As consumers become increasingly aware of the value of their data, clients are also leaning on consultants for help devising strategies and services aimed at encouraging customers to allow high-tech companies ongoing access to their data.”


For more information on Source reports contact ella-sian.jolley@sourceglobalresearch.com, telephone +44 (0)20 3478 1204, or visit www.sourceglobalresearch.com.