2024/2025 IT Sourcing Study – Europe
The 2024/2025 European IT Sourcing Study by Whitelane Research is the most comprehensive survey on IT service provider and cloud platform provider performance in Europe. It evaluates over 6,000 unique IT sourcing relationships and more than 6,500 cloud platform relationships from over 2,300 organizations across the continent.
Over 30% of Organizations Plan to Increase Spending on External Providers, while 19% Anticipate a Decrease.
In 2024/2025, 33% of organizations in Europe plan to increase their IT spending on external providers over the next two years. However, 19% of companies intend to reduce their budgets for external services—up from 15% last year, marking the highest percentage on record. Meanwhile, 34% expect their IT spending to remain stable, and 14% are uncertain about their plans.
Public Sector Leads in Planned Spending Increases
The public sector stands out as the only sector anticipating a significant rise in IT spending. 43% of public sector organizations plan to allocate more resources to external providers—a 9% increase from the previous year and 10% above the European average. Notably, only 10% of public sector organizations expect to decrease spending on external IT services over the next two years.
Organizations Primarily Turn to External Providers for Access to Talent and Scalability
In Europe, organizations planning to increase their IT budgets are primarily driven by the need to access talent and resources, cited by 51% of respondents. Scalability to meet business needs follows closely at 50%, while 44% emphasize the importance of focusing on core business operations. Cost reduction, previously a top driver, has fallen to 7th place, mentioned by only 32% of respondents.
Top 3 Drivers for spending more on external providers
Organizations Consider Increasing In-House ‘Captive Centers’ Primarily for Perceived Cost Benefits
Among the 19% of respondents planning to decrease external IT spending, cost efficiency emerges as the primary driver for the first time, with 53% perceiving insourcing as a more economical option. Knowledge retention is the second most significant factor, cited by 44%, followed by increased team stability at 36%.In most cases, these companies aim to increase the use of their in-house ‘captive centers,’ either offshore or nearshore.
Nearshore Outsourcing Sees Continued Growth
Nearshore outsourcing continues to gain traction, with 35% of organizations planning to increase use of this delivery model. Only 7% expect a reduction, while 58% foresee no change. Nearshoring appeals due to its balance of cost-effectiveness, EU compliance, risk reduction, and geographic proximity.
Top CIO Investment Areas: Security and Automation
For the second consecutive year, improving security, resilience, and cyber defense remains the top investment priority for 56% of organizations. Automation of business processes follows at 53%, with cost savings ranking third at 44%. AI and machine learning have gained significant momentum, with 44% of respondents planning to develop or acquire AI solutions—an increase of 16% compared to last year. These technologies are viewed as key drivers of innovation and competitive advantage.
Top 3 Drivers for spending more on external providers
Limited Impact of AI and Generative AI So Far
Currently, only 9% of respondents report a significant or transformational impact of AI or Generative AI on their business operations. For the remaining 91%: 38% see a minor impact, 29% are in the experimentation phase, 18% do not use AI and 6% is unsure.
Overall General Satisfaction Remains Stable
This year, respondents evaluated a total of 6,272 unique IT sourcing relationships, of which 70% were rated ‘satisfied’ or ‘very satisfied’. The 2024/2025 general satisfaction ranking features 34 IT service providers. TCS, EPAM, and Hexaware achieve first place with scores of 81%. The average satisfaction score remains steady at 75%.
This year’s ranking introduces several new entrants, including AT&T, BT, GTT, Orange Business, Orange Cyberdefense, Persistent, Stefanini, and Verizon.
General Satisfaction Ranking (Exceptional Performers)
Exceptional Performers
Ten IT service providers have achieved exceptional performance in one or more IT service towers, with satisfaction scores exceeding the market average and above the standard deviation:
General Satisfaction: EPAM, Hexaware and TCS.
Application Services: EPAM, Hexaware and TCS.
Cloud & Infrastructure Services: Computacenter, Inetum and TCS.
Workplace Services: Computacenter and TCS.
Network & Connectivity Services: Accenture, T-Systems and TCS.
Security Services: Deloitte, Orange Cyberdefense, PwC and TCS.
Decline in Cloud Platform Satisfaction
Respondents evaluated over 6,500 cloud platform relationships this year. 63% rated these relationships as satisfied or very satisfied—a significant 9% decline from the previous year. The top three hyperscalers continue to lead in infrastructure cloud platforms: Microsoft Azure: 77%, AWS: 76% and Google Cloud Platform (GCP): 75%. In the software cloud platform category, Microsoft Dynamics 365 retains the top position with a 74% satisfaction score, followed by Salesforce.com (72%) and ServiceNow (71%).
2024 Satisfaction
2023 Satisfaction
2024/2025 IT Sourcing Study Europe – Final Report
The final report covers the latest sourcing and governance trends in Europe. It includes rankings across six IT service towers, key performance indicators (KPIs) across four dimensions, and breakdowns by industry sector, country/region, contract size. Cloud platform providers are ranked separately for software cloud and infrastructure cloud platforms. For further details, please contact info(@)whitelane.com
