The 2025/2026 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 close to 7,000 unique IT sourcing relationships and more than 7,000 cloud platform relationships from more than 2,500 organisations across the continent.
65% of organisations plan to outsource at the same rate or more.
Over the next two years, 30% of organisations plan to increase external IT spending, 35% expect no change, 20% plan to reduce expenditure, and 15% are uncertain. Over the past five years, the proportion planning to increase external IT spend has declined from 39% to 30%, whilst those planning to spend less on external providers have nearly doubled from 11% to 20%, highlighting ongoing budget pressures and uncertainty.
The public sector anticipates the most outsourcing growth, with 35% planning to increase spending and only 12% expecting cuts, whereas the manufacturing and chemicals sector is more cost-conscious, with 22% planning to cut external IT spend – the highest reduction across sectors.
Scalability drives increased outsourcing.
The main reason for increased outsourcing is the need for greater scalability (53%), emphasising flexibility as the key motivation for engaging IT providers. This is followed by a focus on core business activities (44%) and access to external talent (43%).
AI becomes a strategic investment priority.
Notably, 90% of organisations plan to increase their AI-related investments over the next two to three years. Of these, 37% expect a significant increase and 53% foresee a moderate rise. Key obstacles to wider AI adoption include data quality challenges (51%), compliance concerns (49%) and the lack of skilled personnel (39%).
Significant AI Investment
37%
Moderate AI Investment
53%
Knowledge retention and cost efficiency drive insourcing plans.
One in five respondents plans to reduce spending on external providers within the next two years. The primary drivers are the need to retain critical knowledge in-house (59%) and the perceived financial advantages (51%).
AI adoption is now extensive, but business impact remains limited.
AI use is widespread among European organisations, with only 4% reporting no use, a sharp decline from 18% last year. Adoption is primarily driven by off-the-shelf tools such as ChatGPT and Copilot (38%), while a quarter have implemented their own AI solutions, though these generally have limited business impact. Only 12% report significant or transformative effects, indicating that although AI is widely adopted, profound operational changes remain in early development.
Nearshore delivery on the rise.
35% of organisations plan to increase their use of nearshore delivery, reflecting rising interest in models that balance cost efficiency with cultural alignment, time-zone proximity, and easier collaboration. Meanwhile, 58% anticipate maintaining current levels, and only 7% expect a decrease.
Governance gaps persist between clients and providers.
A clear disconnect remains between clients and service providers on the need for improvement in key governance capabilities, with providers consistently seeing greater urgency. The largest gap is in transition and change management (56% of providers vs. 24% of clients see a need for very significant improvement), with similar misalignment in relationship management and demand forecasting (37% vs. 20%), highlighting the need for stronger governance and closer collaboration.
Most organisations plan to expand or maintain their use of public cloud.
38% of respondents plan to significantly expand their use of public cloud services, while 42% expect to maintain current levels. Only 4% intend to reduce usage, and 16% remain undecided, indicating overall confidence in cloud adoption.
Record-high satisfaction across IT Service Providers.
This year’s ranking features 37 providers, with three new entrants: Colt, KPMG and Vodafone. In general satisfaction, EPAM, Hexaware, and Stefanini share first place with scores of 82%, followed by TCS with 80%.
Overall, the average satisfaction has increased by one percentage point to 76%, the highest to date.
General Satisfaction (Exceptional Performers)
Exceptional Performers
Sixteen service providers have achieved Exceptional Performer status in one or more IT service towers, with satisfaction scores exceeding the market average and above the standard deviation:
• Application Services: EPAM, Hexaware and TCS
• Cloud & Infrastructure Services: Inetum, TCS and Wipro
• Workplace Services: CGI, Computacenter, Stefanini, TCS and Wipro
• Network & Connectivity: Fujitsu, GTT, Inetum, NTT DATA and TCS
• Security Services: DXC Technology, EY, KPMG, Orange Cyberdefense, and PwC
• General Satisfaction: EPAM, Hexaware, Stefanini and TCS.
Providers do not challenge clients enough.
European respondents identify a lack of strategic challenge as the most significant weakness among providers, with 38% indicating that providers do not sufficiently challenge clients’ thinking. Capability-related concerns follow closely: 30% of clients report that providers rely on inexperienced resources, which undermines confidence and quality, while 27% cite insufficient business and industry knowledge, suggesting difficulties in tailoring solutions to specific client contexts.
AWS and Microsoft Dynamics 365 lead cloud platform satisfaction.
Among the 7,191 cloud platform relationships evaluated, 61% were rated “satisfied” or “very satisfied,” down 12% over the last two years and nine percentage points below IT service provider satisfaction (70%). AWS leads the infrastructure cloud platforms ranking with a score of 77%, while Microsoft Dynamics 365 remains the leading cloud software platform provider, with a score of 73%.
IaaS/PaaS
SaaS
2025/2026 Final Report – Europe
The final report covers the latest sourcing and governance trends in Europe. It includes rankings across five IT service towers, key performance indicators (KPIs) across five dimensions, and breakdowns by industry sector, country/region, and contract size. Cloud platform providers are ranked separately for software cloud and infrastructure cloud platforms. For further details, please contact info(@)whitelane.com
