2025 IT Sourcing Study – Germany
The 2025 German IT Sourcing Study is the most comprehensive analysis of IT service and cloud platform provider performance in Germany. Based on input from more than 300 of the country’s largest IT spending organisations, the study evaluates over 1,000 unique IT sourcing relationships and close to 1,000 cloud platform relationships.
Moderate Growth in IT Outsourcing and Continued Strong Investments in Captives.
In 2025, 29% of German organisations plan to increase spending on external IT providers, up from 27% in 2024, indicating a steady shift toward leveraging external expertise for cost efficiency, scalability, AI and digital transformation. At the same time, 26% plan to reduce spending on external providers, often choosing to redirect funds to grow their own ‘captive centres’ or ‘global capability centres’ in nearshore/offshore locations.
Cost Reduction Back on the Agenda.
The leading reason organisations plan to increase spending on external providers is to focus more on core business operations (57%)—the top driver for the second consecutive year. Cost reduction ranks second at 53%, rising notably by 12 percentage points from last year, a reflection of challenging economic times.
Widespread AI Investment Expected.
90% of organisations plan to increase their AI-related investments over the next two to three years. Of these, 44% anticipate a significant increase and 46% foresee a moderate rise. Key obstacles to wider AI adoption include integration with existing systems (56%), data quality challenges (52%) and compliance concerns (51%).
Significant AI Investment
44%
Moderate AI Investment
46%
Nearshore Delivery on the Rise.
Nearly half (48%) 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, 44% anticipate maintaining current levels, and only 8% expect a decrease.
Cost Efficiency and Knowledge Retention Drive Insourcing Plans.
Twenty-six percent of respondents plan to reduce spending on external providers within the next two years—among the highest rates in Europe. The primary drivers are perceived financial advantages (57%) and the need to retain critical knowledge in-house (51%).
AI Adoption Accelerates, but Business Transformation Remains Limited.
AI adoption is increasing rapidly. Only 2% of respondents report that they are not using AI or generative AI tools—down significantly from 16% last year. Most organisations (34%) are using widely available tools such as ChatGPT and Microsoft Copilot, while 17% are experimenting with internally developed AI solutions that are not yet fully implemented. Despite this growing adoption, only 19% of respondents see a significant or transformative effect of their own GenAI solutions on their business operations.
Sovereign IT Influences Strategy, but Impact Remains Limited.
Forty-five percent of respondents report that sovereign IT considerations significantly impact their IT strategy. Awareness of ‘sovereign’ cloud offerings remains limited, with 61% unsure of available solutions and only 19% viewing existing platforms as fit for purpose. Most organisations are taking a cautious approach: 10% already have initiatives underway, 32% plan to act within the next two years, and 39% currently have no plans.
Record-High Satisfaction Across IT Service Providers.
This year’s ranking features 36 providers, with three new entrants: Cegeka, GTT, and Hexaware. In general satisfaction, NTT DATA and EPAM share first place with a score of 80%, followed by TCS, CGI, and DXC Technology at 79%. The average satisfaction has increased by two percentage points to 74%, the highest level to date.
General Satisfaction (Top 5)
Exceptional Performers
Twelve 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: CGI, DXC Technology, EPAM, NTT DATA, TCS and Tech Mahindra
• Cloud & Infrastructure Services: DATAGROUP, EPAM, NTT DATA and TCS
• Workplace Services: Computacenter, HCLTech, Stefanini and TCS
• Network & Connectivity: Bechtle, GTT, DATAGROUP and TCS
• Security Services: Bechtle, Computacenter, HCLTech and TCS
• General Satisfaction: CGI, DXC Technology, EPAM, NTT DATA and TCS
Inexperienced Resources Emerge as Top Weakness among Service Providers.
The top weakness identified by respondents is the use of inexperienced resources (37%), highlighting concerns around delivery quality, productivity, and client confidence in the provider’s capabilities. Other notable issues include providers not challenging clients enough (31%), high staff turnover (25%), and a perceived lack of a true strategic partnership (25%).
The Majority of Organisations Plan to Expand or Maintain Public Cloud Use.
45% of respondents plan to increase their public cloud usage, while 35% expect to maintain current levels. Only 4% intend to reduce usage, and 16% remain undecided, indicating overall confidence in cloud adoption.
AWS, GCP, and Dynamics 365 Lead Cloud Platform Satisfaction.
Among the 996 cloud platform relationships evaluated, 54% were rated “satisfied” or “very satisfied,” notably lower than IT service provider satisfaction (68%). AWS and GCP top the infrastructure cloud ranking with satisfaction scores of 76%, while Microsoft Dynamics 365 leads the software cloud category with 71%.
IaaS/PaaS
SaaS
2025 German Final Report
Whitelane’s final report offers key insights into IT sourcing and governance trends, featuring rankings of IT service providers across five IT service towers and five key performance indicators (KPIs). It also includes rankings of the leading cloud platform providers for both IaaS/PaaS and SaaS. For more information, contact info(@)whitelane.com (available in German and English).
