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Next-gen application development vendors are branching out into analytics, the Internet of Things, SaaS-based offerings, security and mobile apps to help clients solve business problems, create new growth opportunities and improve profits, according to a new report published by Information Services Group (ISG), a leading global technology research and advisory firm.
The ISG Provider Lens Next-Gen Application Development and Maintenance (ADM) Services Archetype Report also finds next-generation application maintenance evolving, as providers focus on ways to achieve cost savings through intelligent automation and other technologies. These new efforts are reducing the cost of maintenance by 20 to 30 percent, the report said.
"Enterprises are often pairing next-gen ADM technologies with the DevOps development methodology, and DevSecOps, with an added emphasis on secure development, is becoming the 'new normal' for enterprises," said Esteban Herrera, Partner and Global Leader of ISG Research. "Enterprises and providers alike are realizing that security cannot be an afterthought. Security principles are being incorporated as a default feature in early DevOps implementation phases."
The report also finds so-called digital labor assisting in the ADM process. Digital labor goes beyond bot-based automation and now includes diagnostic, predictive and remediating capabilities using intelligence acquired over time.
In addition, enterprises are moving toward rapid application development, with their business, engineering and operations organizations required to quickly add new features to existing applications and release new features into the market. Many providers, meanwhile, prefer to engage with full-stack developers to avoid unnecessary coordination cycles, the report said.
The report examines three different types of clients, or archetypes, that are looking for ADM providers:
Clients focused on digital transformation are adopting and integrating advanced technologies, operations and business processes. They want to become more customer-centric and create a competitive advantage through the quick rollout of applications, enabled through the use of agile development frameworks. They are often interested in output- and outcome-based outsourcing pricing models.
Leveraging packaged software platforms
In this buying scenario, the client is looking to leverage off-the-shelf packaged solutions to build its own intrinsic platforms, or move existing application landscapes to external platforms from technology vendors. These clients are seeking to engage with providers that have platform cycle knowledge and have platform integration skills. They tend to select providers that are strong on automation and SaaS-based technology offerings.
These clients want to offload the application maintenance services (AMS) function to a managed services mode, to improve IT maturity and strengthen governance practices. These clients don't want to be bothered with micromanaging the operational aspects of applications. They are focused on application rationalization as a way to create quicker, closely integrated and user-friendly applications, platforms and systems in place. They want a well-defined service scope in their managed services contracts, and they prefer fixed-fee or application-based pricing.