London - Davos, 22nd January 2020
Accenture has retained its position as the world’s most valuable IT services brand, despite its brand value dropping 4% to US$25.3 billion, according to the latest report by Brand Finance, the world’s leading independent brand valuation and strategy consultancy. The reduction in the American brand’s value was driven largely by a drop in its brand strength with doubts surfacing about its future brand resilience in the face of changing market demands.
The ranking of the world’s most valuable IT Services brands has been expanded to 25 brands for the first time this year. American and Indian brands, which fill eight of the top 10 spots, dominate. The only two non-American or Indian brands to make the top 10 leader board are France’s Capgemini (brand value up 12% to US$6.6 billion) and Japanese NTT Data (brand value up 19% to US$5.1 billion), which were also the two fastest-growing brands in the top 10.
Artificial Intelligence and Cloud Services boost IBM and TCS brand values
IBM’s IT Services division (brand value up 4% to US$21.2 billion) and TCS (brand value up 5% to US$13.5 billion), remaining the 2nd and 3rd most valuable IT Services brands respectively, have reduced the gap behind Accenture.
Both IBM and TCS saw strong brand value growth on the back of increased performance of their artificial intelligence and cloud services, areas that are likely to continue growing strongly in the medium term. With the saturation of Internet of Things services requiring strong and trusted computing services to serve, store and analyse devices, both IBM and TCS are strongly placed to take advantage of the commercial opportunities.
David Haigh, CEO of Brand Finance, commented:
“Accenture remains the world’s most valuable IT services brand, but it is likely to be challenged over the long-term by the rise of IBM and TCS, which are quickly growing their cloud and artificial intelligence services. Both IBM and TCS are well placed to leverage their existing brand strength in this strategic sector of the future economy.”
Accenture and IBM fall in brand strength while TCS remains strong
In addition to calculating brand value, Brand Finance determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. Alongside revenue forecasts, brand strength is a crucial driver of brand value.
According to these criteria, Accenture and IBM both lost brand strength, with their ratings falling from AAA to AAA- to join TCS as the three AAA- rated IT services brands, ahead of the AA+ rated Infosys, Cognizant, and Wipro (brand value up 8% to US$4.3 billion), which maintained strong brand strength with their focus on serving large business customers.
Fujitsu and NTT Data are fastest growing
Fujitsu has claimed the title of the world’s fastest growing IT services brand this year, after recording an impressive 29% brand value increase to US$3.3 billion. The brand has focused on expansion in the key EMEIA markets, through the development of value-added services and solutions for customers. Fujitsu was named a 2019 ‘Competitive IT Strategy Company’ by Japan's Ministry of Economy, Trade, and Industry (METI), and Tokyo Stock Exchange (TSE), showcasing the brand’s prestige in the industry.
Another Japanese brand, NTT Data (brand value up 19% to US$5.1 billion) was the fastest growing IT services brand in the top 10, with brand value growing strongly as a result of increased revenue expectations. NTT achieved an increase of over 18% for new orders received and increased operating income by more than 6%. NTT’s brand has achieved strong growth amongst key stakeholders, especially the public sector in both Europe and North America, where its strong brand has been tied to new business growth. As a result of this growth, NTT has improved its ranking from 9th in 2019 to 8th in 2020.
Samsung SDS improves ranking
The only other brand to improve rank this year is Samsung SDS. With a current brand value of US$3.7billion, it is the 11th most valuable brand in the IT Services ranking. This is also reflected in the strong business performance of Samsung SDS, which recorded a year-over-year revenue growth of 9.7%, outpacing the average IT services market growth. This success can be attributed to Samsung SDS’s ability to leverage emerging technologies to compete within the evolving IT services marketplace.
Capgemini brand strength up from AA to AA+ and value grows 12%
Capgemini was another key brand winner this year. The French brand’s value and strength both benefited from very strong performance in both North America and Europe, especially with its digital and cloud services division growing revenue by more than 20%. In addition, Capgemini is in the midst of an effort to acquire fellow French brand Altran, and while the terms of its merger offer limit its ability to complete a full merger, it is likely that broader synergies from the acquisition will benefit the Capgemini brand.
Finland’s Tieto (brand value US$529 million) is among the ten new entrants into the ranking. Following its recent merger with Norwegian brand Evry, forming leading Nordic IT services firm, TietoEvry, the new entity has retained two market facing brands, enabling the company to utilise their complementary capabilities and market presence to unlock synergies in verticals, as well as reap the benefits of European expansion. This trend for consolidation continues to grow, with fellow new entrant CGI (US$3.2 billion) acquiring two companies over the last two years, allowing the brand to build a strong and integrated presence in the region.
Note to Editors
Every year, leading valuation and strategy consultancy Brand Finance values the world’s biggest brands. The 25 most valuable IT services brands are included in the Brand Finance IT Services 25 2020 ranking.
Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand Strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.
Additional insights, more information about the methodology, as well as definitions of key terms are available in the Brand Finance IT Services 25 2020 report.
Brand Finance helped craft the internationally recognized standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671.
Data compiled for the Brand Finance rankings and reports are provided for the benefit of the media and are not to be used for any commercial or technical purpose without written permission from Brand Finance.
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About Brand Finance
Brand Finance is the world’s leading brand valuation and strategy consultancy, with offices in over 20 countries. Brand Finance bridges the gap between marketing and finance by quantifying the financial value of brands. Drawing on expertise in strategy, branding, market research, visual identity, finance, tax, and intellectual property, Brand Finance helps brand owners and investors make the right decisions to maximise brand and business value.
Definition of Brand
Brand Finance helped to craft the internationally recognised standard on Brand Valuation – ISO 10668. It defines a brand as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand Strength is the efficacy of a brand’s performance on intangible measures, relative to its competitors. In order to determine the strength of a brand, we look at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding rating up to AAA+ in a format similar to a credit rating.
Brand Valuation Approach
Brand Finance calculates the values of the brands in its league tables using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows: