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.
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance, Brand Finance evaluates the strength of brands and quantifies their financial value to help organisations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes nearly 100 reports which rank brands across all sectors and countries.
Brand Finance is a regulated accountancy firm, leading the standardisation of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671, and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is defined 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. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
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 Brand Rating up to AAA+ in a format similar to a credit rating.
Brand Finance calculates the values of brands in its rankings 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:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity, and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, while in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Discount post-tax brand revenues to a net present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.