London - Davos, 22/1/2019
View the full Brand Finance It Services 15 2019 report here
Global IT consultancies, Accenture and IBM, remain at the helm of the IT services sector having swapped 1st and 2nd ranks since last year, according to the latest Brand Finance IT Services 15 report. Valued at US$26.3 billion, Accenture has taken the title of the world’s most valuable IT Services brand, previously held by IBM, which now sits in 2nd place with a brand value of US$20.4 billion.
David Haigh, CEO of Brand Finance, said:
“Accenture leads the sector with an impressive 56% increase in brand value since last year. IBM, on the other hand, stands out for its cognitive services and infrastructure outsourcing excellence, but its brand value has gone up by only 4%. The brand should focus on growing new technologies, such as cloud computing and security software, instead of relying on its older business units if it plans to improve its brand value in the years to come.”
Tata Holds Firm in Third Spot
Holding steady in 3rd place is India’s largest IT services conglomerate, Tata Consultancy Services (TCS), up 23% to US$12.8 billion, with a value bolstered by the brand’s disciplined focus on the market’s increased demand for digital services. TCS has positioned itself as a leader in providing a superior all-round customer experience, leveraging artificial intelligence and robotic automation across its transformation programs. TCS is also the first Indian IT services brand to achieve success in the Japanese market; the Mumbai-based giant has expanded its operations in Japan and overseen a merger of three brands to create Tata Consultancy Services Japan.
Wipro Breaks into Top 10
It is notable that India’s IT services brands have harnessed their domestic talent whilst also serving as an attractive hub for IT outsourcing centres. Moving up one spot is another important player, Wipro, one of the country’s largest software services brands that has entered the top 10 for the first time this year. Up 25% to US$4.0 billion, Wipro’s significant investments in digital transformation capabilities, niche acquisitions, and a recent brand refresh, have propelled it to be the third fastest growing brand in the segment.
Holding their positions firm since last year’s ranking, American brand Cognizant (brand value up 12% to US$8.7 billion) and India’s Infosys (brand value up 8% to US$6.5 billion) remain in 4th and 5th ranks respectively. Although a New Jersey headquartered brand, Cognizant holds a major employee base in Chennai, India and branches of Cognizant India operate across Kolkata, Bangalore, Hyderabad, Mumbai, Pune, and Cochin.
David Haigh, CEO of Brand Finance, said:
“There is a reason why Bangalore is known as the Silicon Valley of India. As more IT services brands ramp up their outsourcing outposts across the country, it is the skilled workforce, world class facilities and infrastructure that makes India such an attractive location and ultimately a global powerhouse.”
Note to Editors
Every year, leading valuation and strategy consultancy Brand Finance values the world’s biggest brands. The 15 most valuable IT services brands in the world are included in the Brand Finance IT Services 15 2019 report.
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 15 2019 report.
Brand Finance helped craft the internationally recognised standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671.
Data compiled for the Brand Finance league tables 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 over 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.