The SAP services market has grown steadily in recent times. Moreover, service providers are predicted to play an essential role in fulfilling the unique demands of consumers in the strategic SAP mid-industry. Also, it estimates the mid-market to be a major participant in meeting its updated growth forecast of 8.3 percent throughout the next three years. SAP’s mid-market services have so far created a considerable impact, adding a huge 13 billion dollars with an overwhelming annual growth rate of roughly 20 percent. With the emergence of the RISE with SAP and GROW with SAP programs, the push is increasing for small and medium enterprises to adopt the SAP suite for unification and modernization efforts. Another factor that assisted in the rise of this market was COVID-19, which provided the opportunity to expand.
The basic factor which is influencing the need for digital transformation is the demand for companies to lower their total expenditure and enhance their operational efficiency. Also, the digitalization of the economies worldwide, improved internet availability, the advent of artificial intelligence and the rollout of the 5G network have accelerated the market growth.
The market growth is also due to the surge in the modification of SAP cloud technologies to further promote sales. The IT sector is working toward cloud technologies. Moreover, it enhances the capacity and efficiency of infrastructure and addresses the complications of functioning the businesses.
Additionally, the integration into the telecommunications industry and the transition to cloud and managed services also fuels the SAP services market. Currently, the telecom landscape is in a changing phase, and it can provide a solution with an internal operation structure. Also, more than 60 percent of SAP users are operating their systems in the cloud, whether on hyperscaler platforms such as Azure and AWS or on SAP’s own cloud.
The SAP services market growth is affected by the high expenditure associated. For instance, in 2023, the prices of on-premises support increased two times. Besides this, the industry players in 2022 blamed the inflated costs of labour, third-party services and energy for the price rise and in 2023 they mentioned the market conditions attributed to still-high inflated rates. From the commencement of 2024, there was again an increase in the support costs by the domestic Consumer Price Index (CPI).
Legacy and lagging systems are another factor hampering the SAP services market. A large number of customers have continued to customize their on-premises SAP ERP Central Component (ECC) systems for many years. This caused sluggishness and an incapability to assist in industry flexibility. The surge in various SAP instances because of organic and inorganic expansion has also resulted in complications and mounting legacy systems.
The future of the SAP services market looks promising, as it is propelled by current technological developments. The demand for robust SAP ERP solutions is expected to expand as all industries are progressively opting for digital transformation. Further, cloud-based products and services are also gaining popularity, allowing companies to access SAP functions and benefits more easily and affordably. Apart from this, technological advancements, including Artificial Intelligence (AI) Integration, Machine Learning for Predictive Analytics, Analytics and Data Visualization, Cloud-Based Solutions, Internet of Things (IoT) Integration, Blockchain, and User-Friendly Interfaces have actively accepted and positioned themselves comfortably in this field. Thus, all these factors are boosting the growth prospects of the SAP services market.
The expansion of the SAP services market is hindered by the shortage of professionals along with skill gaps. In the last two years large number of tech employees have been laid off which has further worsened the situation. Additionally, the lack of business-IT alignment also derailed the growth rate of the industry players. Furthermore, data security and privacy concerns is another area in which companies have struggled regularly.
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REPORT METRIC |
DETAILS |
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Market Size Available |
2023 to 2029 |
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Base Year |
2023 |
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Forecast Period |
2024 to 2029 |
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CAGR |
xx% |
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Segments Covered |
By Service Type, Enterprise Size, End-Use Industry, and Region. |
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Various Analyses Covered |
Global, Regional & Country Level Analysis, Segment-Level Analysis, DROC, PESTLE Analysis, Porter’s Five Forces Analysis, Competitive Landscape, Analyst Overview on Investment Opportunities |
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Regions Covered |
North America, Europe, APAC, Latin America, Middle East & Africa |
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Market Leaders Profiled |
SAP (Germany), EPAM (U.S.), NTT Data (Japan), DXC Technology (U.S.), Infosys (India), CGI (Canada), Atos (France), Cognizant (U.S.), Deloitte (U.K.), PwC (U.K.), Accenture (Ireland), Fujitsu India), Capgemini (France), Fujitsu (Japan), Wipro (India), IBM (U.S.), Tata Consultancy Services (TCS) (India) |
The Strategic & consulting services segment captured the maximum share of the SAP services market and is expected to drive further during the forecast period. The increased popularity of these consulting businesses is because of the characteristics of reinforcing cybersecurity and supporting companies to emphasise core business operations.
The small and medium-scale enterprises segment holds more than 50 per cent of the SAP services market share. Various companies worldwide are adopting the SAP cloud platform services as efficient tools for growing business productivity and improving their functional and departmental abilities. Also, because of being affordable SMEs are integrating cloud services instead of on-premises deployment.
The BFSI segment is the biggest end-user in the SAP services market. Adopting technological developments like machine learning, artificial intelligence, IoT, and other technologies in banking establishments to improve functional efficiency is propelling the growth of digital transformation in the BFSI industry.
Europe accounts for the biggest portion of the SAP services market. This can be due to the presence of several regional SAP partners, the rising adoption by small and medium enterprises, and a significant influx of investments in on-premises and cloud-based services. France, the United Kingdom, and Germany are leading contributors to the region’s market size. It is also predicted to remain the prominent region in the future as well owing to its robust foothold and its partner ecosystem. For instance, the SAP services industry is backing Germany’s economic recovery. IT services and associated sectors are assisting the economy directly and indirectly as more players are digitally transitioning to be future-ready.
The North American SAP services market is the second-largest after Europe, with a considerable industry share. This is due to the presence of service companies like Infosys, HCL, Wipro, cognizant, and Accenture. Moreover, the growing adoption of modern technologies like artificial intelligence and IoT is propelling market growth in the region. In addition, the industry has increasingly accepted the SAP S/4 HANA and cloud-based solutions among the big organizations. Besides this, there is a surge in industry-specific SAP services, particularly in healthcare production and financial services.
Asia Pacific is the fastest-growing region and is quickly capturing more share of the SAP services market. The rapid adoption of these services by big, small, and medium enterprises in economies like China, Japan, and India. Further, the digital transformation expanded twofold in the region, which also influenced the SAP demand owing to companies and several governments' emphases on building strong virtual governance frameworks that include change management, decision metrics, strategies, and KPIs. Also, the growing technical competence of Asian professionals has led to the establishment of regional and local service providers, particularly in India and China.
The Latin America SAP services market is relatively small but is witnessing steady growth. It is propelled by the expanding big data industry, growing focus on upgrading legacy systems and shifting to the cloud.
The Middle East and Africa depict a mixed picture of the SAP services market. Gulf Cooperation Council (GCC) economies like Saudi Arabia and the United Arab Emirates are witnessing greater integration and adoption. Moreover, as per a study, the data center industry in the Middle East and Africa is still at the beginning of development, but it is rising quickly. The area is projected to be one of the swiftly growing data center markets in the future, considering its huge potential for expansion to fill the space between the restricted quantity of supply and the surging levels of demand.
By Service Type
By Enterprise Size
By End-use Industry
By Region
Frequently Asked Questions
SAP services are beneficial across various industries, including manufacturing, retail, healthcare, finance, and logistics. Industries with complex supply chains and large-scale operations, such as automotive and aerospace, particularly benefit from SAP's comprehensive solutions.
The latest trends include the increasing adoption of cloud-based SAP solutions, the integration of AI and machine learning for predictive analytics, a growing focus on cybersecurity, and the use of SAP S/4HANA to drive digital transformation and real-time data processing.
Common challenges include the high cost of implementation, the complexity of integrating SAP solutions with existing systems, the need for skilled professionals, and the time required to achieve full operational efficiency. Overcoming these challenges often requires strategic planning and expert consultation.
The SAP services market offers diverse career opportunities, including roles such as SAP consultants, project managers, technical architects, and support specialists. As demand for SAP expertise grows, professionals with certifications and experience in SAP technologies are highly sought after globally.
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