• Client spending transfers from TTS to STS. Spending in STS will equal TTS spending by 2016
  • Demand for STS Has Expanded to Multi-Year Contracts and to “Shift-Left”
  • Proliferation of New Services. Further Automation through IPs. Larger Contract size
  • Clients aiming to Create Testing CoEs
  • Clients using Testing Services in Support of Go-To-Market and Launching New Applications
  • Clients are looking for Third-Party-Certification for Compliance



  • Financial Services (38%), Telecom & Media (16%) and Retail CPG (12%) are the largest verticals on STS spending
  • Financial Services (19%), Energy & Utilities (12%) and Retail & Logistics (10%) are the fastest growing verticals
  • The adoption of testing has been strong in sectors with large application estates (e.g. banking) Or which are investing in new applications
  • Key Drivers - Regulatory compliance (banking and life science), M&A activity, and new communications media (omni-channel and mobile telephony applications)
  • Financial Services - Retail banking is the main spender in STS driven by cost savings as well as by mobility, payment, omni-channel, and regulatory compliance
  • Telecom & Media - Spending in TME is growing moderately. New usages, e.g. new mobiles, new apps and new models (data monetization and value-added services) are driving spending.
  • Technology vendors - ISVs have key investment priorities revolving around SaaS products
  • Retail & Logistics - STS spending is driven by omni-channel initiatives.
  • Energy & Utilities - New services, e.g. smart grids and meters, and investment in conventional and green energies is driving STS spending
  • Healthcare - Healthcare (U.S.) will remain driven by the Obamacare and ICD 10 migration
  • Public Sector - Central governments tend to increase spending to modernize their administrations and increase ecitizen services
  • Manufacturing - Spending will increase largely related to PLM and IoT /M2M.
  • The global Specialized Testing Services is a high growth industry valued at ~$15.7bn in 2014 growing at ~+12% in 2014 and during the 2014-2019 period
  • Financial Services (38%), Telecom & Media (16%) and Retail CPG (12%) are the largest verticals on STS spending
  • Functional testing represents 75% of STS spending. New offerings in demand are Mobile app testing, security testing, ERP & BI testing, SOA testing and agile testing
  • India based delivery of testing will grow from 54% of STS spending in 2013 to 67% of STS spending in 2018

Nelson Hall Software Testing Services Assessment & Forecast, September 2014