European Manufacturers Embrace the Cloud to Improve Their Agility

European manufacturing firms are embracing cloud-based technologies and services to accelerate their go-to-market plans and improve digital marketing efforts, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2021 ISG Provider Lens™ Manufacturing Industry Services Report for Europe finds manufacturers on the continent also looking to the cloud to enable direct-to-consumer business models.

“Manufacturers in Europe are turning to the cloud to increase their business agility,” said Christian Decker, EMEA partner, ISG Smart Manufacturing. “And they are turning to manufacturing services providers to help them create new reference architectures and bring resiliency to their operations.”

In addition, manufacturing firms want service providers to help them establish robust configuration management databases and leverage automated testing, including shift-left techniques, the report says.

The report also sees the manufacturing industry in Europe looking to revamp its supply chain infrastructure by using predictive models. Manufacturers are looking for more transparency into their supply chains following shortages caused by the COVID-19 pandemic. In some cases, companies are using AI for client or customer forecasts.

A chip shortage across all industries, meanwhile, is a challenge for the European automotive industry, which uses older chip designs, the report says. Fabrication facilities (fabs) are available for 3 and 5nm nodes, which are applicable for servers and mobile and laptop processors, but there’s a shortage of 28, 40 and 65nm fabs to make chips used by automakers.

Most of the new fab investments are directed towards new nodes and there is an ever-increasing demand from medical, industrial, and automotive verticals. The automotive industry may face chip shortages until 2023, when it may begin using more high-performance parts.

Another trend among automakers in Europe is a focus making more electric vehicles, the report says. Automobile manufacturers are working to scale up their electric vehicle infrastructure, which is now taking precedence over autonomous driving technologies. Many auto manufacturers in Europe have announced plans to end sales of gas-powered vehicles, but they face several challenges before realizing these ambitions.

Manufacturers of industrial and off-highway vehicles, meanwhile, are looking for ways to optimize their outputs, the report says. Many of these companies are focused on integrating their manufacturing shopfloors across agriculture, construction and heavy vehicles. They are also integrating many layers of automation.

The report also sees many European manufacturers looking for custom application-specific integrated circuits (ASICs) instead of traditional, complex processes and systems on chips. With the rapid adoption of the IoT and edge computing, companies are integrating multiple sensors on the edge to deliver powerful and intelligent end-to-end systems. Even mid-sized companies are considering developing their own custom ASICs.

In response, service providers have evolved their offerings from conventional design and validation to multiple stages of ASICs. Some service providers are developing smaller and less complex ASICs through turnkey development engagements for clients that are new to this space.

The 2021 ISG Provider Lens™ Manufacturing Industry Services Report for Europe evaluates the capabilities of 41 providers across three quadrants: Digital Engineering – Transportation, Digital Engineering – High Tech, and Digital Engineering – Industrial.

The report names Capgemini, HCL and Wipro as Leaders in all three quadrants. Bertrandt, LTTS, TCS and Tech Mahindra are named Leaders in two quadrants, and AKKA, Alten, eInfochips, IAV, Infosys and UST are named Leaders in one.

In addition, Caresoft Global, IAV, Ignitarium and LTTS were named Rising Stars—companies with “promising portfolios” and “high future potential” by ISG’s definition—in one quadrant.

A customized version of the report is available from LTTS.

The 2021 ISG Provider Lens™ Manufacturing Industry Services Report for Europe is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 800 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

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Contact information

Press:
Philipp Jaensch, ISG
+49 151 730 365 76
philipp.jaensch@isg-one.com

Matthias Longo, Palmer Hargreaves for ISG
+49 152 341 464 63
mlongo@palmerhargreaves.com