IT services giant CSC is to acquire AppLabs, an Indian software testing outsourcing provider, for an undisclosed sum.
The deal marks the end of AppLabs’ indepedence, which used to be its selling point. In an interview with Information Age earlier this year, AppLabs CEO Sashi Reddi argued that software testing should be conducted by an organisation that does not sell software development services.
“In a typical project, 70% of the budget will be for development and 30% will be for testing,” he explained. “So the guy who won the testing business, it becomes his job to win the development part of the business as well, where the real money is.”
“One of our … customers previously hired one of the top IT services companies for testing because the CIO believed in separating it from development, which is great,” Reddi recalled at the time. “But within a few months, he found that the testing provider was saying, ‘The quality of the code is so poor, if only you had given the development work to us you wouldn’t have been suffering like you are now.’”
However, Reddi also lamented that the independent testing providers controlled only a tiny minority of the available market. “It’s a huge market, but it’s all being split up by the big guys,” he said. “We only get the crumbs off the table.”
According to figures from Pierre Audoin Consultants, 80% of money spent by Western European organisations on software testing is spent internally. Of the remaining 20% spent on outsourced testing, two thirds is spent with the same external provider that developed the software being tested.
In other words, over 90% of software testing (by monetary value) is done by the same company that wrote the code.