The uncertain global economic climate is likely to increase demand for IT outsourcing, it has been revealed.

Research carried out by industry consultancy Frost and Sullivan indicates cost controls and a desire to minimise risks will increase focus on variable costs, causing software-as-a-service (SaaS) and hosted service models to become more popular.

The group also believes the hosted model will be adapted to a wider range of services including storage and unified communications.

Andrew Milroy, information and communications technology director at the firm, said: “We believe that there are opportunities for solutions and services that can help organisations to cut costs, change cost structures or increase productivity.”

He added that suppliers face a challenge to recognise this and package their offerings accordingly.

Earlier this week, research carried out by technology adviser EquaTerra suggested global demand for managed IT outsourcing rose globally by 39 per cent in the third quarter of 2008.