Global Spend on IT Outsourcing Will Go Up $5 b This Year: Gartner

Global Spend on IT Outsourcing Will Go Up $5 b This Year: Gartner

Global spend on IT outsourcing services will go up by 2.1 per cent in 2012 to reach $252 billion as against $247 billion.

However, the growth of datacentre outsourcing business, which represented 34.5 per cent of the outsourcing market in 2011, will decline by one per cent this year.

While there will be some impact from the ongoing business slowdown due to sovereign debt issues in Europe and slowing exports in China, research and consulting firm Gartner expects the outsourcing market in the emerging Asia-Pacific region to represent the highest growth of all regions.

In North America, buyers will seek to transition more IT work to annuity-managed service relationships for cost take-out and IT costs. “This will keep outsourcing growing through 2016. The reluctance of enterprises to hire or make large capital purchases, as well as their pursuit of asset-light IT strategies, continues to push clients toward consuming externally provided services,” Gartner has said in its latest report on outsourcing.
APAC spending

Spending on outsourcing in the APAC region will grow by one per cent in 2012 and exceed 2.5 per cent growth next year. “The growth is being driven by the large inflow of capital into Asia over the past three to five years, leading to the need among global and regional businesses to scale up their operations,” it said.

A challenging economic scenario that worsened in late 2011 continues to affect government policies and end-user sentiment in many key European countries. This could result in a decline of outsourcing growth by 1.9 per cent in Western Europe this year.

The European public sector will continue to see a cautious budget environment throughout the year. This will force many central and local government entities to concentrate on outsourcing initiatives aimed at reducing cost through IT efficiencies and rationalisation.
Fast-growing segment

The fastest-growing segment within the outsourcing market is cloud services, which is expected to grow by 49 per cent to $5 billion, up from $3.4 billion in the previous year.

“Continued privacy and compliance concerns may however negatively impact growth in some regions, especially if providers are slow in bringing localised solutions to market,” Gregor Petri, Research Director, said.


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