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Pent-up demand and a slowly improving economy is driving recovery in the global IT services market, which will grow at a compound annual growth rate (CAGR) of 4.4 per cent during the next four years, to hit $756 billion, predicts Ovum.
In a new forecast*, the independent technology analyst finds that although 2011 growth is still not back to pre-recessionary levels, the market will return to healthy growth of over 4.5 per cent in 2013, when the recovery will begin in earnest. This is a significant increase on growth in 2010, which did not even reach two per cent.
Meanwhile, Ovum has also released a new market share analysis** of the top 50 global IT service vendors, to paint a picture of the companies that are dominating the space. IBM continued to be the world’s number one provider of IT services in 2010, followed by HP and Fujitsu.
There was no change in place in 2010 for the top five vendors, when compared to 2009, and all experienced negative growth last year. Most of the vendors that improved their market share and their ranking were Indian-heritage firms such as Infosys, Wipro and TCS, which moved one place to be ranked 13th. Japanese firms such as NEC, Hitachi and Otsuka Shokai also made gains.
Dr Alexander Simkin, Ovum’s lead IT services market trends analyst, commented: “The market for IT services is gradually recovering from the economic downturn. So far, the turnaround has been patchy, with some geographies and service lines emerging faster than others. By 2013, we expect to see a return to pre-recessionary levels of growth. However, the market is not out of the woods yet and there will be small regional and segmental dips along the way.”
Of the all the IT service lines, business process outsourcing will experience the strongest growth from 2010 to 2015, followed by infrastructure-led outsourcing and support services. Dr Simkin commented: “The growth in infrastructure-led outsourcing and support services reflects the fact that it is still a fundamentally sound market in the majority of territories.”
Meanwhile, Ovum predicts that the project services and application-led outsourcing market will also experience healthy growth. Dr Simkin concluded: “After a dismal 2008 and 2009, enterprise customers realise that they can no longer hold back on making new application investments. Vendors have stepped up their efforts around applications rationalisation and modernisation in anticipation of pent-up demand for those services.”