Worldwide Services Spending to Surpass $965 Billion by 2012
IDC is forecasting that companies and government agencies will spend more
than US$746 billion on external services in 2008, representing a growth rate of
6.8% over 2007. Despite - and in some cases because of - a weak U.S. economy,
there are many market forces driving enterprises to continue to turn to service
vendors for assistance. Additionally, increased customer use of new and often
disruptive delivery options (e.g., hosting, SaaS, and utility computing) will
encourage service provides, especially outsourcers, to focus their investments
in these areas.
"In these tough economic times, service vendors are faced with both new
and old challenges. The worldwide services competitive landscape keeps
intensifying with many new entrants with new business and pricing models as well
as the strengthened capabilities of up-and-coming players that are extending
their reach into new markets. This is a time for service vendors to aggressively
review their portfolio of offerings, account targets, investment strategies,
business processes, and delivery practices," said Marianne Hedin, program
manager for Worldwide Services and SOA: The Services Opportunity research
services.
Additional key trends examined in this IDC report include:
- Though representing the smallest outsourcing market, the hosted
application management (AM) is expected to grow the fastest at a five-year
compound annual growth rate (CAGR) of 15.9%, followed by business
outsourcing services at 10.4%.
- In 2007, IT services continued to represent the lion's share (74%) of the
overall services market. But the business services market that IDC tracks is
slowly catching up, with a much faster CAGR of 9.6% compared with the IT
services market's CAGR of 5.6%.
- Service providers continue to aggressively pursue a geographic expansion
strategy to increase their footprint across the globe. While service vendors
based in the United States and Western Europe are focusing on building their
presence in the emerging markets, service companies based in those
geographies are expanding into Europe and the United States.
- The growth of outsourcing of non-core processes and the adoption of
service-oriented architecture (SOA) are prompting enterprises to shift
toward tighter alignment of business and technology. Although such an
alignment is critical, it is still not enough. Ultimately, organizations
will seek to eradicate any distinction or separation between IT and business
in order to obtain convergence between them.
- IDC expects that new types of partnerships along with an expanded
ecosystem will increase in importance as service vendors seek to deliver
best-of-breed offerings and full-service capability at the lowest cost.
- Vendors need to take active steps to provide higher-value-added services
and innovation to their clients.
Posted to the site on 15th May 2008
Posted to: www.cellular-news.com/story/31181.php