Business Service Provider Market to Reach $8.3 Billion by 2006, IDC Forecast Reveals

FRAMINGHAM, MA – FEBRUARY 26, 2002 – Despite a risk-averse climate, IDC estimates that Business Service Providers (BSPs) captured approximately $1.1 billion in customer spending in 2001. IDC expects this market to grow at a compound annual growth rate (CAGR) of 49% to $8.3 billion by 2006. The vast majority of the spending was in the customer care segment, where IDC first spotted the emergence of this new category of xSP.

 

"Since first identified in 2000, IDC has been closely following these new xSPs across all areas of business services," said Jessica Goepfert, program manager for IDC's ASP and Application Management Services and Business Service Providers research programs. "Outside of customer care, there have been a few BSPs who have carved out a solid place for themselves in small business accounting, third-party logistics, or procurement. Except for these few areas there has been little activity in the space, yet the opportunities are as rich and varied as the business functions within any company."

The majority of new entrants to the BSP market will likely be business process outsourcers (BPOs), but there are many companies for whom the market represents an attractive venture, IDC's research shows. "BPO companies need to re-evaluate their offerings in light of this emerging market and the competition that will evolve there," said Karen Moser, research manager with IDC's ASP and Application Management Services and Business Service Providers research programs. "Application Service Providers must seriously consider the BSP market as an opportunity for additional growth and a means to establish a clear value proposition vis-a-vis the competition. IT vendors and business services firms that have a well-defined business expertise in-house would be well-suited to this market."

This research on the BSP market is from IDC's new research service, Business Service Providers (BSPs.). The service provides strategic guidance and recommendations for how to leverage the BSP concept and build a successful BSP practice. It assists clients in understanding the size of the global BSP market and how fast it is growing by region. The research helps them identify and target the most important market opportunities for BSPs and examines how the BSP ecosystem will evolve to embrace and/or compete with BPOs, independent software vendors (ISVs), ASPs, and network providers. The service also provides insights into how BSPs tackle emerging challenges — pricing, partnering, and customer support — as they strive to deliver their service in an xSP fashion.

This document, Worldwide Business Service Provider Preliminary Forecast and Analysis: 2001-2006, (IDC #26441) defines the BSP category and provides preliminary worldwide estimates for the 2001 through 2006 BSP market. Market trends, drivers, and inhibitors and their impact on the forecast are discussed. Regional breakouts and descriptions of some market players are also identified. In the coming months, IDC's BSP analysts will review 2001 performance estimates from the vendors and issue an update mid-year.

To purchase this document, call IDC's volume sales hotline at 508-988-7988 or email jnagle@idc.com.

For more information about IDC's BSP research service, please contact Jill Toole at (508) 988-6915 or jtoole@idc.com.

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in- depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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