IDC Predicts Moderate Growth for the Worldwide IT Services Market Over the Next Five Years.
FRAMINGHAM, MA – APRIL 14, 2003 – A new report from IDC predicts moderate growth for the worldwide IT services market over the next five years. Specifically, IDC forecasts that the worldwide IT services market will increase to $489.8 billion at a 6.7% compound annual growth rate (CAGR) over the full five-year period ending in 2007. However, continued economic and geopolitical concerns will constrain spending in the short term. For 2003, IDC forecasts 4% growth – although much of this will occur in the second half of the year.
"The prolonged global economic slowdown has dramatically accelerated structural changes in the IT services marketplace," said Ned May, program manager for Worldwide Services at IDC. "The end result is that many vendors must now scramble to remake and rebrand themselves to address the market's shifting priorities."
Among the key trends presented in this study are the following: * The global market continues to be plagued by depressed economies and sluggish business profits across the Americas, Western Europe, and Japan. * Outsourcing of all types is becoming the dominant engine of industry growth as companies continue to hand off an increasing portion of IT responsibility to external providers. * Growth across all IT services segments is driven more by a shift in corporate budgets from internal to external spending than by any increase in aggregate spending on IT. * Customers are unwilling to make large IT investments without clearly understanding and defining return on investment (ROI). * There is a lack of compelling new technologies driving growth, and most IT services remain focused on either optimizing prior investments or reducing costs in operating current IT environments.
The IDC study, Worldwide IT Services Forecast and Analysis, 2002-2007 (IDC #29066), presents the worldwide IT services forecasts for 2003-2007. The document also examines the assumptions related to the forecast and the market trends and provides an overview of the major trends in each geographic region. Lastly, the document provides recommendations for services firms competing in the IT services market.
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