IDC Says xSP Growth Will Hold Strong at 30% Through 2005

FRAMINGHAM, MA – OCTOBER 16, 2001 – In the face of struggling economic times, the "x" service provider industry – a $106 billion market in 2000 – will continue to grow strongly with an overall 30% compound annual growth rate (CAGR) to reach more than $392 billion in 2005. This projection excludes content services providers and is down only slightly from IDC's preliminary forecasts released earlier this year. xSP market growth remains more than triple that of overall IT industry growth. The xSP market (comprised of one-to-many, externally managed, network-delivered, fee-based services) includes a wide and growing range of services for businesses and consumers.


A recent report by IDC outlines the specific regional activities of xSPs and the cultural challenges that differentiate the individual areas. "The xSP market is poised to thrive as the greater availability of broadband networks increases the number and complexity of applications and services delivered via the xSP model," said Laurie A. Seymour, manager for IDC's xSP research. "Although each region has its individual challenges, such as poor infrastructure or cultural barriers to outsourcing, the xSP solutions are beginning to take root and grow because of both perceived and real cost savings and ease of use in the eyes of the customers."

IDC research finds the United States continues to dominate the xSP market, accounting for just over 41% of the worldwide market revenues. Although the United States will maintain its dominance through 2005, its revenue share will slip to 34% over that time. One of the strongest growing regions is Asia/Pacific (including Japan), which will increase its worldwide market share from 16% in 2001 to 22% in 2005.

According to IDC, convergence and partnering over the next five years will represent some of the greatest activity in this market as the service providers – both emerging and established – seek the sweet spots for new revenue or margins. In addition, the consumer faith in the xSP model as a viable outsourcing solution will grow as the xSPs refine their techniques of providing the best options to the clients while maintaining the economy of scale that the one-to-many xSP model provides for their customers.

IDC's new report Worldwide xSP Market and Forecast by Region, 2000-2005 (IDC #25457) looks at the current size of the xSP market and provides regional revenue forecasts through 2005. This report provides detailed analysis in the following regions: Asia/Pacific, Canada, Latin America, the United States, Western Europe, and the rest of the world. More than 12 analysts with country- and regional-specific expertise collaborated to provide the specific regional xSP viewpoints. Included within the report are individual overviews of the drivers and inhibitors for growth in each segment.

To purchase this report, contact Jim Nagle at 1-800-343-4952, extension 4549, or at

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

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


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