North America Web Services-Based Professional Services Spending to Break Billion-Dollar Mark in 2003

FRAMINGHAM, MA – APRIL 2, 2003 – The Web services-based professional services market weathered the hype of 2002 and is expected to prosper in 2003. According to a new report published by IDC, approximately 3,300 Web services-based projects were implemented in North America in 2002. IT services companies are evangelizing the benefits of adopting Web services, answering end users' concerns, building track records, refining their offerings, and investing in Web services-related thought leadership initiatives.


IDC's Web services simulation model forecasts North America (United States and Canada) Web services-based professional services spending will break the billion-dollar mark in 2003 and increase to $2.7 billion in 2004 – a growth rate of 146% over 2003. The cumulative opportunity between the beginning of 2003 until the end of 2007 will be $22.2 billion.

"As the North America Web services-based professional services market passes the billion-dollar mark at the end of the year, services companies will formalize their offerings around Web services and further enhance their methodologies," said Sophie Mayo, director for Web Services Implementations and Dynamic Commerce Services at IDC. "The track record that services vendors built in 2002 will be a catalyst for ensuring the projected triple-digit growth."

IDC's study reveals that systems integration services are the largest opportunity for services firms, with over $500 million to be spent by the end of 2003. In 2004, the opportunity will increase by 157%, totaling $1.3 billion.

In an evaluation of adoption of Web services by company size, IDC believes that in 2003, large companies will account for almost 72% of the opportunity; however spending by small and medium-sized enterprises will increase over the years. In 2007, small and medium-sized enterprises will spend approximately $3 billion, or 40% of the total estimated opportunity.

To capitalize on this now billion-dollar opportunity, IDC recommends professional services companies consider the following:

A primary means of entering the nascent Web services market is to leverage business process and vertical expertise.

Despite the potential for Web services, service providers should not place an all-or-nothing bet on it.

Services providers should develop strong Web services competencies, methodologies, and client references to be considered market leaders. These skills will enable providers to more fully realize the potential of this market segment.

Services providers should leverage near-shore and off-shore application development/management services resources whenever possible so that they can remain competitive and take advantage of lower-cost resources.

Governance will become a big issue since enterprise will start viewing, deploying, and managing technology and business processes differently.

This IDC study, North America Web Services-Based Professional Services Forecast and Analysis, 2003-2007 (IDC #28976) presents the North America Web services-based professional services forecast for 2003-2007 and answers the following questions:

What are IDC's predictions and assumptions relating to market forces impacting the North America Web services-based professional services market, and what impact will they have on the market forecasts?

Which assumptions are of sufficient importance that a change in the assumption would result in a change in the market forecasts?

What impact will developments in this market have on the players in the market?

What are the not-to-be-missed opportunities?

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For additional information about IDC's Web Services Implementation and Dynamic Commerce Services research, please contact Virginia Lehr at 508-935-4188 or email at

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