Worldwide Consulting Revenues Will Near $125 Billion in 2004, IDC Says
FRAMINGHAM, MA – JULY 11, 2000 – Along with large growth, the consulting market will experience heightened competition, significantly altering market dynamics. According to IDC, the Internet economy will help to more than double worldwide consulting revenues from $60.1 billion in 1999 to $124.5 billion in 2004. However, Internet services pureplays and spin-off companies from other industries will all fight to get in on the opportunity.
"At the same time that the Internet has provided tremendous opportunities for consulting services, the changes it has instigated have created considerable challenges to the more established firms, which are finding themselves in a completely new competitive environment," said Sophie Mayo, program manager for IDC's Worldwide Services research. "New consulting firms are springing up almost every day and grabbing clients' attentions. These newcomers are beginning to usurp the position of the established firms. To fight off this threat, the older firms will have to revamp and reinvent themselves."
Regardless of the tight competition, IDC believes consulting firms will have the chance to experience tremendous growth. The United States is and will remain the biggest opportunity. In 1999, it accounted for 52.3% of worldwide revenues. Although its share will decline, it will still account for 51.6% of the market in 2004.
The fastest-growing regional markets for consulting services will be in Asia/Pacific (excluding Japan). Consulting revenues in this region will increase at a compound annual growth rate (CAGR) of 26.8% from 1999 to 2004, compared with a 15.7% CAGR for the overall market. Other fast-growing regions include an area IDC defines as rest of the world, which includes Eastern Europe and the Middle East, and Latin America. Economic recoveries and the relatively small base from which they are growing from will contribute to these regions' high growth.
In terms of vertical markets, manufacturing and banking spend more on consulting than other industries. In 1999, discrete and process manufacturing spent more than $6.7 billion on consulting. That amount will grow to over $13.5 billion in 2004. During that same time banking's consulting revenues will grow from almost $5 billion to just over $11.5 billion, representing a CAGR of 18.4% – faster than any other industry.
Go Online with Consulting!
In the spirit of seeking new opportunities, some consulting firms – although only a handful – have taken the step to offer consulting online.
"Since the very beginning of consulting, consultants have not changed their delivery model very much; even after the advent of the Internet, they have been stuck with the idea of offering consulting live," Mayo said. "Now the Internet has opened up the door for consultants to try a different way of providing advice. The time has come to experiment with a new delivery model."
IDC recently published Consulting Services: U.S. and Worldwide Forecast and Analysis, 1997-2004 (IDC #B21918). This report analyzes the worldwide business and IT consulting markets. Revenue forecasts are provided through 2004 segmented by the following regions: the United States, Canada, Western Europe, Latin America, Japan, Asia/Pacific, and the rest of the world. For each region, major market drivers and significant trends are discussed. Spending is also looked at by industry. The report ranks the top 10 worldwide and U.S. consulting services providers. The report concludes with recommendations for vendors wanting to capitalize on the market's opportunities. To purchase this report, please contact Jim Nagle at 1-800-343-4952 extension 4549 or at firstname.lastname@example.org.
IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 500 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.
IDC is a division of IDG, the world's leading IT media, research and exposition company.
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