Worldwide Desktop Outsourcing Will Grow through 2002, IDC Reports

FRAMINGHAM, Mass., September 28, 1998 — The desktop outsourcing services market will show solid growth in all global regions through 2002. In many cases, less developed regions will show the fastest growth, as organizations in these regions leapfrog the path from data center to distributed platforms and move immediately to PC-centric IT implementations. According to a new study published by IDC's Client/Server Support and Operational Services research program, by 2002, worldwide spending on desktop outsourcing will grow to $17.3 billion at a compound annual rate (CAGR) of 21.9%, 1997 to 2002. In the United States, spending in this market will grow to $8.2 billion by 2002 at a CAGR over this period of 19.5%.

The rapid pace of technology change, the increased complexity of implementing and using IT, and other IT challenges (including the Year 2000 issue and the conversion to the Euro in Europe) are all positive drivers of the desktop outsourcing market. Customer organizations are struggling to free up IS personnel to tackle these issues and increasingly are looking to outsource management of their desktop environments. IDC research indicates that the resource issue, as much as potential cost savings, currently drives most organizations to look externally for these services. "We see particularly strong growth in desktop outsourcing activity in industries such as banking, insurance and communications," said Doug Chandler, senior analyst at IDC. "Consolidation and rapid adoption of new technologies in these industries have led many organizations to turn over some or all of the management of their desktop environments to an external provider."

Today, medium- and small-sized businesses are still relatively untapped. The initial target customer base for desktop outsourcing services were large Fortune 500 companies that had lost track of their installed PCs to the tune of thousands of systems. More available in many respects are contracts with medium and small-sized companies, many of whom have gradually come around to the idea of outsourcing some or all of their desktop environments. Although the sales cycle can be longer with smaller companies, and the overall profitability of the deal may be less, the size of the available market makes it attractive and one that service providers cannot afford to overlook.

This new IDC report, 1998 Worldwide Desktop Outsourcing Services Markets and Trends (IDC #16599), examines the U.S. and worldwide market for desktop outsourcing services from 1995 through 2002. It presents market sizing and seven-year growth forecasts for 33 discrete service activities. It also provides sizing by vertical industry and size of organization and describes the influence of worldwide industry trends and customer preferences identified through IDC's ongoing desktop outsourcing services research.

This report is available for purchase by contacting Cheryl Toffel at (508) 935-4389 or by e-mail at ctoffel@idc.com. For additional information on IDC's Client/Server Support and Operational Services research program, please contact Kara Murphy, Group Marketing Manager, at (508) 935-4136.

About IDC

Headquartered in Framingham, Mass., International Data Corporation provides IT market research and consulting to more than 3,900 high-technology customers around the world. With a global network of 375 analysts in more than 40 countries, IDC is the industry's most comprehensive resource on worldwide IT markets, products, vendors, and geographies.

IDC/LINK, an IDC subsidiary, researches and analyzes the home computing market, leading-edge technologies in telecommunications and new media, and the convergence of computing and consumer electronics.

IDC's World Wide Web site (http://www.idc.com) contains additional company information and recent news releases, and offers full-text searching of recent research.

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

All product and company names may be trademarks or registered trademarks of their respective holders.