xSP Market to Reach $530 Billion by 2007, IDC Forecast Reveals

FRAMINGHAM, MA – APRIL 7, 2003 – The xSP market still has many challenges ahead. However, a new forecast document published by IDC reveals that it is a stable and growing market, with a 2002–2007 compound annual growth rate (CAGR) of more than 17%, far outpacing some of the more mature single-digit-growth services markets. In fact, despite the challenges of reputation, leadership and management scandals, overhype, and a poor economy, xSPs were still a $234 billion market in 2002, and are expected to grow to almost $530 billion in 2007.


"While the xSP market struggled with scandal and tough economic times in 2002, customers are beginning again to explore the possibilities and benefits that utilizing xSP services can bring them," said Laurie A. Seymour, IDC xSP program manager.

According to IDC’s new study, some xSPs reported growing customer interest in late 2002 to early 2003 after the initial retreat through 2001 and most of 2002. An increase in interest has helped improve the overall tone of the xSP market, proving (albeit in small amounts) that xSP isn't simply a fad or a faze, but rather a different delivery model for services.

IDC expects xSPs will continue to grow to become a major source of service delivery, in many cases complementing the traditional services and outsourcing markets throughout the forecast period. In addition, IDC also believes consolidation of this market will continue because economy of scale is a key force allowing xSPs to function.

Among the recommendations provided in this study is the need for xSPs to continue to focus on a positive balance sheet. More than ever, customers and partners need to be reassured of strong leadership, solid financials, and that strategic planning is in place to service customers. As the economic belt has tightened, there has been an increased focus on the importance of relationship-based business.

This IDC study, Worldwide xSP Forecast, 2003-2007 (IDC #28982), presents the five-year view of the "x" service provider (xSP) market, which includes the following segments:

Business service providers (BSPs)

Content service providers (CSPs)

Application service providers (ASPs)

System infrastructure service providers (SISPs)

Network service providers (NSPs)

High-level market trends and key success factors that xSPs and their suppliers will need to survive in the market are discussed. The particular subtleties of each segment are explored, including specific company examples.

To purchase this document, call IDC's sales hotline at 508-988-7988 or email sales@idc.com.

For additional information about IDC’s xSP research, please contact Virginia Lehr at 508-935-4188 or email at vlehr@idc.com.

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 www.idc.com.

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


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