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IT outsourcing market sees revenues rise
IT News |
28/05/2012
Revenues from IT outsourcing continued to rise last year, a new report has revealed.
According to research conducted by IT analyst Gartner, global turnover rose to $246.6 billion (£157.2 billion) from $228.7 billion in 2011.
This 7.8 per cent rise in spending on IT outsourcing came as an increasing number of businesses and organisations embraced cloud computing.
Gartner said that Indian-based IT services providers and firms rooted in cloud-based services delivered the highest growth rates in 2011.
IBM maintained the number one position in the charts, as its revenue grew 7.8 per cent, giving the firm a 10.9 per cent market share.
HP grew below the market growth rate, claiming a 6.2 per cent share of overall revenues, overtaking CSC to claim second place.
Bryan Britz, research director at Gartner, commented that revenue cannibalisation "risks muting the growth opportunities for the providers that are heavily weighted in infrastructure outsourcing".
This has resulted from the client adoption of industrialised, and often cloud-based, services, he claimed.
"Strategies will vary as clients are likely to pursue hybrid cloud strategies requiring providers to deliver some asset-light and some asset-heavy offerings," Mr Britz stated.
"This will result in varying growth trajectories among competitors over the next several years."
He said that for many leading providers in the IT outsourcing market, 2011 revenue results demonstrate how challenging simply maintaining a market share position has become.
And this challenge is likely to worsen over the next few years for providers that do not address these forces, Mr Britz commented.
"The challenges are likely to spur consolidation to augment growth, posing risk to the consolidators, because acquisitions have been a challenge in the IT services market," he added.
Posted by Stephen Wilkinson
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