Steady Increase Seen in Tech Services Spending

Global spending on IT services grew 11 percent last year to $751 billion, according to Gartner. IBM did best in the year, slightly increasing market share to 7.2 percent, after doing $54.4 billion of work. But following last week’s $13.9 billion acquisition of second-placed EDS, HP has effectively closed in on IBM with a combined 5.3 percent market share and $39.5 billion combined revenue.

Analysts have pointed out today that the acquisition could deliver strong gains to HP, but also said the execution may carry great risks. The acquisition would effectively leave Accenture in third place, with a 2.8 percent market share. IT generated $20.7 billion of IT services revenue last year.

Behind it were Fujitsu and CSC, each with just over 2 percent of the market. Indian outsourcers grew revenues 38 percent in the year, generating 4.1 per cent of global revenue.

Kathryn Hale, research vice president at Gartner’s worldwide IT services group, said the increased spending was good news for the IT industry: “This strong growth, combined with strong first quarter results for market leaders, runs counter to the gloomy and widespread economic concerns arising in the United States.” She added: “To build on their success in 2007, service providers should focus on
selling services that will deliver visible return in 2008, either in cost, speed to market, or business impact.”

Computerworld UK