Tuesday, May 06, 2008

Outsourcing to prop up IT services, claims IDC

Source : Click

Set to overtake project-based services in 2008 as credit crunch hits home

The growth of outsourcing is shoring up the western European IT services market in difficult economic waters, an IDC report has asserted. The credit crunch will lead to reduced growth in project services, but will have little or no impact on the outsourcing segment, according to the research house. This will lead outsourcing to overtake project services as the largest IT service sub-sector this year.

IDC's study reveals that the total IT services market exceeded expectations in 2007, showing 6.4% growth, and was worth $192.3 billion (€125 billion). Market growth is expected to slow to 4.6% this year and will stay at a similar rate for the next few years, swelling the market to $242.8 billion (€158 billion) by 2012.

Laura Converso, research manager for IDC's European Services Research, said: "As the European economy cools down, the outsourcing segment continues to be the growth engine."

Julian Laister, marketing director of managed service provider Nscglobal, said "There is a willingness and acceptance of the use of external parties. Companies are consolidating their infrastructure and have to get more from their budget," he said.