Worldwide IT services return to growth
The market for IT services is slowly finding its feet again, according to new figures from Gartner (NYSE: IT). Worldwide end-user spending on IT services totalled $793bn in 2010, a 3.1 percent increase from $769bn in 2009, according to the analyst firm.
Worldwide, IBM retained its number one market share position in IT services in 2010, with a revenue increase of 2.6 percent returning $56.4bn in revenue and accounting for 7.1 per cent of the market. With arguably the weakest revenue performance in the top five, HP grew its IT services revenue less than $100m, or 0.3 percent, in 2010.
Fujitsu, at 3.5 percent annual growth in IT services and revenue of $24.1bn had a solid year in 2010 in US dollar terms. Accenture returned perhaps the strongest numbers within the top 10 in 2010, growing revenue $1.3bn to $22.2bn, a growth rate of 6.1 per cent. CSC’s growth in the past year was positive, but it was below market growth levels (at 0.6 percent) due, in part, to an abnormally high level of delays in contract signings in both the federal and commercial sectors, as well as the impact of a challenging US federal government business, where CSC generated 39 percent of its revenue.
“Among the more than 300 vendors tracked, acquisitions affected more than 10 percent of total revenue, in a market where no provider has more than seven per cent market share,” says Dean Blackmore, senior research analyst at Gartner.
Software support showed the highest growth in 2010 at 6.6 percent. Weaker performances came from process management and hardware support, both of which grew approximately one percent less than expected. Consulting and development/integration services came in slightly above expectations as organisations that had put investments on hold began investing again in 2010, particularly in the second half of the year.
From a vertical services perspective, the government vertical showed the lowest growth rate in 2010 (tied with the education sector at 1.6 percent) as governments around the world implement budget cuts aimed at reducing deficits.
