IT services to grow slowly in 2003
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Despite the bleak outlook for the IT services industry this year, Dataquest, a division of US analyst group Gartner, forecasts growth of 6.2% for 2003.
Demand for IT services reached a low-point in 2002. But for 2003, Dataquest, a division of US analyst group Gartner, forecasts stronger growth of 6.2%.
The company projects that revenue in 2003 will reach $591.4 billion, compared with $556.8 billion in 2002, with North America and Western Europe accounting for more than 75% of this revenue Process management remains the highest-growing IT services segment, while hardware maintenance and support remains the slowest growing.
Dataquest says there are three factors that influence users' spending on IT services: decision makers' confidence in IT; the pace at which IT vendors generate demand by implementing compelling new technologies; and the speed at which users' old technology requires maintenance and adaptation.
"The first two factors have been undermined by continued weakness in the world economy and by the tenuous nature of the IT market's recovery," said Robert De Souza, industry analyst for Dataquest's IT services group. "Decision-makers' confidence in IT has been shaken. They have sought to cut costs by relying on their existing technological assets and this approach leaves little room for experimentation and innovation."
Dataquest believes outsourcing of both IT management and process management will increase in popularity as a result and prop up the market. "Vendors will outsource services that enable buyers to both reduce their costs and improve their IT infrastructure," argues principal analyst Kathryn Hale.
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