US companies continues to lead the IT services market in Western Europe, even as competition from indigenous suppliers increases.
According to analyst group IDC, the top four revenue generators come from the US, while five of the remaining six were European headquartered.
IBM Global Services, for example, had higher revenue and market share than its two nearest competitors – EDS and Accenture – combined. In a highly polarized market, Western Europe’s top ten services companies represented 29% of the market opportunity in 2003, with literally hundreds of vendors fighting over the remaining 71%.
The environment in which they compete, says IDC, has been marked by weak economies, restricted spending, adverse client attitudes, intense competition, excess capacity and pricing erosion. That contributed to several vendors having to ‘reinvent themselves’ during 2004.
Those with the solid foundations of an established offshore presence, big outsourcing capabilities and, crucially, the ability to adapt quickly to changing market conditions were best placed to succeed, says the analysts.
Going forward, they argue, the ability to align technology, data and business processes with tangible outcomes, such as cost savings and value creation, will be needed to secure the growing BPO and business transformation outsourcing opportunity.