IBM increases services lead over HP and EDS

<em>28 June 2004</em> IBM increased its lead at the top of the IT services market during 2003 as two of its nearest rivals, Electronic Data Systems (EDS) and Hewlett-Packard (HP), lost share.


According to newly released figures from industry research company Gartner, IBM's revenue from services jumped 6.2% over the year to hit $42.6 billion, allowing it to maintain a market share of 7.5%. In contrast EDS' flat revenues of $21.1 billion resulted in its share falling from 3.9% to 3.7%. Similarly, HP, with revenues up 2.7% to $12.5 billion, saw its share fall slightly from 2.3% to 2.2% – a situation that allowed Computer Sciences Corp (CSC) – buoyed by a wave of US government contracts – to bump HP from the number four position.

However, CSC has a lot of ground to make up on the real star of IT services in 2003 – Fujitsu. According to Gartner, the company grew its services revenues by 11% to $16.1 billion during the year, making it the fastest riser of any of the services top 10.

The research also shows that US-based vendors attracted 59% of total IT services spending worldwide. And despite a sense that offshore outsourcing companies have make inroads into the global services market, Indian vendors still only accounted for a small segment of the total market. Collectively they banked 1.4% of global IT services revenues, although their combined sales increased by 29% over the year, compared with just a 4% growth among US-based vendors.


Top 10 2003 Worldwide IT Services Vendors by Revenue (Millions in US$)
Company 2003 Revenue 2003 Market Share (%) 2002 Revenue 2002 Market Share (%) Growth %
IBM 42,635.0 7.5 40,139.0 7.5 6.2
EDS 21,102.0 3.7 20,979.0 3.9 0.6
Fujitsu 16,122.9 2.8 14,482.9 2.7 11.3
Computer Sciences (CSC) 12,679.0 2.2 12,122.8 2.2 4.6
Hewlett-Packard 12,546.0 2.2 12,211.0 2.3 2.7
Accenture 12,150.0 2.1 11,514.0 2.1 5.5
Gartner Dataquest

Worldwide, organisations spend $569 billion on IT services in 2003, 6.2% more than in the previous year.

Meanwhile, findings at rival research house IDC, which defines the scope of IT services slightly differently from Gartner, show that IBM's market share in worldwide IT services rose to 7.9% in 2003 from 7.3 % in 2002. EDS stayed at 4%, while third-placed Fujitsu dropped by 0.1% to 2.9%. HP was fourth, with its share sliding to 2.4% from 2.5%. In fifth position, Accenture also suffered a slight fall from 2.4% in 2002 to 2.3%.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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