IT outsourcing is the big credit crunch winner
By Davey Winder in Editorial
Posted in Uncategorized on
There is no ignoring the credit crunch, that’s for sure. Whether it is the cost of your weekly food shop, fuel for your car or the fact that the value of your house is moving in the wrong direction, we are all feeling the pinch. All, that is, except the outsourcing segment of the IT services market according to IDC. OK, so a recent IDC study of the Western European IT services market which saw better than expected performance during 2007 and reported growth at 6.4 percent in constant currency has been revised a tad in the light of growing economic uncertainty. But even when taking a “more conservative view of the market” IDC still predicts growth at 4.8 percent CAGR and expects it to reach $242.8 billion by 2012.
IDC even admits that demand for IT services will “slow down in 2008″ to a level of something like 1.8 percent less than the spending growth last year, but importantly IDC reckons that the credit crunch will not have as strong an influence in Europe as it has done in the US. Where it will hit hardest, if you go by the IDC predictions at any rate, would appear to probably be project services, followed by support services but with “little or no impact in the outsourcing segment.”
“As the European economy cools down, the outsourcing segment continues to be the growth engine of the IT services market,” said Laura Converso, research manager, IDC’s European Services Research. “The overall outsourcing market will exceed the size of project-based services by 2008 and will account for 42% of the total IT services market by 2012. At a worldwide level, IDC estimates that Western Europe will eclipse the U.S. to become the largest geographic market for IS outsourcing by 2009.”
In fact, IDC is predicting that the overall outsourcing market will be the fastest-growing of all, attaining a 7.5 percent growth forecast for 2008 thanks to a cost-cutting mentality driven by the credit crunch.
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