The planned merger between Logica and CMG, announced yesterday, is
certain to increase the pressures towards consolidation in the IT
services market, according to analysts.
"This is not an acquisition or a merger aimed at expanding their
service portfolio but rather at consolidating their position," said
Jamie Snowdon, an analyst at market researcher IDC.
The merged companies would make up one of Europe's largest publicly
traded IT service organisations in an economic environment where
size matters.
"In uncertain times, enterprises want to work with a firm they see
as more secure and more stable," said Ned May, another IDC analyst.
"There is a shift away from some of the smaller players."
Georgina O'Toole, analyst at Ovum Holway, agreed. "In today's
market, IT services companies must be either big or niche to
survive," she said.
