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Analysts agree the next couple of years will be services dominated

Both IDC and Gartner are forecasting growth in IT services over the next couple of years advising the channel to invest in the skills needed to support digital transformation

It is still only early November and some people are debating whether or not it is too early to talk about Christmas but for the major analysts the time is right to share thoughts on 2017 and beyond.

Gartner has already outlined its expectations that next year is going to be a strong one for software and services, with hardware spending coming under pressure.

The analyst house expects the growth in services and software, largely as a result of customers seeking help with digital transformation projects, will help drive a growth in Western European IT spending of 1.6% next year.

Hot on the heels of the Gartner insights come some from IDC which underline, if the channel was in any doubt, that the future is going to be services driven.

IDC is expecting IT services and business service worldwide revenues will break through the $1trn mark for the first time in 2018. This year should see them hit the $900bn range.

The US will lead the way but EMEA is not going to be far behind with growth of 1.7% this year and 3.1% by 2020. A lot of that is going to be cloud related investments.

"An increased demand for digital solutions around 3rd Platform technologies will see cloud-related services spending nearly double by 2020 with continued considerable growth expected into the near future," said Lisa Nagamine, research manager with IDC's Worldwide Semiannual Services Tracker.

The next couple of years should be positive ones for those in the channel able to deliver cloud services to those customers that are looking to work with external specialists.

"Project-oriented and outsourcing services produce the majority of spending in cloud-related IT services driven by a high demand for cloud platform adoption," added Nagamine "As digital transformation involves significant changes to people and business processes as well as technology, most buyers will engage an outside services firm to help them along their transformation journey."

The advice from IDC is to make sure that the investment is made now by the channel to ensure they have the right skills to help guide customers through that digital transformation process.

Getting gemmed up on cloud, big data, social, mobility, next generation security and IoT is going to be a wise move.

"Service firms who invest in the right skills and assets...will see their growth prospects shift away from legacy IT services, which are on the decline and towards the digital opportunity that lies ahead," said Rebecca Segal, group vice president, Worldwide Services at IDC.

Services growth



Worldwide Services Revenue by Category in Billions

Services Category

2016

2020

Business

$287

$369

IT

$649

$731

Grand Total

$936

$1,100

Source: IDC Worldwide Semiannual Services Tracker 1H 2016

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