IT services will not bounce back this year

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IT services will not bounce back this year

Karl Flinders

Analyst Ovum said this year will be a challenging one for the IT services in the UK sector and that pre-recession growth levels will not return until 2011 at best.

Swingeing cuts in public sector spending will be partly to blame for the stuttering recovery.

Ovum said IT services in the UK and Ireland will be worth more than £32bn by 2013.

But it said the public sector, which normally accounts for a massive part of UK IT spending, will be responsible for less than a third of this.

The Society of IT Managers said last week that local authorities face 11% IT spending cuts.

Dr Alexander Simkin, lead of Ovum's Market Trends project, said: "Some IT services vendors are pinning their hopes on a marked uptick in the UK and Ireland in 2010.

"They need to take a more realistic view: the market will remain challenging for at least 12 months, with only modest growth overall during 2010."

Ovum said consulting was hit particularly hard and will be slow to make a comeback.

"Infrastructure outsourcing and support services have shown relative steadiness, while application-led outsourcing is expected to benefit from pent-up demand after taking a drubbing in 2009," said Ovum.

John O'Brien, specialist in the UK IT services market at Ovum, said the UK public sector has been relatively shielded from macro-economic forces. "But that's going to change," he added.

"By 2012, we project that the public sector IT services market will be growing more slowly than the private sector, an inversion of the historical pattern."


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