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Analysts predict infrastructure services boom

The market for infrastructure services is set to explode in the coming years, new research has revealed.

The market for infrastructure services is set to explode in the coming years, new research has revealed.

Analysts at International Data Corporation (IDC) say the dotcom crash has forced organisations to refocus their attention on internal infrastructure to enable their networked business strategies.

IDC figures suggest the European infrastructure services market will have a market worth $92bn (£65.1m) in 2005, growing from the $54bn achieved in 2000.

Judy Jerome, IT information analyst at rival company, Bloor Research, agrees with this prediction.

"What we are seeing is a movement from the construction of the infrastructure to the service end of it," Jerome said. "It's now about maintaining the infrastructure, the deployment of newer servers for older ones, the tuning of it."

IDC predicts the market focus will shift and become more competitive as customers demand faster returns on investment and quick solutions to problems.

"Many companies are playing on this market, which is characterised by increasing services commoditisation and a move up the value chain resulting from the intensive competition vendors have to work with," said Lionel Lamy, research manager at IDC's European infrastructure management services programme.

Bloor's Jerome believes this shift is also being caused by the current market downturn and hardware overkill.

"The initial decline in PC sales indicates a saturation of the hardware market," she said. "We are in economic hard times. The bubble has burst and customers need to see immediate returns on investment."

There are many organisations offering infrastructure services, including the likes of IBM, Microsoft, Compaq and HP. IDC anticipates massive consolidation within the market as vendors are put to the test.

However, while smaller or niche companies may actually provider better or comparative services, IDC maintains it will be the IT heavyweights that triumph.

"Only the dinosaurs will survive, [and] although the market dynamics will call for aggressive, flexible companies, the major players will still dominate the market because the infrastructure is too vital for corporations to gamble on," said Lamy.

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