IT services spend to double by 2005

Gartner Dataquest has predicted that the economic slowdown will propel worldwide spending on IT services to £970bn by 2005 - more...

Gartner Dataquest has predicted that the economic slowdown will propel worldwide spending on IT services to £970bn by 2005 - more than double last year's figure.

The analyst group said the worldwide IT services industry grew 9.7% in 2000, and predicted it would increase by 12.5% in 2001 - despite the general slowdown in overall IT spending.

"In periods of economic contraction the IT services market has benefited from the need for organisations to increase productivity and re-engineer their processes," said Michael Palma, principal analyst for Dataquest's IT services worldwide group.

"Product support services will also continue to be a driving force in the IT services market because mission-critical functions and a complex technology environment will continue to require expenditure by end users to support their infrastructure and assets," he added.

The IT services market in Western Europe was worth £120bn in 2000, and is expected to reach £226bn by 2005, according to Dataquest.

"We still see many of the traditional drivers influencing the Western European IT services market, including a constrained supply of labour and the outsourcing of non-core activities," said Robert de Souza, analyst for Dataquest's IT services Europe group.

The largest segments in the IT services industry in 2000 were development and integration (£117.5bn) followed by business process management services (£102.8bn).

This pattern will continue, Dataquest said.

Daniel Thomas
[email protected]

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