The UK software and IT services (Sits) market is predicted to be worth £47.2bn in 2018 after an expected 8% increase on last year’s business levels, but suppliers need to change their ways to succeed, according to analyst firm TechMarketView.
The analyst firm said public sector investment in Sits will hit £12.4bn by 2018, while private sector spending will be £34.8bn in 2018.
TechMarketView said suppliers are facing challenges as customers go digital, with a need to connect technologies and different business managers with the customer-facing businesses.
“As digital transformation services look to shape the direction of the market, technology companies are being forced to overhaul their own business models in a bid to survive; with technology leaders willing to embrace nimble technologies and new digital services set to make significant gains,” it said.
In a market where 1% or 2% growth is celebrated, this might not seem inspiring, said TechMarketView chairman Richard Holway. “But, as our report indicates, it will be truly exciting to witness the massive impact that digital disruption has on the space over the next few years,” he added.
“In this all but flat market, the established Sits players need to move outside of their comfort zone if they’re to remain competitive against the smaller, agile companies that are disrupting the market. They have the experience required to run large projects and need to use this level of expertise to offer new digital services direct to users,” said Holway.
In the latest figures, for 2014, Capita was the biggest UK Sits supplier, with £3.53bn in sales after an 11% increase from 2013. During the same period, HP came second, despite a 5% reduction, with £2.82bn sales, and IBM posted sales worth £2.81bn after a 1% fall. Capgemini and Accenture complete the top five, with £1.89bn and £1.74bn in sales respectively.
Tata Consultancy Services (TCS) was the highest ranked Indian supplier, with sales increasing by 9% from 2013 to 2014, reaching £1.6bn. The fastest-growing firm was German business process outsourcing supplier Avarto, which grew by 26% to £298m. Indian supplier HCL (19%) and French merger Sopra/Steria (16%) also grew fast.
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