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IT services mart to touch $1.2 trillion by 2006
November 03, 2003 16:14 IST
Global IT research firm International Data Corporation said on Monday that worldwide business services spending was emerging as a trillion dollar opportunity, and the IT services market would grow at 8.3 per cent compounded annual growth rate from $800 billion in 2002 to $1.2 trillion by 2006.IDC US Group vice president (services), Traci Gere said, of this, the key business process outsourcing would register a 10 per cent CAGR to touch about $300 billion by 2006, from the existing $200 billion market.
"This is going to be a very interesting opportunity," she said, adding that customers were looking beyond cutting costs and improving efficiency.
"Given the economic resurgence, organisations, which were looking at India and other low cost countries to cut costs are now looking at the next level of outsourcing to do it better," Gere said.
She said IDC was predicting a marginal 0.4 per cent growth in IT spending this year, as compared to minus 4.1 per cent growth
Gere said the worldwide IT spending had dipped from a 10.8 per cent growth in 1999 to minus 4.1 per cent in 2002.
With the recent growth in US economy, she said several businesses were expected to better their performance in the current quarter.
IDC US Infrastructure Management Research Programme manager David Tapper said, utility computing and on demand computing would be the big drivers in IT in future, and global IT majors like IBM and HP were already ahead in this segment.
Terming the offshoring outsourcing as a phenomena in the next five years, he said, eventually on demand computing would make offshoring irrelevant.
Gere said that 12 per cent of the IT outsourcing done by American firms would be offshore driven in the next five years.
Stating that IT giants were on a consolidation mode, Tapper said, Indian companies should grow by acquiring firms as only a few major firms would be in the market place.