IT outsourcing no longer key industry growth area

Revenue from IT services reached $624.4 billion (£336.8 billion) in 2005 after a six per cent increase from 2004.

The latest report from Gartner shows that IBM retained its position as the market leader in IT services last year with revenue of $47,357 million (£25,500 million).

Most of the big players in the industry saw their market share falling marginally in 2005, including IBM which slipped from 7.8 per cent to 7.6 per cent. Accenture was the only notable exception, with its market share climbing from 2.4 per cent to 2.6 per cent.

One of the most important observations of the new Gartner report is that project-based services and software support both grew at a greater rate than the overall market.

This has not happened since 2000 and it is a trend that has seen IT outsourcing lose its previous position as the driving force behind the IT services market.

"Traditionally, the outsourcing service segment has been the key growth area for the worldwide IT services market, but that trend was altered in 2005," said Kathryn Hale, research vice president for Gartner's worldwide IT services group.

With total spending of $141.3 billion (£76.2 billion) in 2005, the financial services market remains the largest vertical for IT services revenue, although healthcare organisations saw the most significant growth in spending during the year.


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