Solution services market set to grow

The light at the end of the tunnel is beginning to shine a little brighter for the IT industry. According to IDC’s all seeing analysts, the next beneficiary of these improved conditions will be solution services markets.

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By  Matthew Southwell Published  May 6, 2003

The light at the end of the tunnel is beginning to shine a little brighter for the IT industry as the global economy and political situation begins to settle. According to IDC’s all seeing analysts, the next beneficiary of these improved conditions will be solution services markets, which should see slight growth in the coming year.

Hampered by the economic slowdown, upheaval in the competitive landscape, tight IT budgets for external services and overall buyer frustration in recent times, the analyst house reports that the solutions services market should rebound from the declining revenues of 2002 in late 2003 and 2004.

“IDC believes that uncertainty surrounding the war in Iraq and the economy will continue to hamper spending,” says Stephanie Torto, program manager for systems integration services at IDC.

“However, given the diversity of services required in the solution services markets, the industry should weather the storm in 2003 fairly well and experience slight growth, particularly in outsourcing services," she explains.

IDC forecasts that the supply chain management (SCM) services market will represent the largest opportunity, reaching US$40.5 billion in 2007 and surpassing enterprise resource management (ERM) services in market size by 2005. Customer relationship management (CRM) services will remain ahead of e-commerce services, representing the third largest opportunity through the forecast period with a compound annual growth rate (CAGR) of 8.5%.

Finally, content management (CM) services, knowledge management (KM) services, and globalisation and localisation (G&L) services will represent the fastest-growing but smallest market opportunities, growing at 12.8%, 16.8%, and 13.9%, respectively over the forecast period.

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