Following a difficult year in 2001, the worldwide IT services industry will rebound significantly by the end of 2002, according to a new IDC report. IT services will increase at a healthy rate of 12.4% to exceed $626 billion worldwide in 2006. The United States dominated the IT services market in 2001, and will continue to experience an 11.8% growth rate through 2006.
"In the short term, the worldwide economic slowdown will continue to impact IT services spending in two ways" said Ned May, program manager of IDC's Worldwide Services program. "First, there will be slightly lower growth in the market as a whole in 2002. Second, the slowdown will skew the year's growth rates upward in some segments while lowering it in others. All flavors of outsourcing will continue to benefit from the slowdown, while what can be seen as less urgent projects -- such as discrete IT consulting -- will continue to be put on hold." However, IDC expects that by mid-2002 pent-up demand will begin to force spending in project-oriented engagements such as systems integration and custom application development.
Drivers propelling the IT services industry include the increasingly pervasive nature of computing with the adoption of portable computing devices, the ongoing IT focus on efficiencies and cost reduction within the enterprise, and the expanding opportunity to utilize IT as a tools to solve specific business problem functions.
From a regional perspective, the United States remains the largest market for IT services, followed by Western Europe. Combined, these two regions account for 74% of total IT services spending through 2006. Although Asia/Pacific and the ROW region (comprising Eastern Europe, the Middle East, and Africa) might not be as large in terms of spending, these two regions represent the fastest-growing opportunity for IT services. Most notably, Asia/Pacific, excluding Japan, is forecast to grow at a five-year CAGR of 21.9% and is led by remarkable growth in China.
This report, Worldwide IT Services Industry Forecast and Analysis, 2001-2006 (IDC #26937) reviews the 2001 performance of the worldwide IT services industry and forecasts corporate and consumer spending through 2006. The forecast examines worldwide services spending by geographic region and services market. Key drivers and challenges are identified for each IT services markets covered. Finally, the report provides IDC's outlook and recommendations for the IT services market in 2002 and beyond.