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IT services revenues up, says Gartner Study

Revenues from worldwide IT services, such as managed hosting and disaster recovery provision, witnessed an increased of 8.2 percent in 2008, according to a recent survey by IT industry analyst Gartner (

The report, "Market Share: IT Services, Worldwide Rankings, 2008." shows that total revenues for IT services increased from $745 billion in 2007 to $806 billion in 2008.

"Vendors had six to eight months of 'business as usual' in 2008 and then approximately four months encountering the beginning of the global economic downturn, featuring widespread cost restrictions and cost reductions," says Kathryn Hale, research vice president for Gartner's worldwide IT services group. "The only two segments of the market that grew less than forecast were IT management and process management. This is particularly surprising, because in economic hard times the potential cost savings from outsourcing usually keeps this market segment buoyant. However, apparently buyer hesitation to commit to the long-term requirements of outsourcing agreements took precedence in 2008."

Across all IT services, IBM continued to lead the rest of the world, with 7.3 percent of the global market.

The acquisition of EDS last August helped boost HP to the number 2 position, but with the difficulties of integrating the EDS business, its revenue increased only by 1.9 percent in 2008, which is significantly below the overall market growth rate.

With the increasing popularity of global sourcing, a provider's headquarter location is becoming more and more irrelevant.

That said, Gartner continues to measure this information for more than 360 vendors which comprise more than 70 percent of end-user spending worldwide.

India-based vendors increased 12.9 percent in US dollars in 2008, however these figures were considerably lower than the 39.8 percent growth it achieved in 2007.

These vendors were particularly hurt by the economic downturn, which is to be expected since these providers rely heavily on the financial sector for their overall revenues.

As far as platforms, enterprise networks increased slightly below the market average at 6.8 percent, while carrier networks showed strong growth at 14.2 percent.

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