Understanding Today's Demand For IT Services
Project Work Is Down But Has Growth Potential; IT Outsourcing Is Just Weak
August 11, 2009
Why Read This Report
The IT services market is behaving peculiarly in this tech downturn. While project-based IT consulting and systems integration work is now falling, it: 1) held up remarkably well until Q4 2008; 2) is down less than other categories of IT spending; and 3) has good prospects for a solid recovery in 2010. Many industry commentators were expecting outsourcing revenue to pick up and help close some of the gap created by the drop in project work, as happened in the 2001 to 2003 tech downturn. But this expectation has not been realized. In fact, in Q4 2008 and Q1 2009 outsourcing revenues for the major providers were down more than their project revenues. While some pick up in IT outsourcing deals and revenues is likely, secular trends point to slow growth in IT outsourcing even when the tech recovery occurs. This means that outsourcers will need to enter new markets and ruthlessly focus on profitability to survive.
Already a Client?
Log in to read this document.
Become a Forrester Client
Customers are the new market-makers, reshaping industries and changing how businesses compete and win. Success depends on how well and how fast you respond. Forrester Research gives you insights and frameworks aligned to your role to shorten the time between a great idea and a great outcome, helping your teams win in the age of the customer. Contact us to learn more.
This report is available for individual purchase ($499 USD).Purchase
Table of Contents
- The IT Services Market Is Shrinking In 2009
- Focus On Protecting Deal Margins As Your Cloud Investments Ramp
- Supplemental Material
- Related Research Documents
Maximizing Innovation From ERP Service Providers
March 24, 2010 | Liz Herbert
IBM's BAO Service Offering Is Positioned For Growth In 2010
January 25, 2010 | Christopher Andrews
Ethernet Services Take Europe By Storm
September 3, 2008 | Phil Sayer