Worldwide IT Outsourcing To Reach $288 Billion In 2013: Gartner

The global IT outsourcing  (ITO) market is expected to grow at a much slower pace in 2013 from the previous year, as nearly all segments in IT outsourcing are expected to show sluggish growth this year. According to a latest research from Gartner, the worldwide ITO market isexpectedto rise by 2.8% from last year to touch about $288 billion in 2013. Talking about the state of the market, Gartner, Research vice-president, Bryan Britz said, “We continue to see overall market growth being constrained by near-term market factors, such as evolving ITO delivery models, economic, political and labor conditions, and service provider financial performance“. However, areas such as application development and maintenance (ADM) and mobile outsourcing will drive the growth and  should be an area of focus for outsourcing firms.

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Britz noted that while planned adoption of IT outsourcing remained positive across all segments, growth potential will be limited due to tighter IT budgets, evolving outsourcing delivery model, economic conditions, and cost-focused buyers. Gartner touted that ITO markets in emerging Asia/Pacific, Latin America and Greater China will all grow more than 13 percent in 2013 and 2014. Expansion by multinationals into these regions, new buyers of ITO that are themselves growing organizations, and fertile economic conditions all drive the positive outlook.

Gartner’s forecast includes slight upward revisions for both custom application outsourcing and infrastructure utility services (IUS) for 2014 through 2017. The report says that although SaaS impacts the IT outsourcing market, it is more a part of the software market. “Companies pursuing hybrid IT strategies and those adopting infrastructure as a service (IaaS) will drive the growth,” says Britz. The research firm also noted a more tempered outlook for end-user outsourcing compared to past quarters due to growth in purchases related to bring-your-own-device (BYOD) and reduced business support requirements for end-user devices. It said that outsourced support for mobile end-user devices will see strong growth through to 2017, fueled by growing business adoption of mobile devices.

“Increased client adoption of pricing models that create volume variability is causing the ITO market to exhibit more cyclical patterns. This shift will continue as clients seek to reduce the nearly two-thirds of IT budgets devoted to operations, while shifting the expense from capital expenditure to operating expenditure through the consumption of ITO service lines”, Britz concluded.
Earlier in July, Gartner cut its global IT spending outlook for 2013, saying that spending would touch $3.7 trillion this year, compared to its earlier forecast of $3.8 trillion. The IP traffic in India is expected to expand at an annual run rate of 33.5 exabytes in 2017. A recent report by Evans Data Corp revealed that India may have more software developers than the US by 2018.

Story Source | Business Standard

Image Courtesy |   computing

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