Consultants to benefit from boom in IT services

The group said yesterday that it expected the worldwide IT services industry to reach a value of $557bn (£382bn) this year, a 2.8% increase from 2001.

Gartner-Dataquest also predicted stronger growth of about seven per cent in 2003, but analysts warned that IT services companies need to prepare for alonger-term future where ‘double-digit growth is the exception rather than the rule’.

Next year’s revenues are expected to reap $597bn, increasing to $644bn in 2004. By 2005, IT services will total $696bn, the group said.

‘The underlying driver of growth in the IT services industry over the medium term will be the continuing, and unstoppable, push towards “connectedness”,’ said Ben Pring, chief analyst for Gartner Dataquest’s IT Services group.

‘The market has only witnessed the early stages of the changes that theInternet and its subsequent derivations will create.’

Pring argued that competition in the IT services market is more aggressive than ever with customers being more sophisticated and more demanding, particularly under current market conditions, expecting greater cost savings from IT.

‘Services providers are facing unprecedented pressure on pricing,’ Pring said, warning buyers not to get greedy.

‘Unprofitable deals lead to reduced service quality, reduced innovation, and inevitably a breakdown of the corporate relationship.’

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