Western Europe outsourcing booms
The Western European IT services market is set to grow by almost five per cent over the next five years, according to research firm International Data Corporation (IDC), to reach $249 billion (£142 billion) by 2012.
“The growth we expect in the application development market and the estimated higher growth in the IS outsourcing market more than offset the downward effect of the crisis,” said Laura Converso, research manager of IDC European software and services. “As the European economy cools, the outsourcing segment continues to be the growth engine of the IT services market.”
IDC stated that economic problems had gone “largely unnoticed” up until now, but added that the UK, Ireland and Spain are likely to be badly hurt by an economic downturn with the slowing housing market adding to their problems.
Despite this trend, and as such may have little effect on the IT industry in the upcoming months, predicting a five per cent rise in demand for IT support and services in 2008.
IDC also predicted that consulting and project engagement will be the most affected by the crisis, but outsourcing will increase as enterprises try to reduce costs. Despite expecting the downturn to last until 2010, the analyst said the effect on the IT services market will remain ‘limited’ because the market has not been led by over investment as in the dotcom crisis.