Systems integration market set for recovery

22 Apr 2003

After a horrific year in 2002, the worldwide systems integration market will start to recover in the latter half of this year and will enjoy a growth rate of 6pc in 2004, according to new research from IDC.

Instead of the double-digit growth that characterised the late Nineties, globally the systems integration market is forecast to increase from US$65.5bn in 2002 to US$82.8bn in 2007 at a modest compound annual growth rate of 4.8pc.

According to IDC, the worldwide systems integration business continues to be plagued by a depressed economy and sluggish business profits.

Customers of systems integration businesses are apprehensive about making large IT investments without clearly understanding and defining return on investment.

As well as this, there is insufficient new ‘hot’ technologies that would drive growth in the market.

While integration services work continues to be in demand, it largely tends to be embedded in major outsourcing deals.

“As a result of the horrific year in 2002, many systems integrators are aggressively looking at ways to cut costs from their delivery models in order to sustain profitability,” said Stephanie Torto, program manager for systems integration dervices at IDC. “These alternatives include building offshore capabilities, using alternative delivery centres and offering flexible pricing structures.”

By John Kennedy