Worldwide IT outsourcing services spending to hit US$251bn in 2012 – Gartner

8 Aug 2012

Worldwide spending for IT outsourcing services is on track to reach US$251.7bn this year, a 2.1pc increase from 2011 spending of US$246.6bn, Gartner, Inc, reports.

Cloud compute services is the fastest-growing segment within IT outsourcing services, and cloud compute services are expected to grow 48.7pc this year to US$5.0bn, up from US$3.4bn in 2011.

“Today, cloud compute services primarily provide automation of basic functions. As next-generation business applications come to market and existing applications are migrated to use automated operations and monitoring, increased value in terms of service consistency, agility and personnel reduction will be delivered,” said Gregor Petri, research director at Gartner.

“Continued privacy and compliance concerns may, however, negatively impact growth in some regions, especially if providers are slow in bringing localised solutions to market.”

Data centre outsourcing

Data centre outsourcing (DCO) represented 34.5pc of the market in 2011, but growth will decline 1pc in 2012, Gartner, Inc, said.

“The data centre outsourcing market is at a major tipping point, where various data centre processing systems will gradually be replaced by new delivery models through 2016,” said Bryan Britz, research director at Gartner.

“These new services enable providers to address new categories of clients, extending DCO from traditional large organisations into small or mid-size businesses,” Britz added.

Application outsourcing

The application outsourcing (AO) segment is expected to reach US$40.7bn, a 2pc increase from 2011 spending of US$39.9bn. This growth reflects enterprises’ needs to manage extensive legacy application environments and their commercial off-the-shelf packages that run the business.

“Change is afoot in the AO market,” Britz said. “The burdens of managing the legacy portfolio, along with the limitations of IT budgets, have shifted the enterprise buyers to be cautious and favour a more evolutionary approach to other application services, such as software as a service (SaaS).

“New applications will largely be packaged and/or SaaS-deployed in order to extend and modernise the portfolio in an incremental manner. While custom applications will remain ‘core’ for many organisations, the trend in the next few years to SaaS enablement in the cloud will reflect in the growth of the AO outlook.”

While there will be some impact from the ongoing business slowdown due to sovereign-debt issues in Europe and slowing exports in China, Gartner expects the IT outsourcing services market in the emerging Asia/Pacific region to represent the highest growth of all regions.

Spending on ITO in the Asia/Pacific region will grow 1pc in US dollars in 2012 and exceed 2.5pc growth in 2013.