Outsourcing the hottest services business

Outsourcing the hottest services business

It's no secret that services are the place to be, but exactly where are the very hottest services markets?

According to GartnerGroup research, outlined at last week's Dataquest Predicts '99 conference, certainly professional services are the fastest-growing area, followed by software maintenance and finally hardware maintenance.

The outsourcing or IT management sector was the fastest growing professional services sector growing at a compound annual rate of 28 per cent over the next five years, said Craig Baty, principal analyst for professional services, GartnerGroup Pacific.

"Australia is really the playground for the world's outsourcing companies right now."

Outsourcing was closely followed by consulting with a CAGR of 21 per cent and integration and development 20 per cent.

Baty said the key was for IT services companies and integrators to differentiate themselves in the market.

"You can't be everything to everyone. You need to have your niche," Baty said.

Only a half-dozen enterprise service providers will emerge that can provide end- to-end solutions, Baty said. Niche players can work effectively by supplementing larger providers, he added.

However, this often required successful partnering, which was not something the channel was particularly good at.

"There is a general inability to keep partnerships going," Baty said.

IBM GSA was clearly the number-one services company in Australia.

The big mover in the top bracket was EDS, which after landing a number of big deals such as with the Australian Tax Office, could soon vault to number two or three, Baty predicted. BHP IT was also doing increasingly well in the private sector, he said.

Meanwhile, while the big boys fight it out for the top tier of customers, there was plenty of "ripe fruit" ready to be plucked in the fast- growing SME services arena, he added.

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