Developing markets such as China, India and Indonesia are poised to be the next Asia-Pacific growth areas for IT services, which until now have been concentrated in Australia and Korea, according to research released on Tuesday by IDC.
The Korean IT services market is growing at a CAGR (compound annual growth rate) of 28 per cent and will overtake Australia in 2005 to become the biggest market in the Asia-Pacific (excluding Japan), IDC said.
The Asia-Pacific IT services market will grow at a CAGR of 21 per cent over the next four years and be worth $US38.8 billion in 2006. Growth will be driven by services companies targeting the banking, communications and media, government and discrete manufacturing sectors, according to IDC.
Australia and Korea accounted for more than half the $US15 billion spent on IT services in 2001, with Taiwan, China, India and Singapore the next largest markets.
Over the next five years, IT services revenue in China, Korea and Indonesia will grow at a CAGR of 41 per cent, 28 per cent and 27 per cent respectively, largely overshadowing the growth rates expected in mature markets like New Zealand, Australia and Hong Kong, IDC said.
By 2006, 65 per cent of IT services spending will be in Korea, Australia and China, with India being clearly the fourth-largest market ahead of Taiwan and Singapore.
China's rapid IT services growth is being driven by investment in and development of Chinese companies, resulting from China's entry into the World Trade Organisation and sustained business interest in Asia's fastest-growing economy. China will speed up to become the third-largest IT services market within a year, IDC said.