Customers boost services spend as digital deployments increase

Customers boost services spend as digital deployments increase

Within the next 12 months, worldwide services revenues will surpass US$1 trillion in 2018

Customer demand for IT and business services continues to accelerate across the world, as businesses increase deployment of digital and cloud solutions.

According to IDC research, worldwide revenues for IT services and business services totalled US$475 billion in the first half of 2017, an increase of four per cent year-over-year.

Within the next 12 months, the analysts firm expects worldwide services revenues to surpass US$1 trillion in 2018.

While IT services spending delivered more than two thirds of overall services revenue during the first six months of the year, investment on business services grew faster than the overall market at six per cent year-over-year.

From a channel standpoint, IT services revenues were largely driven by spending on technology outsourcing and project-oriented services, such as application development and systems and network implementation, while business services spending was led by business process outsourcing and business consulting services.

“Steady growth in the services market is largely driven by a continued demand for digital solutions with cloud-related services expected to surpass the US$100 billion mark this year,” IDC research manager Lisa Nagamine said.

As outlined by IDC, the largest market segment of end-user spending and vendor revenue came from business process outsourcing with first half revenues of US$92.9 billion.

Delving deeper, systems integration was the second largest foundation market at US$62.1 billion, while business consulting was third, followed by IT outsourcing and software deployment and support services.

In addition, the fastest growing markets were hosting infrastructure services (9.8 per cent growth) and business consulting (8.2 per cent growth), with IT outsourcing the only market to experience declining revenues.

“As customers seek to execute on their 3rd Platform and digital transformation initiatives they will turn to services firms in increasing numbers to augment skills, gain help with strategic initiatives, and bring new kinds of business value while reducing risk and addressing critical security issues inherent in these new endeavours,” IDC group vice president of worldwide services Rebecca Segal added.

On a geographic basis, the US was the largest services market with revenues of US$216.7 billion, Western Europe was the second largest region, followed by Asia Pacific, which was also the region to record the fastest year-over-year growth.

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