IDC: Outsourcing explosion only temporary

IDC: Outsourcing explosion only temporary

IT research firm International Data Corp (IDC) has sized the local 1999 services market, showing IS outsourcing leading the charge, estimated to be worth around $2 billion, but it's not likely to happen again, according to Merv Langby, IDC's chief analyst, services.

Langby told ARN the growth rate of around 23-24 per cent for 1998-1999 exhibited by IS outsourcing reflected work conducted on legacy systems and other network issues in preparation for Y2K. Overall, the IS services market has a compound annual growth rate (year-on-year growth) of just 9 per cent.

The total services market was valued at around $7060 million for 1999, and Langby said the market shows a compound annual growth rate of around 14 per cent.

Systems integration services grew a bit over 19 per cent from 1998-1999, up 2 per cent on its expected compound annual growth rate, said Langby, while application outsourcing showed a 20 per cent growth, failing considerably to match its expected 61 per cent compound annual growth rate.

The application outsourcing services market - of which ASPs are a part of, not the entire market - is not expected to boom until 2001, when it is expected to peak at around 71 per cent growth.

IDC broke the services market down into 11 competitive service categories in an attempt to reflect the way customers procure services, and to enable service competitors to more accurately align their services portfolios with patterns of user demands.

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