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Net service marts raise qualification doubtsThe Internet is quickly turning out a new crop of digital middlemen who claim they can help companies negotiate and close outsourcing contracts faster and more efficiently than ever before. But buyers must also beware.

At issue is the quality of the service providers, since many of the new marketplaces do little, if any, real evaluation of the vendors they recommend for users' specific information technology projects.

"The piece that's missing is the vetting of the vendor. At many of these business-to-business (B2B) sites, there's no qualification. You could be Joe's Fly-by-Night House of Web Services. But you pay your fee, and you're included," said Julie Giera, an analyst at US-based Giga Information Group.

On the upside, new B2B IT service marketplaces, such as Newmediary, ITradar.com and IQ4Hire, can cut weeks or even months from the process of bringing in qualified technical help from the outside.

The marketplaces also provide at least a partial directory of vendors to the growing ranks of neophyte IT service buyers. Another US-based researcher, Dataquest, estimates that by 2004, 60 per cent of IT purchasing decisions will be made by people outside IT.

Compaq eyes $53 billion services market

Compaq wants to double revenues from its services business by the end of 2002, a market that is projected to grow to $US53.2 billion in the Asia Pacific by 2003. According to figures from GartnerGroup, while companies in the region have reduced spending on computer hardware, they have increased their investment in IT services.

The total Asia-Pacific IT services market is projected to grow from $US18.8 billion in 1998 to $53.2 billion by 2003, at a compound annual growth rate of 23 per cent. Singapore's IT services market is expected to grow 19 per cent annually to the year 2003, and projected to be worth an estimated $3.3 billion by the same year, according to GartnerGroup.

Compaq wants to "transform from a PC company to a global IT leader", and is betting on services as one of its key market differentiators, said Pathy Pathmanaban, director for services, Compaq Asia-Pacific.

Compaq's services business, which encompasses customer and professional services, contributed 17 per cent of its overall worldwide revenues last year, Pathmanaban said.

Compaq is investing $US15 million into e-commerce and service activities in Asia-Pacific over the next five years, Pathmanaban said.


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