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| Gartner Dataquest Says IT Service Providers Are Selling Many of Their Services to Other Service Providers |
| Seventy-Three Percent of IT Service Providers Say Other IT Service Providers Will Become a Predominant Buyer Segment by 2005 |
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LOWELL, Mass., October 29, 2001 - As businesses compete in a truly global marketplace, their increasingly dynamic demands have brought about a dramatic trend in IT services. IT service providers are increasingly selling to, with and through other IT service providers to satisfy client demands, according to Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB).
A recent survey among IT services providers found that in 2001, 21 percent of IT services revenue was sold to other IT service providers. By 2003, this IT services buying segment is expected to grow to 26 percent of IT services revenue. The survey also indicated that 73 percent of IT service providers believe it is likely that sales of services to other IT service providers will become the predominant buying pattern by 2005. "The changing dynamics of customer demands is the major catalyst for this increased sales activity among companies that, on the surface, appear to be natural competitors," said Michael Haines, principal analyst for Gartner Dataquest's IT services worldwide group. "The pressure on companies to improve performance in the current global business environment is enormous," Haines said. "This pressure results in customer requirements that are much more complex and urgent than just a few years ago and often require solutions from several IT service providers. In response, IT service providers are compelled to collaborate with other IT service providers to jointly contribute to the solutions needed by the end user." Also spurring the trend of IT service providers working and selling to one another is the way clients are managing their relationships and interactions with their IT service providers. Clients have begun shifting toward giving permission to only a limited number of IT service companies to deal with directly instead of having to manage multiple IT service provider relationships. "In the interest of time and resource constraints, customers are seeking direct relationships with IT service companies that can intermediate with other IT service companies on behalf of their interests," Haines said. "Therefore, IT service providers must concentrate on their ability as well as their business, relationship and management acumen to aggregate the necessary service components needed for specific client solutions and ultimately to continue winning buying power from clients." According to the Gartner Dataquest survey, operational and support services, as well as project management and application development, tend to be the most common services sold by IT service providers to other IT service providers. Application development, IT consulting and outsourcing are expected to take the highest priority for these sales activities over the next year. Additional information is available in the Gartner Dataquest Focus Report "Selling IT Services to Other IT Service Providers." This report examines to what degree IT service providers are selling services to other IT service providers, and it examines plans for these initiatives over the next 12 months. This information is produced by Gartner Dataquest's IT Services group. This group provides a complete picture of the IT services industry, including network integration and support, hardware services, consulting and system integration, outsourcing, life cycle service, strategic partnering and services marketing, software support, and vertical markets, including communications, education, financial services, government, healthcare, manufacturing, and retail. To subscribe to one of Gartner Dataquest's IT Services programs, please call 408-468-8000. Reports can be purchased on the Internet at www.gartner.com. Gartner Dataquest is the recognized leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the global information technology industry. Gartner, Inc. is a research and advisory firm that helps more than 10,000 clients understand technology and drive business growth. Gartner's divisions consist of Gartner Research, Gartner Consulting, Gartner Measurement and Gartner Events. Founded in 1979, Gartner is headquartered in Stamford, Conn., and has 4,600 associates, including 1,400 research analysts and consultants, in more than 80 locations worldwide. The company achieved fiscal 2000 revenues of $855 million. For more information, visit www.gartner.com. |
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Contact: Christy Pettey 408-468-8312 christy.pettey@gartner.com |
