Gartner Dataquest Says IT Services Revenue to Grow 6 Percent in 2003
SAN JOSE, Calif., November 20, 2002 - The IT services industry is going through one of its most difficult years, and the forecast for 2003 looks to be only slightly better, according to Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB).

Worldwide IT services revenue is on pace to reach $556.8 billion in 2002, a 2.8 percent increase from 2001 revenue of $541.9 billion. In 2003, worldwide revenue is projected to reach $591.4 billion, up 6.2 percent from 2002.

Process management remains the highest-growing IT services segment, in the short term and long term. Hardware maintenance and support maintenance remains the slowest-growing IT services segment.

"Outsourcing of both IT management and process management will continue to grow faster than consulting services and development and integration services," said Kathryn Hale, principal analyst for Gartner Dataquest's IT Services group. "This faster growth will result from vendors selling outsourcing services that enable buyers to both reduce their costs and improve their IT infrastructure."

Gartner Dataquest analysts said there are three factors that influence users' spending the most on IT services:
  • Decision makers' confidence in the value of IT and in the return on their investment
  • The pace at which IT vendors generate demand by implementing compelling new technologies
  • The speed at which users' aging technological assets require increasing maintenance and adaptation
"The first two factors have been undermined by continued weakness in the world economy and by the tenuous nature of the IT market's recovery," said Robert De Souza, industry analyst for Gartner Dataquest's IT Services group. "Decision makers' confidence in IT has been shaken. They have sought to cut costs by relying on their existing technological assets. This approach leaves little room for experimentation and innovation. As a result, buyers and vendors will find it even harder to decide which IT services to choose for the long term."

North America and Western Europe account for more than 75 percent of worldwide IT services revenue (see Table 1). Asia/Pacific is the No. 4 region in the world for IT services revenue, and it is forecast to have the strongest growth rate through 2006.

Table 1
Worldwide IT Services Market Revenue Estimates by Region (Millions of U.S. Dollars)
  Region 2001 2002 2003
  Asia/Pacific 27,598 30,065 33,442
  Eastern Europe 6,978 7,356 7,819
  Japan 64,805 64,775 70,314
  Latin America 19,707 20,179 21,218
  Middle East and Africa 9,086 9,470 10,027
  North America 267,041 274,806 291,528
  Western Europe 146,711 150,180 157,055
  Total Market 541,926 556,830 591,404
Source: Gartner Dataquest (November 2002)

This information is produced by Gartner Dataquest's IT Services group. This group examines the driving forces in the IT industry, opportunities for IT services vendors, the evolution and market dynamics influencing the competitive landscape, and the strategies, models, and business practices being employed by leading and emerging IT services vendors. Additional information is available on Gartner's Web site at http://www.gartner.com/pages/section.php.id.2027.s.8.jsp.

To subscribe to Gartner Dataquest 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 10,500 clients leverage technology to achieve business success. Gartner's businesses consist of Research, Consulting, Measurement, Events and Executive Programs. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has 4,000 associates, including more than 1,000 research analysts and consultants, in more than 75 locations worldwide. Fiscal 2002 revenue totaled $907 million. For more information, visit www.gartner.com.
Contact:
Tom McCall
Gartner
+1 408 468 8312
tom.mccall@gartner.com
 Contact:
Laurence Goasduff
Gartner
+ 44 1784 487 195
laurence.goasduff@gartner.com