Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

Global outsourcing market grows almost 8% in 2011

Veronica C. Silva | May 24, 2012
India-based companies and IBM are among the leaders.

The global market for outsourcing grew to 7.8 percent last year with India-based companies leading with high growth rates, according to the latest report of Gartner. In terms of vendor ranking, IBM was the leader in all regions.

The IT outsourcing (ITO) market reached US$246.6 billion in revenues last year from US$228.7 billion in 2010.

Gartner said the growth was fuelled by a group of providers, most of them from India, but Gartner did not name them in their press release. This group, composed of 43 providers, booked revenues of US$1 billion or more. Together, their business grew by 9.5 percent in 2011. The rest of the outsourcing providers, excluding India-based IT providers and cloud-centric providers, grew only 6.5 percent.

"For many leading providers in the ITO market, 2011 revenue results demonstrate how challenging simply maintaining a market share position has become, much less gaining share - and this challenge is likely to worsen over the next few years for providers that do not address these forces," said Bryan Britz, research director, Gartner. "The challenges are likely to spur consolidation to augment growth, posing risk to the consolidators, because acquisitions have been a challenge in the IT services market."


IBM revenues grew 7.8 percent, accounting for 10.9 percent of revenues of global IT outsourcing providers. On the second spot is HP with a worldwide market share of 6.1 percent. Gartner said Fujitsu was helped by currency gains to overtake CSC for the third spot in the worldwide market share position in 2011. 

Moving forward, Gartner warns of risks in the evolving business model in the global IT outsourcing industry.

"Revenue cannibalisation resulting from client adoption of industrialised, and often cloud-based, services risks muting the growth opportunities for the ITO providers that are heavily weighted in infrastructure outsourcing," said Britz. "Strategies will vary as clients are likely to pursue hybrid cloud strategies requiring providers to deliver some asset-light and some asset-heavy offerings - which will result in varying growth trajectories among competitors over the next several years."


Sign up for CIO Asia eNewsletters.