Outsourcing drives IT services growth

Driven by growing demand for outsourcing, the global market for IT services grew 6.7 per cent to $607.8bn in 2004, up from $569.6bn in 2003, according to Gartner.

However, the analyst firm warned that the US dollar's continued decline effectively overstates the growth. Allowing for this, worldwide growth was estimated at approximately 2.2 per cent in real terms.

IBM continued to lead the worldwide IT services industry, accounting for 7.6 per cent of global sales. Accenture showed the strongest growth among the top six vendors with revenue up 16.4 per cent.

"Outsourcing was the growth driver for IBM and HP in 2004, while Accenture experienced equivalent increases in the outsourcing and consulting segments," said Kathryn Hale, principal analyst at Gartner's worldwide IT services group.

"Computer Sciences and EDS each have a strong concentration of revenue in the US, which had an impact on global growth for both companies in a year during which the dollar declined."

According to Gartner, Fujitsu's outsourcing business grew in EMEA, but the weak economic recovery in Japan, and the impact of the company's restructuring efforts, resulted in a growth rate slightly below the industry average.