Despite continuing geopolitical unrest, industry analysts are reporting no dampening effect on global services industry spending so far this year.
Companies and governments will spend $553bn on external services in 2004, according to IDC, which expects worldwide services spending to continue at a compound annual growth rate of 6.9 per cent over the next five years.
"The worldwide services industry continues to redefine itself," said Sophie Mayo, director for worldwide services at IDC.
"The vision of a utility-based computing model, and the transformational focus that most companies have on their agenda today, have started to redefine partnership structures, offshore strategies and project-based services delivery, as well as the still nascent business process outsourcing market. The industry certainly continues its transitional journey."
Most leading global vendors see acquisitions as an important part of their strategy, IDC reported. Europe, in particular, is described as "a very fertile ground" for services market consolidation and merger and acquisition activity.
The analyst firm expects global IT services players to keep building their offshore capabilities, and predicts further price cuts for commoditised skills in the application management services, software-as-a-service and application development markets.
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