Economic Slowdown in the US to Accelerate Offshoring of IT Services

In a recently published report, Gartner said that the current U.S. economic slowdown will lead buyers of IT services to consider increasing the percentage of their labour in offshore, lower-cost locations. India will remain the dominant location for IT offshore services for North American and European buyers as a result of its scale, quality of resources and strong presence of local and traditional service providers.

With concerns that the US economic slowdown could extend to other geographies, organizations are refocusing on IT cost reduction and taking steps to accelerate the use of offshore labour. Buyers of IT services will shift from cost containment goals to a greater focus on cost reduction and productivity increases in their sourcing decisions. This will lead to a steady increase in the adoption and expansion of offshore services - primarily from India, but increasingly from other countries as well.

“Factors that will give India the edge over other offshore locations are scale and quality of labour. North American and European buyers of IT services have been the force behind a growing offshore services market and India is central to almost any discussion of offshore services delivery for these buyers”, said T J Singh, research director, Gartner. “Whether it is the indigenous India-centric service providers that have a wide-reaching impact on the IT services sector, or a vast and growing IT labour pool being trained to support a global client base, India will continue to be the most-sophisticated country option to source offshore IT services in the near term.”More>>

Gartner Says Worldwide IT Services Revenue Grew 11 Percent in 2007

Worldwide IT services revenue totaled $748 billion in 2007, a 10.5 percent increase from 2006 revenue of $677 billion, according to Gartner, Inc.

“This strong growth, combined with strong first quarter results for market leaders, runs counter to the gloomy and widespread economic concerns arising in the United States,” said Kathryn Hale, research vice president for Gartner’s worldwide IT services group. “Many providers are successfully selling buyer value propositions that external spending on IT services and solutions can help customers save money and be more productive, even in a profoundly uncertain economic climate.”

Across all IT services, IBM continued to be the worldwide market leader (see Table 1), with 7.2 percent of the market. IBM and Accenture delivered strong growth rates, 12.2 percent and 19.7 percent, respectively, and were the only companies in the top six that experienced revenue growth rates above the overall market average.More>>

Apple To Double Its Market-share By 2011

Gartner, Inc. has highlighted 10 key predictions of events and developments that will affect IT and business in 2008 and beyond.

The predictions highlight areas where executives and IT professionals need to take action in 2008. The full impact of these trends may not appear this year, but executives need to act now so that they can exploit the trends for their competitive advantage.

1. By 2011, Apple will double its U.S. and Western Europe unit market share in Computers. Apple's gains in computer market share reflect as much on the failures of the rest of the industry as on Apple's success.
2. By 2012, 50 per cent of traveling workers will leave their notebooks at home in favour of other devices. Even though notebooks continue to shrink in size and weight, traveling workers lament the weight and inconvenience of carrying them on their trips.
3. By 2012, 80 per cent of all commercial software will include elements of open-source technology. Many open-source technologies are mature, stable and well supported.
4. By 2012, at least one-third of business application software spending will be as service subscription instead of as product license. With software as service (SaaS), the user organisation pays for software services in proportion to use.
5. By 2011, early technology adopters will forgo capital expenditures and instead purchase 40 per cent of their IT infrastructure as a service. Increased high-speed bandwidth makes it practical to locate infrastructure at other sites and still receive the same response times.
6. By 2009, more than one third of IT organizations will have one or more environmental criteria in their top six buying criteria for IT-related goods.
7. By 2010, 75 per cent of organisations will use full life cycle energy and CO2 footprint as mandatory PC hardware buying criteria. Most technology providers have little or no knowledge of the full life cycle energy and CO2 footprint of their products.
8. By 2011, suppliers to large global enterprises will need to prove their green credentials via an audited process to retain preferred supplier status.
9. By 2010, end-user preferences will decide as much as half of all software, hardware and services acquisitions made by IT.
10. Through 2011, the number of 3-D printers in homes and businesses will grow 100-fold over 2006 levels. The technology lets users send a file of a 3-D design to a printer-like device that will carve the design out of a block of resin. read full story