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| Gartner Dataquest Says North American IT Outsourcing Industry to Experience Continued Growth Through 2005 |
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LOWELL, Mass., December 19, 2001 - While the economic recession is slowing growth in many sectors of IT, the North American IT outsourcing market is benefiting as companies try to find ways to save expenses, according to Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB).
Gartner Dataquest forecasts the North American IT outsourcing market to reach $101.6 billion in 2001, an 8 percent increase over 2000 revenue of $93.8 billion. By 2005, the North American IT outsourcing market is projected to reach $159.6 billion, for a five-year growth rate of 11.2 percent. Outsourcing can meet clients needs in good and bad economics. The current economic decline is bringing cost reduction back to the top of enterprises' agendas, which is a benefit of outsourcing. During the economic boom, demand for business transformation and scarce IT skills had driven outsourcing. In the long term, outsourcing is increasingly capable of delivering access to new technology solutions through IT utility services. Access services minimize implementation costs and risks. "In a poor economy, a compelling benefit of hosted solutions is the ability to deploy new technology solutions with little or no capital investment. Beyond the economic downturn, outsourcers should look for increasing opportunities with IT utility services in the small to midsize business market," said Bruce Caldwell, principal analyst for Gartner Dataquest's IT Services worldwide group. "As the business climate improves, enterprises will continue to look toward outsourcing as a means to increase business value by accessing critical skills and technologies for innovation." Gartner Dataquest believes that IT utility services will mature sufficiently within the next two years to realize greater market acceptance among small to midsize businesses. Larger businesses have already demonstrated a strong acceptance level for IT utility services, such as hosting for IT infrastructures and applications. "During the economic downturn, outsourcers should expect to see increased demand for financial engineering through outsourcing," said Caldwell. "Historically, financial engineering has been a key driver of outsourcing growth as economically stressed companies seek to unload IT assets and human resources and convert unpredictable costs to fixed costs." Additional information is available in the Gartner Dataquest Report "IT Outsourcing Service Growth Continues in North American Market." This report examines the outlook for the North American IT outsourcing market from 2000 to 2005. This information is produced by Gartner Dataquest's IT Services group. This group provides a complete picture of the IT services industry, including network integration and support, hardware services, consulting and system integration, outsourcing, life cycle service, strategic partnering and services marketing, software support, and vertical markets, including communications, education, financial services, government, healthcare, manufacturing, and retail. To subscribe to one of Gartner Dataquest's IT Services programs, please call 408-468-8000. Reports can be purchased on the Internet at www.gartner.com. Gartner will provide additional analysis on the future of the IT services industry during Gartner IT Services and Sourcing Summit 2002, which will be held May 15-17, 2002 at the Rio Suite Hotel & Casino in Las Vegas, Nevada. This event brings together both buyers and sellers of IT services and is focused on helping each with tactical market research and advice delivered by the largest and most experienced team of IT services and sourcing experts anywhere. For more information on this conference, please go to 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 11,000 clients understand technology and drive business growth. Gartner's divisions consist of Gartner Research, Gartner Consulting, Gartner Measurement and Gartner Events. Founded in 1979, Gartner, Inc. is headquartered in Stamford, Connecticut, and consists of 4,300 associates, including 1,200 research analysts and consultants in more than 90 locations worldwide. The company achieved fiscal 2001 revenue of $952 million. For more information, visit www.gartner.com. |
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Contact: Christy Pettey 408-468-8312 christy.pettey@gartner.com |
