Global IT outsourcing market to reach $288 billion in 2013: Gartner

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Research firm Gartner forecasted that the worldwide IT outsourcing market will grow at a slower pace than in 2012, at 2.8 percent to reach 288 billion dollars this year. The prediction of 2.8 percent is with relation to US Dollars and in terms of constant currency, the growth is estimated at a rate of 5.1 percent.

In sharp contrast to Gartner’s forecast for 2012, all ITO segments are set to grow slower in 2013. Bryan Britz, Gartner’s Research Vice President was quoted as saying, “We continue to see overall market growth being constrained by near-term market factors, such as evolving ITO delivery models, economic, political and labor conditions, and service provider financial performance.”

He also said, “Mature Asia-Pacific and Western Europe are the regions where the outlook is most tempered, partly due to currency but also reflective of our view that 2013 is likely to be similar to 2012 in these regions.”

The state of the world market

The growth potential of the ITO market is stunted by various reasons, the foremost being restrictive IT budgets and other financial reasons. The ITO delivery model is undergoing an overhaul, with the evolution not complete, it is hard to rely on the model. The world economic conditions are not conducive to the ITO market in the current situation. Further, the cost-focused buyers stunt the growth of the industry across the world.

The cloud and data service sector is influenced by more and more mid and small-size buyers adopting Infrastructure as a service (IaaS) and enterprise buyers pursuing a combination or hybrid IT strategies.

IT Outsourcing Forecast

Despite the world ITO future not looking too bright, the markets in some areas is expected to see positive growth. The Asia-Pacific, Greater China and Latin American markets are all expected to grow at a rate of more than 13 % in 2013 and 2014.

Numerous multinational companies are planning to extend and grow into the afore mentioned areas. Coupled with new companies that buying into IT, in turn growing as new organizations and the conducive fiscal environment, growth projection seems positive.

Companies in North America are looking at transitioning a larger percentage of IT work to service relationships that are managed by annuity to ensure cost takeout and a better predictability in IT costs. The move proves beneficial and the ITO is expected to keep growing till 2016.

There are a lot of reasons why establishments are looking forward to outsourcing as a viable option. The hesitation in hiring more employees or making large capital purchases in an economically unstable environment is pushing the ITO sector growth higher.

Further numerous companies are looking toward IT outsourcing as a strategy that provides the service without being tied to the parent company as an asset or liability as the case maybe. Therefore, although the growth rate is predicted to be slow, growth is nevertheless present.

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