The UK software and services market is dominated by a small group of tech vendors, but tough economic times are providing a "golden opportunity" for smaller companies to make a breakthrough.
According to analyst TechMarketView, the top 30 biggest tech companies operating in the UK accounted for nearly three-quarters (£30.4bn) of the country's software and IT services market last year.
HP topped the rankings again even though, according to TechMarketView, its UK software and IT services revenues declined by five percent, with UK software and IT services revenues of £3.2bn.
The other big players also help their positions, with IBM (£2.89bn in UK software and IT services revenues), Capita (£2.84bn) and BT (£1.73bn) making up the top four places.
Capgemini (£1.71bn), Accenture (£1.63bn), Fujitsu (£1.61bn), Microsoft (£1.4bn) Atos (£1.36bn) and Oracle (£1.35bn) round out the top ten.
But in its report, The UK Software Market: Trends and Forecasts, the analyst house said there is a "golden opportunity" forfrom larger, slower players.
"The baggage of established businesses makes it a lot harder for them to be agile in today's market, which presents an enormous opportunity for SMEs and start-ups. Just look at the success of Salesforce.com and many other new businesses that have pulled the rug out from under major suppliers by snatching away their customers," Richard Holway, chairman of TechMarketView, said in a statement.
According to analysts, the UK software and IT services market will be worth £42.4bn this year. It's a rise of 1.3 percent on 2012's figure of £41.9bn, but disguises a real terms decline of 1.6 percent excluding inflation.
By 2016 it will be worth £44.3bn, but that will represent a decline of five percent in real terms since 2011.
Spending by the public sector on IT continues to slow as the government's austerity measures continue to bite. While UK public sector tech spending last year was higher than forecast, 2013 could be a low point, with a 1.3 percent decline to £11.2bn. Public sector IT spending would then account for 26 percent of the overall tech market in the UK.
TechMarketView calculates that by 2016 public sector spending will have rebounded to 2010 levels — accounting for 27 percent of total spending.
But private sector spending on technology looks slightly more rosy: with total spending hitting £31.3bn, 2.3 percent up on last year, although this growth will decline to 1.1 percent to 1.2 percent in 2015/2016.