Outsourcers grow by 8 per cent: Gartner

Summary:Outsourcing is still on the rise, with global revenue from outsourcing increasing 7.8 per cent year on year in 2011; however, growth is becoming hard to achieve, according to Gartner.

Outsourcing is still on the rise, with global revenue from outsourcing increasing 7.8 per cent year on year in 2011; however, growth is becoming hard to achieve, according to Gartner.

Information technology outsourcing revenue hit US$246.6 billion in 2011, a 7.8 per cent increase from 2010 of US$228.7 billion.

Although Indian-based IT services providers clocked the largest growth numbers in the year, IBM remained king of the market, growing its revenue by 7.8 per cent year on year, and accounting for 10.9 per cent of information technology outsourcing revenue.

HP's growth was slower, but it managed to hold onto second place, with a market share of 6.1 per cent.

Fujitsu, meanwhile, was able to take over CSC to accept the bronze market-share position, with the two providers holding 4.5 and 4.2 per cent of the market, respectively. Accenture grabbed the fifth spot, with 2.6 per cent of the market.

In Australia, IBM was also the top outsourcer, with 18.6 per cent of the market and $1.3 billion in revenue, according to Gartner. CSC gained second position, and Telstra third, with HP and Fujitsu following up in fourth and fifth positions, respectively. These are the same top five as the year before.

Australian outsourcing numbers
(Credit: Gartner)

The cloud spelled doom for some outsourcers, according to the analyst house.

"ITO providers that are heavily focused on infrastructure outsourcing risk revenue cannibalisation and muted growth opportunities, as more of their clients move to industrialised, cloud-based services," said Bryan Britz, research director at Gartner.

"As clients are likely to pursue hybrid cloud strategies, providers need to deliver some asset-light and some asset-heavy offerings. This will result in varying growth trajectories for ITO providers over the next several years."

Britz said that 2011 revenue results had shown that it is hard for many providers to maintain market share, let alone grow it, and that providers are likely to consolidate in order to boost their growth.

Updated at 5.00pm, 21 May 2012: added data for Australia.

Topics: Outsourcing, CXO, IT Priorities

About

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for t... Full Bio

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