Asia-Pacific region defies IT services downturn

The IT services market is continuing to hold up in the Asia-Pacific area, although it is unlikely to return to the golden years of 20 percent growth

Despite continued sluggish performance in Europe and the US, the Asia-Pacific region continues to show healthy growth in the IT services sector according to Rolf Jester, Gartner chief analyst for IT services in the Asia-Pacific.

"The growth trend in IT services in the Asia-Pacific region has continued to a large extent independently of the downturn in some economies within the region," Jester said. "It even survived the East Asian economic crisis of 1997, and is still growing in economies which are still experiencing problems, albeit at a reduced rate."

Gartner is predicting a 4.2 percent compound growth rate during the next five years across the region, after it experienced an 8.4 percent growth in 2001. The Australian market, which holds a third of the overall services market share in the region, grew by 6.4 percent in 2001, and can expect a 10.1 percent growth rate over the next three years.

"To a certain extent we are dealing with less mature markets than those in Europe and the US," Jester said. "There are a number of factors which will shift people towards external services during times of difficulty."

However, Jester confirmed that market maturity will most likely preclude any return to growth rates of 20 percent or more seen in previous years. "IT services is just not pioneering stuff anymore," Jester said. "These days it is just a way to do business."


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