Services

By Vivian Yeo, ZDNet AsiaThe Asia-Pacific IT services industry is evolving rapidly, marked by mergers and acquisitions, the emergence of new players, and the growing interest in business process outsourcing (BPO).According to research analyst Gartner, IT services in the Asia-Pacific region is set to outpace worldwide growth with a compound annual growth rate (CAGR) of 8.

By Vivian Yeo, ZDNet Asia

The Asia-Pacific IT services industry is evolving rapidly, marked by mergers and acquisitions, the emergence of new players, and the growing interest in business process outsourcing (BPO).

According to research analyst Gartner, IT services in the Asia-Pacific region is set to outpace worldwide growth with a compound annual growth rate (CAGR) of 8.9 percent from 2004 to 2009. The CAGR for the global market is estimated to be 6.1 percent. IDC's numbers are more positive, however. The research firm estimates a CAGR of 11.4 percent for the IT services market in the Asia-Pacific region, excluding Japan.

Gartner also predicted India and China as the emerging heavyweights, forecasting growth at 22.7 percent and 11.8 percent, respectively. India continues to champion IT outsourcing, mainly in the area of application development. China, on the other hand, requires extensive new capabilities due to opportunities arising from the opening up of its large market and its preparation for the 2008 Olympic Games which will be help in the Beijing capital.

ZDNet Asia's IT services segment covers outsourcing, development and systems integration, consulting, managed services and hosting constitute. Such services are targeted not only at large enterprises, but also the middle-tier and small businesses.

While the list of companies that made it to the ZDNet Asia Top Tech 50 Index is dominated by traditional big players Accenture, Fujitsu, HP and IBM, Indian companies such as Infosys, Tata Consultancy Services and Wipro did well enough to claim spots of their own. Telecommunications services companies BT Group, Hua Wei and SingTel also rank among the Top 50.

In the outsourcing arena, competition is expected to intensify in 2006 as more businesses show a preference for smaller, less complex deals. This trend was evident in the third quarter of 2005 worldwide.

Will the traditional big boys continue to dominate, or will the specialist players succeed in grabbing more market share? The jury's still out, but it'll be a hard-fought race.