Growth back on agenda of IT outsourcing providers: Gartner

Updated on: Thursday, September 08, 2011

Growth is back on the agenda for IT outsourcing (ITO) providers, according to a survey by IT research and advisory firm Gartner, Inc.

Sixty-two per cent of respondents identified growth as the top strategic goal this year, with aggressive marketing plans and nvestments in cloud, utility and 'as a service' offerings, it said in a statement.

"It is clear that providers are optimistic despite considerable uncertainty in the global economies," said Rolf Jester, Vice President and distinguished analyst at Gartner.

"However, we predict the ITO services market will reach USD 313.2 billion in 2011, a growth of 6.9 per cent from 2010, and will reach 4.6 per cent compound annual growth rate through 2015."

Gartner conducted an online survey in the first quarter of 2011 among 47 ITO providers, accounting for 62 per cent of the total ITO market.The respondents represented the full range of providers, all major geographies and all types of ITO services including infrastructure (data centre, desktop, storage and network), applications and cloud services.

"Many ITO providers are intending to commit serious marketing funds and target new accounts to outgrow the market,” said Bryan Britz, research director at Gartner.

The survey found at least 50 per cent of outsourcing providers said they would spend two to five per cent revenue on marketing in 2011, which is higher than the historical norm for marketing expenditure as a per cent of revenue (which has
tended to be one per cent to three per cent for IT services providers).

At the same time, ITO providers continue to invest significantly more in sales than marketing as demonstrated by two-thirds of providers indicating sales expenses are greater than six per cent of revenue", it was stated.

Growth back on agenda of IT outsourcing providers: Gartner

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