What Decides Growth Of IT Service Provider? IDC Has Its Views

by CXOtoday News Desk    Sep 22, 2015

strategy

The  International Data Corporation (IDC) has identified the top 30 IT services providers in the Asia/Pacific (excluding Japan) (APEJ) region in revenue terms for CY 2014 in its new report, “Asia/Pacific Leading IT Services Providers 2015 Competitive Profiles and Analysis (AP257546).”

The study covers an overview of the IT services market, go-to-market strategy, detailed revenue breakdown and IDC’s view on strength, weaknesses, opportunities and threats of the top 10 IT services providers in the region. The IT services revenue is based on the latest “IDC Asia/Pacific Semiannual IT Services Tracker, 

IDC research indicates that half of the top 10 IT services providers’ revenue declined in 2014 including the top 3 IT services providers, IBM, HP and Samsung SDS — reflecting a structural change in the market. The emergence of 3rd Platform technologies (i.e. cloud, social, analytics and mobility), and particularly cloud services, has increased price pressures on traditional asset intensive markets such as IS outsourcing or hardware support and deployment services market.

The study also identified Huawei, Telstra, and Atos as the three fastest growing companies in the top 30 list. In addition, it highlighted the emergence of strong India and China players like TCS, Pactera, and 21Vianet that are looking to expand their reach in the region.

“With the emergence of 3rd Platform technologies, it disrupts the way IT services are delivered and consumed. We are seeing a number of top IT services providers experiencing revenue decline over the past two years”, said Cathy Huang, IT Services CIS Program Lead, IDC Asia/ Pacific.

Another author of this report, Sherrel Roche, IT Services Senior Market Analyst said,

“The APEJ IT services market is at an interesting juncture and is seeing the rise of resilient India and China players looking to build their presence in the region. The challenge hence for global IT services vendors is twofold — one from the emergence of these Asian players but more importantly the need to innovate to keep up with 3rd Platform technologies such as cloud.”

“Citing from Charles Darwin’s theory of evolution — it’s not the strongest of the species that survive, nor the most intelligent, but the one that is most adaptable to change. We believe that only the services providers that acknowledge the changing market dynamics and take actions in responding to those changes will survive and thrive,” Cathy Huang continued.

IDC recommends that IT services providers must transform their businesses to enable their customers as they embark on digital transformation journeys of their own. Services providers will need to be equally focused on optimizing the business they can generate in their traditional areas of strengths through aggressive cost management, greater optimization, and increased automation.