IT Services Giants Face Slowing Growth

New revenues for the 50 biggest players have risen only 1.9% -- in contrast to the double-digit increases seen by some India-based outfits

The largest IT services vendors are growing below the overall market rate - with a few exceptions, most notably the India-headquartered players.

Research out today from Datamonitor puts the combined revenue growth rate for the top 50 players in this market at $262bn for 2005, up 1.9 per cent year on year. However the market as a whole grew at eight per cent.

The market researcher noted "larger players are losing out to smaller, more focused vendors".

The top of the 50 features familiar companies. IBM, EDS, Fujitsu and Accenture lead the way. BT Global Services overtakes Deutsche Telekom's T-Systems to rank eighth.

However, the main Indian services companies saw combined sales growth of 35 per cent. They were also the most profitable suppliers in the top 50 in terms of both net and operating profit margin and made proportionately more new hires. For example TCS grew its workforce 68 per cent, taking on 27,000 new staff in 2005.

Datamonitor said that clients are increasingly looking at smaller outsourcing agreements rather than mega-deals. Multisourcing has become a recent trend.

The league table did not include those companies mainly reselling products or captive IT operations.

Follow this link to view the top 50 list in full.


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