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Outsourcing growth outstrips overall services

Outsourcing growth outstrips overall services

The outsourcing sector grew 6.9 percent year on year in 2008, and is set to outpace overall IT services growth for the next five years, says an IDC report.

The market is forecasted to reach just over $1.5 million in 2013, a compound annual growth rate of 4.5 percent in the next five years. It is expected to comprise 47.6 percent of the IT services market by 2013.

The analyst firm says maintaining a tight IT budget has replaced a shortages of skilled labour as the main reason to outsource.

"In this time of uncertainty, most organisations, government agencies included, developed a preference for outsourcing and managed services. This is driven by end users' favour for predictable periodic expenses and potential cost savings from vendors' economics of scale," says Adam Lee, IDC Associate Market Analyst for the New Zealand IT Services market.

The reports suggests there is a continuing prefernce for discrete outsourcing, rather than enterprise-wide outsourcing.

Lee says there is increasing pressure on vendors and service providers to help customers ride the economic storm through technology or by better servicing customers' business needs.


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