Bangalore, 1 February 2010 - The top ten Asia Pacific IT services vendors won 38 per cent share in the Asia Pacific (excluding Japan) IT Services Market in 2009, says the latest IT services research report "Asia Pacific IT Services Competitive Report: Survival of the Fittest", published by Springboard. IBM and HP Enterprise Services lead the market with a combined market share of close to 20 percent.
Although IBM was the overall leader in the region, it was only the market share leader for Application Services. HP Enterprise Services had the largest market share for Infrastructure Services and Accenture was the market share leader for Consulting. IBM clearly benefited overall from being ranked number 2 in both Infrastructure Services and Consulting. Unisys, Fujitsu and CSC were the other strong performers in the region but their market share is traditionally over dependent upon their infrastructure service portfolio and a limited number of geographies in the region. Korean vendors like Samsung SDS and LG CNS also scored well overall but this was due to their dominance in their home market. Their failure to significantly penetrate outside of Korea highlights the significant challenge that they face in growing revenue and capability.
"Organisations with a multi-dimensional approach to IT services, a focus on industry specific solutions and ability to transform customer's business to keep pace with the market are better placed than any other service provider to overcome challenges that economic downturn throw up," said Sudip Saha, Senior Analyst, IT Services, Springboard Research. "The overall market shows a preference for vendors with an integrated and end-to-end services portfolio and the ability to combine software, hardware and services," Saha added.
According to Springboard's Vendor Maturity Curve, both IBM and HP Enterprise Services are clearly the key leaders in the region. Based on analysis of key parameters including market performance (market share, revenue growth) and growth potential (ability to deliver locally, client base, employee base, off-shoring ability and capacity for solution and delivery innovation), IBM scored 7.7 and HP scored 7.5 on a scale of 10. Springboard notes that HP marginally lags behind its global services competitors in application services and in the scale and maturity of its off-shoring ability, with the results reflecting this.
"More than ever before, we see the next 12-24 months as a particularly pivotal point of transition for the competitive makeup of the IT industry in Asia/Pacific. Current market valuations and company challenges present ripe conditions for strategic acquisitions for astute IT providers," said Phil Hassey, Vice President, IT Services, at Springboard Research. "In combination with some of the fundamental shifts taking place in technology delivery -- with Virtualisation, Cloud Computing and SaaS most noteworthy among them -- it is clear that the industry is at a point where IT providers need to have a sound active M&A strategy linked with the ability to integrate and execute for long term success," Hassey added.
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