Global IT outsourcing market to reach $288 bn in 2013: Gartner

The worldwide IT outsourcing market is forecast to grow at a slower pace of 2.8 per cent to touch $288 billion this year over 2012, research firm Gartner said on Wednesday.

IT market is forecast to grow 2.8 per cent in dollar terms and 5.1 per cent in constant currency from 2012, Gartner said in a statement.

Compared with Gartner's previous forecast, nearly all ITO segments are now forecast to grow more slowly during 2013, it added.

"We continue to see overall market growth being constrained by near-term market factors, such as evolving ITO delivery models, economic, political and labor conditions, and service provider financial performance," Gartner Research Vice President Bryan Britz said.

Mature Asia-Pacific and Western Europe are the regions where the outlook is most tempered, partly due to currency but also reflective of our view that 2013 is likely to be similar to 2012 in these regions, he added.

"Planned new adoption of ITO remains positive in all service line segments.

"However, constrained IT budgets, an evolving ITO delivery model, economic conditions and cost-focused

buyers are limiting the growth potential of the ITO market," Britz said.

Enterprise buyers pursuing hybrid IT strategies and small and mid-size business buyers adopting infrastructure as a service are key drivers in cloud and data center service segment growth rates, he added.

ITO markets in emerging Asia-Pacific, Latin America and Greater China are expected to grow more than 13 per cent in 2013 and 2014.

Expansion by multinationals into these regions, new buyers of ITO that are themselves growing organisations, and fertile economic conditions all drive the positive outlook, Gartner said.

In North America, buyers are expected to look at transitioning more IT work to annuity-managed service relationships for cost takeout and more predictability in IT costs.

This will keep ITO growing in the region through 2016.

Economic austerity initiatives (fueled by a reluctance to hire or make large capital purchases) and enterprises pursuing asset-light IT strategies continue to push clients toward externally provided services.