Service giants eat larger slice of the pie in 2008

The top 50 service providers in western Europe accounted for the lion’s share of the market in 2008, according to analyst IDC.

Figures released in the market watcher’s report – Top 50 Western European Service Players in 2008 – revealed that the 50 largest service providers represented around 55.5 per cent of the overall services market in 2008, compared with 53.4 per cent in 2007.

IDC also estimated that the western European services market grew by 8.5 per cent – driven by a healthy growth in the IT services market, and double-digit growth in the BPO market.

The top 50 service firms, comprised of a mix of vendor in-house service divisions and larger service players, grew 9.7 per cent – over one per cent more than the total services market – for a combined turnover of $152.2bn (£92.4bn). This was through a combination of renewed spending on project-based as well as outsourcing services.

However IDC predicted that the next top 50 report will be less positive to reflect the worsening of the downturn.

Market consolidation is also forecasted to continue in 2009. The HP-EDS merger was the major contributor to the market consolidation trend, although for 2009 large-scale reorganisations – such as the combination of Fujitsu Services and Fujitsu Siemens Computers under one brand, and Oracle-Sun merger – will play a part.

Laura Converso, research manager, European services market and competitive insights at IDC, said: “With a few exceptions, most of the vendors in the top 50 ranking enjoyed growth driven by increased sales, combined with small acquisitions to strengthen their presence in specific geographies or industries, or to gain global sourcing capabilities

“Pure-play offshore vendors continue to quickly penetrate the European services market. TCS is the first so-called offshore provider to reach the top 20 IT services ranking, marking a symbolic breakthrough."