Delivery firms to storm IT services market

Traditional IT services firms will face increased competition from unexpected sources as delivery companies such as UPS and Ryder International target their services at ebusinesses, according to a report by IDC.

Traditional IT services firms will face increased competition from unexpected sources as delivery companies such as UPS and Ryder International target their services at ebusinesses, according to a report by IDC.

The research firm estimated the global IT services industry will increase at an annual growth rate of 10 per cent to reach $472bn (£295bn) by 2003.

But although traditional companies, such as IBM Global Services, still command significant market share, internet companies are becoming attracted to delivery firms because of their logistics infrastructures, claimed Sophie Mayo, manager of worldwide services at IDC.

She said: "Logistics companies are positioning themselves as providers of services in the internet economy because they play a key role after customers press the buy button."

Ebusinesses can take advantage of the delivery infrastructures used by logistics firms that are beginning to manage ecommerce order processing and warehouse management.

"Companies such as UPS and Ryder are turning themselves into e-logistics companies. They have the infrastructure to manage all the processes from warehouse management to shipment and order processing, all the different supply chain stages. IT services companies have IT knowledge, but not the industry knowledge or the logistics infrastructure," Mayo said.

Despite the threat from delivery services companies, IBM Global Services, EDS, Fujitsu and Computer Sciences continue to lead the IT services market.

"It will probably take half a decade before any company seriously threatens IBM Global Services' supremacy, and even then, it will be unlikely. However, no services provider should be complacent," Mayo added.