Tier-two players rise as government still frosty with top SIs

TechMarketView report finds market giants seeing public sector software and IT services revenue down

A range of tier-two players in the UK public sector software and IT services (SITS) landscape have the opportunity to cash in as leading providers continue to suffer from strained relationships with government procurement chiefs.

That is the conclusion of the annual UK Public Sector SITS Supplier Landscape report from analyst TechMarketView. The research reveals that 2011-12 public sector spending with the top 20 SITS suppliers was down by one per cent, with four of the top five and 11 of the top 20 – including market leader HP – posting annual revenue declines.

The top SITS firms have become less reliant on government business, with the percentage of the top 20 players' SITS revenue derived from the public sector having shrunk from about two thirds to less than half over the past three years.

The report, by TechMarketView analysts Georgina O'Toole and Tola Sargeant, notes that a number of players in the mid to lower section of the leading score grew their sales, with UK-based players Logica and Civica both enjoying growth. The report's introduction claims that "relationships between the top IT suppliers and the Cabinet Office remain strained".

"The leading suppliers to UK government and the broader public sector are adjusting to a different operating environment," adds the report. "The government ICT strategy, the implementation of which is being led by the Cabinet Office, is dictating that the money spent on ICT products and services should be going to a broader range of suppliers, including SMEs. Our analysis highlights that translating policy to reality is a long journey."