Gartner predicts rise in services spending

IT services seen as cutting cost, but adding little value

Analyst firm Gartner has predicted that spending on IT services will rise by 9.5 per cent in 2008, but it warned that business leaders are increasingly seeing outsourcing solely as a means to cut costs.

Gartner forecasts that global spending on IT services in 2008 will top £410bn, up from £376bn in 2007; growth will slow a little to £438bn in 2009, a still-healthy rise of 6.5 per cent.

Nevertheless, the analyst firm has detected a degree of caution from enterprise leaders prompted by financial uncertainty.

"Some outsourcing contract signings are being delayed and some projects are being placed on hold," said Kathryn Hale, research vice president at Gartner, in a statement.

But that caution is exacerbated by the service providers' failure to " provide compelling value statements about the services they provide", she added.

Hale suggested that as a result, enterprise leaders necessarily focus their attention on cost reduction, with the lowest bid usually winning in tenders.

“This approach inhibits the needed innovation for IT to 'make a difference’ and add value and also restricts the level of innovation that providers are able to offer," she added.