Worldwide IT services revenue falls more than five per cent in 2009

2010 to be more challenging than 2009, says analyst Gartner

IT services revenue down more than £31bn in 2010 says Gartner

Worldwide IT services revenue dropped 5.3 per cent to $763bn (£502bn) from $805bn in 2008, according to analyst Gartner.

Gartner's figures show that the top five largest IT services providers saw their revenue fall in 2009 by an average of 7.4 per cent, with HP and Accenture reporting the largest declines at 10.4 per cent and 11.8 per cent respectively.

The top 20 vendors combined gained ground slightly over their smaller competitors in 2009, with the group accounting for 37.5 per cent of the market, up marginally from 37.3 per cent in 2008.

Kathryn Hale, Gartner's worldwide IT services group research vice president, said that 2009 was a year in which the IT services providers' priorities changed.

"Their business focus moved from aggressive sales or tactical revenue acquisition to strategies designed to maintain revenue levels, keep a handle on costs and manage profitability," she said.

The revenue of India-based vendors grew at just 3.6 per cent in 2009, down from 15.4 per cent in 2008.

India-based vendors were affected early in the economic downturn because they sell especially heavily into the financial sector, which suffered most during the first months of the crisis. "The financial sector typically leads with offshore application development services, which are relatively easy to delay in tough times," said Hale.

"2010 will be a year of focused readjustment for IT services providers, even though discipline exercised in 2009 has left the industry profitable and relatively nimble.

"However, investors will expect to see revenue growth and managing those expectations, while maintaining margins, will be more challenging than the comparatively unambiguous goals of 2009, when expectations were more modest," she added.