IDC Predicts that the PRC will Emerge as the Largest IT Services Market in APEJ in 2010

June 06, 2006

Singapore and Hong Kong, June 06, 2006 – In its latest forecast of the IT Services marketplace for the Asia/Pacific excluding Japan (APEJ) market, IDC predicts 2010 is the year that the PRC will overtake Australia to be the largest opportunity for IT Services provision in the marketplace. Additionally, on current projections, in 2011, it is forecast that India will overtake Korea to become the third largest market in the region. This may surprise many providers who have been focusing on the PRC market, often at the expense of other markets for some time. In-depth findings are published in the recent updated IDC report, Asia /Pacific (Excluding Japan) IT Services 2006-2010 Forecast and (Doc# AP221103N ).

From a growth point of view, IDC has forecast that the market will grow from US$29.57 billion in 2005, to US$48.37 billion in 2010. This represents a compound annual growth rate (CAGR) of 10% over the forecast period.

"S ystems integration, enterprise-wide IT outsourcing, and hardware support are going to be the largest engagements, but the discrete outsourcing environment will see the strongest growth rates, clearly at the relative expense of traditional outsourcing, " says Phil Hassey, Director, Asia/Pacific Services Research, IDC Asia/Pacific.

“Vendors are not capturing the growth opportunities that the market provides, nor are they reaching their potential. There is a gap to excellence for many vendors in the region. Clearly this is a frustration for enterprises who often have outcomes that do not match expectations,” said Mr Hassey.

Key factors that will drive the IT Services market include the following:

• Managing around the sensitivities of offshore and “on-demand” delivery. Whilst this is attractive for many enterprises, vendors must be aware that each enterprise will have a unique viewpoint on this
• Whilst enterprises want a low cost opportunity, they are also aware of the dangers of paying too low for a services, as a result balance between price and value is critical
• Standardised offerings that are able to drive out cost
• Company environmental factors, such as profitability, future strategy and geographic framework
• Enterprises attitude to their service provider will also vary dependant upon the outcomes of any relationship, so true partnerships will typically only be formed if there is a transformational element to the engagement, otherwise it can vary from a commoditized relationship to a transformational one depending upon client needs and the ability of vendors to sell their capabilities.

Asia/Pacific (Excluding Japan) IT Services Forecast, Country Breakdown 2010

Notes to Editor

Countries covered in the IDC APEJ Services Research Programs are Australia, New Zealand, China, India, Korea, Singapore, Hong Kong, Malaysia, Taiwan, Thailand, Philippines, Indonesia and in the rest of Asia Pacific.

Contact

Chong Chee Kian
Events & Marketing Executive
Tel: +603-2169-7521
Fax : +603-2163-5098
Email:ckchong@idc.com