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IT services: beware poisoned chalices

Saturday 3rd January 2009
Competitive landscape. Courtesy:www.telindusproducts

EDS (pre-HP acquisition) commanded the largest share of the UK IT services market in 2008. IBM was second followed by Capgemini according to a report from Ovum, the global advisory and consulting firm,

Of the top 15 vendors, Steria showed the strongest growth during the year, followed by Capita and TCS. EDS, despite its leading rank, experienced negative growth and saw its market share slip. Other vendors including Logica and Fujitsu also struggled.  

In the report  Market Trends 2008: competitive landscape, Dr Alexander Simkin, (right) senior analyst at Ovum and author of the report, analysed the performance of IT services vendors during the year, and ranked the top 15 vendors in the UK market giving their rank, market share and year-on-year change.

The report also ranked the top vendors in each of the lines of business that comprise IT services: infrastructure/support services, project services/application-led outsourcing, and business process outsourcing.

This study analysed the strategies of the best- and worst-performing vendors in 2008 and recommends courses of action for large and small vendors in 2009. “There were mega-deals, particularly in the public sector that turned out to be poisoned chalices in 2008.

IT services vendors will need to bid more selectively going forward if they are to avoid repeating this year’s mistakes,”said Dr Alexander Simkin. “Imprudent bidding, portfolio and go-to-market strategies at this stage will prove especially damaging to revenue growth as the UK economy worsens in 2009,” he warned.

Source: http://www.ovum.com/

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