Report: Solutions services market to grow slightly

The solutions services market will recover slightly in late 2003 and 2004 after experiencing a decline in 2002, according to a new study by International Data Corp.

On Monday, Framingham, Mass.-based IDC released its Worldwide and U.S. Solutions Services Forecast, 2003-2007 which indicates this sector of the IT is on the rebound.

With the exception of e-commerce services, during 2002 the solutions services market was hindered by the economic slowdown, upheaval in the competitive landscape and tight IT budgets, IDC said.

Now the tide has changed.

IDC predicts the supply chain management (SCM) services market will grow the most reaching US$40.5 million in 2007, and in 2005 will beat out enterprise resource management (ERM) to be the largest in this part of the market.

With SCM and ERM becoming numbers one and two respectively, IDC predicts customer relationship management (CRM) will represent the third largest growth opportunity with a compound annual growth rate of 8.5 per cent, staying ahead of e-commerce services.

However, the fastest-growing market opportunities – content management (CM) services, knowledge management (KM) services and globalization and localization (G&L) services – are also the smallest, and will grow at 12.8 per cent, 16.8 per cent, and 13.9 per cent respectively, according to IDC.

IDC’s study also found that customer services, information security and supply chain are a priority for investment, and that customers are looking to optimize technology rather than invest in new products. In addition, customers are looking for client-focused service forms that will provide holistic solutions.

Some dark clouds are still hanging over the IT market such as the war in Iraq and the poor economy, which will still curb spending, according to IDC. However, the firm believes the industry will weather the storm well, due to the diverse nature of the solution services sector.

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