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By Mel Duvall
Describing it as a year like "no other before," Gartner issued a report Tuesday stating that worldwide IT services revenue fell 5.3 percent in 2009.
The recession seemed to leave no major player undamaged, as all five of the largest IT services providers reported drops in revenue ranging from 11.8 percent for Accenture to a slight drop of 0.4 percent for Fujitsu.
Kathryn Hale, research vice president for Gartner's IT services group, said 2009 presented some of the most difficult challenges that the industry has ever faced and IT services providers had to make dramatic changes to their game plans. "Their priorities changed and their business focus rushed from aggressive sales or tactical revenue acquisition, to strategies designed to simply maintain revenue levels, keep a handle on costs and manage profitability," Hale said in the report.
After Accenture, HP reported the steepest decline in revenues, with sales falling 10.4 percent from $38.6 billion in 2008 to $34.6 billion in 2009. Overall, the market fell from $805 billion in 2008 to $763 billion in 2009.
While most markets suffered, Gartner said India-based service providers still managed to continue their impressive record of growth. Indian vendors saw their revenues grow 3.6 percent in 2009. That was down significantly from 15.4 percent growth in 2008, but in stark contrast to the decline experienced by U.S. and European-based vendors.
Looking at 2010, Hale expects most service providers will need to continue to adjust their strategies to respond to customers' changing business needs and to respond to varying recovery rates around the globe. Infosys Technologies, India's second-largest IT service provider, warned this week that it may see a decline in outsourcing work in Europe as a result of the debt crisis in Greece. Infosys garners about 23 percent of its revenue from Europe.
"The discipline exercised in 2009 leaves the industry profitable and relatively nimble," Gartner's Hale said. "But 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, a year in which expectations were modest."
Gartner's 2009 worldwide IT services vendors by revenue:
1. IBM: $55 billion, -6.6% growth over 2008
2. HP: $34.6 billion, -10.4%
3. Fujitsu: $23.3 billion, -0.4%
4. Accenture: $20.9 billion, -11.8%
5. CSC: $16 billion, -6.5%
Overall 2009 IT services market: $763 billion, -5.3%
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