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IT services remained a bright spot for Hewlett-Packard
in its most recent earnings release, and now research firm Gartner says that IT
services revenue showed strength for much of 2008.

Worldwide IT services revenue totaled $806 billion for 2008, an 8.2 percent
increase from 2007 revenue of $745 billion, according to Gartner.

“Vendors had six to eight months of ‘business as usual’ in 2008 and then
approximately four months encountering the beginning of the global economic
downturn, featuring widespread cost restrictions and cost reductions,” says
Kathryn Hale, research vice president for Gartner’s worldwide IT services
group, in a prepared statement.

Hale points out a surprising development following the onset of the downturn—markets
that previously would have done well in tight economic times haven’t proven to
be immune this time around.

“The only two segments of the market that grew less than forecast were IT
management and process management,” Hale notes. “This is particularly
surprising, because in economic hard times the potential cost savings from
outsourcing usually keeps this market segment buoyant. However, apparently
buyer hesitation to commit to the long-term requirements of outsourcing
agreements took precedence in 2008.”

IBM continues to be the market leader in the
space by a wide margin, with 2008 revenue of $58.9 billion and 7.3 percent of
market share, followed by HP in the No. 2 spot with $38.6 billion and 4.8 percent
market share (following HP’s acquisition of EDS).
Gartner notes that HP’s difficulties in integrating the EDS
business meant its revenue only grew by 1.9 percent in 2008, considerably below
the overall market growth rate.

Accenture is third with $23.7 billion and 2.9 percent market share. Fujitsu is
fourth with $20.4 billion in revenue and 2.5 percent market share, followed by CSC
in fifth place with $17.1 billion in revenue and 2.1 percent market
share. The remaining players make up 80.4 percent of the market and
contribute $647.2 billion to the overall market revenues, according to Gartner.

The company notes that growth at India-based vendors slowed down in 2008 to a
12.9 percent growth rate in U.S. dollars, down from a 39.8 percent growth rate
in 2007. Gartner attributes this to cutbacks by financial services firms,
particularly on offshore application development services.

Gartner says that in the platform space enterprise networks grew by 6.8 percent,
compared with carrier networks, which grew at 14.2 percent.

“As carriers look to create operational efficiency and business growth and
continue network transformation projects, opportunities are created for
professional services firms, particularly in network and system integration and
managed services,” says Christine Tenneson, research director at Gartner, in a
prepared statement. “Carriers are looking to transform their infrastructure and
business environment to capture the opportunity to develop services for new
revenue opportunities, while simultaneously developing operating expenditure
savings with a flat IP infrastructure.”