Technology Service Sales Won’t Recover in 2010

The IT services market will
continue to feel the 2009 recession hangover in 2010, not seeing a
“substantial” recovery until at least 2010. That might be tough news for
vendors and IT solution providers to stomach after the year they’ve been
through in 2009.

“Vendors who are planning on ‘pent-up customer demand to fuel substantial
growth’ in 2010 should rethink their strategies,” said John Madden, co-author
of a new research report from analyst firm Ovum, in a statement.

“While there are encouraging signs for an economic recovery, CIOs and IT
decision-makers are clearly more cautious when it comes to making short- and
long-term IT investments,” he added.

Click
here to check out how technology services fared during the recession with
OnForce’s 2009 Q4 and year-end market numbers.

Ovum is forecasting that the
North American market will show growth of just over 2 percent in 2010 and
increase to slightly under 3 percent in 2011. Ovum further forecasts that
project-led and applications services and business process outsourcing will
slightly outpace growth in infrastructure and support services by 2013.

In 2009, businesses focused on cutting costs and increasing efficiencies, and
that’s why discretionary consulting, application and business process
outsourcing projects declined. At the same time, data center outsourcing and
other infrastructure services suffered a lesser decline as companies looked for
service providers to take over some IT functions.

OnForce’s
CEO says high unemployment will drag on technology sales to business in 2010.
Click here for more.

Ovum said that North American end users will remain
in a defensive IT spending position as they wait for a stronger recovery,
something that will likely arrive in 2011 and 2012, Madden said.