IDC reports in its latest services research, “IDC Market Analysis Perspective (MAP)”, that the IT services market in Asia Pacific excluding Japan (APeJ) declined by 2.1% year-on-year in 2015. This negative growth was largely driven by local currency fluctuations against the U.S dollar and business depreciation in global oil prices. The major market slump in China, which is a key trading partner for Australia, Hong Kong, and Taiwan impacted the results as well.
Over the past two years, competition in the IT services market space has stiffened, with the top 10 service providers struggling to maintain their market share. Service Providers (SPs) such as Fujitsu, Oracle, Cisco, and NCS have gained substantial share over CSC and are benefiting from the fragmentation of IT outsourcing under the impact of cloud services.
The top 10 IT service providers in the region are continuing to experience a decline in margins and are increasingly facing threats from service providers such as Wipro, Digital China, and Huawei, which are steadily climbing up the market ranking.
IDC recommends that SPs aiming to provide end-to-end service delivery capabilities have to decide what their capability limits are. SPs need to either have their own highly developed automated service delivery capability or have a strong partner that can provide the service delivery platform to them.
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