The Application Management Services Market Heads for Growth in 2005, IDC Finds

FRAMINGHAM, Mass., May 19, 2005 – According to a recent IDC study, approximately $17.9 billion was spent worldwide on application management (AM) services in 2004. Due to a strong surge in demand for application management services, the worldwide market is expected to grow at an overall compound annual growth rate (CAGR) of 9.2% and reach $27.2 billion by 2009. This study finds that offshore labor sourcing and high-end transformational services will be critical offerings for successful application management services vendors.

“The worldwide application management services market is healthy and growing rapidly,” said Barry Mason, senior analyst, Application Outsourcing and Offshore services at IDC. “Customers are seeking vendors with global sourcing capabilities and diverse offerings that span everything from basic application maintenance services to transformational services such as legacy modernization, service oriented architectures (SOA), and portfolio rationalization. This critical combination of both low-cost operational capabilities and high-value services offerings are crucial elements for vendors to help their customers create truly dynamic IT organizations, and will drive further growth in the application management services market.”

The U.S. application management services market continues to grow and leads in regional spending. Approximately $8.5 billion was spent by U.S. customers on discrete application management services in 2004, and this amount is expected to increase to $11.8 billion by 2009 at a 6.9% CAGR. The Europe, Middle East, and Africa region (EMEA) as well as Asia/Pacific are also expected to grow during this forecast period, however; the growth rate of the Asia/Pacific region will continue to increase throughout the forecast period, while both the Americas and EMEA will experience declining growth rates beyond 2007 as those markets mature.

This IDC study, Worldwide and U.S. Application Management Services 2005-2009 Forecast (IDC #33221), presents the annual update to the five-year forecast for the worldwide and U.S. market for application management services. The document identifies and quantifies the impact of recent trends and events influencing the application management services opportunity through year-end 2004 and their impact on the five-year forecast. Future outlooks and essential guidance are offered for application management services vendors.

To purchase this document, call IDC’s Sales hotline at 508-988-7988 or email sales@idc.com.

IDC is a division of IDG, the world’s leading IT media, research and exposition company.