Gartner Says Worldwide IT Services Market On Track to Grow 9 Percent in 2007

Analysts Discuss the Future of IT Services Industry During Gartner Symposium/ITxpo in Orlando, October 7-12

STAMFORD, Conn., September 17, 2007 � Despite the slowing U.S. economy, growth in IT services is expected to remain solid as worldwide IT services end-user spending is forecast to exceed $730 billion in 2007, up 8.7 percent from 2006, according to Gartner, Inc.

�While many businesses remain focused on improving internal processes and reducing costs, investing in innovation is more widespread than in recent years, providing two solid reasons to invest in IT services,� said Kathryn Hale, research vice president for Gartner. �Global delivery models are meeting both needs by enabling buyers to effectively use labor arbitrage which simultaneously stimulates some demand for services that might otherwise be unaffordable, while dampening spending growth for many services that now cost less.�

Core outsourcing (IT management and process management) remains the highest growth area in the market. In 2007, core outsourcing services are on track to represent 41 percent of total worldwide IT services end-user spending. Process management services are typically funded outside of IT budgets and IT management services replace internal IT spending, so growth in these outsourcing segments often occurs even in the face of restricted growth in IT budgets.

The development and integration (D&I) segment continues to exhibit steady growth (see Table 1) fueled by regulatory and compliance initiatives, and a continued push for improved business change management and agile architectures driven by merger and acquisition activities. The worldwide D&I segment is forecast to reach $225 billion in 2007, up 9 percent from $206 billion in 2006.

Table 1

Worldwide IT Services End-User Spending by Segment (Millions of Dollars)

Segment

2006

2007

2008

Consulting

55,311

60,285

64,205

D&I

206,369

225,244

239,752

IT Management

168,175

183,383

196,252

Process Management

104,910

115,714

126,544

Hardware Support

88,689

92,810

95,481

Software Support

48,640

53,217

57,197

Total Market

672,365

730,654

779,431

Source: Gartner (September 2007))

Additional information is available in the report �Dataquest Insight: IT Services Forecast, Worldwide, 2004 -2011.� This report examines the state of the worldwide IT services market, looks at what trends are developing and provides a full forecast for the market. The report is available on Gartner’s Web site at www.gartner.com/DisplayDocument?ref=g_search&id=512914&subref=simplesearch.

Gartner analysts will further examine the IT services market at Gartner Symposium/ITxpo 2007 taking place October 7-12 in Orlando, Florida. Symposium/ITxpo is the industry�s largest and most strategic conference for senior IT and business professions. More than 6,000 senior business and IT strategists from virtually all major industries will gather to gain the latest advice on the biggest challenge: driving profits and performance with IT. Gartner’s annual Symposium/ITxpo events are key components of attendees� annual planning efforts. They rely on Gartner Symposium/ITxpo to gain insight into how their organizations can use IT to address business challenges and improve operational efficiency. Additional information is available at www.gartner.com/symposium/us

About Gartner

Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 3,900 associates, including 1,200 research analysts and consultants in 75 countries. For more information, visit www.gartner.com.