02/07-03   -   Pressemeddelelse

Current Climate Drives Swedish Offshore Outsourcing, says IDC

HELSINKI, July 2, 2003 — Starting at a time when the economy was booming, the past few years have seen renewed interest in offshore outsourcing. This is a result of the global economic downturn and the consequent slump in IT investments, according to recent research by IDC Nordic.

Organizations are looking for ways in which they can cut their cost bases without jeopardizing revenue streams. IDC predicts the Swedish IT outsourcing services market as a whole will grow at an average 11% annually during the forecast period (2002 to 2007).

"In 2002 the Swedish market experienced growth of 11%. Driving factors for outsourcing growth continue to be a persistent economic slowdown, as well as continued growing acceptance of outsourcing as a compelling business practice among small and medium-sized organizations. The top vendors in Swedish IT outsourcing are IBM, WM-data, and EDS, but there is still room for growth, as the top 10 cover only about 60% of the market, compared to 89% in Finland. However, IDC forecasts that the Swedish market will continue to strongly consolidate," said Esa Peltonen, research manager with IDC Nordic in Finland.

Offshore outsourcing originated in the 1990s when the booming economy made times very lucrative for IT service providers generally. The boom resulted in a scarcity of skilled professionals and a consequent rise in IT salaries, sometimes very dramatically. Offshore outsourcing offered the needed availability of skills, the possibility of delivering services remotely and significantly cheaper. "Offshore service provision potentially has a very important role to play in an environment where cost bases are under renewed pressure. The offshore market is also evolving and expanding beyond its traditional fare of custom application development services to offer a wider range of IT services as well as business services," said Peltonen.

"IDC recommends that vendors should not ignore the offshore market. Of course, there are many unknowns about the future of the offshore firms. Regardless of that, IT outsourcers will be pressured into incorporating an offshore delivery model into their overall offering. Vendors such as HP, IBM, and Accenture have already added the offshore component to their outsourcing offering to be able to offer competitive prices," Peltonen said.

IDC´s IT Outsourcing and Application Management Market Analysis, 2002–2007, Sweden (IDC #SE560341K) analyzes the competitive landscape of the IT outsourcing and application management markets in Sweden. The study includes 2002 outsourcing services market size and forecast until 2007 and market structure as well as pinpointing the top players in the market and their market shares. The study contains a market review including discussion of major trends and changes including both traditional and current drivers as well as examples of contracts made in 2002 and 2003.

For additional information on the study, please see: http://www.nordic.idc.com/products/products_outs_am.htm

The study is available to purchase from your local IDC office, or on www.idc.com.

For additional IDC Nordic press releases, please see: http://nordic.idc.com/press

About IDC
IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

IDC is a division of IDG, the world’s leading technology media, research, and events company. Additional information can be found at www.idc.com

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For more information, contact:
Esa Peltonen
+358 9 8770 466
epeltonen@idc.com

Lotta Hållén-Kragh
+45 39 16 22 42
lhallen@idc.com