Worldwide spending for IT outsourcing (ITO) services is on pace to
reach USD 251.7 billion in 2012, a 2.1 percent increase from 2011
spending of USD 246.6 billion, according to the latest outlook by
The fastest-growing segment within the ITO market is cloud
compute services, which is part of the cloud-based infrastructure
as a service (IaaS) segment. Cloud compute services are expected to
grow 48.7 percent in 2012 to USD 5.0 billion, up from USD 3.4
billion in 2011.
"Today, cloud compute services primarily provide automation of
basic functions. As next-generation business applications come to
market and existing applications are migrated to use automated
operations and monitoring, increased value in terms of service
consistency, agility and personnel reduction will be delivered",
said Gregor Petri, Research Director at Gartner. "Continued privacy
and compliance concerns may however negatively impact growth in
some regions, especially if providers are slow in bringing
localized solutions to market."
Data center outsourcing (DCO), a mature segment of the ITO
market, represented 34.5 percent of the market in 2011, but growth
is expected to decline by 1 percent in 2012. "The data center
outsourcing market is at a major tipping point, where various data
center processing systems will gradually be replaced by new
delivery models through 2016. These new services enable providers
to address new categories of clients, extending DCO from
traditional large organizations into small or midsize businesses,"
said Bryan Britz, Research Director at Gartner.
The application outsourcing (AO) segment is expected to reach
USD 40.7 billion, a 2 percent increase from 2011 spending of USD
39.9 billion. This growth reflects enterprises' needs to manage
extensive legacy application environments and their commercial
off-the-shelf packages that run the business.
"Change is afoot in the AO market. The burdens of managing the
legacy portfolio, along with the limitations of IT budgets, have
shifted the enterprise buyers to be cautious and favor a more
evolutionary approach to other application services, such as
software as a service (SaaS)," said Britz. "New applications will
largely be packaged and/or SaaS-deployed in order to extend and
modernize the portfolio in an incremental manner. While custom
applications will remain 'core' for many organizations, the trend
in the next few years to SaaS enablement in the cloud will reflect
in the growth of the AO outlook."
Spending on ITO in the Asia/Pacific region is expected to grow 1
percent in U.S. dollars in 2012 and exceed 2.5 percent growth in
2013. With the exception of Japan, Australia, New Zealand, and to a
lesser degree, Singapore and Hong Kong, the countries in
Asia/Pacific are quite new in terms of outsourcing usage,
understanding and sophistication, said Gartner release. The growth
is being driven by the large inflow of capital into Asia over the
past three to five years, leading to the need among global and
regional businesses to scale up their operations.