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China's IT outsourcing grows 16%

(Shenzhen Daily)
Updated: 2006-04-18 15:15

Analysys International, a leading Internet based provider of business information about technology, media and telecom (TMT) industries in China, says China's IT outsourcing services market reached 3.13 billion yuan (US$390 million) in 2005, increasing about 16 percent over the previous year.

The market will keep a high growth rate of 21 percent CAGR (Compound Annual Growth Rate) in the coming four years. The total IT outsourcing services market will reach 7.49 billion yuan by 2009, Analysys International says.

According to the research report "China IT Outsourcing Market Report 2005-2006" recently released by Analysys International, in China's IT outsourcing market, the IT operations and maintenance market reached 2.63 billion yuan, accounting for 84 percent of the total market. The IT application and management market size reached 380 million yuan, accounting for 12 percent; and the Help Desk market size reached 120 million yuan, accounting for 4 percent.

On market segments, Analysys International says IT operations and maintenance will develop more slow than the entire market, with CAGR of 19 percent, and the market share will decrease from 84 percent in 2005 to 81 percent in 2009.

Help Desk will develop at a rapid growth rate of 26 percent CAGR. Its market share will remain at about 4 percent.

With the development of IT applications in Chinese enterprises, IT applications and management services will grow at a high CAGR of 38 percent over the coming four years. Its market share will increase from 12 percent in 2005 to 15 percent in 2009.

IBM, HP and Siemens hold the top three positions in China's IT outsourcing market, with market shares of 9.30 percent, 8.40 percent and 7.28 percent, respectively.

The top 10 players in the information technology outsourcing services market held a market share of 60 percent. A large number of emerging small and midsize vendors occupied the remaining 40 percent.