Indian IT Firms Collectively Grew 7x Faster Than IBM

Indian firms in the IT services fray collectively grew 18.9% in 2010, according to data published by research outfit Gartner. Compare this collective growth to IBM's, the world leader in IT services. Big Blue grew by just 2.6% during the same time; which makes Indian firms (taken together) grow at about seven times faster by comparison. This well-above the market average spurt increases the market share of Indian vendors from 4.8%  (in 2009) to 5.5% in last year. The overall market grew by 3.1%.

"Although global sourcing makes the location of a provider's headquarters increasingly less relevant, we found that India-based vendors continue to grow above the market average and, therefore, continue to gain market share," said Dean Blackmore, senior research analyst at Gartner.

Worldwide end-user spending on IT services totaled $793M  in 2010, a 3.1% increase from 2009 revenue of $769B. The aftermath of the global recession of 2008 and 2009 are still playing out according to Gartner, but the market for IT services bounced back last year after a 5.1% revenue decline in 2009, so vendors rejoice.

IBM retained its lead in market share, with a revenue increase of 2.6% returning $56.4B in revenue and accounting for 7.1% of the market. Hewlett Packard (HP) had the weakest growth in the top five, inching forward by just 0.3% or revenue increases of less than $100M. Accenture registered the fastest growth at 6.1%. The five leading IT services players are (according to both market share and revenues) IBM, HP, Fujitsu, Accenture, and CSC.

"Among the more than 300 vendors tracked, acquisitions affected more than 10% of total revenue, in a market where no provider has more than 7% market share," said Dean Blackmore, senior research analyst at Gartner.

Software support showed the highest growth in 2010 at 6.6%. Weaker performances came from process management and hardware support, both of which grew approximately 1%  less than expected growth. Consulting and development/integration services came in slightly above expectations as organizations that had put investments on hold began investing again in 2010, particularly in the second half of the year.

It was a bad year for the government and education verticals, as as governments around the world implemented budget cuts aimed at reducing deficits. Both these sectors grew at a snail's pace of 1.6%.

IT Services include consulting, systems integration (SI) services, IT outsourcing, managed services, hosting, training, support and maintenance services.