Disruptive technologies drive growth of IT consulting and systems integration

Analyst Photo The growing adoption of disruptive technologies in the Philippines has driven the growth of professional services, particularly IT consulting and systems integration services.

The same is true with other growth countries such as Malaysia and Vietnam. “Digital transformation initiatives continue to be a major trend influencing the market over the past year. There has been an increasing demand for digital technologies such as analytics, cloud, and internet of things (IoT),” said Aubrey Lim, Senior Market Analyst, Services, IDC Asia/Pacific.

Lim noted that although the size of some of the deals was still relatively small, more organizations are setting aside budgets for 3rd Platform technologies and that IT services and business processes have begun to transform from a labor-centric model into a technology-centric model of service delivery.

IDC expects IT services spending across the Asia Pacific excluding Japan (APeJ) region to exceed US$95 billion by 2021. Overall APeJ Services spending, which includes IT and Business services, is anticipated to reach almost US$140 billion in 2021, from an estimated US$105 billion in 2017.

Vendors such as IBM and Accenture are some of the leading vendors in the cloud, analytics, mobility and security (CAMS) services space tracked by IDC, whose strength is backed up by their robust digital capabilities. They have also continued to bolster their capabilities in the digital space through acquisitions of digital agencies.

Meanwhile in 2017, DXC Technology – the merged entity of CSC and HPE’s Enterprise division – will be a strong contender, banking on the expertise from both of its predecessors, expansive global partner network and strong technology offerings.

China and Australia, the two largest markets in Asia Pacific region except Japan which accounts for half of the region’s services market size, have also seen similar developments.

IDC said the Chinese government has been actively promoting the development of the high-tech industry, and continues to implement its Internet+ strategy and encourage the construction of new smart cities. This is expected to drive the growth of the IT services market and other areas such as analytics and cloud.

Meanwhile, traditional outsourcing managed services are being substituted for cloud services at an accelerating pace in Australia. Enterprises now prefer to bundle cloud services with traditional capabilities as part of a single outsourced managed services engagement.

2 Cloud-related services spending in the APeJ region is expected to reach more than $10 billion by the end of 2017, with a compounded annual growth rate of 18.2% for the 2017-2021 period.