Research from ComputerWire found that the top 50 vendors, headed by IBM Global Services, EDS Corp and Fujitsu Ltd, made combined sales of $228.3bn in their latest fiscal years, compared to revenue of $213.7bn in the previous year.

Gartner Inc claims that the global IT services market was worth a total of $555bn last year, which would mean that the top 50 players accounted for a 41% share of overall spending, with top dog IBM Global Services taking a 7.7% share based on its revenue of $42.6bn.

IBM’s takeover of PwC Consulting in 2002 placed it among the 10 fastest-growing vendors in the top 50 rankings. It ranked 10th in a list topped by offshore vendors Infosys Technologies and Wipro Technologies with respective growth rates of 38.3% and 33.2%. Those Western IT services providers in the top 10 rankings were largely driven by takeovers, such as BearingPoint and CGI Group.

The two companies in the top 10 to report significant organic growth were BT Global Services and Titan Corp. The former has enjoyed strong demand for network management and infrastructure management contracts culminating in two major awards worth a combined $2.6bn from the UK National Health Service last December.

Titan grew its full-year 2003 revenue 28% on the strength of a string of major contract awards from US defense agencies, although it may disappear out of the top 50 rankings this year if its planned $2.4bn takeover by Lockheed Martin, which is currently being held up by an SEC investigation into alleged corruption at Titan, goes ahead.

Despite the top 50 growing their combined revenue last year, their total headcount remained static which suggests that the last three years of cost-cutting by most vendors has led to an improvement in efficiency. The 50 largest IT services providers employed 1.25 million staff at the end of their 2003 financial years – the same figure as 2002, according to ComputerWire records.

This headline number masks some dramatic fluctuations in headcount at some of the companies in the top 50 rankings, with the offshore service providers ramping up their employee bases at a rapid pace. Infosys Technologies for example, grew its headcount from 14,000 to 21,000 during calendar 2003, and Wipro Technologies increased its staff numbers from 17,200 to 27,200 between March 2003 and the end of last year, boosted by the development of its business process outsourcing operation Spectramind.

Western services companies are now building up headcount in offshore locations to lower the cost of delivering applications maintenance and back-office processing work, and it will be interesting to see how this recruitment affects their revenue per employee ratios over the next 12 months. With total headcount remaining flat, average revenue per employee at the top 50 vendors also grew by 6.8% $182,640 in 2003, having previously grown 5.3% to $170,960 in 2002.

This article is based on material originally published by ComputerWire