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February 19, 2009

UK software services markets will shrink to 2011

Analysts value market at £39 billion

By CBR Staff Writer

UK IT software and services spending reached £39 billion in 2008, and according to numbers produced by specialist consultants the market will slip by 2% in 2009 and a further 1% in 2010.

The forecast has come out of research carried out by UK computing services aficiando Richard Holway, and the market research and consulting outfit of Pierre Audoin Consultants.

PAC said it is going to be a tough year for the UK IT services and software sector as clients batten down the hatches and freeze discretionary spend.

There are only limited opportunities for suppliers, the analysts have said. According to senior consultant Nick Mayes, these include areas such as IT and back office administration outsourcing, “where we have already seen a resurgence in contract signing activity since the start of this year.”

Holway, who last year set up a new UK IT research venture with former IDC UK Research Manager Anthony Miller, has stated that the sector contracted last year for the first time since 2003. 

Trading as TechmarketView, the two market-watchers have said UK businesses of all sizes are reining in discretionary IT spending.

The company has also noted that fluctuations in the currency markets are starting to hurt some service providers.

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It said that when Hewlett-Packard posted its first quarter numbers yesterday it attributed half of the 15% fall off in revenues on a proforma basis to ‘the unfavourable British currency’.


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