IT service providers have to assist customers on business transformation

International Data Corporation (IDC) has listed the top 30 IT services providers in the Asia Pacific excluding Japan (APEJ) region in revenue terms for CY 2014 in Asia/Pacific Leading IT Services Providers 2015 Competitive Profiles and Analysis.

The research indicates that half of the top 10 IT services providers’ revenue declined in 2014 including that of the top three IT services providers, IBM, HP and Samsung SDS — reflecting a structural change in the market. The emergence of 3rd Platform technologies (i.e. cloud, social, analytics and mobility), and particularly cloud services, has increased price pressures on traditional asset-intensive markets such as IS outsourcing, hardware support and deployment services.

The study also identified Huawei, Telstra, and Atos as the three fastest-growing companies in the top 30 list. In addition, it highlighted the emergence of strong India and China players like TCS, Pactera, and 21Vianet that are looking to expand their reach in the region.

Cathy Huang, IT Services CIS Program Lead, IDC Asia/Pacific, said that 3rd Platform technologies have disrupted the way IT services are delivered and consumed. "We have seen a number of top IT services providers experience revenue declines over the past two years,” she said.

Another author of the report, Sherrel Roche, IT Services Senior Market Analyst said, "The APEJ IT services market is at an interesting juncture and is seeing the rise of resilient India and China players looking to build their presence in the region. The challenge hence for global IT services vendors is twofold — one from the emergence of these Asian players but more importantly the need to innovate to keep up with 3rd Platform technologies such as cloud."

“Citing from Charles Darwin’s theory of evolution — it's not the strongest of the species that survive, nor the most intelligent, but the ones that are most adaptable to change. We believe that only the service providers that acknowledge the changing market dynamics and take actions in responding to those changes will survive and thrive,” Huang continued.

IDC recommends that IT services providers focus on helping customers on digital transformation journeys. Services providers will need to optimize their businesses through aggressive cost management, greater optimization, and increased automation.

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