Cloud to drive IT services spend up in 2016

Hosting infrastructure services and business consulting services are expected to return dividends for the IT channel next year, as the purse strings – and currency exchange woes –  loosen on services spend.

IDC says while the services market has been down this year, positive growth is expected in 2016.

Hosting infrastructure services is expected to see 8.3% growth in 2016, while business consulting services are forecast to see 7.7% growth. IDC says the growth forecasts indicate that more cloud-related changes and developments are expected to continue driving the IT and business services industries.

Lisa Nagamine, research manager with IDC's Worldwide Semi-annual Services Tracker, says while hosting infrastructure services and business consulting services are expected to see the largest revenue growth in the near term, key horizontal business process outsourcing (BPO) and systems integration services are expected to retain the largest revenue pools in the long term.

"These are $100-plus billion dollar markets respectively," Nagamine says.

Chad Huston, IDC worldwide services group research manager, says even though worldwide services growth was negative in 2015 in US dollar terms (-3.4%), when controlling for exchange rate volatility the 2015 growth rate was around 3.9%.

"Moreover, the long-term trend has returned to a growth trajectory through the end of the forecast period (2019)," Huston says.

"This is compared to expectations from three months ago, which expected worldwide services growth rates to peak in 2016.

IDC is forecasting 5.3% growth in services revenue for Asia Pacific in 2016, following a decline of 2.9% in 2015.

Globally, services spend is predicted to be up 3.9% in 2016.