According to PSBQ Director Eugene Zakharov, “while the IT services market is not yet out of the woods in terms of the recession, many vendors are starting to see the first signs of demand improvement and reduced pricing pressure, especially around offerings that drive new revenue opportunities for clients. Vendors are also positioning for growth through M&A activity, as evidenced by recent actions from IBM, Dell, Xerox and many others.”

In addition to areas of demand that have sprung from the economic recession, including cloud computing and ‘green’ IT, IT services vendors are positioning to win contracts from government economic stimulus spending. Globally, governments are expected to spend $5.5 trillion on economic recovery projects between 2010 and 2011, generating considerable opportunities in the areas of energy, healthcare, transportation, education, science, banking and cybersecurity. To capture these and other growth opportunities, vendors are investing in new services and solutions, particularly around business intelligence and analytics, virtualization and cloud computing.

Merger & acquisition activity began to pick up toward the end of 2Q09 and the beginning of 3Q09 among PSBQ-covered companies, including some recent activity that has the potential to shift the competitive landscape among the top-10 IT services vendors by revenue. Dell’s acquisition of Perot Systems creates an entity with a combined $7.7 billion in trailing 12-month services revenue, while Xerox’s acquisition of Affiliated Computer Services, with a combined $16.5 billion in trailing 12-month services revenue, has the potential to displace major services vendors such as CSC, T-Systems and Capgemini. Zakharov added that “the IT services vendors that invested in M&A and services expansion during the downturn, while also tightening their belts, will emerge from the recession even stronger.”

Analyzing the performance of 29 companies using more than 15 standard and proprietary metrics, TBR’s PSBQ Benchmark report provides expert analysis of services companies’ businesses and operations; their strategies, actions and financial results; and what might be expected in coming quarters. The PSBQ team provides commentary on IT services such as strategy and management consulting, systems integration and outsourcing and covers the following companies on a quarterly or semiannual basis: Accenture, ACS, Atos Origin, Bain, BCG, Booz & Co., Capgemini, Cisco Services, Cognizant, CSC, Dell Services, Deloitte, Fujitsu Global Services Businesses, General Dynamics Information Systems and Technology, Genpact, HCL Technologies, HP Services/EDS, IBM Global Services, Infosys, Lockheed Martin Information Systems and Global Services, McKinsey, Northrop Grumman Information and Services, Raytheon IT Services, SAIC, Siemens IT Solutions and Services, Tata Consultancy Services, T Systems, Unisys and Wipro. The PSBQ Benchmark incorporates coverage on additional players, including British Telecom Services, Capita, CGI, Ciber, Convergys, EMC Services, Hewitt, Logica, Oracle Services, Perot, SAP Services and Sun Services.

Technology Business Research, Inc., headquartered in Hampton, N.H., is recognized as one of the leading high-tech market research and consulting firms specializing in the analyses of computer, software, networking equipment, wireless, portal and professional services companies, as well as customer satisfaction studies. Serving a domestic and international clientele of high tech manufacturers, IT professionals, end users and financial executives, TBR provides timely and accurate market research and business intelligence in a format that is uniquely responsive and tailored to clients’ needs. TBR analysts are available to further address client specific issues or information needs on an inquiry or proprietary consulting basis.