“TBR is excited to see the light at the end of the tunnel and positive IT services market growth signs,” said Eugene Zakharov, PSBQ Director. “By the end of 2009, a significant number of large deals that had been in the works for months came through, and will drive growth for the market in 1Q10 and on. Although 1Q10 growth is expected to be only 1%, this remains a welcome change for the vendors that have survived one of the deepest recessions for the IT services.” Zakharov continued: “As recovery emerges in the United States, the economy in Europe remains sluggish, with pockets of non-growth and even continued contraction. At the same time, TBR believes the IT services market has generally turned the corner.”

IBM Global Services and HP Services retained the No. 1 and No. 2 spots, respectively, in revenue among the IT services providers covered in the report. Given their market dominance, as evidenced by trailing 12-month services revenue of $55.0 billion for IGS and $34.6 billion for HPS in 4Q09, TBR does not foresee any major changes to the rankings despite the consolidation activities taking place among Tier 2 and Tier 3 companies.

In contrast with last quarter, when Business Process Outsourcing was the only service line to demonstrate growth, TBR’s report indicates that revenue from Information Technology Outsourcing and Applications Outsourcing also increased slightly on an industry-average basis. While many IT services vendors continue to experience pricing pressure, most are now focusing on top-line growth, having rationalized costs in preceding quarters. Vendors continue to focus on higher-value service offerings with high growth potential, including cloud computing, smart metering and smart grid, as well as business intelligence.

“As clients emerge from the fog of the economic downturn, we are seeing an increase in demand for vertical-specific solutions,” said Erin Hichman, an analyst with TBR’s Professional Services division. “Clients want IT services and solutions geared directly towards their industry requirements in order to maximize their benefits. TBR believes vendors with the capability to transform their services and solutions into industry-specific services and solutions will have an edge throughout 2010.”

Analyzing the performance of 31 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, 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, 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.