IDC Cautiously Optimistic About AIP Market

The market for application infrastructure provider (AIP) outsourcing and managed services will grow at a percentage rate in the mid-teens over the next five years, according to Framingham, Mass.-based research firm IDC.

According to IDC, the five-year growth from 2002 to 2007 for the worldwide and U.S. AIP outsourcing/managed services markets will be approximately 17.6 percent and 11.5 percent, respectively. While worldwide growth from 2002 to 2003 is expected to be 13.4 percent, U.S. growth for this same period will be 8.5 percent.

“Although growth in spending on AIP services in the United States is slowing due to a number of factors, we are cautiously optimistic about the future of the worldwide and U.S. AIP markets,” said David Tapper, analyst for the IT Outsourcing and Utility Services program at IDC.

Market growth will be driven by enterprises need to leverage the Web in order to reduce and/or stabilize costs, improve efficiencies in areas such as supply chains and internal operations, reach new customers through customer relationship management (CRM) and salesforce automation (SFA) capabilities, and find new markets. IDC’s Tapper also said that this market has become accepted as a part of IT outsourcing and is also “stepping stone to providing utility computing services.”

IDC’s study cites the following AIP trends:

  • Continued concentration and consolidation in the market, with IT outsourcers coming to dominate this space.
  • Continued decline in market share held by telecommunications providers.
  • Increased customer need to maximize investments, achieve faster return on invest and leverage improved service qualities.
  • Enhanced integration of AIP-managed services with general outsourcing offerings and utility-based services.
  • Increased customer demand for data center and server consolidation and optimization.

IDC reports that to achieve success, players must be able to ensure customer trust regarding financial stability and viability and show customers significant ROI by leveraging real-time reporting through Web portals. They must also leverage utility-based services to improve service and cut costs, develop a mid- market strategy and enable end-to-end computing services from the application to the access device.

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