Service Providers Should Think Vertically

Service providers looking for new opportunities in the IT services market should direct their efforts toward offering solutions that address the specific needs of vertical industries, says a report released by the Yankee Group’s E-Sourcing Strategies research and consulting practice.

The Yankee Group Report, ‘Beyond Consolidation: Opportunities in Tomorrow’s xSP Market,’ offers advice for both end users and vendors who want to know how the IT services market will look after a year of considerable restructuring.

The report, which explores future growth opportunities in the IT services market, found that while consolidation and reorganization in the IT services market is expected to continue into 2002, the market’s overall outlook remains strong.

The Yankee Group’s forecast for the international IT services market, indicates it will grow to over $345 billion by 2002, but how vendors take advantage of this depends on their savvy in identifying growth areas.

Says Carrie Lewis, E-Sourcing Strategies analyst and author of the report, developing go-to-market strategies targeting vertical industries is one emerging opportunity for service providers. This can be achieved through re-architecting and leveraging horizontal delivery mechanisms to help provides solutions for specific vertical industries that can often be complex, she explains.

Lewis argues that the answer to what the services market will look like post-reorganization will be found through the tactics that vendors use to make a play in for new opportunities.

The opportunities for growth have definitely shifted, but new opportunities are emerging,” she says.