Software and services market remains in the doldrums

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Software and services market remains in the doldrums

Simon Quicke

The UK software and IT services market is set for tough times for a while longer as it will not be until 2016 before real growth is experienced again.

The part of the industry has already been in recession for eight years and is forecast to notch up a decade of difficult times, according to analyst house TechMarketView.

The market watchers have released its Software and IT Services forecasts report for 2012 and it has some sobering news for those hoping that the worst was over.

"According to our estimates, the UK SITS market shrank by almost 3% last year in real terms (i.e. taking into account CPI inflation), the fourth year of decline. We see the pain easing over coming years, but we do not expect the UK SITS market to grow again in real terms before 2016. Indeed, it would take just two further years of decline to mark a decade of recession," stated a TechMarketView subscriber update.

The economy was not just the sole factor undermining the recovery with the influence of disruptive technologies including BYOD, big data and off-shoring all playing a part in changing the landscape.

The developments are all designed to cut the costs of computing and the fear is that the increasing demand for software and services is not enough to offset price deflation.

The silver lining on a fairly dark cloud was the example being set by those channel players that embraced the disruptive technologies and managed to grow their businesses on the back of delivering cloud, big data and consumerisation tools and services.

The consequences for those that were left behind sticking to more traditional models were fairly sober with a warning that the experiences of the current recession could become something much more permanent.


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