CIOIN

The total domestic IT services spending for China in 2011 is expected to grow by 12 per cent over 2010, according to the newly released report 'PRC IT Services Report: 2010' from Springboard Research.

Findings of the report indicate that this market will grow tremendously as it has recovered from the economic downturn that hit all businesses across the world.

This market will reach US$11.5 billion, and according to Springboard, this represents 22 per cent of the overall APEJ (Asia Pacific excluding Japan) IT services market.

Last year, the discrete IT services constituted 90 per cent of mainland China's IT services market and now it will continue growing thanks to new IT project rollouts.

In the next few years, the discrete IT services market will largely comprise of systems integration, infrastructure deployment and support services segment.

Rapid growth

Springboard Research notes that currently, the domestic IT outsourcing market is growing at a faster pace than that of the discrete services segment but it will remain in the early adoption stage over the next five years.

In future, the IT services market in China will continue its rapid growth, driven by government support, private cloud computing and business continuity and disaster recovery (BCDR).

Elaborating more on these factors, Springboard says the Chinese government's stimulus initiatives for the 12th five-year plan aim to expand domestic demand.

The research firm expects most of the investment in BCDR services to come from banking, financial services, and government organisations in PRC.

Commenting on the cloud, Gene Cao, senior analyst, IT services, Springboard Research said: "The emerging trend of adopting virtualisation/private cloud deployment will bring more opportunities to system integration service providers in China."

"Multinational service providers are now focusing on expanding their geographic coverage to tier 2 and 3 cities in the PRC. Springboard Research expects the competition will intensify dramatically over the next few years in this rapidly expanding and maturing market," said Fred Giron, VP - IT services, Springboard Research.