Gartner Survey Shows Majority of German Companies Expect to Increase or Maintain IT Services Spending in 2010

(PresseBox) ( Egham, UK, )
Opportunities exist for service providers in Germany according to a recent survey by Gartner, Inc. that showed 37 per cent of respondents plan to increase their IT services spending in 2010, while 49 per cent expect their spending to remain the same in 2010.

In the fourth quarter of 2009, Gartner interviewed 150 organisations in the German market, probing their expectations of external service providers (ESPs), their views on the impact of the global economic recession on their organisations' IT services and their buying intentions for IT services in 2010 and when the economy recovers.

"The survey shows the positive market acceptance of ESPs to support IT initiatives, with 45 per cent of German organisations turning to an ESP for their IT services provisioning, an increase of 16 per cent from 2008," said Michael Von Uechtritz, research director at Gartner. "Among the factors accentuating the use of ESPs, 45 per cent of respondents said they will turn to ESPs that can ensure they will 'keep the lights on' and 25 per cent identified a reduction in the operating cost of IT as their top drivers to use ESPs."

Respondents were also asked to indicate the likelihood of using ESPs for different services in the coming two years. Beside an overall higher likelihood to invest in hardware and software support services, German organisations are considering using ESPs for services, such as emerging technologyasaservice, data centre infrastructure outsourcing and consulting on IT or business strategy.

With many changes in the competitive landscape for services, the survey also showed that although organisations appeared almost equally receptive to using the different broad categories of providers, nearly half the respondents (44 per cent) were likely to contract with regional providers, followed closely by local providers at 43 per cent.

"In addition to understanding the organisations' immediate plans for spending with ESPs in 2010, we also wanted to determine if changes in ESP spending would occur when the German economy recovers," said Mr Von Uechtritz. "We found that the majority of German organisations anticipate their economy will recover in 2010, and 27 per cent of respondents will increase their spending with ESPs while 57 per cent expect no change. This shows that while buyers' angst is reducing, uncertainty about an organisation's long term IT services spending future remains."

In a recovering German economy, respondents clearly expect ESPs to demonstrate the competencies that they can support in business operations. "Eightyseven per cent of respondents said that the key driver for turning to ESPs is support of business operations, closely followed by reducing operating costs of IT at 86 per cent," said Mr Von Uechtritz.

Before ESPs market or sell to targeted German buying centres, Gartner recommends they assess and compare their own competencies and skills with those of their peers. They need to communicate their identified unique differentiators and be ready to address critical economic buyside demand for agility and certainly for further cost takeout in 2010 in their marketing plans.

"Service providers that prioritise understanding the German marketplace, and by monitoring the changes in their client and user environments, will be best prepared to capitalise on growth," said Mr Von Uechtritz. "The days of lowhanging fruit and solesource decision making in IT services are largely behind us. However, through deep relationships, providers can still rely on new opportunity leads and selling their services from existing client relationships, often as solesource opportunities."

Additional information is available in the Gartner report "User Survey Analysis: German Buyers' Shrinking Angst Yields Growth Opportunities for IT Services Providers." The report is available on Gartner's website at
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