To: Sig who wrote (168113 ) 12/19/2001 10:23:21 AM From: D.J.Smyth Read Replies (1) | Respond to of 176387 Gartner Says Spending on IT Services in Hong Kong to Reach US$2.6 Bln. by 2005 December 19, 2001 (HONG KONG) -- Hong Kong's IT services revenue is projected to reach US$1.5 billion in 2001, an 11.8 percent increase over the 2000 revenue of US$1.3 billion, according to Dataquest Inc., a unit of Gartner Inc. Dataquest predicted that the industry is to continue to grow during next few years, with IT services revenue reaching US$2.6 billion by 2005. According to Rolf Jester, research director for the Asia Pacific IT Services Market at Dataquest, from 2002 onwards, increased confidence and an upturn in business will renew demand for IT services based on new technology innovations. Jester noted that Hong Kong local IT management services will continue to do well despite sluggish economies. From late 2002, networking, security and telecommunications technology related services and e-business initiatives will be the drivers of demand, providing vendors with increasing opportunities for new businesses. Dataquest says overall demand for IT services in Hong Kong will continue to have double-digit growth from 2003 to 2005, although the economic slowdown and the uncertainty resulting from terrorism and war are still expected to dampen growth throughout 2002. Development and integration, the two largest segments of the local IT services industry, will continue to grow in 2005, generating a US$794 million market. For the Asia-Pacific region as a whole, these segments will show the highest continuing growth rate for the next few years. "The Asia-Pacific services market continues to outpace other regions significantly, with a growth rate that doubles the world average, and nearly triples that of North America," said Jacqueline Heng, senior analyst for Dataquest IT Services group in the Asia-Pacific. Business process and transaction management (BPTM) service has been a smaller segment, but is forecast to grow to become the second largest in Hong Kong, as enterprises turn to external suppliers and focus more on their core business competencies in order to maximize returns. Economic and political uncertainty is still hitting the consulting industry, with the growth rate dropping to 13.6 percent in 2001. Dataquest says the general recovery of consulting will lag behind the economic recovery by three quarters. (Lung Ho Wang, Hong Kong Editor, Asia BizTech/Nikkei Electronics Asia)