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Evolving IT Services Market Warrants Attention

Consulting offers the most advantage in this huge, fragmented market.

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From service lines and geographies to consolidation, new technologies, and commodification, the information technology services industry is dynamic and offers both opportunities and risk for major global vendors.  Accenture (ACN) remains the best-positioned IT services company, given its breadth and depth across all market segments, and we believe it has a wide economic moat. Narrow-moat  Cognizant Technology Solutions (CTSH) also has a strong competitive position.

IT Services Market Is Large and Fragmented
Global IT services spending is enormous, estimated at $922 billion in 2013. Over the next five years, we expect the total market to grow at a compound annual rate of 5%. We separate the IT services market into six key areas: consulting, systems integration, IT outsourcing, business process outsourcing, software support, and hardware support. In this article, we focus on the first four categories.

Andrew Lange does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.