Billions Ahead for Integration Services Market

The market for solution integration services is growing rapidly and will top $100 billion by 2005, according to research released Sept. 4 by market research firm International Data Corp. of Framingham, Mass.


Worldwide revenue for systems integration will increase at a compound annual growth rate of 25 percent, from $38 billion in 2000 to $116.5 billion in 2005, IDC found.


"Growth in the solution integration services market is being fueled by the need for seamless business processes across a company's entire value chain of customers, partners, suppliers and employees," said Stephanie Torto, senior analyst with IDC's Solution Integration Strategies research program.

"In today's competitive environment, it's not sufficient to have isolated solutions that are unable to communicate with one another," Torto said. "Companies need their IT systems and applications to work as one cohesive unit. As a result, the services opportunity around implementing, integrating, customizing and optimizing business solutions has never been larger."


According to IDC, the supply-chain management services segment of the systems integration market represents the largest growth opportunity. IDC forecasts revenue in this area will increase from $12.7 billion in 2000 to $41.4 billion by 2005.


"Achieving operational efficiency is a major growth driver in the [supply-chain management] services segment," Torto said.


The fastest-growing segments will be knowledge management services and customer relationship management services, which IDC predicts will have compound annual growth rates of 40 percent and 35 percent, respectively, through 2005. Growth in the customer relationship management services segment represents an increase of more than $16 billion.

By comparison, knowledge management services revenue will increase from $1 billion to under $3 billion, IDC found.


The distinctions separating the market's various services segments will blur in the coming years, making it crucial that service providers to expand their skills so they can offer a full range of solution integration services, Torto said.


"The most dramatic trend that will affect the solution integration services industry will be the merging of solutions services," she said. "This convergence is being driven by customers' needs for solutions services across the front and back offices that don't stop and start at artificial boundaries."