The research house expects IT services spending in the region to rise from US$15 billion last year to US$42 billion by 2005. This translates to a 15 percent compound annual growth rate.
IDC also expects IT services spending in the region to increase to US$18 billion by year end.
According to IDC Asia Pacific senior analyst for services opportunities Caron Harrison, IT services refer to "human expertise that's purchased for IT projects". These services include consulting, system integration and outsourcing.
"In many of the Asia Pacific countries, investment in IT services is going to mean the survival of the company in a global slowdown," she said. For instance, more companies would outsource their internal IT systems to cut cost (in bad times), instead of investing in expensive IT skills.
Harrison said mergers and acquisitions could fuel increased IT services spending. She explained that when mergers or acquisitions take place, companies need to either integrate IT systems or migrate data from one company to another.
She cited vertical markets such as communications, banking and government as the biggest IT services spenders in the region. For instance, she said the banking sector will continue to invest more on IT services for "regulatory purposes and because they have decentralised operations that need to be able to communicate with each other".
Without revealing specifics, she expects China to see the largest growth in IT services spending -- from US$900 million last year to US$9 billion by 2005.
Singapore's IT services spending is set to hit US$2 billion by 2005 compared with US$1 billion last year. "Singapore is (already) a relatively developed IT services market, and what it needs will be high-level services like consulting and solution integration within companies," Harrison said.
