IDC releases top 10 predictions for services in 2007

Offering services has become a major component of a good many vendors' solutions portfolios, and many of them are continuing to drive home the need for their channel reseller partners to focus their businesses on providing services.  According to IDC, there will be several key areas of growth in services throughout 2007.

The services delivery model continues to evolve rapidly, and the market for both IT and business services will represent more opportunities this year.  New delivery models that are becoming increasingly important include dynamic, on-demand, scalable and accessible.  According to IDC, companies that wish to succeed in services will have to work harder than ever to maintain customer and employee loyalty, innovate continuously, and leverage technology and hosted models.

'Basically what we're seeing in the prediction document is we're moving into a new business model for services delivery that revolves around online capabilities -- building communities online and things like that,' said Rebecca Segal, vice president of global services markets and trends at IDC.

Service providers really need to think about what they can deliver on an online basis, whether its hosted applications, service-oriented architectures or something else entirely, she said.

'Everybody's kind of building up their offshore capabilities at the same time they need to build up their hosted-oriented capabilities,' Segal said. In order to be successful, service providers will have to be increasingly creative to grow their businesses in a profitable way, she said.

Top 10 list of predictions for services in 2007:

* While battles will be fought for the megadeals in 2007 (those over $1 billion), the war will be waged for the mid-size ($50 million to $500 million) deal.

* Acquisitions by offshore service firms will accelerate as they seek to add scale to compete in the outsourcing business and buy greater specialization and industry expertise to address high-value consulting.

* Competition for the mid-market brass ring will intensify as key ISVs Oracle and SAP focus on this segment and hosted applications make enterprise-class performance available to smaller companies.

* Service productization will gain traction as service firms seek to increase profitability through standardization.

* Homeshoring, the use of home-based customer care agents to field customer care inquiries, will flourish as it addresses the need for better agent quality, lower turnover, and the seasonal nature of many businesses.

* Enterprise risk will drive investment across the consulting services spectrum; with the big four firms leveraging their expertise and fuelling their growth engines.

* Search will transform the training content markets.

* SOA adoption will accelerate as companies move beyond the pilot stage and advance to the enterprise level.

* The human resources market will consolidate as large firms seek to grow their client base and niche players broaden their portfolios.

* Network complexity and skills shortage will combine to heighten opportunities for network infrastructure consulting and integration services.

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