UK software and IT services market to shrink

TechMarketView forecasts two years of market contraction

The UK software and IT services market could see a significant downturn this year compared with 2010, according to research firm TechMarketView.

The firm has forecast that the market, which shrank by 2.5 per cent in 2010, will shrink again this year by three per cent, and again in 2012 by just under one per cent.

It also predicts that cloud computing will have a "deep and fundamental" impact on the UK software and IT services market and could represent nearly 30 per cent of the market by 2014.

Cloud is currently the fastest growing segment of the software and IT services market.

"Cloud computing is especially disruptive because it requires software publishers and IT and business process service suppliers to completely reconstruct their operating and business models," the company said.

"This is why we believe that the winners in the cloud computing market will not necessarily be those suppliers whose cloud proposition is the most agile, accessible, elastic or scalable.

"It will be those who are able to adapt their operating model most quickly. Because those that don't - or can't - will simply not make money from the cloud."