The global telecoms software professional services (TSPS) market is set to reach $61 billion in 2014, according to the Telecoms software professional services: Worldwide Forecast 2010–2014 report from Analysys Mason.

This market generated $43 billion in revenue in 2009, and will grow at a CAGR of 7.2 percent in the coming years. The research firm expects the strongest growth to come from the hosted managed services sub­segment, where spending will grow at an 8.3 percent CAGR.

Other segments such as systems integration and outsourced operations will grow at a CAGR of 8.2 percent, while product-related services and design consulting will achieve CAGRs, at 6.3 percent and 6.6 percent respectively.

According to the report, business consulting and custom development will show the lowest growth rates, at 3.8 percent and 2.8 percent respectively. This report is authored by Glen Ragoonanan, senior analyst at Analysys (News - Alert) Mason, who noted in a press release that TSPS spending will be driven by transformation initiatives in developed markets and by outsourced operations in emerging markets in the short term.

Things will look different in the long term as new technologies, services and business models will drive spending in developed markets. Looking forward, transformation projects will become increasingly common in emerging markets.

Ragoonanan added that the recent global recession has had a muted impact on the TSPS market, because cost reduction benefits provided by TSPS helped service providers to navigate through the tough times.

Analysys Mason noted that the market growth is primarily driven by transformation projects. Service providers have now become keen to secure TSPS suppliers’ expertise when launching new technologies and new services. However, the factors that are currently looking as market drivers may eventually become as inhibitors and according to Ragoonanan, growing competition will eventually bring down the prices.

TSPS at lowered prices will make them more attractive to service providers but such competition could restrict the overall market size.

“Some suppliers are already devaluing business consulting and some design consulting services by bundling them into implementation and integration projects, as well as managed services contracts,” Ragoonanan continued.