[October 21, 2014]

Worldwide Services Operating Income for the Entire Market Increased in 2013 Despite Lackluster Revenue Growth, According to IDC

In a newly released study, International Data Corporation (IDC) announced that services operating income for the entire services market increased from 12.3% in 2012 to 13.4% in 2013. Vendors most commonly attributed this increase to the reduction of their labor cost base, more specifically this included head count reduction, increased productivity/utilization rates, and an increased offshore presence.

Additional findings include:

• Support and training services remained the most profitable service line for the entire analysis period.
• The second and third most profitable service lines were business consulting and IT project-based services, respectively.
• IT outsourcing was the least profitable service line in 2012 and 2013.
• Asia/Pacific was the most profitable region for services, followed by the Americas and EMEA.

"Profitability in the worldwide services industry has continued on an upward trajectory in 2013 in spite of lackluster revenue growth. The main driving force behind this paradoxical trend is vendors have been able to decrease their costs at a rate faster than revenue, resultig in an overall gain to profitability in spite of falling revenue," said Chad Huston, Senior Research Analyst, Global Services Markets and Trends.

The study, An Update to Profitability in the Worldwide Services Market (IDC (News - Alert) #251588), analyzes profitability trends in the services market as a whole and then provides quantitative metrics and commentary for profitability by type of service, geography and vertical.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. In 2014, IDC celebrates its 50th anniversary of providing strategic insights to help clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com. Follow IDC on Twitter (News - Alert) at @IDC.

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