IT Services - UK - February 2020

OVERVIEW
What you need to know
Covered in this Report
EXECUTIVE SUMMARY
The market
Major growth factors
Figure 1: UK market for IT services, 2015-19
Market driven by demands from every industry
Figure 2: segmentation of the IT services market, by end use industry, 2019
Consultancy leading growth
Figure 3: Segmentation of IT services, by activity, 2015-19
Cloud computing – a major driver
Figure 4: The cloud computing market, 2015-19
Security and compliance – another major driver
Figure 5: UK market for computer security products and services, 2015-19
Blockchain likely to be a major future driver
Figure 6: Changes in perceived organisational barriers to investment in blockchain technology, 2018 and 2019
Strong growth expectations
Figure 7: Forecast market for IT services, 2020-24
Companies and brands
Huge industry dichotomy
M&A activity not driven by consolidation
What we think
ISSUES AND INSIGHTS
Has the cloud made IT services economy independent?
The facts
The implications
Is GDPR continuing to underpin growth?
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Digital transformation at the heart of developments
Consultancy leading growth
Diverse demand
Strong prospects
MARKET SIZE
Digital transformation driving growth
Figure 8: UK market for IT services, 2015-19
Sector inflation stronger than early 2000s
Figure 9: Price indices of IT services, 2010-19 (2010 = 100)
Seasonal variation reduced in 2019
Figure 10: Seasonal variation in the IT services market, 2019
MARKET SEGMENTATION BY INDUSTRY
Ubiquitous demand
Figure 11: segmentation of the IT services market, by end use industry, 2019
MARKET SEGMENTATION BY ACTIVITY
Overview
Figure 12: Segmentation of IT services, by activity, 2015-19
IT consultancy
Figure 13: Segmentation of IT consultancy activity, 2019 (£ billion)
Outsourcing and services
Figure 14: Segmentation of the IT outsourcing and services sector, 2019 (£ billion)
MARKET FORECAST
Continued strong prospects
Figure 15: Forecast market for IT services, 2020-24
Forecast segmentation
Figure 16: Forecast segmentation of the IT services market, 2020-24
THE IMPACT OF THE ECONOMY
GDP growth returns in Q3
Figure 17: UK GDP growth rate, 2012 – Q3 2019
Figure 18: GDP growth levels in major EU economies, September 2019 (% annual change)
Business investment and confidence suffering from uncertainty
Figure 19: UK business investment, £ million, Q1 2015 – Q3 2019
Figure 20: UK ICT investment, £ million, Q1 2015 – Q3 2019
Figure 21: ICAEW UK National Business ConfidenceTM index, Q4 2013 – Q4 2019
MARKET TRENDS
Cloud computing
Figure 22: The cloud computing market, 2015-19
Figure 23: cloud computing revenue streams, 2015-19 (£ billion)
Blockchain
Figure 24: Worldwide geographic segmentation of blockchain, 2017
Figure 25: Changes in perceived organisational barriers to investment in blockchain technology, 2018 and 2019
It’s all about speed
Superfast and ultrafast broadband
5G
Artificial intelligence becoming commonplace
The Internet of Things
MARKET DRIVERS
Continued internet growth
Figure 26: Worldwide internet usage, by region, 2000-19 (million)
Figure 27: Proportion of UK businesses with internet access, by size of company, 2018
Figure 28: Proportion of employees using computers and the internet for their business, by size of company, 2018
Figure 29: Breakdown of employees with work internet access, by size of company, 2018 (million)
Figure 30: Proportion of employees provided with a 3G portable device for accessing the internet for their business, by size of company, 2018
Website use by companies
Figure 31: Proportion of UK businesses with websites, by size of business, 2018
Figure 32: Proportion of companies with various capabilities on their websites, by size of business, 2018
E-commerce
Figure 33: Development of B2B and B2C e-commerce, 2014-2018
Figure 34: Proportion of industry sector turnover derived from e-commerce, by sector, 2018
Security
Figure 35: UK market for computer security products and services, 2015-19
Figure 36: Average investment in cyber security, by sector, 2019
Figure 37: Segmentation of the computer security market, by solution, 2019 (£ million)
Figure 38: Segmentation of the computer security market, by product/service, 2019 (£ million)
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Many types of IT services providers
A constantly evolving market creates demand
Compliance a key driver
INDUSTRY STRUCTURE
Overview
IT consultancy
Figure 39: Development of the IT consultancy sector, 2015-19
Figure 40: Analysis of the financial structure of the IT consultancy sector, 2019 (number)
IT facilities management
Figure 41: Development of the IT facilities management sector, 2015-19
Figure 42: Analysis of the financial structure of the IT facilities management sector, 2019 (number)
IT other services
Figure 43: Development of the IT other services sector, 2015-19
Figure 44: Analysis of the financial structure of the IT other services sector, 2019 (number)
Expected developments
COMPETITIVE STRATEGIES
An international sector
Diversity of industry concentrations
Cloud computing, artificial intelligence and security are key focus areas
Partnerships are key
An acquisitive sector
COMPANY PROFILES
Accenture
Activity
Performance
Figure 45: Financial performance of Accenture (UK), 2014-18 (£ million)
Strategy
Capgemini
Activity
Performance
Figure 46: Financial performance of Capgemini UK, 2014-18 (£ million)
Strategy
DXC Technology
Activity
Performance
Strategy
FDM Group (Holdings)
Activity
Performance
Figure 47: Financial performance of FDM Group (Holdings), 2014-18 (£ million)
Figure 48: Geographic analysis of FDM Group (Holdings) revenue, 2018 (£ million)
Strategy
IBM
Activity
Performance
Figure 49: Financial performance of IBM United Kingdom, 2014-18 (£ million)
Strategy
Wipro
Activity
Performance
Figure 50: Financial performance of Wipro, 2015-19 (million Indian Rupees)
Strategy
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Methodology
FURTHER SOURCES AND CONTACTS
Trade associations
Trade magazines