Big IT Service Providers Seen Losing Share To Smaller Shops

The top vendors had combined revenue in 2005 of $262 billion, a 1.9 percent increase from the previous year, but well below the 8 percent boost in the overall market, Datamonitor said. The top 50 ranged from IBM Global Services with sales of $47 billion to Patni Computer Systems with $450 million.

“The game has changed for many of the traditional powerhouses in the IT services market," Datamonitor analyst Nick Mayes said in a statement. "Pricing pressure is sweeping through infrastructure and applications services, and clients are opting for smaller outsourcing engagements rather than mega-deals. Bigger suppliers are becoming increasingly reliant on merger and acquisition activity to improve their top line growth.”

There was no change in the top four vendors, starting with IBM and followed by EDS, Fujitsu and Accenture. However, BT Global Services overtook its German peer T-Systems to take the eighth spot, and India's five largest players all made significant moves up the top-50 ladder, growing their combined sales by 35 percent to $9.3 billion.

The 10 fastest-growing IT services vendors in the top 50 rankings last year were either specialists in low-cost offshore delivery, such as Cognizant, Satyam, Patni, TCS, Infosys, HCL and Wipro; or focused on the lucrative U.S. central government and defense sector, such as SRA, CACI and SAIC.