The IT Services market in Asia Pacific (excluding Japan) will grow from US$37.5B in 2007 to US$55.9B in 2011, representing a compounded annual growth rate (CAGR) of 10.5% from 2006 to 2011, according to the 'Asia Pacific IT Services Market and Forecast, 2006-2011' report by Springboard Research.

According to the report, the Indian IT Services market with a CAGR of 18.6% will remain the fastest growing in the region, although as a region Greater China will offer the largest market opportunity in dollar terms at the end of the forecast period.

"For India and China, local capabilities, offerings and presence is just the start of a list of essential requirements for success. On the other hand, existing relationships, marquee clients and strong partnerships can provide capabilities for expansion in markets such as Hong Kong and New Zealand with relatively limited opportunities," said Phil Hassey, Vice President – Services Research at Springboard Research.

According to the report, Application Hosting with a CAGR of 19.5% between 2007 and 2011 will register the fastest growth during the forecast period, although Enterprise Application Integration at US$ 7.8billion will continue to be the largest component of the market by 2011. While Enterprise IT Outsourcing is the largest market in 2007, the reluctance of PRC firms to use the Enterprise IT Outsourcing model will reduce its relative size and weighting in the market by 2011.

As part of the report's overall assessment of the APEJ IT Services market, Springboard Research has several key outcomes and predictions for the industry in 2008. The report predicts that challenges in accessing and retaining IT Skills will accelerate the shift to external services providers, as enterprises will struggle to retain in-house key individuals and skill sets. Also, China will not challenge India as the home of offshore service delivery especially for English language requirements – as skill levels, quality, culture and governance are all more suited to India being a hub of global delivery against the PRC.