This IDC study seeks to analyze recent trends in profitability in the worldwide services market. To achieve this, profitability is first shown at the overall services market level. Next, profitability is estimated by engagement type, with commentary provided around each engagement type's profitability. Finally, the group of vendors included in this analysis are segmented into three vendor groups: consulting oriented, outsourcing oriented, and offshore oriented, and their relative profitability is reported and analyzed.
"From a profitability percentage standpoint, deploy and support engagements are estimated to be the most profitable service, followed by business consulting, IT consulting/systems integration/custom application development in aggregate, IT outsourcing, and finally business process outsourcing," said Chad Huston, senior analyst, Worldwide Services program. "However, there exist several key differentiators that enable some vendors to achieve higher levels of profitability than the engagement-level estimates."