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Nov 2016 - IDC Presentation - Doc # AP41891416

1H16 Country Report on IT Services – Hong Kong

Author: Liew Siew Choon Senior Market Analyst, Services, IDC Asia/Pacific
On-line Presentation

This IDC Presentation provides a detailed analysis of the market and competitive landscape in IT services in Hong Kong from January to June 2016 (1H16). It covers the market size movements and growth trends in each of the macromarkets (i.e., project oriented, outsourcing, and support and training services) as well as the key industries such as finance, manufacturing and resources, public sector, distribution and services, and infrastructure. The report also provides a market and vendor analysis of the 3rd Platform technologies as the key market drivers. The competitive analysis section includes key strategies and activities of large global and local IT services providers in the market.

The data and insights within this presentation are a part of the "Asia/Pacific Semiannual Services Tracker" research, which covers 14 foundation markets across 14 Asia/Pacific countries.

The sluggish external demand continued to impact Hong Kong gross domestic product (GDP) growth, which was recorded at 1.2% in the first half of 2016. Given, the domestic demand grew modestly. Business sentiment continued to slide due to exports subdued and slower inbound tourism that impacted several industries.

Multinational companies (MNCs) and China-based companies continued to set up offices in Hong Kong. This has driven the demand for hosting infrastructure services and public cloud services as enterprises want to minimize their capex investment. Furthermore, since Mainland China launched the One Belt One Road (OBOR) program, Hong Kong has been attempting to capture the opportunity from this program by positioning itself as "connector" for Mainland Chinese companies that are related to the OBOR regions. IDC expects the that OBOR program will not have significant impact on both economy growth as well as the IT services market in the short term. However, in the long term the impact of this program remains to be seen.

Since the announcement of the Smart City project in Kowloon East, vendors have been focusing on Smart City–related solutions and there has been an increasing number of start-ups leveraging Internet of Things (IoT), cloud, and analytics to develop related solutions. However, the Smart City is primarily focusing on infrastructure (such as network connectivity) in the first stage and IDC expects that it will not have an immediate impact to the IT services market in the next 12 months.