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Dec 2016 - IDC Presentation - Doc # AP41955916

1H16 Country Report on IT Services - Korea

Authors: Min Kim, Steffi Han
On-line Presentation

This IDC Presentation provides a detailed analysis of the market and competitive landscape in IT services in Korea 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 part of the "Asia/Pacific Semiannual Services Tracker" research, which covers 14 foundation markets across 14 Asia/Pacific countries.

In 2016, even as overall economic sentiments are weak, annual gross domestic product (GDP) growth is likely to stay at 2.7%, higher than the 2.6% last year, driven by strong domestic demand. In 2017, GDP growth is expected to grow slightly at 2.8% due to an improvement in exports. The Bank of Korea announced that GDP grew by 3.0% and capital investment decreased by 3.6% in 1H16.

Owing to a decline in capital investments, the number of new large deals continued to decline, thus leading to a low growth in the IT services market. In 2017, the overall services market is expected to grow slightly compared with 2016, supported by an increasing number of new projects from major industries such as finance. The outsourcing market played a key role in sustaining growth of the overall IT services market, mainly driven by the demand from affiliate markets. The project oriented market experienced low growth due to a decline in demand for new projects across industries, especially the public sector.

Most new large-scale projects have come from the finance sector, because of the demand for post-next-generation system construction. The retail and services industries were the other market growth drivers, supported by an increasing demand for the implementation of smart or intelligent customer services.

There have been no significant market winners but, in general, major local IT services providers showed comparatively sound/high growth performance on the back of some outsourcing projects from the affiliates.