This IDC Market Perspective is an update to 2015 Profitability in the Worldwide Services Market (IDC #US40754216, November 2016). It begins by analyzing profitability trends in the services market as a whole and then provides quantitative metrics and commentary for profitability by service line, vertical, and region. This information is geared toward readers who wish to find benchmarks to measure their own profitability when compared with the market average. However, any person who seeks to gain a better understanding of both how profitability is differently based on the type of service, vertical, or region and the factors that drive the varying levels of profitability will find this information valuable.
"2016 saw a return to services profitability growth after the decline seen in 2015. Most vendors attributed revenue/sales increases as the driving factor behind their 2016 services profitability growth compared with last year when vendors attributed labor cost increases as the main factor driving profitability declines," said Chad Huston, research manager, Global Services Markets and Trends. "The first half of 2017 looks to be a return to downward profitability, however, as labor cost increases are once again increasing faster than revenue growth."
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