Another reason to avoid those slow-growth markets

A couple of weeks back, I was asked to produce a list of the top three vendors in each of the major markets in both Germany and UK. It wasn't part of the request, but as a by-product, I produced the graph below, plotting the growth of each of these markets between 2006 and 2007 against the total market share held by the top three vendors in each market.


(Very broadly speaking, 'GBS' consists of consulting and systems integration, and 'GTS' consists of outsourcing and other IT services. Source: IDC Tracker)

There's a strong diagonal trend from top left to bottom right—in a nutshell, the more concentrated a market, the slower the growth.

This shouldn't be a complete surprise: the less growth there is in a market, the less incentive there is to stay in it if you're an also-ran, and the lower the attraction of entering it if you don't already play there. There's a GE dictum that if you're not in the top two in a particular market, you should aim to get out in the long term.

The graph also provides some confirmation for the long-term product life-cycle, in that the older product families—the IT industry began with servers and storage—tend to experience slower growth than the newer families such as IT consulting and services.