Global growth slowdown in software & systems testing services

Peter Dinham
Wednesday, 11 March 2009 14:10

IT Industry - Deals

The heady rates of growth in outsourced and in-house software and systems testing services that characterised the market over the past four years are over, but there’s still growth, albeit at a much slower rate.

The market for these services is still forecast to be valued at a very healthy $56 billion by 2013 although with the current slowdown in sales, testing services are still predicted to grow by an annual compound growth rate (CAGR) of 9.5% from 2008 to 2013. Even that slower rate of growth is faster than most other IT services.

Global advisory and consulting firm, Ovum, in its latest report, says that growth in outsourced testing services is outpacing that of in-house testing due to the greater cost savings, time-to-market and quality offered by outsourcers.
 
According to the report, outsourcing currently accounts for 53% of the total worldwide testing services market and this will reach 58% in 2013.

Dr Alexander Simkin, Ovum senior analyst and author of the report, says the outsourced testing market is being driven by offshore delivery mainly from India which is quickly establishing itself as the home of outsourced testing.
 
However, the rapid growth in the market has caused skill shortages around testing in India, according to Simkin.

“Indian testing services providers used to compete purely on price through labour arbitrage. That’s changing. They’re now climbing the value chain and offering the same capability as North American and European testers.
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