Analyst predicts market is set to become $1.6bn market by 2010

Shared services is set to become the single biggest opportunity for UK public sector software and IT services (S/ITS) suppliers over the next five years, according to analyst firm Ovum.

Ovum predicts that the total S/ITS market for shared services in the public sector will grow at an annual rate of 29 per cent between 2005 and 2010, taking the market size from £351m in 2005 to £1.6bn in 2010.

Over this period, a total of £6.6bn will be spent on shared services, which will outstrip IT spend on other major initiatives such as Building Schools for the Future, eBorders and even ID Cards through to the end of the decade.

John O'Brien, analyst at Ovum, said: "Shared services will require a strategic response from IT suppliers. A common vision between all parties is key to success. To achieve this objective and help shape the market, IT suppliers will need to take an active role and a pragmatic approach with Government but also with the wider industry community."

"The market for shared services outsourcing will only begin to accelerate from the end of this decade, Revenues will not materialise until the next decade, but suppliers can't afford to take their eye off the ball today if they want to stay in the game," added O'Brien.