This IDC study analyzes the situation and trends in the Japan IT outsourcing market by segment. It reports the 2004 actual market performance and forecasts the market sizes in the years from 2005 to 2009. IDC's recommendations for service vendors are also included.

IDC forecasts the Japan IT outsourcing market size in 2009 at 2.4478 trillion Yen and the 2004?2009 CAGR at 7.9%. The market, which had been growing at a rapid rate, has now entered stable growth period due to the dwindling number of large-scale projects and the slower rate at which the user base is now expanding.

"With the recovery of the Japanese economy, corporate IT investment is also showing an uptrend. However, companies remain cautious in deploying IT investment. They strongly desire service price reductions despite harboring high expectations of IT outsourcing. Furthermore, increased importance has been attached to IT strategies for management support and the services required by companies have also become more diverse. It is important for service vendors to increase profitability and develop services that would help user companies to strengthen their management functions," observes Satoshi Matsumoto, senior market analyst, IT Services, IDC Japan.