Testing services market to reach over US$56b in 2013
ConvergenceAsia staff
10/03/2009

According to a new report by global advisory and consulting firm Ovum, the worldwide market for software and systems testing services will reach over US$56 billion in 2013. Both the outsourced and in-house testing services markets will grow over the next four years but not at the heady rates seen over the last four years. Despite this slowing, testing services will grow at a compound annual growth rate (CAGR) of 9.5 per cent from 2008 to 2013, faster than most other IT services.

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 per cent of the total worldwide testing services market. This will reach 58 per cent in 2013.

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.

“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. Western testers that don’t offer significant offshore delivery will find it increasingly difficult to compete with India,” says Dr Alexander Simkin, a senior analyst within the IT Services practice at Ovum and author of the report.

“The Indian provision of outsourced testing is being dogged by skills shortages though. So we could see increasing numbers of testing services jobs going to other low cost territories such as China, Malaysia and north Africa,” he adds.

The worsening global economy will impact the worldwide market for testing services which will not be entirely shielded from reductions in end-users’ budgets. Still, testing will grow faster this year and next than most other IT services due to the cost efficiencies testing offers and the trend of testing ‘smarter’ that began before the credit crunch hit.

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