Global spending on IT services grew 11 percent last year to £384 billion, according to Gartner.

IBM did best in the year, slightly increasing market share to 7.2 per cent, after doing £27.8 billion of work.

But following the £7.13 billion acquisition of second-placed EDS, HP has effectively closed in on IBM with a combined 5.3 per cent market share and £20.2 billion combined revenue.

Analysts have pointed out that the acquisition could deliver strong gains to HP, but also said the execution may carry great risks.

The acquisition would effectively leave Accenture in third place, with a 2.8 per cent market share. IT generated £10.6 billion of IT services revenue last year. Behind it were Fujitsu and CSC, each with just over two percent of the market.

Indian outsourcers grew revenues 38 per cent in the year, generating 4.1 per cent of global revenue.

Kathryn Hale, research vice president at the Gartner worldwide IT services group, said the increased spending was good news for the IT industry: “This strong growth, combined with strong first quarter results for market leaders, runs counter to the gloomy and widespread economic concerns arising in the United States.”

She added: “To build on their success in 2007, service providers should focus on selling services that will deliver visible return in 2008, either in cost, speed to market, or business impact.”

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