Magazine article Public Finance

Small Firms Make Inroads into Public Sector IT Market

Magazine article Public Finance

Small Firms Make Inroads into Public Sector IT Market

Article excerpt

Small and medium-sized businesses are winning an increasing share of the lucrative public sector IT market as a result of government efforts to encourage a wider range of suppliers, new research has shown.

A study by public sector analysts Kable has revealed a steep reduction in the amount of new business going to the leading 20 companies.

s Their market share tumbled from 69% in 2003 to 63% just a year later, the report published on June 29 found.

The public sector IT market expanded by a massive 19% from £10.3bn to £12.3bn between 2003 and 2004. Kable's analysis found that the value of the contracts held by the biggest 20 companies rose by 8% over that period, from £7.1bn to £7.7bn. By contrast, other suppliers' contracts shot up in value from £3.2bn to £4.6bn, a 44% increase.

According to the study, the reason for the shift is the increasing trend for contracts to be awarded to consortiums of smaller firms rather than large single bidders. …

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