The IT, software and services market is heading back to growth - but growth tempered by a strong focus on cost-cutting.

The impact of offshoring and budget cutting means growth will fall to less than five per cent over the next three years. The market will remain very price sensitive and public sector spending will fall to below 10 per cent after 2007.

What growth there is in spending is likely to be financed by cuts elsewhere in the IT budget. The research, from analyst Ovum's Holway division, reveals the areas likely to keep growing.

Business continuity and recovery, and regulatory pressure will continue to push spending. CRM spending is changing from salesforce automation and incoming call systems to more customer analysis and outgoing marketing.

Business intelligence systems will outperform other forms of enterprise software. Ovum says the move to IP-based networks is happening but warns: "telcos rarely hurry these things, so patience is a virtue".

Service-Oriented Architecture is of interest to many but not actually happening - companies are looking at it, and spending money on consultants, but not implementing it yet.®