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Press Release - June 2003
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Companies with Multi-service Capabilities Change Landscape of Integrated Facilities Management

San Jose, Calif. - May 7, 2003 - Integrated facilities management services are gaining popularity in North America as clients seek to outsource non-core activities to third parties.

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New analysis from Frost & Sullivan (http://www.BuildingTechnologies.frost.com), North American Integrated Facilities Management Services Markets, reveals that revenues in this industry totaled $12.39 billion in 2002 and are projected to reach $21.89 billion by 2009.

"Corporate America is rethinking its approach to facilities infrastructure, with an increasing number of companies concluding that outsourcing makes sense as a way to cut costs and focus on revenue-generating core competencies," says Frost & Sullivan Industry Manager Sanjiv Bhaskar.

The need for expert professional maintenance of sophisticated heating, ventilation, air-conditioning, data communications systems and constant replacement cycles is likely to benefit facility service providers.

"Often times, service providers and maintenance contractors reach a stalemate due to sticky contract-related issues," adds Bhaskar. "In these cases, a mutually satisfactory resolution is essential in order for the contract to proceed smoothly."

Currently, single service suppliers appear to be the preferred option since the client is able to perceive tangible benefits of specific operations rather than a broad-base of services.

"Despite the current trend, acquisitions and consolidations is spawning a new breed of providers with multi-service capabilities and a global presence," says Bhaskar. "These providers have numerous opportunities to target large global corporations in need of multiple property management, tenant representation, and infrastructure maintenance services."

[an error occurred while processing this directive]Consolidation can help integrated facilities management service companies to better meet the needs of their customers as well as provide a significant cost advantage in a competitive and thin-margin business.

"The ability to provide a bundled solution individually or through alliances is likely to be a strong competitive factor," adds Bhaskar.

The "single-sourcing" trend is creating demand for companies that can provide comprehensive services, best practices management, and consistent engineering standards.

Frost & Sullivan is a global leader in strategic growth consulting. This ongoing growth opportunity analysis is part of the Building Automation Subscription, which also includes market insights on North American Lighting Controls Markets, and North American Performance Contracting Markets. Frost & Sullivan also offers custom growth consulting to a variety of national and international companies. Executive summaries and interviews are available to the press.

North American Integrated Facilities Management Services Markets Report: A234


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