Australian IT services buck global downturn

Peter Dinham
Tuesday, 18 August 2009 15:47

IT Industry - Market

The IT services market in Australia has bucked the doom and gloom of the global financial crisis with companies continuing to spend on IT while maintaining strict cost restrictions as they weather the downturn.

In a report just released, IDC says Australia’s IT services market stands “contrary to global and regional expectations” with the market a “hub of activity”, albeit one where companies, understandably, are more cautious about where, and how, their dollars are spent.

According to IDC in its report, total spending in the IT services market in Australia stood at approximately, $13 billion in 2008 and is predicted to grow at a five year compound annual growth rate (CAGR) of four percent from this year to 2013.

IDC senior market analyst, IT services, Marina Beale, says the economic crisis has created an opportunity for Australian organisations to address spiralling costs and review plans on the way their business should evolve to retain a competitive edge.

According to Beale, there is no doubt that there are price pressures and contract renegotiations, as well as some delays, however, she maintains that the Australian IT services market “remains a hub of activity and will continue to do so over the forecast period (2009-2013).”

Beale also says that the challenge for customers is to “contain costs in running and managing this environment,” adding that "customers want to optimise, consolidate and centralise systems and applications.” She says that customers are looking at ways to rationalise IT support costs, revamp their networks to capitalise on the convergence of voice and data, as well as turning to an array of outsourcing solutions, “be it in the form of managed services, hosted services or embracing delivery models such as SaaS."

IDC says that the IT environment has become increasingly complex, with the convergence of network and IT infrastructure, the inherited mix of legacy systems against newer compliance and governance standards and security concerns.
 
Beale says that Australia can expect to see organisations embracing newer delivery models or employing a hybrid mix of models to address pain points.

“Also expect to see an increase in uptake of managed services as well as a greater activity around presence of next generation networks and services. We are currently in a cost conscious time but that does not mean that customers are not thinking beyond this and keeping in mind more transformational projects," added Beale.