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Growth will come from new not old business initiatives: Gartner

Growth will come from new not old business initiatives: Gartner

Analyst firm is also encouraged by the strong uptake of Cloud services in Australia

Growth and incremental spending in the IT industry will not come from business-as-usual, renewals, repurchases or routine IT purchases, according to analyst firm, Gartner.

Vice-president and analyst, Rolf Jester, said buyers are working hard to drive down costs and negotiating for decreases.

“Old ways of selling won’t capture new spending,” he said.

“Providers selling as they did before will find times tough and revenue shrinking steadily.”

Jester instead foresees the opportunities coming from digital selling models and new business initiatives this year.

“The growth will come from new ventures, new product offerings, global expansion, and new ways they serve their customers,” he said.

Cloud momentum

Jester is encouraged by the rapid take-up of Cloud services in Australia.

“While we have been predicting the rise what is now called Cloud services for many years, it’s fair to say that we, along with the providers I speak to, were stunned by the speed of adoption locally,” he said.

The numbers and share of the market may still look small on paper, but Jester said there is no denying the fast growth.

To illustrate his point, Jester said operations management services for Cloud grew by 43 per cent in Australia this calendar year.

“For Cloud services overall, the incremental money that will be spent next year over this will be about $500m, taking the total spend to $3.6 billion,” he said.

Jester adds that is money not already tied up in existing contracts.

“The growth won’t stop, as Australian businesses are adopting Cloud services,” he said.

Patrick Budmar covers consumer and enterprise technology breaking news for IDG Communications. Follow Patrick on Twitter at @patrick_budmar.

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