IDC tips moderate services growth in 2011

IDC tips moderate services growth in 2011

IDC's predictions for 2011 include modest economic growth even though spending on IT services will remain challenged.

The analysts forecast that the overall IT services market in New Zealand will grow by 3.6% to reach $2.9 billion in 2011, with the IT outsourcing market remaining the fastest growing one at 4.3% with revenues rising to $1.4 billion, representing nearly 50% of the IT services market.

Reconstruction, deconstruction, transformation, and consolidation are recurring themes in IDC New Zealand’s ICT services predictions, but it is the rate at which these themes will fuse that will make the difference in 2011.

"IDC's predictions illustrate that 2011 will be the year when IT service providers will need to take a microscopic view of their business to identify any gaps in their strategies, including potential fusion or alignment with the broader ICT ecosystem," says Rasika Versleijen-Pradhan, IDC senior IT services analyst.

This year, she predicts the lead theme for the sector will be the acceleration of this fusion among the IT service providers, telcos, network providers and hardware and software vendors across all tiers to create a more dynamic ICT ecosystem.

"Furthermore, the confusion around cloud is expected to dissipate in 2011 as the discussion moves away from cloud as a ‘be all and end all’ solution, towards cloud being viewed as another sourcing option in the IT mix in a ‘best fit for purpose’ approach," says Versleijen-Pradhan.

The analyst firm’s predictions for ICT services in the next 12 months include:

• The cloud fog dissipates - cloud computing gains traction, but the approach will be 'best fit for purpose' with the focus on migrating, integrating, securing and consistently delivering services.

• Cloud federation will be an added push for cloud adoption - as organisations work with multiple cloud providers and share computing resources and information at different levels and geographic locations.

• 2011 will be the year of the datacentre war - new datacentres could create overcapacity for a small market such as New Zealand and lead to price wars.

• Ubiquitous computing will change the face of traditional desktop services – the challenge is around striking the right balance between high-value services and effective, replicable standard services.

• Disruption will force ICT players into new partnerships and roles for growth, forcing them to reshape, recreate and reconcile business models.

• Expect the harsh realities of outsourcing contracts - there will be greater emphasis on vendors to be more flexible, adaptable, and have the ability to transform alongside their client's environment.

• Fragmented IT services market ready for a rollup - Tier two and three vendors remain classic targets for IT service providers or private equity firms with cash. 

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