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IDC: IT market recovery expected next year

IDC: IT market recovery expected next year

A modest recovery is expected by IDC next year but this will not mean a return to precession status quo, according to the analyst firm's latest ICT predictions.

Country manager Ullrich Loeffler says technology investments will continue to be one of strict cost control, with an emphasis on reducing complexity and sweating existing assets.

“Cashflow and liquidity will also continue to be constraining factors for growth, particularly in the SMB business market.”

The top predictions are

1. From an understood recession to an unknown future.

“Economic recession has bought into focus long term underlying trends - the need to get better value from IT and telecommunications investment. On the downside it means that pricing pressures in traditional "commoditised" areas such as calling will continue to grow as tight cost control remains top priority. On the upside it will focus attention on new solutions, delivery methods and product/services packaging.”

2. Consolidated buying to become the new Government savings plan.

“Government actions will significantly shape the ICT industry this year. The Government's savings plan will lead to centralised procurement: that means greater risk and opportunity for the vendor community. The Government will further remain in the spotlight for its leadership in the national ultra-fast-broadband plan”

3. Deconstruction and reconstruction of the ICT industry for growth.

“As the fundamental transformation of the ICT industry continues, IDC predicts continued market consolidation throughout 2010. Infrastructure sharing - to improve cost/risk ratio of Capex investments - the emergence of open ICT alliances and strategic collaboration between technology providers under a 'best-of-breed' aggregator approach, will reshape the competitive landscape in the NZ ICT community.”

4. Use of ICT will become critical to CO2 reduction strategies.

“As the targets for greenhouse gas reductions are set, the rhetoric will shift to the reality of how those targets can be achieved. IDC believes ICT has a critical role in supporting CO2 reductions with productivity gains, as outlined in IDC's ICT Sustainability study presented to the UN at the Climate Change Summit in Copenhagen.”

5. Technologies facilitating customer care and retention strategies will receive VIP treatment.

“A key learning for companies during the economic turmoil is the importance of retaining its current customer base. IDC predicts customer care services increasingly being homeshored on a unified, cloud-based CRM platform. Reduced cost of customer service as well as fast and agile scalability of services are some of the benefits fuelling this online CRM adoption in 2010.”

6. Mobility will enter a new growth curve.

“IDC sees 2010 as marking the beginning of a fundamental shift in the way New Zealanders interact with mobility and 'ubiquitous networking'. As companies indicate increased spending on mobile broadband and data in 2010, IDC expects to see the emergence of new mobile applications, devices and pricing plans allowing greater flexibility and 'prosumer' use.”

7. The adoption of Cloud Computing will take baby steps amongst trophy wins.

“IDC expects 2010 to be the year when customers start to take a hybrid approach to cloud adoption. Although, IDC expects to see some 'trophy wins' in 2010 it will still be baby steps in the bigger scheme towards the full cloud potential. Vendors will be challenged to position themselves as cloud contenders while not loosing sight of the short and mid-term market opportunities which remain to be predominantly on-premises based.”

8. 2010 will see an increasing number of 'Managed Business Outcomes' contracts.

“With increased business-alignment in IT spending, IDC expects that risk-reward contract terms become more business outcome-focused. The change in engagement structure will force vendors to take on more business outcome risks, transforming the relationship to strategic partnering rather than technology supply.

"Running in parallel with these economic and political trends we will see market inroads made by maturing technologies. Online services known as 'Cloud', the new capability offered by mobile broadband and advanced-customer-care solutions will fuel new activity and present a number of transformational tipping points." says Loeffler.


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