IDC: Vertical markets the next opportunity for IT vendors

IDC: Vertical markets the next opportunity for IT vendors

A new IDC NZ study predicts that local vendors will target specific vertical markets in order to compete in a shrinking market.

The report entitled New Zealand Vertical Markets 2009 2013 Forecast and Analysis has found that the IT market will grow from $5.9 billion in 2008 to a modest $7 billion in 2013.

IDC NZ senior market analyst Louise Francis says that while cost savings will dominate IT decision-making this year, it is essential for vendors to focus on specific verticals rather than taking a generic approach.

“As a result, targeted products and services will be a key competitive differentiator for the next 12 months.”

The report found that the top three local verticals in 2009 will be government, finance (banking, financial services and insurance) and communications and media. These are expected to account for 54.8 percent of business IT spend this year with an increase to 56.9 percent by 2013.

IDC’s findings also suggest that verticals expected to decline in spending include manufacturing, retail, transport, construction, wholesale and distribution.

According to IDC, partnerships between vendors will help when targeting vertical markets as companies can combine industry knowledge.

Francis adds that a word of warning needs to be made to vendors taking a vertical strategy.

“Vendors falsely claiming expertise or attempting to cover too many industries will risk being seen as lacking focus or commitment to specific verticals, which may potential dilute their success.”

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