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NZ spending outlook less gloomy than region's

NZ spending outlook less gloomy than region's

New Zealand IT spending will be negatively impacted by the impending US economic recession, but not as badly as other Asia Pacific countries, according to research firm IDC.

At its recent Directions 08 conference in Auckland, international business units executive vice-president Philippe de Marcillac told delegates that IDC’s forecast was a US$5 billion fall in IT spend in the Asia Pacific Japan region this year.

“It’s still a growing market, but we’ll see less growth in places like Korea and Taiwan, which have tight connections to the US. We believe in New Zealand [spending] will be impacted in 2008 and 2009 by the US recession, because the economy will be a bit more sensitive to the downturn than Australia with its more diversified economy.”

De Marcillac says the recession will affect hardware more negatively, with less of an impact on servers and hosted offerings, while services will be “most resilient”.

IDC in New Zealand also forecasts a relatively stable and flat local market in the coming two years. Country manager Amit Gupta says most growth over that time will be in software and services, while hardware and telco sales would be “reasonably flat”.

De Marcillac also says there is a major opportunity to better service small and medium businesses in the region.

“Worldwide SME spending growth outpaces the total growth [in the sector] each year. There’s a tremendous opportunity with a large number of companies and a great spending opportunity.”

He says spending in the SME market could be encouraged by providing better products and services for these firms.

“One feels vendors have just been trying to downsize products for SMEs, but we’re seeing some change recently.”


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