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IDC's New Zealand IT Services predictions
Posted on 17-Jan-2011 14:03. | Tags Filed under: News.

Reconstruction, deconstruction, transformation, and consolidation — these are all recurring themes in International Data Corporation's NZ services predictions, but it's 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 (SPs) 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," said Rasika Versleijen-Pradhan, senior IT services analyst at IDC.

The acceleration of this fusion among the IT SPs, telcos, network providers, and hardware and software vendors across all tiers to create a more dynamic ICT ecosystem will be the lead theme for 2011.

"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," said Versleijen-Pradhan.

The New Zealand IT services top 10 Predictions for 2011 are as follows:

• 2011 will be a year of modest economic growth, but spending on IT services will remain challenged. However, IDC forecasts the overall IT services market in New Zealand to grow by 3.6% to reach NZ$2.9 billion in 2011. The IT outsourcing market remains the fastest growing at 4.3% with revenues rising to NZ$1.4 billion, and representing almost 50% of the IT services market.

• Government trims down to gear up - the new Government public procurement programme drives shared services, providing better frontline services with less duplication.

• Bold marketing strategies with smart execution will be key to survival - for the simple reason that the competitive landscape has become so diverse and there is greater tendency for cross pollination, especially in the delivery of cloud services.

• Strange bedfellows – 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 2/3 vendors remain classic targets for IT SPs or private equity firms with cash.

• 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 drive 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 datacentre builds could create over capacity for a small market such as New Zealand and lead to price wars.

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

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