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North Sydney, New South Wales, Australia, 2009/11/10 - Australia’s large organisations slash IT spend by 4.3% in FY09/10. Organisations to outsource more. Cloud computing & desktop virtualisation of interest, but solutions too immature. Private sector embrace offshoring, but not so for government.
ITNewcom, one of the Asia Pacific’s leading IT advisory and benchmarking firms, released today the results of its 2009-10 IT Market Study (ANZ).
ITNewcom has found that Australia’s large organisations will reduce IT spend by 4.3% this financial year. Most sectors of the economy are affected.
"The drop in IT spend in large organisations is not surprising. The IT sector tends to be a lagging indicator of the economy and we are now seeing the full impact of the global financial crisis. In addition, the Australian IT sector still has to weather the implementation of the Federal government’s Gershon recommendations, including significant reductions in Federal government IT spend over the next 2 years.” said Mr. Brendan Welsh, Managing Director of ITNewcom.
“We’ve been looking at technology trends in our last few studies, and this year’s study indicates that there is significant interest in cloud computing, however the majority of the solutions are perceived to be too immature. Suppliers also need to demonstrate that their cloud computing solutions will secure and protect data especially in the Financials and Government sectors, and that their pricing models will deliver ongoing cost savings as demand increases” advised Mr. Welsh.
The results of the study also highlight that almost 90% of the study participants indicated that they had already implemented or were implementing server virtualization and mobile computing – higher than the other 6 technology trends looked at: Green IT, Unified Communications, Service Oriented Architecture, Open Source Technologies, Desktop Virtualisation and Cloud Computing. Green IT has also achieved reasonable implementation levels, primarily through setting policy (for example, double-sided printing, power saving initiatives and server virtualisation). This is because organisations recognise their social responsibility, and for most policy based initiatives, are inexpensive to implement.
There is also significant interest in desktop virtualisation. “Interest in desktop virtualization is driven by supplier claims of higher reliability and lower costs, but the business case needs to be more compelling when cashflow is tight in order to compete for budget allocation against business critical projects” explained Mr. Welsh.
Another trend Mr. Welsh found from this year’s ITNewcom Market Study was that whilst four years ago the private and public sector showed similar interest in offshoring, the public sector now shows little interest in offshoring, while the majority of private sector respondents have already implemented some form of offshoring for Application Development and Application Maintenance services. The private sector is also now showing increased interest in offshoring ICT Service Desk and midrange support services.
ITNewcom’s Annual 2009-10 IT Market Study (ANZ)
“We have had strong participation in this year’s invitation-only study, with most respondents in the top 100 in terms of IT Spend. We interviewed 44 organisations – 24 private and 20 public sector, with a good mix of IT insourced and outsourced organisations. The responses included data on more than 150 IT contracts including 95 large scale managed services contracts and 30 offshore contracts” said Mr. Welsh. The ITNewcom Annual 2009-10 IT Market Report (ANZ) covers technology trends, supplier performance, sourcing trends and IT spend.
Contact: Brendan Welsh
P: +61(2) 8904 7777 / E: bwelsh[.]itnewcom.com.
ITNewcom (itnewcom.com) was established in 1997 and has grown into one of Asia Pacific’s leading IT advisory and benchmarking firms. ITNewcom’s goal is to help client optimise IT value. ITNewcom has more than 20 experienced IT advisors and analysts, with an average of more than 20 years IT industry experience. ITNewcom’s advisory and benchmarking tools and methodologies are both proven and flexible, and complement our extensive proprietary benchmarking databases. ITNewcom's clients are top 100 companies and major public sector departments and agencies. Since 1997 ITNewcom has advised on over 200 ICT sourcing transactions valued at more than $10 Billion and has conducted over 400 benchmarks.