Australian IT services markets bouncing back - IDC

Australian organisations are opening their coffers once again and spending big on IT services, with new research from IDC illustrating that IT budgets are finally on the rise again.

The study found that the IT services market is projected to grow to AU$11.3 billion in 2004. These higher spending intentions will see the Australian market grow at a compound annual growth rate of 6.8 percent to reach $14.6 Billion in 2008.

Also, according to the findings, the Australian services market by macro-market sees outsourcing grab the largest share of the pie with 47.5 percent of the total services market, with consulting/systems integration accounting for 34.6 percent, and support/training making up the remaining 17.9 percent.

"Growth in outsourcing continues to drive the services market, and is forecast to continue to represent around half of the Australian market," said Phillip Allen, senior analyst in IDC's Services group.

Allen also noted that "After two years of flat growth, the market is poised to move, with Australian IT budgets finally growing again. Australian companies are starting to feel more confident about overall business prospects, however, for IT vendors this remains a buyers market."

IDC expects the IT services market to continue to grow in the future, albeit at a slowing rate as operating conditions inevitably become more difficult due to a combination of market maturity, and significant downward price pressures for project-oriented services, as well as competition by offshore providers.

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