The IDC report found the Australia services market in 2007 was worth $12.6 billion.
IDCs IT services research manager Margaret Banaghan said the outlook for the broader Australian economy and for IT services remains “buoyant” and that end user organisations were addressing a range of business issues that would underpin growth in the services sector.
“Executives are turning to IT services firms to assist with issues including Green IT, SOA (Services Oriented Architecture) and web services, selective sourcing including offshoring and mobility services,” Ms Banaghan said.
Meanwhile the report found the outsourcing market in Australia, which is approximately 50 per cent of the total IT services market, was as vibrant and dynamic as ever.
IDC research manager for outsourcing and BPO Aprajita Sharma said there would likely be a decline in so-called “global mega-deals” in the short-term, but that this would “result in increased and heated competition in the IT outsourcing segment, especially on the pricing front as players tread on competitor territory.”
The report said skills shortages in the services industry continued unabated, and that as a result “smaller players are finding themselves in greater demand by government and business clients alike, as they often possess skills in a particular technology that have become scarce.
The report also found that market consolidation activity in 2007 was solid. There was a healthy rate of acquisition activity in the Australia IT services arena over the past year which is expected to continue over the next 12–24 months as players strive for growth and an extension of skills or geographic reach.
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