Services market to hit $15b in 2011: IDC

THE Australian technology services market will grow at a compound rate of 4.4 per cent annually to reach A$15 billion by 2011, according to research IDC, though skills shortages will present the sector with ongoing challenges.

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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Tanner unveils tech apprenticeships

FINANCE Minister Lindsay Tanner has announced a $15 million ICT apprenticeship program for government as the Commonwealth moves to address a current and projected public sector tech skills shortfall.

The four-year Australian Public Service (APS) program will deliver up to 60 jobs for young people with Government agencies and will be coordinated by the Department of Finance and Deregulation, Mr Tanner said.

“This programme directly addresses the ICT skills shortage in the APS and provides real career opportunities in the technology sector,” Mr Tanner said. “It is all about investing in skills and investing in young Australians.”

“The initiative also highlights the benefits of agencies working together to provide opportunities, produce efficiencies and develop important workforce skills.”

Work placements and the academic component of the program will begin this month.

During their training, apprentices will receive important ‘on-the-job’ experience with an APS agency and graduate with a nationally-recognised qualification - providing them with the essential foundations to pursue an ICT career in the APS.

The initiative has been welcomed by the Australian Computer Society, the peak professional body for the tech sector.

“Maintaining Australia’s global competitive position will depend on the high levels of ICT awareness and knowledge in the general population – people taking on ICT careers and understanding ICT as part of their regular career skills,” ACS president Kumar Parakala said.

“The ACS has long advocated that we would like to see the Government, industry and the tertiary sectors work more closely together to develop initiatives to attract young people into an ICT career,” he said.

“The APS Program is a positive step in the right direction, matching the skills being developed to those the Governments need. We look forward to seeing more apprenticeships, both in the public and private sectors, being made available to graduates.”

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Cabinet approves $1b schools plan

FEDERAL Cabinet has signed off on a $1 billion plan to give every student in years nine to 12 their own computer at school, with the first $100 million in funding to become available in March.

The plan is one of the first election commitments to be put through the Cabinet process, and means that schools can start applying now for funding of up to $1 million each.

Prime Minister Kevin Rudd said an national audit of schools’ computer resources and broadband facilities would be conducted to determine those in most need.

Though funding is available to all schools – public and private – the first round money will go to those found to be in most urgent need.

Mr Rudd said schools can elect to spend the funding on a range of digital equipment – from computers, interactive whiteboards, networking equipment, digital projects and improved broadband connectivity.

Deputy Prime Minister and education Minister Julia Gillard has also outlined broad plans to improve teacher training in ICT skills to ensure they are equipped to teach in computer-equipped classrooms.

Under its National Secondary School Computer Fund commitment during the election, Labor noted that ICT “is also now becoming critical to most jobs in most industries,” for mining, to agriculture, manufacturing and services.

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