Integrators face fierce competition in uncertain market
- 25 February, 2009 13:35
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In late January, ASG Group’s efforts in the government sector paid off when it announced new contracts worth $30 million.
Additionally, head of consulting for analyst firm Intermedium, Kevin Noonan, said government agencies were beginning to bring staff on and claimed with the Rudd Government’s $42 billion stimulus package soon to rollout, we may have just seen the bottom of the market. Other government vertical players, Dataflex and Ethan Group, also both indicated business was picking up.
“As sweeping comments go, certainly it is harder times out there and businesses are looking at lowering their costs. Integrators are going to have to justify how businesses can make a tangible short-term return on any investment before they are going to get any deals across the line,” Harris said.
“Corporates aren’t going to spend as loosely as they did previously. So A, it is harder to get deals across the line, and B, there is more competition there. Certainly, there will be tougher times with a bit of margin pressure coming through as business try and get revenue through the door. But there are still some good opportunities out there.”
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Comments
SJG
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Corporate Spending on ICT Projects
If Corporate and Government customers were serious about saving money in this economy they could start by reducing what they pay for professional services. Most PS organisations should be making 30% - 40% margin on each hour of services sold at standard rates. This should mean a greatly reduced PS bill when a customer screws the rates down to something more representative of the the times we are facing. Therefore a 20 - 30% discount will enable more projects, cost savings and PS organisations are still able to pay staff and keep the doors open, with less profit but then again the business doesn't crumble.