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Cashing in on a bullish market

Cashing in on a bullish market

Integrators are reporting bullish market conditions, with several contacted by ARN claiming businesses were no longer thinking of IT as a necessary evil.

Data#3 CEO, John Grant, said the local corporate market was a competitive environment to be working in but was strong and buoyant. The Queensland-based integrator posted a statement to the ASX this month claiming its first half financials were expected to jump by 40 per cent compared to the previous year. The company is expecting to post a new earnings record as a result.

"The market has been strong for the past 18 months," Grant said. "Many of our customers are investing in projects that are outside the usual governance or risk management area. They're using IT to drive revenue for a change and shifting to enablement projects."

ON A ROLL

As examples, Grant said businesses were looking into IT to provide business continuity, disaster recovery, network enablement and IP telephony. "All of our businesses are going well, which is the salient point," he said. "There are opportunities in everything, even basic ICT procurement. We're having a good run."

New Data#3 deals include a four-year, $8 million contract with the Brisbane City Council for supply of PCs and services, as well as a two-year agreement with Suncorp as preferred national ICT supplier. The latter contract could be worth up to $9 million a year.

Market analysts at IDC concurred with Grant's positive outlook, predicting the integration market was well positioned for growth. According to its research, the Australian integration market is expanding at a five-year compound annual growth rate of 6.4 per cent. Local companies were expected to spend more than $2.4 billion on integration this year, or a tenth of total technology spend.

Research analyst for vertical markets, Phillip Allen, said integration was now a critical issue for Australian businesses. Spending was being driven by improved customer service, reduced costs and greater efficiency needs.

"It's like a pendulum swinging - market sentiment was leaning towards cost savings and batting down the hatches," he said. "But in the past year, and particularly during the past six months, it has swung towards innovation, growth and customer needs."

Allen cited network-oriented projects and integration as key growth drivers, as well as integration issues related to security and storage. Verticals of opportunity included government, commercial sectors and finance.

S Central managing director, Peter Mavridis, said it was experiencing strong sales right across its business divisions, with the services company chalking up 65 per cent year on year growth to the end of October.


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