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Cashing in on a bullish market

Cashing in on a bullish market

ORGANIC GROWTH

While half of this had stemmed from its new voice over IP division, the remainder was the result of organic growth in areas like application development, data centre hosting and Novell deployments, he said.

Mavridis said expenditure on business processing projects was also on the rise, with the average sale sitting at about $250,000. Last year, the figure had been closer to $100,000, he said.

Another shift was that organisations were being proactive about investing in IT and approaching integrators, he said.

"I think the drive has been that corporate Australia has had a good run in profitability. They're starting to reinvest this into their systems to drive improvements in efficiencies," he said. "Businesses are coming up with ideas and identifying issues internally."

Datacom CEO, Michael Browne, said customers were choosing to break up larger outsourcing contracts into selectively outsourced pieces. As a result, more were calling for local players who could be flexible and innovative to their business needs.

"Organisations are looking for different approaches and fresh perspectives on their issues," he said. "This means there are more opportunities that can be actively targeted by a broader range of organisations."

IDC's Allen agreed, adding the traditional big three outsourcing players - IBM Global Services, EDS and CSC - were losing market share.

"The large deals are being broken up into smaller chunks, which is making them more suitable for smaller organisations," he said. "There's also the issue of cultural fit. The softer issues about business are coming to the fore."

Project management had also increased in importance, according to IDC's list of top integration skills.

Datacom was continuing to improve its bottom line, recording annual revenue of $140 million in the last financial year. The company had achieved this by securing more projects with a larger number of clients, Browne said. In the past six months, the company had won contracts to provide identity management-related services to the Australian National University, Australian Taxation Office and Charles Sturt University. It was also working on pilot projects with Telstra and Vodafone.

HOSTING HEATS UP

On the helpdesk and CRM side, Datacom had scored deals with Unwired, Netgear and fast food chain proprietor, Yum Brands.

Another hot area of opportunity cited by S Central and Datacom was data centre services. Mavridis said customers had warmed to the prospect of hosting and were increasing the amount of systems they outsourced.

"Customers are realising the criticality of their processing environment," Datacom's Browne said. "In the past, they could provide the environment for their own IT systems. But as you get a greater concentration of infrastructure in smaller spaces the power and heat costs go up massively. Now these environments are not passing muster."

Data#3's Grant was not sure how long the positive market conditions would last but, for S Central's Mavridis, strong growth was expected to continue for at least six month. However, IDC's Allen warned the industry could be almost at its peak in terms of project deployments.

"There are early signs that we are at the peak of a wave," he said. "It's a case of be alert, not alarmed."


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