Service providers who don't grasp the industrialisation of IT will be left flat-footed and won't survive, a Gartner analyst claims.
Speaking at the Gartner Symposium in Sydney, vice-president of IT services, Rolf Jester, said the market was transitioning towards technology as a service, and delivering "one service to many". This shift will see new types of competitors, or substitutes, entering the playing field, he said.
Jester highlighted telcos, engineering and media companies as examples of organisations now delivering application services.
"What we do now - systems integration, managed services, business process outsourcing and consulting - will deceptively continue as usual for a while yet," he said. "But the reality is it won't stay that way.
"We're moving towards IT as a service; mass configured services and ecosystems rather than the traditional services as we know them. We've got to turn services from a cottage industry where everything is invented anew every time to one that is about repeatable processes."
Jester said a major driving force was the rise of new customers like the business buyer. He recommended service providers define and simplify services against business outcomes, measurable terms and methodologies.
"Industrialisation of IT services allows providers to be compared to others like for like. Customers will ask for more transparency on value and they will compare prices," he said. "Branding of services will become a necessity."
Another influencer on services consumption was the Asia-Pacific growth phenomenon and the global competitive landscape, Jester said. On top of this, consumerisation of IT and Web 2.0 technologies were coming to the fore, creating challenges and opportunities. "There's also almost a whole new sector in the IT economy around the Web-based arena. You can think of this as what the dot coms wanted to achieve but never did," he said. "We have started to take things for granted like mobiles and technology in the home, so we assume everything we need is just there.
"Users don't have to buy software anymore - they don't care about the hardware or software that's running it. This creates fantastic opportunities for services providers because everything is being delivered as a service. And since what is being transacted is digital, there's no limit to its growth."
Jester forecast global IT services revenue will remain healthy over the next four years, chalking up year-on-year growth of 7.3 per cent. Australia's IT services market is expected to increase 4.6 per cent over the same period.
He said all sectors of the services market would grow.
"The big are getting bigger, but the market is not really consolidating. As the bigger guys buy SMBs, more SMBs are springing up," Jester said. "Locally, niche players are important in creating a competitive environment, but they in turn, need to be conscious of the global market because that's where their competitors are coming from."