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Outsourcing growth speaks volumes

Outsourcing growth speaks volumes

Australia's IS outsourcing market is going from strength to strength, with IDC figures released last week reporting the sector is now worth $2.55 billion after growing 17 per cent last year.

IDC anticipates this growth will continue at 16 per cent on average over the next five years.

Kathy Beckman, IDC Australia's senior analyst, services, anticipates one of the largest areas for opportunity in IS outsourcing is in SMEs. "It's an untapped market," Beckman said.

"Outsourcers should have the skillsets the smaller businesses don't have," she said.

According to Beckman, with the growth in the market, branding was becoming increasingly important.

She said advertising campaigns employed by many of the top companies supports this argument . "A lot of that is just building the awareness of their brand to markets they haven't typically gone to before.

"As services become ubiquitous between providers, brand has become one of the few ways to distinguish professional services providers", she said.

Beckman uses the example of IBM's focus on e-business services, where it had always had strong branding of its products. "IBM jumped on the e-business services advertising bandwagon early," she said. "Everyone is familiar with IBM's e-business campaign, which actually benefited not only IBM GSA but most of its competitors and niche players as IBM successfully introduced a new concept."

Another example is EDS, with its campaign on its solutions offerings, EDSolved.

"IT services providers have a brand image, whether they actively go about creating one or not," Beckman said. "The key is managing that perception."

Philip Heggie, managing principal of IT services company Unisys, agrees the outsourcing market will continue to grow locally, and uses the example of Federal Government opportunities.

He also sees growth in the SME market, and believes it will come through the ASP hype, as it becomes reality.

"It's an exponential curve really," Heggie said. He anticipates the growth will take off in the first to second quarter next year.

"There is something there and it's a question of when it'll start to take off," he said. "There's no doubt we're all positioning ourselves for that."

In regard to branding, Heggie said Unisys had been associating itself as being an IT services company. "If you look at the branding, it's about being an e-business organisation."

But Heggie concedes it is often hard to test brand awareness growth in business.


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