ARN

Australian IT services spending to hit $20B in 2019

Project-oriented firms expected to reap bulk of rewards

Australia’s IT services industry is expected to grow by nearly four per cent by 2023 as businesses increasingly embrace the digital economy.

According to IDC predictions, market revenue will climb to just over $19.4 billion this year, rising to $23.4 billion over the next four years. 

Driving the growth will be firms looking for digital transformation, with IT services providers increasingly expected to take on the role of a business consultant.

The latest figures mark a minor increase in IDC’s previous forecast, with compound annual growth rate (CAGR) rising by 3.8 per cent by 2023, rather than 3.7 per cent by 2022.

Published in IDC’s Australia IT Services Forecast and Analysis, the research claims services providers focused on delivering projects for end users will see the most growth.

In particular, providers involved in deeper deployments of cloud, mobility, big data and social and those implementing accelerator technologies like artificial intelligence (AI), internet of things (IoT) and robotics will have the most competitive advantage.

There will also be demand for providers to modernise or replace legacy systems due to businesses’ failing to embrace new technologies either because of cost or complexity.

Other core industries of managed and support services are also expected to see growth, the report said.

“Technology suppliers must enable organisations to execute on their enterprise-wide digital strategies,” IDC A/NZ market analyst for IT services Chayse Gorton said.

“End users will look to IT services providers for consultation on next-generation technologies. They will seek assistance in using these technologies to create new offerings, business models, and relationships."

The main main challenge for vendors going forward will be differentiating themselves from their competitors, the report stated.