IDC recently conducted a detailed analysis of Australia’s market and competitive landscape in IT services from January to June 2018 (1H18), noting key economic and industry metrics, including market size movements and growth trends in each of the primary macro-markets (project-oriented services, managed services, and support services), as well as key industries, such as finance, manufacturing and resources, public sector, distribution and services, and infrastructure. The report also provides a market and vendor analysis of 3rd Platform technologies as the key market drivers. The competitive analysis section includes key strategies and activities of global and local IT services providers in the market.
The project-oriented services market saw steady growth in 1H18, driven by the increased focus of vendors on providing flexibility of services to keep up with consumer demands. Custom application development services saw some improvement in performance from the previous cycles as customers sought custom solutions to remain competitive against a myriad of potential disruptors.
The growth of the managed services market remains stable as the public sector remains a large IT services customer. For instance, the Western Australia Government Rail will be spending more than AU$100 million on digital radio services over the next 10 years, leveraging on the technical expertise of Huawei and UGL. The managed services market is also expected to continue growing at a robust pace as the local business industry acclimatises to new disruptive technologies, such as internet of things (IoT), artificial intelligence (AI), and blockchain.
With the Australian services market shifting away from legacy infrastructure, the support services market will continue to grow as a result of increasing digitalisation. However, the increasing digital savviness in the business industry means the growth-rate of the support services market will slow down in the long-term. Nonetheless, the support services market will be driven by companies continuing to adopt technologies, such as cloud, AI analytics, and IoT.
Blockchain has become a major potential disruptor for the Australian banking, financial services, and insurance (BFSI) industry. With knowledge of the technology growing, BFSI organisations are increasingly willing to invest in the technology. Many smaller institutes look to blockchain as part of their go-to-market strategy, whereas large organisations disrupted by blockchain, such as the Commonwealth Bank, have formed an association, are researching the technology and benefits of its implementation.
The public sector remains a major driver of IT services adoption. With the Australian government continuing to propel its people toward digital processes, the public sector is expected to continue its large consumption of services over an extended period with its support, training, and maintenance needs.