It's Gut-Check Time as Disruptive Business Models Drive Second Generation Outsourcing

<p>NORTH SYDNEY, 21st July 2006 - Convergence, consolidation and realignment of sourcing models are the flavour of the year as major outsourcing contracts come up for renewal in 2006-2007.</p>
<p>IDC's recent report finds the total IS outsourcing market growing at CAGR of 5.1% over the forecast period 2006-2010.</p>
<p>Growth in the enterprise wide IS outsourcing market is slowing down, whereas discrete services within the outsourcing domain, such as applications management and NDOS (Network and Desktop Outsourcing) are growing at a higher rate. Overall the Australian growth rate for enterprise wide IS outsourcing over the forecast period will remain about 3% while the total outsourcing market growth, which includes the discrete markets, is showing a growth rate of 5.1%.</p>
<p>"A huge number of outsourcing deals being signed over the next 12 months will see market shares shift as outsourcing contracts are further broken up and best of breed providers take a larger share of the pie." said Aprajita Sharma, IDC's Research Manager, for Outsourcing and BPO services.</p>
<p>"As a result of the continued impact of offshore labour sourcing, the rise of software as a service, and relentless software vendor consolidation, the Australian applications management services market is thriving. IDC’s five-year forecast included in this study shows the applications management services market growth far outpacing the overall IT outsourcing and IT services markets, indicating increasing customer faith in the value proposition of outsourcing management of application portfolios," added Ms Sharma.</p>
<p>IDC Report Highlights:</p>
<p># The strong business focus coupled with a cautious approach to IT investments mean that IT projects are cut into several smaller projects each with a shorter time frame. Although the projects must fit into a long-term strategy, an immediate benefit for the customer is a prerequisite.</p>
<p># The improved buyer sentiment and the shift of focus from cost saving to a certain extent to efficiency improvement leads to growth in new projects. However, protection of existing investments is high on the agenda, and integration is gaining importance.</p>
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<p>For press enquiries please contact:
Aprajita Sharma
Research Manager, Outsourcing and BPO
Phone: 61 2 9925 2257
Email: asharma@idc.com</p>
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<p>Click here to view the press release online:
http://www.idc.com.au/press/release.asp?release_id=245</p>
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http://www.idc.com.au/newsletters/register/</p>

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