IDC: Firms struggling in

A new report from the IDC has said that both the public and private sectors in New Zealand are expected to continue to spend significantly on external IT Services.

Titled ‘New Zealand IT Services 2010 - 2014 Forecast & Analysis’ the report says that IT services spending could reach NZ$3,329 million in 2014. Outsourcing alone, represents 47% of the IT services spend in 2010.

"It won't be an easy ride, while the New Zealand economy has certainly showed signs of improvement through increased consumer and business confidence, any certainty of a full market rebound in the short-term looks optimistic. Many organisations are still short on capital and struggling with cash-flow issues, growth needs to be financed and with depleted resources it remains a challenge for these organisations to obtain finance," said Rasika Versleijen-Pradhan, IDC Senior Services Analyst for New Zealand Business Enablement: IT Services.

IDC says that anyone looking to embark on projects that encompass new technologies will continue to look at external IT service providers because their own resources are limited.

"Who these organisations choose to work with, will very much depend on who will survive the current market shake-up. Organisations will be short-listing those they trust and know are likely to be in for the long-haul, and are no merger & acquisition targets," added Versleijen-Pradhan.