capioIT is proud to release the first IT Services market forecast. This is a significant step for us and something that I am very excited about. I have made a real concerted effort to be innovative in the forecasts. That has happened. The focus is looking at the total market from two perspectives;
- What is bought
- What is sold
This is simple, but clearly often forgotten by legacy New England based analyst firms. Organisations do not typically buy outsourcing, they buy the capability to manage infrastructure. Vendors sell outsourcing. I have attempted to marry these two markets and to reflect the growth in cloud and other innovative services offerings. This results in a complex and time consuming forecast model that results in outputs that allow for easy calculation of the addressable market. But it took longer than I thought, though the outputs are fortunately better than I thought. New Zealand is first for several reasons, it is a mid-sized market with a lot under the surface, and it is experiencing macro economic challenges as well.
Back to the forecasts.
- The New Zealand IT Services market is forecast to grow from US$1,586M in 2010 to US$2,081M in 2015. This represents a growth rate of 5.6% through the forecast period.
- The largest market segment for IT Services in New Zealand from 2010 to 2015 was the Enterprise Wide IT Outsourcing market. This grew marginally from US$300M in 2010 to US$314M in 2015. This represents a growth rate of just 1.8% through the forecast period. It highlights the relative decline of the traditional outsourcing model.
- In percentage terms, the fastest growing market from 2010 to 2015 is the Infrastructure Applications delivered through a public cloud market. This will grow from US$4M in 2010 to US$21M in 2015. This represents a growth rate of 36.3% in the forecast period.
Between them, the public and private cloud markets are clearly the fastest growing markets in the New Zealand IT Services marketplace.
The “Last Dollar Analysis” highlights the strongest market opportunities taking into consideration absolute growth and actual annual growth.
From the buyer perspective the strongest market opportunity is in
- Infrastructure Applications
- Enterprise Applications
From a vendor perspective, the strongest market opportunity is very clearly
- Private Cloud
- Public Cloud
Drivers for Growth in New Zealand
- New Zealand is one of the most mature IT services markets globally. It was an early adopter of outsourcing both in the public and albeit a limited major enterprise sector. capioIT believes that future market growth will be driven by the public sector and mid-sized local organisations.
- Some key activities that have the potential to change dynamics in the New Zealand IT Services market include the consolidation of the Auckland City Council, structural change at Telecom, and the redevelopment of infrastructure as a result of the tragedy of the Christchurch earthquake that struck in February of 2011.
- From a technology point of view, clearly the move towards cloud computing and refined outsourcing models is significant for growth in the market. This is in particular for data centre investments and both infrastructure and enterprise based applications.
Clearly, there is a lot more in the market to look at. Please let me know if you want to know more detail on the report. It is very exciting to get the forecast report out there. This was an important investment, and there is more to come.