IDC: Strong year ahead for IT industry

Speaking at IDC's Directions 2008 conference, Bob Cowley, principal Corporate Advisory at IDC, discussed a report he authored on the financial status of Australian IT companies.

The research predicts that mobile devices and investment in business intelligence, storage and collaboration will continue to drive ICT spending in Australia. Growth in verticals such as government, manufacturing and business services will also play an important role.

Discussing findings in the report which reveal that the IT services space in the Australian market has been growing at around 7 percent over the past few years, Cowley said that Australian IT companies have performed exceptionally well.

“Local companies are being quite successful, they’re growing rapidly and they’re holding profits,” he said.

According to Cowley, the market share of global IT companies in Australia is declining, while that of local listed companies is growing rapidly. The same holds true for profitability. While Australian companies continue to face issues such as labour and skills shortages, trimming operational costs, and dealing with regulatory and compliance pressures, Cowley said that strategic acquisitions have played an important role in helping businesesses expand scale and achieve their growth targets.

“The revenue growth that’s been shown by the Australian companies is extremely strong. That’s driven by organic growth and by acquisition activity,” he said.

Based on the strong performance of local companies, global IT companies will begin examining local players to absorb in order to fuel their growth and profitability, he added.