IT service providers heading into interesting times in 2009

For local IT service players there will be a greater focus on applications and infrastructure outsourcing models, Software as a Service (SaaS) impacts, partner/alliances, sustainability in light of the enlarged Australian regulations.

Jens Butler, principal analyst, IT services and sourcing Asia Pacific for Ovum told CRN that they will need to look at how to best address the economic flux from a local market perspective and associated sourcing strategies, electricity deregulation, innovation, etc.

“[They] will have to look beyond simply growing the business, there will have to be a substantial focus on retaining customers and revenue and delivering to contracted services, i.e. not giving the customers the opportunity to move,” he said.

“Customers will still expect the services they are paying for, as well as all the factors associated with innovation, value-add, etc. Vendors need to be aware of trends, technologies, offerings, solutions and services that may impact their clients.”

He told CRN that IT service providers can look at technology like cloud computing, which could potentially offers savings, transparency and flexibility.

“It has been doing the rounds for a while, but this year expect some demand to actually realize some of the benefits associated with it,” said Butler.

“Quality Assurance and Information Security will also continue to have a high priority locally, but in the Financial Services arena, for example, expect the SPs to have to up their game in light of the new tranche of Basel II requirements.”

In the coming year there will be substantial demand by users for providers to offer alternative delivery, pricing and resourcing models to achieve the client organisation’s outcomes, often with narrower boundaries to play with.

“The adage, more with less will definitely come into play but it will require more flexibility, shifting revenue streams (less “spikey” consulting, more retained revenue), greater measurement and an outcome focus,” said Butler.

“Interestingly, there will be consolidation, acquisition, disappearance of some players and this will also affect how buyers see the risk/viability associated with some organizations and may shift their spending/engagements.”