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More New Zealand businesses shift to the cloud: IDC

More New Zealand businesses shift to the cloud: IDC

“The big winner will be cloud-based services. There is a strong appetite for services that drive cloud and cloud integration, as well as investments in a strong network to enable these solutions," says Donnie Krassiyenko, IT services market analyst for IDC.

IDC is forecasting off premises IT services (including hosted applications and infrastructure) in New Zealand to grow 7 to 9 per cent each year until 2019.

The big winner will be cloud-based services, which will grow at a staggering 15 to 27 per cent compound annual growth rate (CAGR) until 2019, according to the latest IDC NZ IT Services Market Analysis and Forecast.

“New Zealand organisations are committed to shifting their IT needs off premises and into the cloud. There is a strong appetite for services that drive cloud and cloud integration, as well as investments in a strong network to enable these solutions,” says Donnie Krassiyenko, IT services market analyst for IDC.

“At a business level, it is all about mobile applications transforming the way in which business connect to its customers via its staff and ongoing digital engagement.”

The IT services market for New Zealand grew at a conservative level of 1.9 per cent for 2014 (year on year) but IDC is forecasting annual growth rates of 2.6 per cent each year until 2019.

Read more: Winning users’ hearts and minds

At a business level, it is all about mobile applications transforming the way in which business connect to its customers via its staff and ongoing digital engagement.

Donnie Krassiyenko, IDC

This uplift reflects the massive transformation that the market is realising as organisations take to a hybrid style infrastructure model with wider technology adoption across the organisation.

IDC's market share analysis, meanwhile, finds that Datacom is now the largest IT services provider (including business consultancy services) in New Zealand.

Its strong representation of IT services across systems integration, IS outsourcing, and application management has driven the company's increased market share, with the major industry penetration in government, communications and media, and finance.

Read more: ‘Not using cloud is just like fighting gravity’: Glenn Gore, AWS

A key driver for this growth is the notable improvement in the number of New Zealand organisations expanding ICT budgets over the past year.

The IDC 2015 Asia/Pacific C-Suite Barometer reports 19 per cent of companies stated their budgets were increasing this year. In addition, only 16 per cent of local organisations interviewed stated that lack of ICT budget for the business requirements is a top challenge in leveraging ICT to drive business forward.

“IDC is also seeing the power partnership of the CIO and CMO beginning to form. Marketing understands the value of leveraging information to drive stronger customer engagements however to do this in a way where applications are integrated and information is well governed the value of the CIO is critical,” says Adam Dodds, IT services research manager for IDC.

Read more: The CIO’s bi-modal innovation agenda

New Zealand users have indicated to IDC the investment focus for the coming 24 months will be targeted across the following areas:

• Cloud – Datacentre migration

• Mobility, including virtual desktop infrastructure (VDI)

Read more: Movers and shakers: David Kennedy, Ashley Mudford, Edwina Mistry and John Ruthven

• Unified communication and collaboration, and

• Data analytics

Related: If you, as a CIO, are not leading digital, then you are eroding your role: Fletcher Building Group CIO Carl Powell

Read more: Presbyterian Support Central makes ‘bold move’ to the cloud

Towards digital transformation

IDC forecasts that in five years, the third platform will become the mainstream of the ICT market.

The third platform – IDC’s term for the convergence of the cloud, big data/analytics, social business and mobility – will increase its share of the business IT market from 49.2 per cent in 2015 to 71.3 per cent in 2020.

Growth of the third platform will be nearly five times that of the average growth of the ICT market, it states.

We are also seeing the power partnership of the CIO and CMO beginning to form.

Adam Dodds, IDC

IDC reports six technologies based on the this multi-technology platform will accelerate global business innovation:

Robotics: enabling super-automatic flexible production and provision of services, and speeding up manufacturing transformation and upgrade

Natural interface: making products or systems easier to use and more intelligent and comprehensively upgrading the user experience

3D printing: achieving large-scale customization of manufacturing, meeting personalized needs of consumers, and driving manufacturing innovation

Internet of Things technology: pushing the limits of sensing and intelligent scaling applications to improve user experience and empower business model innovations

Cognitive systems: applying sophisticated artificial intelligence applications in various industries to improve user experience and business procedures; and

Next-generation security technology: protecting all digital businesses ICT security must advance to meet customer demands.

Related: Bringing cyberanalytics to the frontline

Send news tips and comments to divina_paredes@idg.co.nz

Follow Divina Paredes on Twitter: @divinap

Follow CIO New Zealand on Twitter:@cio_nz

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