Business software set to defy downturn

Business software set to defy downturn

Large and mid-sized companies are continuing to spend on IT projects, with vendors expecting growth in mining, banking, retail and government sectors.

Business software sellers are confident corporate Australia will keep pumping money into major technology projects following a decision from

Origin Energy last week to press ahead with a multimillion-dollar

software overhaul.

The Origin project, awarded to SAP and Indian outsourcer Wipro, is

believed to carry a value well into the tens of millions of dollars

and was announced just days after Superpartners said it remained

committed to a $100 million information technology revamp.

SAP Australia and New Zealand chief Tim Ebbeck said that tightening

credit meant the subsidiary had found some softening in spending at

businesses with annual revenue of less than $200 million. However, he

said that across sectors such as mining, retail and banking mid-sized

and large businesses remained committed to strategic projects and that

would drive further growth in SAP's Australian business before


"We grew 20 per cent in the third quarter, year-on-year, and that was

about where we expected it to be . . . I'd expect growth in Q4 to be

higher," Mr Ebbeck said. "We've got a very strong pipeline. Some of

that is business that has already closed and we're hitting milestones.

We've also got half a dozen very large projects that we expect to

close this quarter."

Queensland software developer and SAP rival TechnologyOne also remains

upbeat about the coming year despite expectations that computing and

communications spending will slow.

The company's executive chairman, Adrian Di Marco, said that TechOne

would recruit an extra 200 people in the year to September 30, 2009,

and pump more than $32 million into research and development.

"To us [the global slowdown] just hasn't had a real impact at all. The

pipeline has been strong and continues to look strong," he said.

Businesses were performing greater due diligence on new deals, he

added, but said he believed that corporate and government computer

users would continue to invest in mission-critical information


Business intelligence software would continue to sell well, he said.

Similarly, mining and defence software developer Mincom also expects

growth to continue and chief executive officer Greg Clark said that

while slumping commodity prices had led some resources companies to

review spending, other were forging ahead with major plans.

He said that defence spending was unlikely to be affected and that

businesses would continue to install new information systems if they

delivered productivity benefits or helped boost sales.

The comments from three of the leading business software providers in

the Australian market came despite warnings from chief information

officers at major companies - including Qantas and Suncorp - that some

projects would be shed.

The looming cuts were reflected in a study from research firm Gartner,

which last week cut its Asia Pacific technology spending growth

forecast for 2009 from 11 per cent to 8.3 per cent.

However, Mr Ebbeck said that in some ways the downshift reflected a

return to normalcy after frantic growth in recent years.

Fairfax Business Media

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