Market Report, "Australia Information Technology Report Q2 2011", published

May 1, 2011 - PRLog -- Market Overview

Australia's IT market should continue to provide opportunities in the consumer, government and business sectors in 2011, following a strong recovery in 2010. The total size of the domestic IT market is projected by BMI to increase from US$21.0bn in 2011 to US$27.0bn in 2015.

IT spending in 2011 should be boosted by growing demand across IT spending sectors to take advantage of opportunities presented by cloud computing. In 2010 a wide range of leading Australian private and public sector organisations launched cloud initiatives and the government unveiled a six-year cloud computing strategy.

Several factors underpin our forecast of a 6% 2011-2015 CAGR for the Australian IT market. Government tenders will drive considerable spending in years to come. Banks will continue to need to spend on regulatory compliance, and intense competition in the retail sector is spurring spending on customer relationship management (CRM) and back-office systems. Competition and new service platforms in the telecoms sector are driving the key IT spending segment.

Industry Developments

In 2010, the Australian federal government announced a six-year plan to transfer government agencies' computing systems to a public cloud environment. According to the plan, public cloud adoption for public-facing websites is scheduled to begin in 2011, with pan-governmental integration taking place from 2012 onwards. However the plan requires government agencies to notify the Department of Finance Deregulation of their intention to move to the cloud.

In November 2010, the Australian Senate passed a bill to restructure Telstra, to increase competition as Telstra's infrastructure is incorporated in the new National Broadband Network (NBN.) The NBN project aims to connect 93% of the population by 2017 and rectify a situation which has led to Australian broadband charges being ranked the fifth most expensive among Organisation for Economic Cooperation and Development (OECD) countries.

In 2010, government projects in sectors such as e-government, healthcare and education drove significant opportunities for IT vendors. The Australian government announced plans for a standardised reporting system scheme, while the National E-Health Transition Authority has set the goal of creating a paperless environment in Australia's health sector, including public hospitals.

Company News

In 2010, the release of Apple's iPad opened a new competitive battleground in the PC market, with Apple's rival vendors planning to release their own tablet devices. Apple is expected to continue to dominate Australian tablet sales in the Austalian market, with the Apple iPad 2, while the price of the entry-level original iPad is now down to about A$445. However the number of competitor tablet devices from the likes of Samsung, Lenovo, HP, Acer, Dell and Asus is expected to grow in 2011.

In 2010, software vendors were positioning themselves to take advantage of growing demand in Australia for cloud computing services. US enterprise software vendor Oracle set up a dedicated CRM On Demand package for the Victorian Department of Human Services. US Software-as-a-Service (SaaS) pioneer Salesforce.com has enjoyed growing success in the segment, with estimates that around 10 of Australia's largest financial institutions, including ANZ Bank, use at least some Salesforce.com modules.

Vendors in the Australian market are investing in infrastructure to provide cloud computing services locally. In Q111, Telstra launched a 45-day free trial of its cloud infrastructure for government agencies. US IT giant HP is also moving to compete directly with Telstra, Optus and Macquarie Telecom for a share of the cloud computing services market, and will open its data centres to local customers.

Computer Sales

Australian computer hardware sales are projected at US$9.2bn in 2011, with the popularity of tablets helping to keep demand buoyant after a strong PC market recovery in 2010. Sales are forecast to grow to around US$10.8bn by 2015, with drivers including new form factors, government programmes, and growing broadband penetration .

More than 90% of Australian households now have a PC and consumers appear willing to spend on upgrading their notebook computers; it is also becoming more popular to purchase a second household PC. Small business comprise more than 99% of all Australian businesses and slightly more than 50% of business PC sales.

Software

Software is expected to account for about 17% of the Australian IT market in 2011, with estimated spending of US$3.6bn. As the focus moves from hardware to services and solutions, the share of the market accounted for by software is forecast to rise by 2015, with businesses seeking greater leverage from their investments. Software sales are forecast to have a CAGR of around 9%, rising to US$5.0bn by 2015.

Given many businesses' focus on controlling costs, cloud computing models have also grown in popularity and spread beyond initial core application areas. Over the forecast period, enterprise resource planning (ERP), CRM and other e-business products will be increasingly popular with the small and medium-sized enterprise (SME) market, as companies look to enhance productivity through automating essential functions.

IT Services

IT services are expected to account for about 40% of the domestic IT market in 2011, with spending of US$8.2bn. CAGR for the segment is estimated at 8% over 2011-2015. Demand picked up in 2010 with the revival of several IT projects that had been shelved as a result of the economic slowdown, and IT services is forecast to be one of the most dynamic sectors in the Australian IT market.


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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.