Technology | Media | Telecommunications

Tuesday, December 23, 2008

Managed Services will Grow in Asia-Pacific

The Asia-Pacific (excluding Japan) IT services market is expected to remain healthy and grow to $49.4 billion in 2009 -- despite IDC's recent downward adjustment of the region's overall IT spending forecast.

The optimistic outlook is driven primarily by continued demand for managed or hosted IT and network services, as cost management becomes a key focus for organizations in the region.

In addition, the relatively stronger resistance to the global economic recession in the IT services market is being helped by continued double-digit growth in the developing markets of India and China -- as well as contribution from emerging countries such as the Philippines, Thailand, and Vietnam.

According to IDC's latest poll conducted in October, more than 12 percent of 400 organizations surveyed indicated they would increase their spend on managed or hosted out-tasking services in 2009.

Apparently, this is the only category in which there are double-digit percentages across the spectrum of hardware, software and services. It does highlight that opportunities will exist in the services space in 2009.

IDC found a significant proportion of survey respondents indicating that they would invest in cloud-based services, as well as other managed services, and were looking to allocate higher budgets for such out-tasking related services.

They anticipate that the impact of IT services will vary across the different service lines, countries and verticals. For example, project-based services -- such as systems integration -- are likely to suffer the most.

They expect organizations to scrutinize portfolios of strategic versus non-strategic projects with a view to putting certain initiatives on hold, if not canceling them altogether.

Managed service adoption will grow as organizations move IT assets off their books and scrutinize their operating expenses more closely. New support contracts in conjunction with new hardware sales are likely to decrease, but organizations will look to lengthen the life-cycle of existing infrastructure, delay refresh cycles, and will therefore look to procure extended support services as warranties expire.

From a vertical perspective, the public sector is expected to be a potential bright spot, as spending in this sector tends to be anti-cyclical in nature. Markets with good potential for government investment in new IT services between 2009 and 2010 include Australia, Singapore, China, India and Hong Kong.