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Nov 2016 - IDC Presentation - Doc # AP41930516

1H16 Country Report on IT Services — New Zealand

Authors: Donnie Krassiyenko, Adam Dodds
On-line Presentation


This IDC Presentation provides a detailed analysis of the market and competitive landscape in IT services in New Zealand (NZ) from January to June 2016 (1H16). It covers the market size movements and growth trends in each of the macromarkets (i.e., project oriented, outsourcing, and support and training services) as well as the key industries such as finance, manufacturing and resources, public sector, distribution and services, and infrastructure. The report also provides a market and vendor analysis of 3rd Platform technologies as the key market drivers. The competitive analysis section includes key strategies and activities of large global and local IT services providers in the market.

The data and insights within this presentation are a part of the "Asia/Pacific Semiannual Services Tracker" research, which covers 14 foundation markets across 14 Asia/Pacific countries.

Activity in New Zealand's economy in the past 18 months has been tumultuous. Economic growth dipped down from 3.6% to 2.5% for the year ending March 2016, and disinflation saw the inflation rate drop from 3% to just 0.5%. It was also initially a period of economic pessimism, with business and consumer confidence down off the back of a poorly performing dairy industry, but gradually improved as the worldwide oil prices fell, translating into cost savings across the board. New Zealand's economic growth will fare better than most developed economies in 2016.

Major boost to the IT services market growth is coming from hosted and managed services in the application and infrastructure spaces. Systems integration continues to be the fastest-growing project-oriented service. A decline is seen in the hardware deployment and support — a long-present trend conditioned by the update of the 3rd Platform technologies and rising popularity of the "everything-as-a-service" (XaaS) consumption model. NZ adoption of professional services is a driver for enabling end users to adopt more advanced platforms. At the same time, complexity in the services market is on the increase as end-user organisations are recognising local service providers and global cloud-based service providers in the same space. With the decreasing business sentiment and softening economic conditions, IDC expects the IT services market to grow at a modest rate of 1–2%.