IDC NZ: Cloud adoption driven by organisations seeking competitive advantage

The New Zealand IT services market is predicted to grow at a compound annual growth rate (CAGR) of 2.8 per cent through to 2023.

This is a marginal increase on the previous forecast predicting a 2.7 per cent CAGR through to 2022, says IDC as it releases theNew Zealand IT Services Forecast and Analysis, 2018- 2023 report.

IDC says New Zealand IT services revenue will reach approximately $3.96 billion in 2023, up from an estimated $3.452 billion in 2018.

Out of the core IT services primary markets, the managed services market is predicted to achieve the highest CAGR through to 2023.

Chayse Gorton, IDC New Zealand

Organisations are analysing the impact of not migrating to the cloud and how they can use cloud to create competitive differentiation

A driver of this accelerated growth is that organisations are shifting from cloud for business and system optimisation to using the technology to create competitive advantages and in conjunction with other innovation accelerators, such as IoT and AI.

“Organisations are prioritising innovation and security over cost and scalability,” says Chayse Gorton, ANZ market analyst for IT services.

“With regards to cloud adoption, organisations are moving beyond questioning whether they should migrate to the cloud,” says Gorton.

“They are instead analysing the impact of not migrating to the cloud and how they can use cloud to create competitive differentiation by shifting digital talent from traditional in-house IT to innovation initiatives.”

Over the next five years, IDC sees Kiwi firms working with IT services vendors and their partners to help implement and manage cloud solutions.

This will play a big part in ensuring the continued growth of the IT services market, it says.

The challenge for IT services providers will be to differentiate themselves from competing vendors as cloud services become increasingly commoditised.

As a result, the ability to communicate their capabilities across complex digital ecosystems and to partner effectively will become even more critical, IDC concludes.

The challenge for IT services providers will be to differentiate themselves from competing vendors as cloud services become increasingly commoditised: IDC