IDC says the New Zealand IT services market is predicted to grow at a compound annual growth rate (CAGR) of 2.8% through to 2023. New Zealand IT services revenue will reach approximately NZD$3,960 million in 2023, up from an estimated NZD$3,452 million in 2018.
IDC’s recently published "New Zealand IT Services Forecast and Analysis, 2018-2023" report revealed that managed services market which is predicted to achieve the highest CAGR through to 2023. 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.
Chayse Gorton, ANZ market analyst for IT services, added that organisations are prioritising innovation and security over cost and scalability.
"Organisations are moving beyond questioning whether they should migrate to the cloud. 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," added Gorton.
Figure 1: New Zealand’s IT Services Revenue, 2018-2023
Source: IDC 2019
Over the next 5 years New Zealand organisations will leverage 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.
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.