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Australian ICT Market Perspectives for the Queensland ICT Industry

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Australian ICT Market Perspectives for the Queensland ICT Industry

  1. 1. Australian ICT Market Perspectives Peter Carr, Managing Director Sam Higgins, Research Director July 2008 Copyright © 2008 Longhaus Pty Ltd
  2. 2. Reviewing the Australian ICT Market • How are business and ICT cycles driving CEOs and CIOs? • Where are Australian CIO’s spending? • What are the local CIO priorities? • Who are the vendors making waves in the market? • Which major Australian themes and trends are we watching? 2 Commercial-in-confidence
  3. 3. CEOs know the current Business Cycle is ending 9 8 7 6 5 Forecast 4 3 2 1 0 -1 Average long -2 business cycle is 34 quarters -3 (8 1/2 years) 36 qtrs. 34 qtrs. 34 qtrs. 33 qtrs. 38 qtrs. 33 qtrs. -4 -5 Annual real GDP growth (%) progressed in quarters to September 2007 (and forecast to June 2011) -6 1962 1966 1970 1974 1978 1982 1984 1986 1988 1992 1994 1996 2000 2004 2006 2008 2010 2012 2014 2016 2018 2020 1960 1964 1968 1972 1976 1980 1990 1998 2002 Source: Paul Ruthven of IBISWorld 07/12/07
  4. 4. CIOs know the ICT Asset Cycle is right behind it Post Y2K Synchronised ICT Asset Renewal Cycle Asset Replacement Renewal Business Planning As Usual 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Longhaus
  5. 5. Longhaus’ Annual ICT Spending & Priorities Study is aimed at understanding these cycles • Australia’s annual domestic business and public sector spending on ICT is $80-90 Billion • 80% of this spending is by the top 6000 Medium to Large Enterprises – >200 Employees / $10 million in revenue • We survey 100+ CIOs and IT Decision Makers from this population • Giving us a 95% confidence level with a MOE of +/-10% 5 Commercial-in-confidence
  6. 6. Our studies include both private and public sectors 6 Commercial-in-confidence
  7. 7. Australian organisations spend an average of 5% of their revenue / budget on ICT 7 Commercial-in-confidence
  8. 8. People “assets” consume the most and are hardest to “renew” 8 Commercial-in-confidence
  9. 9. Regardless of the economic climate CIOs remain optimistic 9 Commercial-in-confidence
  10. 10. There is growth is occurring in the typical segments Expected Segment ICT Spend Change Growth Banking High Above Average Steady Construction Medium Average Up Finance & Insurance Low Above Average Steady Government High Above Average Up Manufacturing High Below Average Down Resources Low Above Average Steady Retail Medium Average Steady Services Medium Average Up Telecommunications High Above Average Steady Transport Low Average Steady Base: 150 in 2006 , 123 in 2008 Australian Medium to Large Enterprises 10 Commercial-in-confidence
  11. 11. Proportion of new investment remains low, but rising • Australian firms expect to have to spend 12% more on ICT in 2008 BUT Lights On: 80%  84% • New investment is expected to increase by 16% – Real increase of 3.2% New Investments: 20%  16%
  12. 12. This new investment is balanced overall, with new purchases reinforcing steady growth 12 Commercial-in-confidence
  13. 13. But as Business and ICT Cycles change so does “IT Value” • Just as personal needs change with economic cycles, so does the IT needs focus of an enterprise The Hierarchy of Personal • Self Actualisation Needs • Esteem Needs • Social Needs • Safety Needs • Physiological Needs Source: Abraham Maslow, 1943 13 Commercial-in-confidence
  14. 14. But as Business and ICT Cycles change so does “IT Value” • Just as personal needs change with economic cycles, so does the IT needs focus of an enterprise The IT Value • Paradigm Shifting Hierarchy • Competitive Differentiation • Integrated Information • Stability & Security • Infrastructure & Connectivity Source: Robert Urwiler & Mark Frolick, 2008 14 Commercial-in-confidence
  15. 15. The primary issues facing CIOs suggests a focus on stability 15 Commercial-in-confidence
  16. 16. And spending intention reinforces this, but we expect this to change in the next 24 months 16 Commercial-in-confidence
  17. 17. Stability in the short term means cost strategies around addressing skills and service management 17 Commercial-in-confidence
  18. 18. Microsoft’s Server Launch Wave is highly anticipated when it comes to vendor focus 18 Commercial-in-confidence
  19. 19. Australian CIOs are starting to engage in preparation for the application renewal wave • Y2K bubble has driven asset replacement, but… – Skills required to implement are scarce • Virtualisation offers savings through utilisation, but… – Virtual server sprawl now rivals physical sprawl • Service-oriented architecture offers flexibility, but… – Inevitable SOA creep means many connections are unmanaged • Digital regulation means safer consumers, but… – Complex compliance not previously see in Australian mid-market 19 Commercial-in-confidence
  20. 20. However, Longhaus cautions organisations to look beyond the hype • Y2K bubble has driven asset replacement, but… – Skills required to implement are scarce • Virtualisation offers savings through utilisation, but… – Virtual server sprawl now rivals physical sprawl • Service-oriented architecture offers flexibility, but… – Inevitable SOA creep means many connections are unmanaged • Digital regulation means safer consumers, but… – Complex compliance not previously see in Australian mid-market 20 Commercial-in-confidence
  21. 21. Selected Source Material • Successful Portfolio Management Unifies ICT Management Practices, Longview, September 2006 • Post-Y2K bubble looms as an asset replacement train wreck, Longview, December 2006 • Managing not implementing SOA becomes the real challenge, Longview, December 2006 • Business culture is the next barrier to second generation SOA projects, Longview, December 2007 • Increasing Digital Regulation will drive ICT spending In already saturated market, Longview, December 2007 • IT Spending and Priorities Study 2008, February 2008 21 Commercial-in-confidence
  22. 22. Who is Longhaus? • Longhaus is a research publisher and • Strong international and technology advisory company with a specialty in research experience technology • Leading industry voice in press and • We publish business reports and media broadsheets advise executives and management across Australia's government, business, and consumer sectors on the application • Queensland founded and headquartered and direction of technology – Website: 5,000+ site visits per month • Our directional research reports are – Website: 12,000+ page visits per month utilised by both SME and major – Website: 7-10 minutes per visit organisations across the world – Blog: 3,500+ hits – Newsletter: 2,500+ distribution per month • Through our AAA (Access All Areas) – Downloads: 1,000+ per month advisory service we answer big business – 8,400+ SlideShare visits questions that most often pertain to customer, product or services markets – strong focus on government 22 Commercial-in-confidence
  23. 23. Research Focus
  24. 24. Website Snapshot
  25. 25. Corporate Blog - The Naked Chief
  26. 26. Strong Local Research and Branding
  27. 27. Online Research Database
  28. 28. National and International Press Visibility
  29. 29. Annual Retainer Service - Access All Areas
  30. 30. Access All Areas Deliverables
  31. 31. Work Product – Traditional Whitepapers
  32. 32. Work Product – Custom Strategy Development
  33. 33. Thank you Longhaus Head Office Level 30, AMP Place 10 Eagle Street Brisbane QLD 4000 Longhaus Research Centre 7/269 Abbotsford Road Bowen Hills QLD 4006 p: +61 7 3868 4796 f: +61 7 3303 8445 inquiry@longhaus.com 33 Commercial-in-confidence

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