The Federal Government ICT market is expected to reach the $6 billion mark in 2010-11 according to research presented at Intermedium’sHalf Year Update Briefing in Canberra on 6 April.
Speaking at the event, Intermedium’s Managing Director Judy Hurditch said the market was expected to reach a new record high in 2010-11 with $4.3 billion in contracts already signed by 31 December 2010, the mid-point of the year.
Managed services was driving the total contract value reported so far in 2010-11 with the establishment of the new outsourcing arrangements at the Australian Taxation Office and the renewal of a number of other substantial outsourcing arrangements creating an enormous spike in the first quarter of the year, she said.
However growth appears strong across the market as a whole, not just in the high value outsourcing market. The Federal Government ICT market appears remarkably resilient having continued to grow despite the dampening impacts of the implementation of the Gershon Review recommendations and the Global Financial Crisis.
“There seems to be an underlying growth engine in ICT as more and more ICT enablement is required for public servants to perform their duties and as citizens’ demand improved technology based service delivery” she said.
Federal Government ICT procurement has historically been dominated by eight large agencies, a handful of perennial suppliers, and one large category in IT Services, she said.
She also posited that coordinated ICT procurement might extend even beyond the panels already in place, those currently under evaluation and those proposed, further impacting the hardware, software and IT services categories of supply.
Ms Hurditch predicted that 2011-12 would see a tighter budget with dampened ICT spending due to a challenging political climate with the Government needing to retain the support of the independents and allocate funds to bring the budget back to surplus while also finding funds for disaster relief efforts.
But she remained cautiously optimistic about the 2011-12 outlook saying “A tight 2011-12 budget will dent the market rather than savage it.”