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IBM top government supplier for Q1

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Large suppliers look set to win bigger contracts, as changes to procurement spark a “fewer but higher value” trend.

Intermedium’s new Executive Brief shows IBM and Telstra dominated in Quarter 1 2008-09 results, with Defence awarding major contracts to both suppliers during the quarter. 

It appears the tendency of market polarisation towards larger suppliers will continue.

According to Intermedium’s 2007-2008 Supplier Report, in both 2006-07and 2007-08 the top 3 suppliers accounted for approximately 30% of total contract value. 

IBM’s performance during Q1 has firmed its position as the likely top government supplier in 2008-09, after it won contracts worth over $330 million.

Its highest single value contract, awarded by the Department of Defence, is valued at $268 million.  Paling in comparison in second place is a $35 million awarded by the Department of Health and Ageing to IBM for the provision of IT services.

During the quarter, HP finalised its acquisition of EDS, and their combined business made the new entity the third largest supplier, but the impact on overall percentage market share was negligible. 

Intermedium expects recent changes to procurement arrangements are likely to favour incumbent suppliers and other major suppliers at the expense of smaller companies and new entrants to the market.

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