Last week in the medium we reported preliminary data showed a significant decline in the number of Federal ICT contracts in the 2008-09 financial year. In part, this reflects the long term trend towards fewer and larger contracts. This will continue as coordinated procurement gathers pace and as agencies take advantage of existing contracts under the cooperative procurement arrangements.
Intermedium research also shows significant variation in the market across ICT product/service categories. Intermedium’s preliminary analysis of AusTender data for the 2008-09 financial year shows IT Services remains the largest category of spending, and grew during the year. After a decline in IT Services spending in 2007-08, this segment of the market rebounded in the latest financial year. This category includes the sub-categories of Managed Services, SI Services, Labour Hire, Software and Hardware Support, Training and Business Consulting. The growth, in part, reflects seasonal factors with the extension, renewal and market testing of existing outsourcing and managed services contracts
Other categories to record increased spending were Telco Services and Software. Hardware, Telco Equipment and Large Office Machines lost ground during 2008-09. Again, the renewal or extension of large telecoms carriage contracts reflects a seasonal factor. A number of suppliers, notably IBM and Microsoft, have done well through enterprise licensing arrangements.
These high level category results mask considerable variation in sub-categories. For example, within the IT Services category, there was a significant increase in the value of Managed Services contracts, while at the same time, Labour Hire contract value fell by almost 30 per cent.
Intermedium will announce the full 2008-09 Federal ICT market results in its Federal ICT Market Year in Review 2008-09 in Canberra 28 October. We'll announce the top suppliers overall and in specific categories and also present the Froggy Awards, recognising up and coming suppliers.