The BMI-TechKnowledge South African IT Services Report has revealed that while companies are looking to outsourcing to give them access to new, complex IT capacity and functionality without capital expenditure, consolidation and business failures have created uncertainty about the stability of potential outsourcing partners.
This uncertainty is delaying the decision-making process, extending the time to close a deal from six to 18 months.
According to Roy Blume, BMI-T divisional manager of IT services and co-author of the report, the two most important factors that impact the IT services market are the degree of business confidence among buyers, and the degree to which vendors deploy and utilise available technology to develop compelling solutions that address buyers` needs.
The report shows that the IT services market has been hoping for a return to spending on IT products, which has not materialised. An increased rate of consolidation may reduce overall market growth as the remaining vendors rationalise and further commoditise their offerings.
"To grow in a low-growth environment, IT services vendors must exploit their understanding of the potential innovation that could be developed through the application of technology and aggressively drive that vision into reality," says Blume.
"Product support is a reliable, relatively stable market in tough times because the installed base of hardware and software ensures continued demand for support services. Even in a downturn, when users forego new IT investments, enterprises typically spend to support installed assets," he says.
Share
