For further information on the Information Technology Services industry in Australia, please contact Commercial Specialist Duncan Archibald, U.S. Commercial Service Sydney on Tel: (+61-2) 9373-9212, Fax: (+61-2) 9221-0573, Email: duncan.archibald@N0SPAM.mail.doc.gov

Overview

The Australian information technology (IT) services industry accounts for approximately 38 percent of the total IT market. The market is growing at the expense of the shrinking hardware market. At the end of 2006, the value of the Australian IT services market was US$8.5 billion.

Over the last decade outsourcing has been one of the single largest contributors to the local services sector, led by the Federal Government's drive to outsource the majority of its agencies’ and departments’ provision of IT requirements. After a winding back of some of the "cluster" contracts, Federal Government agencies’ IT spending is showing robust growth. Of the approximately 200 federal government tenders over the last year, approximately 50 percent were for the provision of IT services. The federal government accounts for 47 percent of all public-sector IT spending. While it may not be possible for smaller U.S. based IT service providers to compete with the large system integrators on whole department tenders, opportunities exist partnering with these companies to provide solutions and expertise that they do not have in house. Key government agencies include Department of Defence, Australian Taxation Office, Centrelink, Veterans Affairs, Australian Customs, Medicare, and Department of Human Services.

In the public sector, key market segments include finance and insurance, retail, transport, mining, telecommunications and media. Most of these companies look to IT service providers to provide technology expertise that the organizations do not possess internally.

The largest players in this market segment include IBM (revenue of US$3 billion in 2006), EDS (US$1 billion), CSC, Fujitsu (US$500 million), HP (US$2.5 billion), and Unisys, as well as major accounting and consulting firms like Accenture (US$460 million revenue in 2006). These companies account for more than 75 percent of Australia’s outsourcing market. Local integrators of significant size include Kaz Computing (owned by Telstra) and AlphaWest (bought by Singtel Optus).

In addition, Indian integration and service companies including Tata, Infosys, Satyam, and HCL provide some of the strongest competition to U.S. integrators in the local market. These companies are relatively new to the market, but have positioned themselves aggressively by buying smaller local services companies in an effort to acquire clients.

Best Products/Services

Research group International Data Corporation (IDC) reported that Voice and Voice over Internet Protocol (VOIP) services will increase strongly in the local market in 2008. IDC also identified ITIL compliance as another area of strong growth (40 percent) in 2008, as well as storage over IP (25 percent), fixed wireless broadband (25 percent), document management (40 percent) and wireless LANs (52 percent).

Security solutions are also in demand. All the local banks are targets for “phishing” attacks, network security, email security, and virus protection solutions are in strong demand. Recent surveys of leading Australian enterprises have indicated that Australian IT executives are spending increasing amounts of IT budgets on IT security solutions.

While the provision of broadband technologies has increased 50 percent over a three-year period there is still scope to “convert” the two million or so existing dial-up accounts to broadband solutions.

The provision of IT services in the healthcare market is also expected to grow strongly over the next five years. The federal government is evaluating systems and standards to implement electronic patient records systems for public hospitals. This will provide good opportunities for US applications developers.

Still in its infancy, Software as a Service (SaaS) is showing signs of gaining traction in the local market, particularly in the small to medium sized enterprise (SME) market where customers want fully scalable enterprise-class solutions without the upfront expense involved in an outright purchase.

Opportunities

• Wireless and fixed broadband services. There are approximately 4,300,000 broadband subscribers in Australia. There is a challenge to migrate the two million or more dial up subscribers to broadband accounts. Services to run on this technology such as VoIP will also be in demand.Provision of IT infrastructure security services
• IT infrastructure security services.
• Network services such as storage, desktop management and document management.
• General IT security projects.
• Software as a Service solution (customized software).

Resources

Trade Shows

CeBIT Australia, 2008
Date: May 20-22, 2008
Location: Sydney Convention & Exhibition Center
Website: http://www.cebit.com.au

AusCert Asia Pacific Information Technology Security Conference 2008
Date: May 20-25, 2008
Location: Royal Pines Resort, Gold Coast
Website: http://www.auscert.org.au

An international conference focusing on IT security for CFOs, CIOs, CTOs.

Publications

Australian Reseller News: http://www.Arnnet.com.au
CIO: http://www.cio.com.au

Associations/Government Agencies

Australian Communications Authority: http://www.aca.gov.au

• The Australian Communications Authority is the chief regulator of the Telecommunications and Radiocommunications Act.

Australian Information Industry Association: http://www.aiia.com.au

• The AIIA is the industry association acting for the local IT industry.

Internet Industry Association of Australia: http://www.iia.net.au

• Australia's national industry body for Internet commerce, content and connectivity.