IT and telecommunications on collision course, says IDC

The merger of IT and telecommunications continues apace — if research company IDC's latest research is anything to go by.

According to IDC's IT Services and Solutions Survey, 73.7 percent of respondents would consider using the same provider for both IT services and telecom needs.

This strong response came as a bit of a surprise, says Jenna Griffin, IT services market analyst at IDC New Zealand.

"ICT (Information and Communications Technology) convergence is a key trend within the IT market and this opens up huge potential, for both IT solutions' providers that have telecommunications capabilities, such as VoIP, and for telco companies that can provide traditional IT, as well," says Griffin.

The 236 survey respondents are IT decision-making professionals in the public and private sector who have spent NZ$100,000 (US$61,715) or more on IT over the past year.

But, although most respondents seemed keen on a single converged IT-telco services provider, many were also keen on best-of-breed solutions, says Griffin.

Almost 45 percent of respondents also said they planned to install BI (business intelligence) in the coming year — that's up from 20 percent last year. Around 38 percent also plan to buy storage software and nearly 35 percent plan to implement CRM solutions, and 30 percent plan to install security software. Around 22 percent plan to buy enterprise relationship management (ERM) software and nearly 15 percent plan to buy software configuration management (SCM) software.

When it comes to selecting a solutions provider buyers look for expert technical capability in integrating the technology, followed by the ability to select the right technology for the business problem; buyers then look for cost-effective value.

Griffin's study, called The New Zealand IT Solutions Ecosystem, says this indicates there is an IT skills shortage within organizations and that the skills shortage also makes it difficult to retain technical skills and knowledge in-house. This leads organizations to seek IT expertise from external providers, she says.

The study also indicates that vendors' long-term viability of the vendor is less important to buyers in 2006 than it was last year. Only 11.9 percent of respondents said this was important to them when selecting a vendor, compared with 16.6 percent last year.

This could mean that the market is becoming more comfortable with mergers and acquisitions, says IDC.

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