Australian firms spend more on IT outsourcing

Australian firms are expected to spend about $7.5 billion on IT outsourcing services this calendar year, according to analyst firm Gartner.

The figure represents a compound annual growth rate of 3.8 percent, Gartner vice president and distinguished analyst Rolf Jester told iTnews.

"It's still above GDP growth, so it's healthy, it's sustainable," he said. "It's not the sort of growth rates of decades ago but it's pretty good."

Jester identified a shift in the way Australian businesses consumed outsourced IT, with cloud-based infrastructure services beginning to cannibalise traditional infrastructure outsourcing.

Australian firms are expected to spend $235 million on cloud infrastructure services, such as infrastructure-as-a-service, this calendar year.

Although the figure represented only a small percentage of the total $7.5 billion IT outsourcing outlay, cloud infrastructure services spending was "growing by nearly half every year", Jester said.

That growth was expected to continue until at least 2016.

"We're then talking about a much more substantial proportion of the total [IT outsourcing market]," Jester said.

Cloud services could also begin eating into the data centre outsourcing market. Jester said customers in that space were already looking "beyond co-location" to managed infrastructure.

"They're [now] beginning to say that when it comes time to think about their next phase of sourcing they want to consider a cloud option," he said.

"They're not necessarily switching [everything] to Amazon, but they're considering other steps along the way such as infrastructure utility [compute services] or virtual private cloud."