New Breed of Service Providers Challenges The Existing Community Of Players, IDC Australia Says

NORTH SYDNEY, DECEMBER 12, 2000 – The addition of an eBusiness model into the IT infrastructure is transforming the traditional Network and Desktop Outsourcing Services distributed management model to one centred on the Internet. As a result of this, a new breed of service providers is making its presence known for the delivery of broad-based Network and Desktop Outsourcing Services (NDOS). The critical difference between these start-ups and existing NDOS players, is their primary emphasis on delivering most of all network and desktop services via advanced wireless and Internet technologies. This newly emerging Networked Infrastructure Management Services (NIMS) model is designed to dramatically lower a customer's Total Cost of Ownership (TCO) and can be offered to a wide range of customer sizes.

 

IDC estimates that the Australian market for Network and Desktop Outsourcing Services (NDOS) was worth AU$230 million in 1999. This market is expected to increase to around AU$630 million by 2004, displaying a CAGR (Compound Annual Growth Rate) of 22.3%. Certain network and desktop outsourcing operational service activities such as the NIMS are expected to grow at rates well above the average for the overall market segment.

Although currently in an embryonic stage and with a number of technological challenges in their path, these new ventures are attracting the attention of traditional NDOS providers because they signal the transition to new business and service-delivery models that could seriously challenge the existing community of players.

"The two main drivers of the NIMS model include the Internet-centric focus of customers and the shift in the asset environment. As customers increasingly centralise their business strategies around the Internet, their demands for Internet-based services are growing rapidly. While these demands are focused primarily on implementing eCommerce strategies, they are also triggering a need for 24 x 7 monitoring and management of mission-critical systems that both support and extend these strategies" said Kathy Beckman, IDC Australia's Senior Analyst, IS Outsourcing Services. "Additionally, customers' demand in reaching new markets and gaining greater control of their distributed environments are providing NIMS players with opportunities to deliver greater remote access to internal end users through Virtual Private Networks (VPNs). Their service offering is also tailored to alleviate end-user desktop headaches with Web-based, and eSupport services," Beckman added in her analysis of the current status of play.

According to the market researcher, another driver enabling the delivery of utility-based networked infrastructure management services over the Internet is a shift in the asset environment. "Assets are now being taken out of the customer environment and located at the service provider premises. This fundamental change in the location of IT assets is directly affecting how network and desktop services will be delivered" Beckman explained. "Until recently, most IT assets (e.g., servers, applications, and storage) were managed remotely from a Network Operations Centre (NOC). Now, virtually all assets, including networks, servers, and applications, can be accessed remotely by end users and not the service provider. The only remaining assets on site include desktops, which will be primarily portable, and some LAN switching devices, which will eventually be replaced with wireless systems".

Information such as the above can be found in IDC's recent report "The Internet Effect on the Australian Network and Desktop Outsourcing Market" (IDC doc. # AU25301H). The report examines the market's competitive dynamics, presents demand-side market spending data, identifies potential sources for competitive advantages, and makes recommendations for competitively positioning network and desktop outsourcing service offerings.

For more information, or to purchase the report please contact John Mlynowsky at (02) 9925-2237 or email jmlynowsky@idc.com.

About IDC:

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and eBusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts local and worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organisations, eBusiness companies and the financial community. Additional information can be found at www.idc.com.au