Business Visas Australia

Australia’s IT market should continue to provide opportunities in consumer, government and business sectors in 2010, following a better-than-expected performance in 2009. The total size of the domestic IT market is projected to increase from US$18.7bn in 2010 to around US$22.7bn in 2014. Consumer spending held up relatively well in 2009, thanks to demand for notebooks, while corporate IT spending had started to recover by the end of 2009.

In 2010, there could be a boost, particularly in the second half of the year, from computer hardware tenders delayed from 2009. The launch of Microsoft’s Windows 7 operating system also has the potential to help trigger a new cycle of hardware upgrades. A number of factors underpin the forecast of a 5% 2010-2014 compound annual growth rate (CAGR) for the Australian IT market.

Government tenders will drive considerable spending in years to come. Regulatory compliance will continue to need spending by banks and intense competition in the retail sector is spurring spending on customer relationship management (CRM) and back office systems. Competition and new service platforms in the telecoms sector is a driver for that key IT spending segment.

Industry Developments
In 2010, government projects in sectors such as e-government, healthcare and education will drive significant opportunities for IT vendors. In mid-2010, the Australian government is expected to launch a standardized reporting system scheme. Australia’s National E-Health Transition Authority has the goal to create a paperless environment in Australia’s health sector, including public hospitals. While most government IT programmes were relatively immune to the global slowdown, the financial downturn encouraged the government to seek greater efficiency in IT procurement.

There were reports in 2009 that the Australian government was considering centralizing the procurement of desktop computers, with the appointment of a single supplier. The Australian Information Industry Association expressed concerns about the implications for smaller companies. Federal programmes have also found an echo in state government projects in areas such as education and smart cards. Queensland Transport recently unveiled plans to introduce a new driving license using smart card technology. Adult proof of age cards are also to be introduced, as are cards for licenses for passenger transport and by a number of other licensing authorities.

Company News
In 2009, the PC battleground continued to focus on competition for government tenders, particularly the computers in education programme. In April 2009, Lenovo succeeded in a tender to provide computers to new South Wales schools. This followed a previous big win for Lenovo in February, when it teamed up with a local partner to roll out 10,000 netbooks to Victoria public schools over a three-year period. The project supplied netbooks from both Lenovo and Acer to students in years five through to eight. In 2010, Microsoft anticipated that support from leading PC makers would underpin success for its new Windows 7 operating system.

Microsoft received credit for a smoother launch of Windows 7 compared with its previous Vista operating system, due in large part to better co-operation with other players in the software value chain. a wave of new PCs were released with the new operating system, while Acer and Dell said that as of launch date there was zero inventory of Vista machines going into stores. IBM’s Australian subsidiary remained positive about its revenue prospects in 2009 and in December, the company opened a new regional IT service centre in Ballarat.

IBM had experienced a setback in March 2009 when Telstra reportedly reassigned parts of its six-year US$697.7mn IT outsourcing project with IBM Global Services. Meanwhile in October 2009, Unisys was granted a two-year extension on its contract with Australia’s Immigration Department for outsourced desktop services.

Computer Sales
Australian computer hardware sales are projected at US$7.8bn in 2010, and are forecast to grow at a 2010-2014 CAGR of around 5% to reach US$8.7bn by 2014. The main drivers of growth in the PC market will be government programmes, growing broadband penetration and greater affordability. The fastest-growing segment is notebooks, which already accounts for more than 50% of the market by value. The main drivers of growth in the PC segment will be government programmes, growing broadband penetration and greater affordability.

More than 90% of Australian households now have a PC, but consumers appear willing to spend on upgrading their notebook computers and it is also becoming more popular to purchase a second household PC. Small business comprise more than 99% of all Australian businesses and slighly more than 50% of business PC sales.

Software
Software is expected to account for about 18% of the Australian IT market in 2010, with estimated spending of US$3.3bn. As the focus moves from hardware to services and solutions, the share of the market accounted for by software is forecast to rise to 20% by 2014, with businesses seeking greater leverage from their investments. Software sales are forecast to have a CAGR of around 8%, rising to US$4.5bn by 2014.

Software piracy has fallen in Australia in recent years but remains an issue in some segments of the enterprise market. Over the forecast period, enterprise resource planning (ERP), CRM and other ebusiness products will be increasingly popular with the small and medium-sized enterprise (SME) market, as companies look to enhance productivity through automating essential functions.

IT Services
IT services are expected to account for about 40% of the domestic IT market in 2010, with spending of US$7.6bn, up from US$7.2bn in 2009. CAGR for the segment is estimated at 6% over 2010- 2014. IT services are forecast to be one of the most dynamic sectors of the Australian IT market. In 2010, sectors such as government, telecoms, healthcare and banking should continue to supply demand for implementation, consulting and managed services. Regulatory compliance will continue to need spending by banks and intense competition in the retail sector is spurring spending on CRM and back office systems.

E-Readiness
A number of alternative Australian internet service providers (ISPs) are in the process of expanding the coverage of their ADSL networks. Other broadband service providers, including Unwired, are rolling out WiMAX networks, which will help to ensure greater choice and flexibility in the type of broadband connection available. Australia is above the OECD average in terms of businesses purchasing online (49% versus 33%) and selling online (27% versus 17%).

The central component of the Rudd government’s ICT strategy and overall domestic economic policy is the construction of a National Broadband Network (NBN). The programme is expected to drive economic growth and foster the creation of a digital economy. The government has projected GDP gains of 1.4% after five years from the broadband project. Tenders for the construction of the network were lodged in November 2008.

Despite these investment commitments, outlook for Australian broadband growth continues to be cautious. This is based partly on delays that have characterised government and operator efforts to address the problem of low broadband coverage in rural parts of Australia. Meanwhile, fixed penetration rates in urban areas are already very high.