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NEW ZEALAND: Industry analyst group IDC has shown in a survey that in times of economic uncertainty, there is an increase in the outsourcing of managed hosting solutions among large organizations in New Zealand.

The study shows that the sector grew 6.9 percent year-on-year in 2008, outpacing overall IT services growth and is expected to maintain this pace for the next five years.

The report titled, "New Zealand Outsourcing Services 2009 – 2013 Forecast & Analysis" states the IT outsourcing market is projected to reach $1,005 million in 2013, which shows a compound annual growth rate of 4.5 per cent over the coming five years.

The study also showed that users' preference for predictable periodic expenses and potential cost savings from vendors' economics of scale in a recession often leads to the outsourcing of managed services, as a news report points out.

By the end of the forecast period, this market is estimated to account for 47.6 per cent of the entire IT services market.

"In this time of uncertainty, most organizations, government agencies included, developed a preference for outsourcing and managed services," says Adam Lee, IDC Associate Market Analyst for the New Zealand IT Services market.

"This is driven by end users' favor for predictable periodic expenses and potential cost savings from vendors' economics of scale."

The study also showed that the mounting pressures on vendors to help their customers survive an unstable economic period are leading to a preference for discreet outsourcing over enterprise-wide information system outsourcing.