The public sector is reducing its spending on IT with
the trend likely to continue as major projects slow down, said
analyst firm Ovum.
According to Ovum the public sector software and IT services
market grew just under 9% last year with the overall sector worth
£8.1bn in spending.
Although the company expects growth to reach 11% in 2008 it
anticipates that the slowdown will continue from next year to 2011
as major projects reduce in number. It expects an annual compound
growth rate of just 6.9% valuing the market at about £11.7bn by
2011.
"2006 and 2007 continue to be predominantly impacted by the pace
of major ICT projects such as the
NHS National Programme for IT, the MoD's Defence Information
Infrastructure (Future), the Criminal Justice IT programme ('Joined
Up Justice') and
local government mega-deals," said Ovum.
Georgina O'Toole, lead analyst for the research, said the
dynamics of the UK public sector market is likely to change
significantly.
"In this comparatively lower-growth environment, suppliers will
need to shift their modus operandi in the UK public sector. Account
teams will need to be far more adept at understanding the specific
needs of customers and potential customers rather than on winning
the next mega-deal," said O'Toole. "The winners will be those
companies that change their approach to suit the new shape of the
market."