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Demand for systems integration services soaring in New Zealand

Systems integration and custom application development projects contributed to the fastest-growing segment of New Zealand’s IT services market in 2018

Enterprises in New Zealand are relying more on systems integrators as they ramp up on efforts to modernise existing applications and move to the cloud, a study has found.

According to IDC’s IT services market tracker for Australia and New Zealand (ANZ), the “project-oriented” segment of the market in New Zealand saw the highest revenue growth year on year. The revenues mostly came from system integration projects, followed by custom application development.

In 2018, New Zealand’s IT services market grew 1.9% to reach $3.43bn. Managed services continued to account for the largest share of total IT services revenue.

Chayse Gorton, IDC’s ANZ market analyst for IT services, said rather than build new applications from scratch, many Kiwi firms are tapping systems integration services to integrate software-as-a-service (SaaS) applications, as well as custom application development skills to modernise existing applications.

Gorton added that as organisations shift from on-premise software deployments towards cloud-based SaaS models, the need for systems integration services will become imperative.

“Organisations that implement SaaS solutions often have investments in on-premise software, hence it is imperative that cloud data can integrate with these on-premise applications,” he said.

In addition, many New Zealand organisations have taken a lift-and-shift approach to cloud software deployments.

Although lift-and-shift cloud migrations can help to lower on-premise infrastructure costs, the cost benefits of the cloud may not be fully realised without re-architecting an application. Performance issues associated with the application may also crop up, according to IDC.

As such, one of the critical priorities for organisations that have taken a lift-and-shift approach is to engage with suppliers for custom application development services to modernise shifted applications, IDC said.

The analyst firm believes the trend of modernising existing applications will continue throughout 2019. However, when an existing application is about to be decommissioned, organisations will, in many cases, be inclined to shift to a SaaS model.

The growing demand for application modernisation and cloud integration services is good news, not only to systems integrators, but also to integration platform suppliers.

One such company is Dell Boomi, which specialises in cloud-based integrationapplication programming interface (API) management and master data management used by enterprises in cloud migration, as well as to connect legacy systems to the cloud.

Additionally, enterprises have taken to Dell Boomi’s services to integrate on-premise Oracle systems to NetSuite’s cloud-based applications, said William Fu, managing director of Dell Boomi in Asia.

The success that Dell Boomi – which is scoring nearly six new customers a day for the past 12 months – has had so far has led it to cast its sights on Southeast Asia after it launched operations in 2016 in Australia.

“We’ve been accelerating our business at very high double-digit, triple-digit numbers over the past three years,” a Dell Boomi spokesperson said. “Certainly, while we started building some of that core business, we unquestionably started in ANZ because of the maturity of the market in terms of digital transformation and adoption of cloud.” 

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