Survey: IT Development Budgets On the Rise

According to the latest IDC survey, IT development projects are on the rise in 2009.

With more than 6,000 respondents surveyed, there’s a pronounced tendency that IT budgets are increasing this year and the overall IT landscape looks more promising. Respondents were senior business leaders and software development professionals from independent software vendors, enterprises with more than 500 employees, SMEs, and other organizations for which software development was a key business focus or priority.

The major takeaways from the survey read:
• 38% of companies are outsourcing "some software development" to India, China, Ukraine and other Eastern European countries;
• 71% of respondents said new product or software development was a "top priority" for their organization;
• 51% of respondents said "saving money" was a top priority for their organization;
• 42% of respondents said agile methodologies were their software development models of choice,
• 36% of companies use Capability Maturity Model Integration as their process maturity and quality model;
• 62% of respondents focus their software development efforts on enterprise applications;
• 51% of respondents focus their software development efforts on Web-based applications;
• 42% of organizations execute software customization and integration in different systems and environments.

Rona Shuchat, director of Application Outsourcing Services at IDC, sums up: "During this economic recession, the competitive application outsourcing arena has become even more fierce as customers push for lower cost and improved operational efficiencies. Flexible, consistent delivery and management models, alongside scalability, reliability and high performance, will be critical as new hosting models become viable alternatives to the enterprise."

Source: Integration Developer News

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Russian IT reports brilliant half-year

Last fall, a study was conducted by Linex analysts that helped formulate the assumption that there will be a change of trend in the IT market: the IT market, which was experiencing a slow rate of growth, is hypothesized to undergo a period of rapid growth.

The results of monitoring the first quarter validated the forecast that the market will be experiencing a faster rate of growth. The services that were most in demand on the Russian IT market were network and system integration, IT consulting - including consulting and custom application development, and maintenance and support of software and hardware.

Comparing characteristics of IT business from the first half year in 2008 with its analogous period last year showed that network and system integration, despite all forecasting and predictions, will not give up its place as the leader in Russia’s IT.

According to Linex’ “Real IT Market - Q2 2008” report, the results of the second quarter, and first half-year as a whole, allow the following conclusions to be made:

• The forecast that the IT market will experience a change in growth rate was accurate. The rates of growth during the first half-year increased by 55%, resulting in a 23.6% increase in profit compared to the 15.3% increase of last year.

• The growth rate of the Russian IT market for 2008 will be closer to the rate of market growth in the second quarter (20.8%), than to its anomalous high growth temps in the first quarter (27.3%). The irregular first quarter growth can be attributed to a marked increase in spending by the government sector on IT.

• The highest rates of growth in the first half-year were from the IT Services segment - 34.7% (in the second quarter, 27.7%). IT Services have become the engine driving the whole Russian IT market.

The full report is available in Russian at http://www.linex.ru.

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Gartner Predicts Steady Growth for IT Outsourcing Market in 2008

The spending on third-party providers will increase by eight per cent this year both in the United States and in Europe, according to research by analyst Gartner.

The value of publicly-disclosed business process and IT outsourcing contracts dropped by 50 per cent during 2007, says the study. But as the market matures and becomes more commonplace, fewer deals may be reaching the world's press, suggested the analyst. Companies are outsourcing more, but electing to use a multi-provider strategy and so deals are smaller in size and less reported.

Gartner has identified 35 countries where IT directors could consider establishing their own software development and shared services operation, or where local service providers are beginning to sell services beyond their domestic market.

Gartner says Russian locations are providing “credible alternatives”. Others topping the list include Ukraine reconfirming its maturing market positions.

According to Ian Marriott, a research vice-president at Gartner and an expert in IT outsourcing, Belarus has begun carving a niche in application development services.

He also noted end-user businesses were increasingly factoring in proximity of time zones and ease of travel into their outsource requirements.

Sources: Computing ; ComputerWeekly ; Networkworld

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