Shortage of big contracts to hit IT suppliers

10 September 2007
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11 September 2007 | Antony Barton

IT suppliers must prepare for a slowdown in UK public sector business, according to a technology consultancy.

Ovum expects a significant drop in market growth from 2008 to 2011 as the number of major IT projects slows sharply. Its research attributes this largely to the impact of the Comprehensive Spending Review 2007's budget constraints on government departments and their suppliers.

Georgina O'Toole, lead analyst for the research, said that from 2008, the dynamics of the UK public sector software and IT services (S/ITS) market are likely to change significantly.

She said: "Suppliers fortunate enough to have landed themselves a 'mega-deal' in recent years have benefited most. However, with fewer mega-deals on the horizon, the underlying S/ITS market is set to become relatively more attractive, particularly for second-tier suppliers, as UK government puts greater emphasis on exploiting the infrastructure investment of the early part of the decade."

She warned that suppliers must change the way they operate in the UK public sector. Account teams will need to dedicate more time and understanding to the needs of existing customers rather than focusing on the next big deal.

SMsep2007

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