Auckland, 10th December 2019: Managed cloud services are set to replace outsourced IT services as systems integrators, independent software vendors
and other cloud ecosystem partners in New Zealand reap the benefits of flexible new IT service delivery models. Revenue
from managed cloud services is forecast to finish 2019 at approximately NZD$582 million and reach NZD$1.01 billion in
2023 according to Chayse Gorton, ANZ Market Analyst for IT services and author of IDC Australia/New Zealand's recently
released New Zealand Cloud Heatmap report.
IDC's forecast represents a five-year compound annual growth rate (CAGR) of 15% for 2019-2023. In contrast, the revenue
for New Zealand non-cloud managed services is forecast to decline at a five-year CAGR of 4% to 2023. Managed cloud
services revenue share will increase from 34% in 2019, to 53% in 2023, says IDC.
Essentially, managed cloud services are replacing traditional outsourced-managed services markets as a set of preferred
options for end-user organisations to deploy.
Gorton, says "Organisations are turning to managed cloud-services providers to help manage increasingly complex cloud
environments, provide solutions for legislative and industry compliance – especially security - support technology
adoption, and access new business services to deliver business outcomes."
Broad adoption of cloud services and technology across New Zealand is driving workload migration to the new delivery
platforms and providing new opportunities for New Zealand’s IT professional services providers as enterprises seek to
fill their skills gaps. These IT services providers are increasingly embedding cloud-related services within
project-oriented services such as application modernisation, workload migration, and application and data integration to
provide an on-ramps to managed cloud services.
The New Zealand Cloud Heatmap report indicates that organisations shifting from legacy infrastructure to cloud
environments will be the primary driver of cloud managed services revenue in the short-term, as organisations partner
with managed cloud services providers that can play a role in modernising and transforming IT infrastructure and
applications.
Demand will increase for managed cloud services providers with capabilities that complement public cloud providers'
capabilities. In particular, those with vertical expertise to meet the demands of enterprise LOB managers.
Gorton predicts that, "Competition will intensify in 2020. Managed cloud services providers will increase their focus on
strengthening partnerships with multiple cloud providers. They will also develop capabilities for cross-cloud migration
and efficient service provisioning to tap into managed cloud-related opportunities."