By next year 19 per cent of public-sector organisations will spend more than half of their annual IT budgets on managed services, according to a report by the Economist Intelligence Unit.
The report, commissioned by Telewest, showed that in contrast, the private sector will spend only about 10 per cent of its IT budget on managed services in 2006.
Managed services are popular in the public sector because of a lack of internal resources and a desire to lower costs, with 88 per cent of respondents citing this as their main strategic aim, the report said.
Overall IT investments in the public sector will remain relatively static next year, with 17 per cent of organisations claiming their investments will be lower, and 38 per cent saying they will remain at 2004 levels.
For the 24 per cent of respondents that claimed their IT investments will rise slightly, software applications, storage and call-centre technology will be the main investment areas.
Christopher Small, director of public sector at Telewest Business, said in a statement: "Increased demands on resources for the public sector means that organisations are increasingly turning to managed services. As the pressure to find skilled staff grows, this trend will continue."
Dave Meaden, managing director of public services at VAR Northgate, echoed this view.
"Much of the public sector is beginning to look at outsourcing to drive their core operations. The figures show a dramatic increase in spending," he said.
However, he warned that not all resellers are cut out to be managed service providers.
"Channel players should stick to what they are good at. It would be wrong for them to stretch into outsourcing just because it's expanding. That just leads to IT projects going wrong," he said.
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