IT services, or outsourcing, is what companies are spending the majority of their IT budgets on, according to BMI-T?s recently published ?South African IT services market sizing and outlook (2005-2009)? report.

The report goes on to say that in 2004, South African companies spent a total of R18.4 million (US$2.8 million) on services and outsourcing, an increase of 5.3 percent from 2003.

?We estimate that local enterprises will be spending a total of R27.5 million on IT services in the year 2009,? says Natalie Bryden, senior analyst at BMI-T.

Heat on Microsoft

The report also disclosed current and future IT trends, in particular regarding the uptake of open source software and the adoption of open standards.

?More and more companies are moving towards open source and open standards, as they are quickly seeing the benefits, avoiding problems such as ?vendor-lock-in?,? says Roy Blume, research manager at BMI-T. ?With open standards, a company is able to switch from one vendor?s product to that of another, without having to worry about compatibility issues,? he says. ?We see this trend growing more and more, especially now that SA enterprises want to spend as little as possible when it comes to IT.?

This may present a huge problem to Microsoft. ?Granted, Microsoft has come a long way since the days of DOS. Microsoft?s Windows XP is a relatively stable operating system, and its adoption, both locally and globally, has been massive,? continues Blume. ?What is more, consumers can purchase additional hardware and software off the shelf, and be fairly confident it will work with Windows XP.?

However, Blume feels that, as open source filters its way down to the consumer market, drivers and additional software will be shipped with the products to ensure that they run on open source platforms, such as Linux. ?In the not-too-distant future, Microsoft will have to pull something out of its hat in order to stay as prevalent as it is at the moment,? he adds.

?Microsoft?s next big operating system -- Longhorn -- could be its saving grace,? he says. If the operating system is as stable as Microsoft says it is, and if it offers users everything they need, then the company may just be able to keep a strong hold on the market.

However, if the operating system comes out with bugs, and requires numerous fixes, Microsoft could have a serious problem on its hands.