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While chances of it becoming the next Silicon Valley were "unlikely", according to Xebidy Strategic Design director Dan Roberts, he said Queenstown had the potential to grow a sustainable IT industry.
"Mountain View in Colorado and Silicon Valley . . . were in the middle of nowhere," he said.
But slow, unreliable internet already caused problems and with the resort missing out on the Government's planned roll-out of ultra high-speed broadband, the problem would only intensify, Mr Roberts said.
"Working with 10-year-old technology is not ideal - it is already a nightmare trying to run a web company on connections which drop out.
"It is potentially damaging."
Despite the obstacles, Mr Roberts and others are successfully taking their products to the world.
As online marketing and website development specialists, Xebidy have an impressive portfolio of Australian and New Zealand clients and a reputation as being good at "the hard stuff".
A recent project was developing uploading software allowing photos and videos to be instantly shared using social networking sites such as Facebook and Bebo, "a massive project", for A. J. Hackett Bungy.
Mr Roberts' passion for social media recently saw Xebidy launch a beta version of travel itinerary site Travel Generation, blending social networking with web bookmarking technology developed in-house.
Many of the team behind those projects sought out Queenstown for its adventure reputation.
An example is former Yahoo software engineer Sam Tihen - an enthusiastic part of Xebidy since arriving four months ago.
"Sam's also done some cool stuff with our software in his own time," Mr Roberts said.
Previously, another software engineer - Michael Gall, from Australian IT company Emu - came to Queenstown to snowboard but stayed 18 months working full time.
However, staffing has been an issue for another Queenstown company, leading it to set up an office in Christchurch.
IBIS Technology - a tourism software specialist - has been providing about 130 New Zealand tourism businesses with business solutions for years and now is building its global customer base.
It has successfully exported its reservation and tourism business bundle to one of Canada's largest tourism operators, Ziptrek Ecotours.
Canadian resort Whistler's flying fox eco-attraction now uses IBIS's real-time online reservations system to keep track of clients, bookings, tour numbers and also accounts.
"It has streamlined their operations to one programme," IBIS general manager Rebecca Cochrane said.
IBIS managing director Erik Bradshaw said Ziptrek's high profile in North America made "them an excellent first [international] customer".
Ms Cochrane said while Queenstown had been the ideal starting point for IBIS, the company now had a Christchurch office - mostly in response to difficulties in hiring and retaining skilled staff.