IT industry on track for recovery, says IDC

IT industry on track for recovery, says IDC

Market intelligence agency IDC says the information technology industry is set to rebound by mid-2002, recovering from the devastating impact of the 11 September terrorist attacks on America.

In a report detailing its top ten predictions for the global IT market in 2002, IDC forecasts that IT spending will increase 4-6% in the United States, 6-7% in Western Europe and 10-12% in Asia-Pacific.

John Gantz, IDC's chief research officer, comments: "Prior to September 11 we were expecting the rebound to begin in 2001, but terrorism's impact on the global economy took a commensurate toll on the IT market."

He continues: "The good news is that the economic assumptions behind our IT forecast are holding up. In fact they may be conservative. If that's the case, the IT recovery could come sooner and be stronger than we currently predicted."

The report says China's entry into the World Trade Organization (WTO) will help ensure its 25% IT spending growth continues for years. By 2010 it will be the third largest IT market in the world, predicts IDC.

Other top ten predictions include:
* businesses will feel a crunch in 2002 as users and workers with wireless and mobile Internet access create demand for enterprise support that's not yet in place;
* the "Bin Laden Effect", as Gantz calls it, will drive enterprises to rethink their specs for business continuity - creating a need to reset IT security plans in 2002; and
* the concept of "Web services" will hit its hype peak in 2002 - long before any critical mass of products or services in the market is reached.

With Microsoft pushing Passport to XP users and competitors reacting, digital identity services will become real - even if single-sign-on to the Web will remain a consumer's pipe dream, believes IDC.

The intelligence agency also forecasts that streaming media will be hot as new standards come online and new services and market needs come into play; and that Linux will have a 'breakout year', becoming a viable alternative for enterprise use.

In comparison, while 75 million WinXP licenses will ship in 2002, XP won't have the clout that Windows 95 did in driving hardware sales or generating first-time users, predicts IDC.

Also, although the market for server blades won't be a big money maker in 2002, the new architecture will disrupt the entry server and appliance server markets - yet another disturbance in a server market already undergoing multiple transitions, says IDC.

Although more optimistic, IDC's forecasts chime with a recent survey of chief information officers by Merrill Lynch, which tips European and US IT spending to rise by four and two per cent respectively. Much of the increased spending will go to larger companies, such as Microsoft, Cisco, Compaq, IBM, Hewlett-Packard and Oracle, says the US investment bank. Storage and software markets will be the biggest beneficiaries, say CIOs, with spending on PC upgrades a low priority.

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