Global IT–Alive and Kicking

DQI Bureau
New Update

If you thought the worldwide boom in the infotech sector was

over, think again. A look at estimates of the growth expected in different

segments of the industry by leading market intelligence and research groups like

Gartner and International Data Corp (see table) will convince you that it hasn’t,

and won’t.


Take, for instance, B2B e-commerce. According to Gartner

Group, this will leap to a mind-numbing $7 trillion by 2004, up from a mere $145

billion in 1999. This would indicate a fundamental shift in the way companies do

business. Bear in mind, though, that not all of this accounts for new business;

they are merely a transition of the current non-electronic business to online

transactions. Nevertheless, by 2004, B2B e-commerce will represent 7% of the

forecasted $105 trillion total global sales transactions.

Growth catalysts

The main catalyst behind this huge growth will be the

e-market making activity. An e-market maker is an organization that develops a

B2B, Internet-based, e-marketplace of buyers and sellers within a particular

industry or geographic region. E-market makers, says Gartner Group, are expected

to facilitate around $3 trillion of sales transactions, a little over third of

the overall B2B market. Leading e-market makers include VerticalNet, Paper

Exchange and Chemdex.



IT Segments


At present

By 2004 ($)

B2B e-commerce

145 billion

7.3 trillion

IT services

605 billion

1.3 trillion

Management software

4.2 billion

14.7 billion

Database Software

8 billion

12.7 billion

Data communications (AP)


9.0 billion

Source: Gartner Group, IDC

Though not on the same scale, growth in IT services is poised

to outstrip all others. The worldwide IT services market place will continue its

pace. It will become the largest and fastest-growing segment in the IT industry

as it rises from $605 billion in 1994 to cross $1 trillion in 2004. As

businesses struggle with the huge demand for IT skills, an increasing number of

them are looking to outsource these skills. The market, according to Gartner

Group, will be fueled by end-user demand for external service providers–for

everything from product support to e-business transformation services. In fact,

business management services are projected to grow at the fastest rate of 21%

through 2004.

Explosive growth was also witnessed in 1999 in the global

data storage management segment, with new license revenue totaling $4 billion, a

47% increase over the 1998 revenue. This is expected to rise to $15 billion by

2004. At present, the storage management segment represents 53% of the overall

market. However, with strong growth in the storage infrastructure and the

enterprise storage resource management segments, the share of data management is

expected to drop to 46% by 2004.


Good days ahead

If the e-market makers have reason to rejoice, companies like

Oracle and IBM too can look forward to good days ahead. The worldwide database

software market–the two companies compete neck to neck to lead–is expected

to grow to $13 billion by 2004 from its present $8 billion. Already in 1999,

buoyed by the growth of new Internet applications and demand for business

intelligence software, the market grew by 18% in revenue terms. In fact, the Y2K

concerns had limited impact on database spending. By 2004, it is expected that

the NT platform revenue will almost equal that of the Unix platform. The market

will be driven by Internet-related applications, electronic commerce and content

management, among others.

If worldwide things are looking up, the Asia-Pacific market

is positively booming. Given the resilient pace maintained in 1998 and 1999,

International Data Corp expects the overall data communications market in the AP

region alone to touch $9 billion by 2004. This will be on account of economic

resurgence, telecommunication industry liberalization and increased Internet

usage. The largest component of this will be the LAN market–which is likely to

grow at 18% over the forecast period to reach $5.8 billion by 2004. The remote

access market will also quadruple in the next five years to hit $1.4 billion.

This will be primarily due to the lack of an installed base in emerging markets.

China will remain the leader in terms of total market share, though the fastest

growth will be in India, which will grow at a compounded annual growth rate of

36%–pushed primarily by the growth of Internet and the related technologies.


So, if forecasts are anything to go by, the best days for the

industry are yet to come. And even if the numbers fall somewhat short,

manufacturers and industry watchers can be sure that there will be plenty of

action in the near future.